COVID-19's Net Revenue Impact on Burlington to June 30 is $200K -- and That's Good News

COVID-19
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At Monday's (April 20) Burlington City Council meeting, staff presented our three-month plan for our COVID-19 emergency response strategy and highlighted the financial impacts to the city up to June 30, 2020.Throughout this unprecedented and extraordinarily challenging time, City staff has worked hard to balance the essential needs of our community with a steadfast commitment to fiscal responsibility and respect for our taxpayers.I am grateful to staff for reporting the numbers to council on Monday that allow us to be transparent and accountable to the public along with a thoughtful plan to see us through this crisis with minimal financial impact. Many decisions were made at council that will help us stay safe and manage ongoing risk.We heard from staff that after factoring in revenue loss, savings and cost-cutting up to June 30, 2020, the net revenue impact of COVID-19 to Burlington is $200,000. While that may seem like a lot, it's a better picture than what we're seeing from some other municipalities, so this is a piece of good news.This shortfall can be covered by our tax rate stabilization reserve or other measures.I do think there is some confusion around reserve funds and how they're used mainly because there are so many different types at the City of Burlington. We have some that act as holding accounts for specific projects, that we only use for those projects, and others that are more like “rainy day” reserves to account for unplanned events. Today, our rainy day is called the “COVID-19 pandemic.”The rainy day reserves are created to provide for revenue or shortfall fluctuations year-to-year, so we don’t go back to you, our taxpayer, and ask for more funds in a shortfall year.In good years, revenues that exceed expenses go into those funds, so we'll be able to draw on those reserves in a year of shortfall. For some reserves, we provide an annual provision in our budget to keep the balance up, so it’s there should we need it.The winter control reserve is an example. We set an annual budget for winter control based on an average use. In a mild winter, like we had last year, we will have a surplus that stays in the winter control reserve, so that when we have a bad winter we can draw from the reserve without increasing taxes to increase the overall annual winter budget.Another example is the downtown parking reserve fund. Revenues from paid parking and fines go into the fund, and expenses related to parking (for example, the purchase of parking machines, paving lots, etc.) come out of the fund, and the surplus between the two goes into the reserve. This year, the city chose to offer free parking downtown during the COVID19 emergency. We also relaxed ticketing, given more people working from home and fewer people are out, so fine revenue is also down. So, there will be a shortfall in parking revenue, and a subsequent draw from the reserves this year due to these measures that have been welcomed by the community. But the reserve balance (more than $9 million) can accommodate the shortfall because of the many years of surplus.In short, there are reserves set up precisely to cover shortfalls due to unexpected events -- in this case a global pandemic -- to allow us to absorb these shortfalls without raising taxes or issuing debt.In conclusion, the three month picture for Burlington is very positive, due to the financial planning at the city, and our provision to reserves for “rainy day” unexpected events.That said, we also know this is just the picture for the next three months, and continued shortfalls will not be sustainable. To that end, we have asked staff to provide monthly financial updates (normally we get them quarterly). At our May City Council meeting, staff will also provide a financial picture to the end of the year, with various scenarios, from “worst-case” -- the crisis extends fully to the end of the year; to mid-case -- the crisis is lifted by fall 2020; to “best-case” -- the crisis ends at the end of June 2020.We will continue to look for ways to cut costs, realize savings or use reserves where appropriate.Residents can rest assured we are taking the necessary steps to plan ahead and reduce costs wherever possible while ensuring the essential services our residents depend on can continue.-- Mayor Marianne Meed WardRELATED LINK:

—PLEASE NOTE: To stay updated on what the City of Burlington is doing regarding COVID-19, please visit the dedicated pages burlington.ca/coronavirus (and subscribe) and bit.ly/mayormeedwardCOVID19updates, and our Frequently Asked Questions (FAQ) page — bit.ly/COVID19BurlingtonFAQ that are updated as new information becomes available.A Burlington COVID-19 Task Force has been created to help support our community through this unprecedented emergency — updates will be provided at burlington.ca/COVID19taskforce.To report an incident of non-compliance with provincial emergency orders, please contact the Halton Regional Police Service COVID-19 Hotline: 905-825-4722.We’ve also created a dedicated page to feature the local organizations and businesses that have inspired us during the COVID-19 pandemic by taking action to support our community in new and creative ways — head to bit.ly/covidwallofinspiration.HELPFUL RESOURCES & RELATED LINKS:

—*Posted by John Bkila, Mayor’s Media and Digital Communications Specialist

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