You’ve heard the prediction from Ford on what the Covid-19 virus will do to health provincially, but what about the hit to the Town’s finances? Only 63% of revenue comes from municipal taxes, the rest from other sources. So what is the risk that at least some of these other sources will not happen during the virus crisis? Given what we know and listing the budget revenue items at risk (see below), either 1) the Town will have to go into debt to cover the operating budget or 2) there will be a large tax increase or 3) some things will not get done or 4) a combination of these. We know that transit fares will not be collected, parking will be free and parking fines will be minimal – but let’s look at other items relying on “other revenue”.
Budget items not covered by taxes
Selected items – full year numbers from approved budget. Impact is hopefully less since restrictions may be lifted before year end.
|Lottery Licences||$110,000||With no events, how many of these will there be?|
|Police Business Revenue||$786,252||With Canada wide disruption, will this be impacted?|
|Building Permits||$410,000||With no new residential construction allowed – this will be less|
|Transit Fares & Passes||$116,500||Transit is now free|
|Parking Lot Revenue||$70,000||With stores closed, there is much less parking|
|Parking Tickets||$100,000||If parking is free and less crowded, there will be many fewer tickets|
|Downtown Parking Revenue||$187,500||With stores closed, there is much less parking downtown|
|Revenue Victoria Park||$330,000||With no events and free parking, this will disappear|
|Marina Revenue||$707,540||This will be reduced because of general event restrictions [Update: Closed until May 29]|
|Campground Revenue||$313,000||With the beach closed, there will be fewer trailers.[Update: Closed until May 29]|
|Cobourg Community Centre||$1,400,570||How can the CCC get anywhere near this revenue if it’s closed?|
|Seniors Activity centre||$102,730||If closed, then there’s no revenue|
|Victoria Park Canteen||$20,000||A closed beach and cancelled Victoria Park events means virtually no canteen business|
|Concert Hall Revenue||$181,050||A closed concert hall will have no revenue|
|Planning Fees||$110,000||With no new residential construction allowed – this will be less|
There are also many other smaller items that could easily be less than budgeted due to reduced activity in the Town.
Some costs related to the above revenue will also drop so the overall impact is far from clear.
It’s not clear whether Provincial subsidies/grants would continue if related activities are cancelled. Therefore, these could also be lost making the shortage worse.
As a minimum, we can expect significant discrepancies (over-runs) on the budget. That is, the current budget is basically no longer applicable.