The latest forecast shows the City of Prince Albert will receive a financial hit of around $1.5-million due to COVID-19.
That’s an increase of nearly $400,000 over the previous estimate. The $1.5-million figure is based on the most current information available as of Oct. 31.
City financial director Cheryl Tkachuk said there are some areas of concern, but overall she’s happy with Prince Albert’s financial picture.
“You hear a lot of cities (saying) ‘where are we going to get all this extra money from?’” Tkachuk said during an interview on Monday. “I’m really grateful that we’ve got the funding to cover the costs. I can sleep a little bit better at night.”
The $1.5-million figure could increase to $1.7-million in the coming months. A lot of that will depend on whether the City shuts down recreation facilities like hockey rinks or the Alfred Jenkins Fieldhouse.
Even if Prince Albert closes those buildings, Tkachuk said she doubts they’ll remain closed for long, which means the cost won’t be as severe as it was over the spring and summer.
The $1.5-million figure includes extra costs associated with the pandemic along with lost revenue. Declining interest rates are the biggest factor. The City has lost $194,285 in interest payments since the Bank of Canada reduced rates in March and April.
Tkachuk said that’s a considerable drop for the City, but they do expect to recuperate it down the road when they borrow funds for new capital projects.
“A one per cent (change) can make a huge difference to the cost of a project,” she explained. “I’m looking at it in that positive way. It’s good timing for us in some ways. I think we’ll save more money with our capital projects than we would lose in our operating revenue.”
The 2020 municipal election was also more expensive than expected. The City spent between $25,000 and $30,000 on extra training sessions, cleaning supplies, personal protective equipment (PPE) and signage. The City also employed more people than normal on advanced poll days and Election Day.
The City also won’t save as much as they initially thought from temporarily closing municipal buildings. New numbers show actual savings were $235,591 less than anticipated.
City administrators are still trying to collect on more than $400,000 in unpaid utility bills. Tkachuk said they’re trying to get more people on payment plans, but it’s been slow going. She estimates roughly $150,000 of that will never be recuperated.
Tkachuk said it’s difficult to know how many of those unpaid bills are due to COVID-19, since some unpaid accounts predate the province’s State of Emergency declaration.
Unpaid property taxes were not a major factor. Less than 50 property owners applied for an extension due to financial hardship caused by COVID-19. The remaining payments were received in a timely manner.
Despite the extra costs and lost revenue, Prince Albert will have a surplus when council heads into budget negotiations next month. The City received more than $5-million from the provincial government’s Municipal Economic Enhancement Program (MEEP) in July, plus more than $2.2-million from the federal government’s Safe Restart Program (SRP) in September.
Tkachuk said she doubts they’ll receive any additional funding, so the remaining surplus will have to last for the next two years.
“I feel a lot more comfortable, especially since we’ve got the additional funding (and) especially if we can keep it for the next year or two,” Tkachuk said. “We’ve got a little bit of money set aside for those things we know are going to have an effect on us for the next two years.”
The next financial update is scheduled for March.
