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Pembroke's treasurer lays out the financial impact of COVID-19 on the city's 2020 budget

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The COVID-19 pandemic is not only a major health problem, it’s a massive financial one and after Tuesday night’s committee meeting, Pembroke council knows roughly how big.

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City treasurer and deputy clerk Angela Lochtie made a presentation to the city’s combined committee forecasting the financial impact of COVID-19 on the city’s 2020 budget.

Overall, the members of city council heard there is an anticipated shortfall in the once balanced general budget of $516,142. In addition there are $50,605 in extra costs in the waste management budget and just over a $100,000 loss of revenue in both the water and the sewer budgets.

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“During this time the City has continued to provide essential services to our residents however the pandemic and these closures have had an effect on the City’s finances,” Lochtie said adding that staff are working to adapt the 2020 budget to the anticipated loss of revenues and to reduce a possible year-end deficit.

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The measures she went on to suggest were developed in consultation with department managers and CAO/clerk Terry Lapierre. Lochtie cautioned they are based on some assumptions.

“Essentially it’s out best guess at this point,” she said.

Pembroke Mayor Michael LeMay said he appreciated the work done by staff in looking for ways to mitigate the financial hit, adding more information on anticipated grants from the provincial government would be very helpful.

“We’re waiting for the provincial government and now let’s hope it’s soon, now that they’ve got their education (plans) organized and health (plans) organized as well,” he said. “Municipaliities should be next on their list because when we look at this, I think (our) staff has done an excellent job of keeping to a, what we’re looking at is the possibility of, maybe a $4,000 deficit. But also we’re looking at a half-a-million dollars which really does affect us now making any decisions as council. We’re just going to have to wait and see where the province is (going) and again I can see the treasurer coming to us probably in July with another update and by then we should know where we are from a financial point of view as far as grants are concerned from the province or we’d better be, because it’s getting awfully late.”

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According to Lochtie the recreation department is now anticipating $353,487 in reduced revenue with facilities and programs shutdown because of the COVID-19 restrictions. She warned given the province’s restrictions on large gatherings, some programs and events may not be held at all in 2020 while others might be able to resume in the fall, but in smaller numbers with longer turn-around times between programs because of more stringent cleaning protocols.

As a result of the temporary financial relief the City provided to residents, lower interest rates and the impact of the closure of city hall to the public, finance and administration is expecting a revenue reduction of nearly $99,000. Planning, building and bylaw expects a revenue reduction of about $63,890 because of the economic uncertainties softening the demand for new housing and associated fees as well as reduced fine revenue because of lower traffic volume downtown and the extension of parking time limits. Additional operating costs related to COVID-19 are anticipated to be over $65,000, the result of additional cleaning expenses, personal protective equipment purchases and the addition of Plexiglass sneeze-guards.

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To offset these losses, the City expects to save $61,897 in operating costs through decreased opportunities for staff and savings in office closures. Because of the limits on large gatherings of people, it is expected that many of the City’s summer programs will be cancelled resulting in a savings of about $72,500. This includes cancellations like Canada Day celebrations, Waterfront Live, Fiddle Week and youth and senior’s programming.

Unfortunately for students and seasonal staff, this also means a decreased need for this type of employment during the summer. Cutting these positions could save as much as $236,708. Using Kinsmen Pool staffing as an example, Lochtie said the City typically employs six full and part-time staff plus 15 students at the pool. These positions have already been impacted by COVID-19 and the closures. Across other city departments, except for water and sewer, the City typically staffs 33 seasonal positions in the summer and is considering reducing this by 11 positions because of event and program cancellations. Lochtie said with the closure of recreation facilities, the city could deploy existing full-time staff to cover work load gaps.

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The remainder of the shortfall could mostly be made up through deferrals of some facility repairs and improvements and projects like the Active Living Plan, amounting to $206,768. Even with these savings, there’s still a deficit of about $4,000.

Specific budgets outside of the general budget are also being affected. Because of an increase in curb side collection this spring, there have been additional costs of $50,605. Lochtie suggested offsetting this by reducing the planned contribution to the Waste Management Reserve in the 2020 budget. The city had allotted $92,010 for this.

In the water and sewer budget, Lochtie said other municipalities are seeing a reduction in metered revenues of between 15 and 25 per cent. A 15 per cent decrease for Pembroke would mean a loss of $101,067 in water and $100,049 in sewer for the remainder of 2020. In addition, the department is anticipating additional costs of $6,000 related to COVID-19. According to Lochtie this could be partially offset by operating savings through not proceeding with some intended training and testing and eliminating two summer student positions. She still anticipates a shortfall of nearly $5,000 in the water budget. The sewer budget loses could be offset through the elimination of a summer student position, some capital project deferrals, cutting of some building condition assessments and the postponing some staff training.

Lochtie said City staff are committed to continuing to provide services and that $18.2 million in infrastructure projects are still slated to go ahead this year.

She did emphasize to council this information was staff’s best guess and that many questions remain including a possible increase in the cost of paramedic services shared with the County of Renfrew and increased costs from the Renfrew County and District Health Unit.

She said staff will continue monitoring the situation and provide updates as the COVID-19 situation continues to unfold.

adixon@postmedia.com

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