THUNDER BAY – The COVID-19 pandemic is set to take a more than $5 million dollar chunk out of city coffers by the end of May. On Monday, city councillors discussed just how dire that situation is, as well as possible responses to the fiscal burden.
Councillors differed on whether the costs of the pandemic constituted a crisis. A recent report estimated COVID-19 would cost the city $5.4 million by the end of the month, and around $1.4 million per month after that, as long as current public health restrictions stay in place. That report was considered by councillors Monday evening.
“When I read the report, I was actually not at all discouraged,” said Mayor Bill Mauro, adding those costs should be well within the city’s ability to manage. The challenge, said the mayor, would be how to tackle the challenge without increasing taxes or depleting the city’s financial reserves.
“I actually share the mayor’s [optimism],” said Coun. Andrew Foulds. “None of us like getting this report, none of us are happy we’re in this pandemic. But I’m surprised it’s not more, to be frank... I think this is in the realm of manageable.”
Other councillors expressed more concern. Coun. Brian Hamilton worried the full impact of the pandemic was yet to be felt.
“I’m still quite wary that this is just the tip of the iceberg,” he said.
Coun. Rebecca Johnson said the city might have to consider cancelling some planned projects to account for the costs of the pandemic, while Coun. Aldo Ruberto suggested the city’s stabilization reserve could largely cover the shortfall.
That fund now sits at $9.2 million, city treasurer Linda Evans told council. The city also has an estimated surplus of $3.4 million from the city’s 2019 fiscal year.
The COVID-19 crisis is a perfect example of why saving money in the stabilization reserve is so important, Ruberto told his colleagues.
“This is why we do the planning,” he said “It shows that planning pays off.”
Hamilton wasn’t keen to see the city rely on the reserve to cover pandemic costs, saying council needed a plan to keep from depleting it too much.
“I certainly have a red line on where I want that reserve to go,” he said.
Mauro seemed to agree, saying city administration should get to work on identifying cost savings to manage the $1.4 million impact estimated for each month after May. Administration’s next planned fiscal update, scheduled for early July, was too far into the future for the mayor’s liking.
“I’m hoping you can find that,” he said. “And I’m hoping we don’t have to wait until June or July to find that out.”
City manager Norm Gale assured councillors administration was doing its best on that front.
“I wish to say that we do that now,” he said. “We’re very careful about expenditure, and we’re watching it all the time.”
Other councillors diverged from the mayor, saying the city should focus more on maintaining services and dealing with the pandemic, rather than looking for more efficiencies.
“I’m not prepared to have administration going out and looking for a million-plus dollars,” said Johnson. “I don’t think that’s a good thing to do at this point in time.”
The at-large councillor said the city should wait to see more information on financial impacts, as well as possible assistance from higher levels of government, before making any major moves.
There’s little certainty over what help may be coming from the provincial or federal governments, though Mauro and Gale indicated some funding to compensate for lost transit revenues was likely to come from Queens Park. The city expects to lose around $400,000 a month after eliminating bus fare during the pandemic.
The report did not take into account lost revenues from the Community Auditorium. A second-quarter report on the financial toll of the COVID-19 crisis is expected in early July.
