THUNDER BAY – The City of Thunder Bay expects to finish 2020 with a surplus despite the COVID-19 pandemic, largely thanks to millions in assistance from upper levels of government.
City leaders had feared COVID-19 could wreak havoc on its finances earlier in the pandemic, to the tune of up to $13 million. A previous update in July had trimmed estimated losses to $7 million.
However, city treasurer Linda Evans now expects the city to balance its books and then some, ending 2020 with a surplus of $1 million in its tax-supported operations.
That should also leave $2.8 million in unspent federal-provincial “Safe Restart” funding for 2021. The city received a total of $9.4 million from the fund this year.
The encouraging numbers will be presented to city council on Monday as part of its quarterly financial variance report, which compares year-to-date numbers against the 2020 budget approved by council in February.
The turnaround comes thanks to federal and provincial assistance, revenues from the reopening of recreation facilities, savings from temporary layoffs, and other factors.
The newest financial update indicates upper levels of government stepped up with enough support this year, said Evans, but she anticipates more will likely be required in 2021.
“It certainly is adequate for 2020, however we know higher cost and lower revenues are going to continue,” she said.
Before accounting for savings and Safe Restart funds, those two factors – increased costs and decreased revenues – left a more than $16 million hole in the city’s budget in 2020.
The city will end the year with $13 million in lost revenues, largely from transit ($3.3 million), recreation ($2.6 million), casino revenues ($1.7 million), child care ($1.2 million), and parking ($1.1 million).
Meanwhile, the city’s two long-term care homes, the purchase of pandemic supplies such as PPE, and Superior North EMS were the largest drivers of $3.5 million in anticipated additional costs due to COVID-19.
On the other side of the ledger, the city found nearly $12 million in pandemic-related savings, largely from substantial temporary layoffs of city workers, reduced spending on supplies, fuel, and utilities, and a reduction of around $1 million in planned capital spending.
The city’s solid waste department, supported by rate-payers rather than tax revenue, also took a hit of over $1.3 million, mostly from lower commercial user fee revenue. The difference will be offset by Safe Restart funding.
Evans stressed that some uncertainty remains – particularly related to casino revenues, which she said could vary by up to $200,000 from projections – with two months remaining in the year.
