Emergency bailout cash has filled the COVID-sized hole in Oakville’s 2020 budget, but 2021 may still present the town with fiscal challenges.
Over the last week, Oakville councillors have received updates on the town’s current financial situation and the outlook for next year’s budget.
Despite early alarm around the impact of the pandemic on revenues, this year’s financial situation is “the good news, or the less bad news perhaps is a better way to describe it,” said Mayor Rob Burton.
While the town is expecting to end the year with a $6.4 million budget gap, that hole will be more than filled thanks to an emergency grant of $6.9 million from the federal-provincial Safe Restart Agreement.
Massive drops in revenue from transit fares, recreation bookings and assorted fees are the main reason for the shortfall, although savings from staff layoffs helped reduce the gap.
But the emergency funding means the town won’t need to pull money out of reserve funds to cover the impact of the pandemic.
It can also carry over the extra money from the emergency grant to 2021, according to a report presented to the Sept. 21 meeting of town council.
And based on next year’s budget predictions, a bit of extra cash will likely come in handy.
“Staff are currently preparing the 2021 budget and believe that many of the impacts of the pandemic will be felt longer term, and will carry into the early part of 2021 at minimum,” says the report from Nancy Sully, the town’s treasurer and acting commissioner of corporate services.
Those impacts include reduced transit ridership and lower than expected revenue from recreation and culture programs.
Back in July, town staff warned the budget committee that about $10.7 million in budget cuts or new revenues would have to be found to meet the goal of keeping 2021 property tax increases in line with inflation.
During a Sept. 15 meeting of the town’s budget committee, staff outlined some of the actions it will use to reach that goal.
These include “temporary mitigation measures” such as:
- One-time reductions to part-time or casual staffing
- Temporary gapping of vacant full-time positions
- Partial closure or reducing hours at facilities such as stand-alone arenas and facilities within schools
- Reductions in programming materials, fuel, utilities and contracted services that correlate to COVID service modifications
- Temporary reduction to contracted maintenance and repairs and operational maintenance activities
- Reductions in office supplies and professional development and training costs
The budget committee has also voted to waive the policy of adding an annual one per cent capital levy to the 2021 budget, a decision that will save about $2.1 million.
But even with those moves and other departmental efficiencies, finance staff say another $3.2 to $4.6 million is needed to meet the target.
One source of funds could be the reserves that were not tapped in 2020, suggested Sully’s report.
Town staff will continue to work on next year’s budget, with a planned public release of November 17.
Staff presentations are scheduled for Nov. 19, followed by public delegations on Dec. 1 and 3. Council deliberations and recommendations are planned for Dec. 15.