The City of Whitehorse is projecting a deficit for the 2020 year of $512,718, largely attributed to COVID impacts.
Brittany Dixon, the city’s manager of financial services, presented Whitehorse city council with the second quarter variance reports for both the capital and operating budget at its Sept. 21 meeting.
The projected deficit was outlined in the operating budget, highlighting the impacts of the global pandemic on the $84.7-million dollar operating budget.
As she pointed out, soon after the state of emergency was declared for the territory in light of COVID, city staff began tracking direct costs incurred due to the pandemic.
“Additional costs to the city in the form of unrealized revenues have been forecast to the end of the year based on actual losses and the current phase of reopening in the Yukon,” she said. “Some cost containment has been identified through delaying hiring of seasonal or casual employees and through the cancellation of hosted events.”
She stressed that the projected deficit is based on the continued reopening of city facilities and services as anticipated. If that is changed, the numbers could also change, she said.
Looking more closely at the figures, Dixon said that while the deficit is expected to be over $500,000, the impact of COVID accounted for a loss of $1.8 million that is being offset by $1.2 million more in revenues than was originally projected. The extra revenue is largely due to staff vacancies, more development cost charges being paid than anticipated due to increased residential development, and increased tax revenue that came due to city growth and property assessments being done in 2019.
Among the major impacts of COVID-19 listed is the loss of parking, transit and recreation revenues as well as the suspension of interest and penalties on city bills (with that set to end Sept. 30).
The loss of revenue in recreation passes came in highest at $1.2 million. In the same category of parks and recreation, there was $105,185 of a loss in park user fees.
Meanwhile, there’s a loss of $459,650 in transit revenues and $288,425 in parking meter collection and fines that came with the city not charging for transit and parking meter services early in the pandemic. Charges for those services have been reinstated since April (for parking meters) and July (for transit).
Another $54,690 of a loss is estimated for water and sewer penalties, with $37,770 listed as a loss in lease revenue and $16,178 in other revenue penalties.
A further $483,816 in additional costs is listed in the form of Plexiglas ($4,765) and other materials ($26,892) purchased for city buildings, additional janitorial services ($47,099); and wages and benefits ($405,060) that came with resources invested into COVID-19 planning and responses to the pandemic.
Finally, the cost-containment category, which lists planned expenses that will not be incurred due to the pandemic, lists hosted events at $35,052; instructor fees at $51,800; contract services at $59,615; training at $66,455; consultants at $85,150; transfers to the parking reserve at $97,700; and wages and benefits that came due to season and casual hires not going ahead or being deferred.
While the city is faced with a deficit, a number of council members noted it’s not as high as they initially thought they would be.
Coun. Steve Roddick said there was “a bit of relief” with the numbers.
“All in all I think we’re doing OK,” he said, later confirming with Dixon that reserves could be used to offset the deficit.
As Dixon noted when questioned by Coun. Jan Stick, officials are first looking at whether the city will be eligible for funding the federal government has stated it will make available to municipalities to assist with COVID-19-related expenses.
In an interview following the council meeting, Mayor Dan Curtis said he too had been expecting a larger deficit.
“It’s remarkable,” he said, praising city staff who kept essential services going throughout the pandemic. While major adjustments had to be made, services continued to be delivered throughout the city, he noted.
Meanwhile, on the capital budget side, Dixon reported changes of $28,354 from five projects that came in under budget including replacements of a utility work machine and a compressor at the Canada Games Centre as well as purchases of an end dump trailer for the operations department and a thermal imaging camera.
Council will vote Sept. 28 whether to adjust the capital budget in light of the changes.
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