Local Journalism Initiative
Council approved a temporary emergency response reserve to deal with the financial impacts the COVID-19 pandemic has and will have on the town’s operations.
A total of $240,000 from the recreation expansion reserve was transferred to the temporary emergency response reserve, and any request to access those funds require approval from council.
“Our shortfall to date has been about $192,000. Depending on the length of this pandemic, those costs will only increase over time,” said Peter Vana, director of development services, at the special meeting of council on April 7.
Town administration projects a shortfall of $103,000 due to deferring property taxes, and approximately $11,000 due to deferring utility payments.
After looking at service reductions, facility closures, and staff layoffs, the town still estimates an operational shortfall of approximately $306,000, Vana said.
Administration initially recommended renaming the recreation expansion reserve to the climatic and emergency response reserve.
“I’d like to keep some [funds] in that recreation centre reserve, at the same time acknowledging that administration does need some cash flow and will need some cash flow to operate town business,” said Coun. Tyler Waugh.
Vana stated that pandemics historically occur at least every ten years and the province is experiencing wildfires on a yearly basis for which a specific reserve could be beneficial.
Coun. Albert Ostashek first commented that there wasn’t enough background information on how that reserve would be managed and controlled.
A report about the creation of a permanent emergency response reserve will come to council at a future standing committee meeting including funding sources, and reserve management policy.
Administration stated that no funds had been identified in the budget to cover the shortfalls due to the COVID-19 crisis.
“At this point in time we have no indication that money will be provided provincially or federally to a municipality. We have to move forward ensuring that there is money available. That doesn’t mean we’ll access the money until such time we know at the end of the year that no grant money is provided,” said Carla Fox, director of corporate services.
Vana stated that some kind of reserve is necessary to continue town operations, and suggested creating a separate reserve and moving money into the reserve.
Not having a reserve would have very significant impacts on the town, he continued.
“What really it amounts to is us moving much much quicker down to purely essential services for the town. That means police, fire, some payroll and that’s about it. Everything else is just temporarily laid off,” he said.
Laying off all staff will impact the recovery process, he added.
Currently operations cannot be reduced enough to offset losses, Fox said.
Coun. Ryan Maguhn asked how residents can look at expenses made in an emergency reserve, to which Fox replied that council could request a report on what has been spent for transparency.
“To be fair and for transparent communication to the public as well, all one-time emergency expenditures that were put in the budget for 2019 are reported back to council through the one-time capital and project expenditure report,” Fox said.
The recreation reserve is not completely drained after the transfer of funds to the temporary emergency response reserve and unused funds can be moved back at a later date.
The only way to access any funds is for administration to come to council directly because these expenditures weren’t originally budgeted for in the 2020 budget, CAO Emily Olsen clarified.