By Jensen, Randy on July 3, 2020.
The City has tightened its belt in light of COVID-19, and has so far been able to absorb this year’s property tax cut and other revenue losses through reductions in service levels and by hiring fewer seasonal personnel.
“The City did reduce operations and didn’t recall summer staff as quickly,” explains Mayor Chris Spearman earlier this week. “We are addressing some areas and, of course, there have been impacts on service levels. So people have been complaining to councillors about areas where the city has been unkempt -grass needs cutting, weeding needs to happen. We’ve been behind in terms of addressing issues, but we have had to make compromises and try to plan for revenue reductions. There have been impacts on transit service, and other significant impacts. Difficult decisions have had to be made.”
Better-than-expected commodity prices on the sale of electricity have also provided the City with greater fiscal capacity than had previously been expected, says Spearman.
“We are seeing what the (COVID) impact has been so far,” he explains, referring to the City Treasurer’s report presented during Monday’s city council meeting. “There has been a deficit in operations despite those cutbacks which has been offset by favourable commodity prices for energy; so $1.4 million favourability in energy we didn’t anticipate has offset the deficit in operations by over $1 million.”
The City has also not had to tap into its extended $60-million credit line to help pay for the community’s response to COVID-19.
Spearman says so far so good, but he anticipates the full impact of the crisis might not be known until the property tax deferral deadline passes on Sept. 30.
“What is very important to emphasize at this point is this is very preliminary information; so we will have a better understanding as we learn more about whether people have been able to pay their utility bills, who have deferred them, whether people will be able to pay their taxes, and whether businesses are able to pay their taxes,” he says. “We hear some disturbing stories about businesses that have gone under, and aren’t recovering. Of course, those are not good stories to hear, and we hope that can be minimized.”
Referring specifically to the recent closure of Average Joe’s Sports Bar downtown, Spearman acknowledges the difficulties many small businesses are facing in Lethbridge at the moment.
“They are basically an institution in the downtown and it’s a sad story to hear,” he says. “It’s challenging for entrepreneurs at the moment, but on the other hand there is also positivity in the businesses in the downtown who are optimistic about the future.”
Spearman also sponsored a motion during Monday’s city council meeting, which passed unanimously, to direct City staff to prepare to make cuts of anywhere between five and 10 per cent during this November’s budget review.
“Over the past few years taxpayers have asked us to look at the City’s level of spending, and of course complementing that is the level of services we provide to citizens,” he says. “Going forward, if it’s going to be economically challenging, we have to look at how we need to be positioned to maybe make some structural changes at the City of Lethbridge. When we are talking about a five per cent or 10 per cent reduction in expenses; those are structural changes. Those aren’t one-time cuts. We have to look at those carefully and see what the impact will be on residents and businesses.”
On the positive side of things, council’s current four-year Capital Improvement Program is going full steam, says Spearman,
“What we heard was there were 80 projects (planned) and 52 are in progress,” he confirms.
Spearman says he is also looking forward to hearing further details of the province’s stimulus plans, one major part of which was announced in Lethbridge on Tuesday with a $27.8-million commitment to building a new agrifood hub at Exhibition Park.
During his recent visit Premier Jason Kenney also confirmed $200 million in additional infrastructure (MSI) funding for all municipalities was on its way. There is no word yet on what Lethbridge’s share of that might be.
“There may be additional (capital) projects that will come forward sooner rather than later,” Spearman says.
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