Nelson’s finance manager expects an $830,000 reduction in revenue for the city this year because of the effects of COVID-19.
That money would have normally come from such things as parking fines and meters, parkade revenue, downtown patio rentals, sports field fees, the city campground, youth centre camps, investment income, and transit fees.
In response, the city has come up with a financial stability plan intended to balance the 2020 budget and help citizens cope with the pandemic.
Highlights of the plan include:
• No property tax increase for 2020
• No fee increase for Nelson Hydro for 2020
• No increase in Nelson Hydro dividend to the city
• No wage increases for 2020 – except those governed by existing labour contracts, and through negotiations with unionized employees whose contracts have expired
• A general hiring freeze except replacement of critical positions or when there are grants to fund the position
• Minimized travel, training, legal fees and other discretionary costs
• Reduced dental and extended health premiums by $40,000 per month, negotiated with benefits carrier
• Allowance of $100,000 for recovery and/or wildfire response activities
• A request to the provincial government to fund the operating shortfall for transit
• A request to all organizations that receive grants from the city and/or lease city facilities to first find other grant support before requesting support from the city
• Deferral of funding to reserves unless this would have a significant negative impact on the city’s future sustainability.
“It is very challenging to project our revenues with all the uncertainty on the duration and extent of restrictions,” chief financial officer Colin McClure said. “This financial plan is built on a most likely scenario and maintains the city’s financial capacity to respond to the impact of a longer pandemic shutdown and the resulting economic fallout.”
In addition, the city expects to have to draw up to $530,000 from various reserve funds to balance the 2020 budget. Reserves are accounts that the city funds each year and holds for specific future projects or emergencies.
Mayor John Dooley said it is no accident that the city is able to balance its budget despite hard times.
“The city has been on a very solid footing for the past 15 years or so and that did not happen by good luck or anything else,” he said. “That was good planning and thoughtful process.”
Economic stimulus plan
The plan also includes economic stimulus measures for city residents and businesses, the details of which the city will release later this week, perhaps before the print edition of this article appears.
The city has been meeting with members of the business community recently to brainstorm this.
“Initial feedback from our business outreach project has been well received and has identified where our community needs additional support,” Dooley said.
“While we have limited financial capacity to directly support our community, we believe we have found some creative ways to help out and stimulate the economy.”
Dooley said senior city staff are now meeting weekly to monitor the city’s finances in light of the pandemic.