How London hopes to cover $58M in COVID-related costs in 2021
Published Wednesday, April 21, 2021 7:11PM EDT Last Updated Wednesday, April 21, 2021 7:12PM EDT
LONDON, ONT. -- The pandemic will take another massive bite out of city hall’s budget this year, and the options to fill the financial hole are limited.
A new budget report to city council estimates COVID-related costs and lost revenue will total $58.3 million in 2021. Continued belt-tightening by the municipality and anticipated senior government funding will still leave a pandemic-related deficit of $12.9 million.
Budget Chair Elizabeth Peloza emphasizes its an early estimate, “We’re waiting on other government funding to come through, and we’re waiting to see if we can open up normally, or what life will look like this year.”
Last year, pandemic-related costs reached $69.4 million dollars at city hall and its agencies including London Transit and the RBC Place Convention Centre.
However, senior government bailouts and cost containment at city hall resulted in a $22.3 million dollar surplus.
The city treasurer recommends council redirect last year’s pandemic surplus to mitigate this year’s anticipated loses.
“Taking action to put that surplus away, squirrelling it away, will help mitigate any of the issues we have in 2021,” explains Councillor Peloza. “But we’re still projecting losses out into 2022.”
Specifically, the treasurer recommends $3.5 million for the RBC Place Convention Centre, to both offset losses expected in 2021 ($2.5M), and to ensure a $1 million contribution still goes into its reserve fund for future upgrades and repairs.
“The COVID-19 pandemic has had a devastating impact on RBC Place London (Convention Centre),” reads a separate report on the facility’s financial outlook.
The convention centre has laid off 90 percent of its staff, implemented 15-25 percent pay cuts to remaining employees, and drained two reserve funds.
Other municipal agencies and assets are also struggling.
Fare revenue at London Transit reflects the loss of about half its usual ridership, and the Covent Garden Market saw revenues drop $1.5 million in 2020.
Meanwhile, reliable revenue streams for city hall have dried up, including the hotel tax, slot machine revenues, and Budweiser Gardens.
The budget report goes on to warn, “if pandemic-related restrictions intensify or persist longer than anticipated, and significantly exceed the current projected financial impact, other measures may be necessary.”
Councillor Peloza says that may once again require municipalities to turn to the provincial and federal governments.
“We’re all in this together. Taxpayers can only shoulder so much, and we will need help.”
The financial impacts of the pandemic will be discussed by city council on Tuesday.