The City of Whitehorse’s projected deficit could be higher than originally predicted earlier this year.
At Whitehorse city council’s Nov. 30 meeting, members were presented with the city’s third quarter financial reports by Brittany Dixon, the city’s manager of financial services.
The reports show a projected operating deficit of $640,101 by year’s end, largely attributed to the impacts of COVID-19. That’s larger than the $512,718 deficit that was projected by year’s end in the second quarter reports.
“At the end of third quarter, management had been asked to review spending as compared to budget and to forecast expected final results to the end of the year,” Dixon stated in her report. “Through analysis of both the COVID-19 impact and the variance from normal operations … the city is anticipating an operating deficit for 2020 with a revised total of $640,101.”
Among the revenue losses due to COVID-19 are the loss of parking and transit revenue with the city not charging for either during a period early in the pandemic. There have also been recreation losses that came with the closure of the Canada Games Centre as well as fewer numbers since it reopened and the suspension of interest and penalties on utility bills earlier this year means the city was not collecting that money.
Offsetting the $1.8 million deficit coming from the impacts of COVID-19 was an increase in development cost charges with more construction happening in 2020 than anticipated, as well as staff vacancies and tax revenue to bring the deficit down to a projected $640,101.
Answering questions from Coun. Laura Cabott, Dixon confirmed that the numbers could change yet again by the end of the year.
As she pointed out, the analysis for the third quarter was done prior to the territory’s case count rising and while it may lead to a higher deficit due to COVID-19, it would be impossible to say until the final numbers are in.
Meanwhile, on the capital side of the budget, Dixon brought forward a recommendation that council reduce the 2020 to 2023 capital spending plan by $117,420, with most of those funds to be returned to city reserves.
The changes to the capital budget also come thanks largely to the impact of COVID-19.
“As part of the city’s third quarter variance reporting, managers were asked to review the planned capital spending and to identify projects that have been significantly impacted by the COVID-19 pandemic,” Dixon explained in her report.
The long list of individual projects requiring budget changes fall under four categories. Among them are a lack of contractors or consultants due to availability, travel restrictors, low tender submissions or a contractor’s own issues in finding staff; supply issues including a lack of supplies or materials, longer delivery times and increased costs for supplies; city staff capacity issues that have come with distancing and other safety measures, hiring issues or delays in tender preparation; and a broader “other issues” category that includes things like adapting to working with consultants virtually or delays that have come as the city revamped public consultation efforts to meet new safety requirements.
A number of the 2020 projects that were not done this year are anticipated to carry forward to 2021.
Council will vote on the capital budget changes Dec. 7.
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