By John Swartz
Orillia council has three meetings scheduled for Monday afternoon. The day starts with a 2 p.m. budget committee meeting for the purpose of council getting a picture of municipal finances in light of the COVID-19 epidemic.
The economic recovery task force has a report about the preliminary work they have been doing. This committee was established by the emergency management committee on April 3. Counicllor Ted Emond is the chair. The committee includes members from the chamber of commerce, the downtown management board, the CDC and the Orillia and Area Lake Country Tourism board. Ted Markle and Ron Shulman are also member of the committee.
To date they have gathered information from 12 sectors including commercial and residential landlords, marinas, hotels, restaurants, grocery stores, construction, festivals and events small businesses, not-for profits, manufacturing and non-essential healthcare providers. Notably absent from the list is the broader cultural sector.
The paperwork included in the agenda package does not give details and states the committee will be making a verbal report to council.
How Do The Books Look?
The treasury department has a report outlining tax policy and financial update.
Council will be asked to set aside up to $1 million from the tax rate stabilization reserve for a two year period to be used for social assistance and economic recovery directly related to the epidemic.
It is also recommended council transfer $1,384,000 from that reserve to the land acquisition reserve (25%) and the major capital facilities reserve (75%) to cover interest charged internally to those reserves.
And, staff are recommending council increase the Orillia Recreation Centre budget contingency by $650,000 and that an internal loan of $628,000 related to 2 Hunter Valley Road be retired from the 2019 surplus.
Speaking of surplus, the above allocations are a result of the final 2019 budget results, which had a general surplus of $1.2 million, and another $1.3 million was realized from income received in addition to the 2019 budget forecast. The City also earned $774,000 in interest income. 2019 was a good year for construction projects too, $3.5 million budgeted was unspent and returned to reserves. Staff report the 2019 assessment base grew by $915,000.
Before council gets into allocating any surpluses on Monday (which traditionally go into the tax rate stabilization reserve before being moved into any other accounts) the reserve balance stands at $5 million.
The treasurer, Jim Lang, is letting council know there will be some issues relating to the 2020 budget because of the epidemic. He is expecting lower user fee revenue, lower revenue from programs and services, higher costs to emergency response service, but some savings from staff layoffs, deferral of filling open positions and delays implementing approved initiatives.
There are too many unknown factors to accurately predict how finances are going to be affected, but staff say reduced revenue and additional expense may be approximately $2.5 million, which include $1 million less in water and sewer charges because we’re using less water right now. They also say cost containment measures (laying off staff, etc.) is saving $1.5 million, not opening the new rec enter are saving $500,00 in operating expense, and the City has money in hand from the province for $473,000 for a ‘transitional’ grant which was not in the budget.
Utility Rate Review Re: COVID-19
Environmental services has a report outlining some options for council budget committee to consider in light of the pandemic. Water usage has dropped by 33% in April compared to April 2019. This is reducing revenue by $1 million, and will reduce by the same amount for each subsequent 3 month period of lower usage.
Water, sewer and storm water rates were approved to increase in April. The increase in rates was approved in 2019, and covered a 4 year period. Staff outline a number of options to reduce rates because of the epidemic and are recommending freezing the rates at 2019 levels for 6 months and then applying the rate increase. This will decrease 2020 water revenues by $601,000 and save residents approximately $30 on their annual water bills.
The committee meeting is scheduled to start at 4 p.m. There is only one item on the agenda and it is a report on the Downtown Tomorrow Community Improvement Plan.
In March 20-19 council approved grants to NABI for a development at 4 King Street. The property has since been sold to McLean & Dickey Insurance Ltd. and they have asked the tax deferment grant be transferred to them.
McLean & Dickey are proposing to make $200,000 to $250,000 of exterior renovations to the existing building. They have a lease expiring at another location and say they need to get moving quickly on their plan for 4 King Street. However they also say it represents a portion of the $1.5 million renovation to the building and the exterior improvement will only go ahead if they receive the grant.
Another grant was made at the same time to Sterling Group for a development at 144 Elgin Street. This project has been delayed because of unforeseen environment conditions and will not meet the condition of the grant for occupancy in 2020.
Staff are recommending to receive the report, which means do nothing. They say since conditions have changed the purpose of this portion of the DTCIP program has concluded. Both property owners could re-apply in 2021.
Regular Council Meeting
Regular council meetings formalize decisions made in committee and enact by-laws. The only agenda item coming from earlier in the day is the committee report, and there are 2 items on the consent agenda; those things usually pass in one motion with little discussion.
One of those consent agenda items is a letter from Ontario’s solicitor general informing communities the deadline for submitting Community Safety and Well-Being plans is extended past the Jan. 1, 2021 due date, to an as yet undetermined time.
Council will be televised on Rogers TV.