Despite a decrease in revenues due to the Coronavirus pandemic, the city is on pace to break even financially by the end of the year — avoiding the need to borrow funds. Council is also considering measures to ease the burden on ratepayers impacted by COVID-19.
Timmins council received a second-quarter financial update at its Aug. 11 regular meeting.
“I’m very pleased the City of Timmins took action very early to limit expenses in the wake of reduced revenue,” said Deputy Mayor Andrew Marks. “We were almost ahead of the curve. Nobody knew how the pandemic would affect us. Nobody knew what timeline would be involved. We’re looking very much, at the end of the 2020 tax year, like we’re breaking even.
“That will be a positive for the city and certainly a strong message that the right direction was taken early on to help us in this situation so we don’t have to borrow any funds … at the end of the year.”
The outlook does not fact in special funding coming from upper levels of government to cover losses caused by the pandemic.
“As you know, the federal and provincial governments announced certain moneys available to municipalities,” Marks said. “We haven’t even put that list out yet to the province because we’re still waiting for the formulas for municipalities to be able to apply for extra losses that occurred.
“I’m optimistic. But, with this pandemic, every month, every week, every day, something seems to change.”
The report was presented by Natalie Moore, the city’s director of finance. While the city is on pace to break even by the end of year, she cautioned that Timmins is “still very vulnerable in the second half” of the fiscal year depending on what happens with the pandemic.
“With the tax bills being sent out in May, the largest portion of our revenue has been recognized in the second quarter,” she said in her report. “All revenues are impacted by COVID-19 and are close to 40 per cent of budget, where they should be closer to 50 per cent being midway through the year.”
Provided there are no major setbacks, the year-end should be as predicted.
“The total lost revenue to date for the end of June is $2,643,904,” Moore said in her report. “We are still forecasting the total lost revenues to be close to the previously presented amount of $2,900,00 as there will be a slow return to normal operations from now to year end for air travel, sporting activities, court, etc.
“The building department has seen their levels return to normal in June. While the issuance of building permits was on hold from March to May, the staff were still receiving applications and reviewing them, which is why we see an increase in revenue in June because all the permits were issued in June.”
The report also showed the Archie Dillion Sportsplex pool remains closed. But the Whitney Arena was scheduled to open Aug. 10 to allow for ice rentals. When the report was written, ice rentals were already 52 per cent booked.
“The revenue impact on our facilities for the fall remains unknown at this time and are dependent on sporting activities resuming to normal levels in September,” the report stated.
The report also sought input from council on possible relief measures for local taxpayers.
One issue that garnered discussion was rent for city-owned facilities. Three options were provided for council to consider:
• Do not provide any relief for lease holders, which would have no financial impact on the city’s bottom line;
• Provide 100 per cent relief for the months of April to June. This would include businesses that remained partially open and those closed during the pandemic. The impact would be a decrease of $97,508 in revenue; and
• An application-based relief program similar to the provincial program. It is for businesses that have seen a revenue drop of 50 per cent for the months of April to June. The city would waive 25 per cent of the rent for that period, 25 per cent would be paid by the tenant, and the remaining 50 per cent would be amortized over the remaining term of the lease.
“There is a mix of our lessees that remained open, were partially open and fully closed. The estimated impact to our bottom line to waive 25 per cent of the rent for all renters from April to June would be $25,000,” the report stated. “We have consulted other municipalities in the North and, at the time of this report, Thunder Bay was the only other municipality offering rent relief to the lessees.”
Council seemed to favour the application process option, with some tweaks brought back to the next council meeting.
“I would go with option three,” said Coun. Noella Rinaldo. “$25,000 is not a lot to the municipality, but means a lot for businesses to survive. I think that’s a fair option, given what we’ve been going through the last few months.
Coun. Joe Campbell said the Schumacher Lions Club’s leased facility was closed for the entire time period.
“The Lions were essentially locked out of their clubhouse,” he said. “I think there is a fourth option … those locked out entirely should get 100 per cent relief.”
Administration also sought direction for possible relief for tax and water accounts. Two options provided were:
• Do not provide any relief for tax and water accounts that fell into arrears during the pandemic. This would have no financial impact on the bottom line; and
• Offer an interest-free payment program to taxpayers who have been impacted by the pandemic to amortize their outstanding balance interest free over the next one to two years. This would be an application-based program. The financial impact depends on the number of applications approved.
“Option two provides more flexibility at the application level,” Marks said. “Also, we don’t know what will happen this fall.”
A resolution will be brought back to the next council meeting.
Marks said it is important that the city treats its ratepayers fairly throughout the crisis.
“We’re the grass roots of municipal government,” he said. “We go grocery shopping, we fill up at gas stations, so we’re constantly in touch. We see how people are directly affected by taxation.
“These measures … were very much a response from councillors to make sure we’re treating residents as fairly as we can.”
