With several facilities shut down for nearly six weeks, a sharp drop in interest rates, and no revenue coming from the town’s recreational spaces, it’s a sure thing Collingwood’s bottom line will be impacted.
But, according to the town’s treasurer, neither the savings nor the losses resulting from COVID-19 are fully realized yet.
“The weekly burn rate … that is what we thought this was costing us or net loss revenues … figure we’ve arrived at is about $36,500 a week,” said Marjory Leonard, Collingwood’s treasurer.
The town was asked to calculate the information for the Federation of Candian Municipalities' ask for federal funding support.
“We won’t know the true impacts until probably sometime later in May when we can process all of the information we have,” said Leonard. “The largest revenue loss I predict we will have will be on interest income.”
Leonard said the town was earning 2.35 per cent interest and is now earning 0.75 interest. So in December 2019, interest revenue was about $183,000 and she predicts that will drop to below $100,000 in a month.
The town is also not collecting revenue from the arenas, the pools, or the Simcoe Street Theatre.
But those facilities are also not generating the same operating costs. There could be some savings on things like hydro bills, vehicle use, and fuel.
She’s waiting on bills to come in May for April utilities.
Leonard’s report was prompted by a request from Councillor Yvonne Hamlin who tabled a motion asking staff to present a budget review identifying cost savings and losses as a result of the COVID-19 crisis.
“I feel that … we have no information as a council on what the impact, financially, this disaster is having on us,” said Hamlin. “We can only do with what we have, but I am just always concerned that if we should be making changes to what’s in our budget, we shouldn’t be waiting until – I’ll just throw this out there – December because we’re going to be quite a bit in the hole by then.”
Both Treasurer Leonard and CAO Fareed Amin said staff would be able to present a comprehensive budget review in June.
Councillor Hamlin asked Leonard if the town was possibly going to run a deficit in 2020.
“I’m not sure we haven’t run a deficit in 2019,” said Leonard, noting she and her staff were working on year-end. “The judicial inquiry cost $5,155,000 in 2019, and it stripped all our reserves. There’s a potential there’s a deficit last year and one this year.”
In addition to a “comprehensive” budget review in June, council will also get a budget update at the Strategic Initiatives Committee on May 6.
“What I’m looking for … is some indication of where we are in the budget and whether we should be making changes now,” said Hamlin.
Deputy Mayor Keith Hull supported Hamlin’s motion but said it was important to note “for the public” that anyone “following along” is fully aware of what the town is doing financially due to COVID-19.
“We have, for all intents and purposes put things on hold from a spending standpoint,” said Hull, noting staff have put capital projects on hold. “It’s not business as usual and until we can make very good decisions as it relates to going back through the 2020 budget, we have put decisions on hold,” said Hull.
Council voted unanimously in favour of Hamlin’s motion to receive an update at the next SIC meeting and an anticipated timeline for when the more comprehensive financial statements will be ready.
The next SIC meeting is May 6, and council voted in favour of a motion changing the timing of all council and committee meetings, so it will likely be at 1:30 p.m.