City on track to come out $3 million ahead of 2021 budget figures, largely thanks to provincial aid, says report.
THUNDER BAY – New financial projections indicate the City of Thunder Bay could reduce its pandemic-related losses to just over $2 million in 2021, significantly below earlier estimates.
All told, the city is projected to finish the year about $3 million ahead of estimates in the 2021 budget, says a quarterly financial variance report from city treasurer Linda Evans. The report updates the budget’s financial projections based on information from the first quarter of the year.
The city projects cutting COVID-related losses from $3.9 million in the budget, to $2.1 million, largely thanks to relief funding announced since the budget was passed.
Aside from trimming pandemic losses, the city also projects a non-COVID-19 favourable variance of $1.2 million in its operations by end of year.
The combined $3 million favourable variance represents 1.1 per cent of the city’s total net budget of $273 million.
Any COVID-19 losses will be covered by the city’s stabilization reserve fund, which sits at over $12 million.
Evans hoped the city could reduce the pandemic impact on that fund even further, below the new $2.1 million projection.“As we move on through the year, we hope the reserve funds are needed even less,” she said.
Trimming COVID-19 costs
The impact of the pandemic on city coffers will fall from $3.9 million to $2.1 million, the new variance report projects.
A large part of that reduction comes thanks to $1.5 million in municipal recovery funding, and $1.2 million of Phase 3 Safe Restart funding for transit, both announced in March.
The municipal recovery funding can be used to cover a broad range of pandemic operating costs and pressures throughout the year. Any surplus can be placed in a reserve to cover COVID-19 costs in 2022.
The City was allocated up to $3.1 million in Phase 3 transit funding, to cover costs incurred from April 1, to Dec. 31, but estimates losses of only $1.2 million. Any surplus must be returned to the province.
Other major drivers include around $300,000 in savings in recreation and culture, primarily from wage savings related to facility closures, and about $100,000 saved from reduced childcare operations.
On the other side of the ledger, the city projects it will receive $800,000 less than forecast in parking revenues, and $600,000 less in casino revenues.
The projections assume Thunder Bay will remain in shutdown in April, move to Red zone restrictions in May and June, and to the Green zone for the remainder of the year.
“We had to make some assumptions,” said Evans. “Our forecasts right now are assuming things will improve and that things will open up to the public. If there are further restrictions imposed… we will provide updates to our variances.”
Favourable variance of $1.2 million
The city’s projected $1.2 million non-COVID-related favourable balance is largely made up of about $500,000 in newly announced grants for the Thunder Bay Police Service, projected fuel savings of about $400,000, and interest payments projected to be about $200,000 less than anticipated.
The city is also expecting $6.6 million in one-time top-up federal Gas Tax Funds, through the Canada Community Building Fund, announced by the federal government in late March.
The additional funds can be used for a broad range of purposes including transit, sport and recreation, and municipal infrastructure including drinking water, waste, and disaster mitigation.
City administration will report back in the second quarter of the year with recommendations on where the additional $6.6 million could be spent.
Administration is projecting no significant variances within rate supported operations for Waterworks, Wastewater, Solid Waste and Boater Services.
source tbnewswatch