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Town of Oakville takes $13.4 million COVID-19 financial hit

Covid-19 Financial
Town of Oakville takes $13.4 million COVID-19 financial hit
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Kim Arnott

Kim Arnott

Kim Arnott is a graduate of McMaster University and Sheridan College’s journalism program, her reporting has appeared in dozens of daily and community newspapers, magazines and specialty publications over the last two decades.

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Oakville’s COVID-19 financial cost is expected to hit $13.4 million this year.

But the town, forbidden by Ontario law from running a deficit, is still in solid financial shape, says treasurer and acting commissioner of corporate services Nancy Sully.

The town will lose about $19 million in revenue from bus fares, recreation programs, building permits and parking fees, according to a report presented to a virtual town council meeting on Monday.

Waiving penalty and interest fees on unpaid property taxes for the remainder of 2020 – a move that councillors approved during the meeting – will cost an additional $2 million.

Some of those extra costs will be offset by pandemic-related savings, with lower than budgeted spending on staff, fuel and supplies.

Along with leaving unfilled full-time positions vacant, the town laid off more than 900 part-time, seasonal, casual and temporary recreational staff as of April 1.

Last year’s $4.5 million surplus will help cover the projected $13.4 million hole in the budget, with reserve funds used to cover the remainder of the shortfall.

And while $7.1 million will be pulled from the town’s tax stabilization reserve, Sully said the town’s reserves will still exceed recommended levels.

“We are in a good place for this year,” she said, but added a warning that the financial picture could darken if revenue-generating programs are slow to restart, cost more to run or if participation is low.

Solid financial management has put the town in a strong position to weather the massive budget hole, said Mayor Rob Burton, but he isn’t happy to see the town’s savings spent to cover the COVID-19 financial hole.

“That’s one-time money,” he says. “Once it’s gone, we’ve got a problem.”

He warned that financial pressures on the municipality may result in higher fees for recreational programs and cuts to services like transit.

“It’s essential for the relighting of the economy that people get to work and for some people to go shopping,” he said. “It would be a shame if we couldn’t afford to run a transit system.”

As a result of the pandemic, the town has also deferred $71 million dollars in capital spending until next year.

The 185 delayed capital projects include technology infrastructure upgrades, bus equipment and shelter replacement, fitness equipment purchases for recreation centres, park renewal and rehabilitation projects, work on the Bronte Harbour walkway, and vehicle and furniture replacement.

The town will also delay a range of studies and surveys related to parking, libraries, zoning and recreation.

The full list of deferred projects can be found on Appendix C of the April 23 Council Agenda Addendum.

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