For months now, local news broadcasts repeatedly mention the dire financial impact of the pandemic on the finances of the City of Kawartha Lakes, indicating the combination of lost revenues and increased expenses has left a deficit exceeding $3 million. What is the impact in Cavan Monaghan?
Many the biggest expenses in the township budget are unaffected by the pandemic. Roadwork, waste management, police and fire department services continue, as do most planning activities because of their long horizon. The pandemic has hit the township through increased expenditures and revenue losses. Director of Finance Kimberley Pope is tracking incremental expenditures across all departments that can be attributed to the pandemic. In her report presented at the August 4th Council meeting, the township incurred $97,168 in COVID related expenditures as of June 30th. These expenditures are within the approved budget but are being tracked to facility recovery should some form of assistance become available.
On the revenue side, there are fees that have been waived and others that are not being collected because services are not available.
At the onset of the pandemic, the township waived late payment penalties up to August 31st. These revenues fund a variety of administrative expenses in the annual Operating Budget. These waived fees will total $100,147 by the end of August. Late fees will begin to appear in the next tax bill, starting with amounts from periods prior to the pandemic.
The other significant source of lost revenue is from facility rentals. These have been slightly offset by reduced operating costs. There will have been approximately $89,330 in lost revenue from recreation facilities including the CMCC, the arena, Maple Leaf Park and the Old Millbrook School, bringing the total lost revenues to $189,477 by the end of August. The shuttering of OLG operations at Kawartha Downs has eliminated revenue that was to help offset the CMCC construction cost overruns.
It could have been a lot worse. When things shut down in the 3rd week of March, the season for ice sports was winding down, so ice rental income was about to drop significantly in a few weeks. Summer program staff had not been hired, and part time staff in the facilities were laid off. Building operating costs including cleaning and air conditioning were also cut dramatically. The facility will not reopen until October at the earliest, and its rental revenue will depend on the decisions of various user groups who must decide if they are prepared to operate under the new safety protocols.
To date there has been no significant impact on this year’s capital projects as there is very little flexibility in the short term for these expenditures. Most of these projects have already been tendered and the contract awarded.
So while Cavan Monaghan has taken a few hits, we’re not in such a bad place, particularly after the recent emergency funding announcement from MPP Laurie Scott. A few weeks ago our local MPP announced $8 million dollars in provincial assistance for municipalities in her riding of Haliburton-Kawartha Lake–Brock in response to the COVID 19 pandemic. It is the riding’s share of the $695 million of the Phase 1 emergency funding created to address municipal operating pressures arising from COVID. Allocations were calculated on a per household basis, with Cavan Monaghan’s share totalling $217,100. There is a second phase of equal value for municipalities facing impacts that exceed this initial distribution. Municipalities must apply for this phase. If the township is eligible, staff is ready to apply when the details are released.
We’re not out of the woods yet, but as long as we avoid a “second wave”, we should come out of this with a few bruises rather than body blows. The 2021 budget process just became a lot more complicated. KG