Pandemic costs top $68 million at city hall and LTC
LONDON, ONT. -- The financial impacts of COVID-19 continue to mount at city hall, but the 2020 budget still projects a multi-million dollar surplus.
Council’s latest budget update estimates the financial impacts of COVID-19 at the city and London Transit Commission (LTC) will total $68.4 million by the end of this year.
But Budget Chair, Councillor Josh Morgan credits cost-cutting measures and COVID-19 grants from senior governments will result in an estimated surplus of $15.3 million.
Dire predictions in the spring of a massive budget shortfall have been avoided.
“I know these have been tough decisions for Londoners with the reduction of service,” says Morgan. “but we’re now positioned to be well prepared for the future. It’s a position many other municipalities are not in right now.”
The city treasurer recommends the surplus be used to bailout the RBC Place Convention Centre, restart projects that were put on hold, create a $5 million economic recovery fund, and set aside the remainder for pandemic costs in 2021.
• RBC Place Convention Centre Grant $1.6 million
• Restart Capital Projects $1.1 million
• Restart Business Case Investments $1.3 million
• Economic Recovery Reserve Fund. $5.0 million
• Contingency fund for 2021. $6.3 million
There remains some uncertainty as the financial estimates in the report were made before this week’s rise in COVID-19 cases in London.
“If circumstances change in the province or new regulations come in place, obviously those estimates will have to be updated,” says Morgan.
He adds despite a good financial outlook through the end of 2020, city hall and the LTC still face difficult financial challenges related to the pandemic looming in 2021.
“The initial cost estimates are already outstripping the surplus estimates for 2020, and that’s assuming things go as we anticipate.”
In August, the province and federal government agreed to a $4 billion bailout for Canadian municipalities. London’s share, $40.5 million included $22 million for city hall and $18.5 million for public transit.
The report on year-end pandemic costs will be discussed by city council members on Sept. 21.