Greater Sudbury's finance and administration committee met Tuesday and gave the go-ahead to use up to $5.5 million in funding from the city's capital holding account reserve, if required, in order to partially fund the year-end deficit due to COVID-19.
The city is projecting a potential net impact of lost revenues and costs related to the pandemic to be $5.1 million by the end of June and depending on response requirements, that number could rise as high as $14 million by the end of the year.
Staff presented the committe with capital projects that are complete, those that have been cancelled and budgets that can be reduced to fund projects that require additional funds. With the approval of the finance and administration committee, $5.5 million can drawn from the capital holding account reseve to partially fund the COVID-19 deficit.
The decision did not come without a point of contention, as Ward 4 Coun. Geoff McCausland raised an amendment to have one specific capital project that has had no activity for the past 24 months and was slated to be scrapped to clear up $300,000.
The project discussed was a therapeutic pool, and McCausland expressed a measure of disappointment that he was not informed beforehand that the project was on the chopping block.
"It would be a serious slap in the face to all the people who have donated, for us to let this disappear in this manner without some kind of fullsome discussion in the appendix of another report," said McCausland.
"And frankly I must say I was a little disappointed that I wasn't contacted about it before it appeared in this report. So I would appreciate if we have that discussion at another time and not do that here and now."
The committee supported McCausland's amendment and ultimately voted unanimously in favour of being able to pull up to $5.5 million from the capital holding account reserve.
Within the latest COVID-19 financial impact report, the city is estimating a revenue loss of $2.2 million by the end of June, just in transit services. The city is anticipating resuming fare collection on GOVA buses starting June 15.
Landfills have been re-opened, but the city is still projecting a total loss of around $175,000 in tipping fee losses by the end of June. Approximately 88 per cent of the revenue loss is attributed to a reduction in commercial activity and the balance based on landfill site restrictions.
In response to these losses the city has axed its summer student program for 2020 and has also revised its salary gapping plan up to $2.5 million.
The 2020 budget included a plan to avoid $1 million in salary and benefit costs by delaying the hiring process for positions when they become vacate, where appropriate to do so.
To offset some of the net costs created by the city's COVID-19 response, that number has been revised to $2.5 million. Vacant positions will be kept open longer, creating a resource gap that saves money but also increases the potential for service levels to be lower than expected.
Current estimates indicate the total cost of the corporation’s COVID-19 response to the end of June is approximately $9.6 million. This includes the need to redirect resources worth approximately $4.5 million to support the response instead of delivering planned results described in the 2020 budget.
As a result, the city is facing an incremental impact of $5.1 million to the end of June. Staff will continue to monitor these costs and provide monthly updates to the finance and administration committee.
Full report can be found here.