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Municipalities preparing for financial impact of COVID-19 crisis

UPDATED on 06/06/2020

The COVID-19 emergency has affected how just about everything functions, and municipal government is no exception.  Access to municipal buildings has been severely restricted and council meetings are being held online or by teleconference.  The emergency has also had varying effects on municipal finances and staffing.

“So far, so good,” was how Champlain Township Mayor Normand Riopel described how that municipality’s finances have been affected.  The impact on revenue has so far been minimal at approximately $18,000, but there is not yet a firm estimate on exactly how COVID-19 has affected the township’s finances.

Riopel did note however that the township is trying to ensure is has proper cash flow due to the decision to allow ratepayers to defer payments, and without paying interest.

To ensure proper cash flow, the township has decided to defer some capital projects to 2020.

Lost revenue due to cancelled facility rentals has not been significant in Champlain, according to Riopel.  He said that the hockey season was already over so arena revenue was not seriously affected, even though the annual Pond Rocket Hockey Tournament in Vankleek Hill was cancelled this year.

Riopel is pleased that the municipal marina in L’Orignal is opening and is also hopeful that the municipal campground in L’Orignal will also open.

“We’re trying to do our best with what we have,” he said.

Champlain Township is the only local municipality that has had to layoff employees due to the COVID-19 emergency.  Chief Administrative Officer (CAO) Paula Knudsen said approximately 30 people were temporarily laid off in March when the township had to suspend its childcare programs.

Financial losses due to the pandemic for the Town of Hawkesbury are presently estimated at approximately $170,000, according to Treasurer Philippe Timbers.  However, with an approximate $250,000 surplus in the general fund, Timbers anticipated that the town is in a good position to absorb some of the losses expected this year.

Those potential losses include $95 in revenue that would have come through the Robert Hartley Sports complex due to the pool being closed and no other facility rentals happening at this time.  However, due to the facility being closed, up to $105,000 in savings from salaries could be achieved.

The town’s investment income could be affected by up to $25,000 due to lower interest rates.  Income from interest could also be affected by an additional $25,000 because the town waived interest for April and May on unpaid property taxes and other rates.

Due to gambling and gaming establishments being closed, and fewer raffles and lotteries being held, $17,500 to $35,000 in revenue could be lost due to fewer lottery and gaming licences being issued.

Potential losses or savings to the town from Provincial Offences fines, building permit revenue, employee training and development costs, and electricity costs are still unknown.

Timbers explained that the town’s cashflow position is still good.  Hawkesbury. Has $1.5 million in short-term investments it could cash in if necessary, and the town is approved for $2 million in short-term borrowing, but Timbers did not foresee either option would have to be used.

East Hawkesbury Township CAO-Clerk-Treasurer Luc Lalonde said the pandemic will have an impact on that municipality’s finances in 2020.  He said it was difficult to estimate an exact amount, but it could represent more than $100,000.

Lalonde explained that there will be an impact on tax revenue, but community centres have been affected the most because all rentals have been cancelled.

East Hawkesbury has not laid off any municipal employees due to the COVID-19 emergency.

“The situation is not that bad,” was how Alfred and Plantagenet Township Mayor Stéphane Sarrazin described the effects the COVID-19 emergency is having on the municipality’s finances.

He said that while revenue will be down, the township has reserves that can be used to help withstand the impact.

No municipal employees have been laid off and many are working from home.

Sarrazin said that while rental revenue from community hall rentals has disappeared, the township is saving money because of less need for janitorial services at those facilities.

La Nation CAO Josée Brizard projected that lost municipal revenue due to the COVID-19 situation is now as high as $93,200.11.  Out of that amount, $68,018.60 is from the disappearance of revenue from community centre and arena rentals.  Lost revenue from delayed payments of taxes, other fees, and the suspension of interest on those fees accounts for $11,403.38.

At the regional government level, the United Counties of Prescott and Russell is also anticipating the effects of the emergency on its budget.  Treasurer Valérie Parisien said that the repercussions are being reviewed and will be indicated in a draft of the revised 2020 budget, which will be presented to counties council on June 10.

 

James Morgan

James Morgan is a freelance contributor. He has worked for several print and broadcast media outlets. James loves the history, natural beauty, and people of eastern Ontario and western Quebec.

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