CFO recommends one time COVID-19 funding to all Canadian municipalities
Jenna Cocullo, Local Journalism Initiative
Chatham-Kent’s chief financial officer is set to present a report to council at Monday’s meeting outlining recommendations to recover $2 million of tax dollars lost in the pandemic.
“The Municipality of Chatham-Kent is facing unprecedented financial pressures as a result of the COVID-19 response and the economic fallout from the pandemic, including an operating deficit and lower investment returns,” reads Quinton’s report.
The anticipated net impact of the response to the COVID-19 pandemic on the 2020 operating budget is $3.3 million. Quinton estimated $2 million of the deficit can be offset with service level adjustments, leaving Chatham-Kent $1.3 million in the hole.
If approved, services that are too “complicated” to start mid-way through the summer season, such as arenas, camps, pools and recreation will be closed.
“It is fair to assume that Chatham-Kent will not be made whole for increased costs and loss of revenues,” reads Quinton’s report.
To stimulate the economy, council would continue to contract out more than $50 million of asset- and infrastructure-related projects, which local businesses rely on annually. Redeployed municipal staff will continue to keep their jobs, as demand in places such as Riverview Gardens remains high.
Council will also discuss supporting the Federation of Canadian Municipalities’ request for one time COVID-19 funding to all Canadian municipalities.
The report highlights some inconsistencies in the distribution of taxes versus responsibilities. The municipalities receive none per cent of overall tax revenue in Canada while providing 40 per cent of services residents rely on.
It even cites multinational corporate giants like Amazon benefitting from the pandemic while using city resources.
“Amazon’s value has increased by $24 billion since COVID-19, with many trucks delivering all over Chatham-Kent, but pays no property tax to Chatham-Kent,” reads the report.
The report to council did acknowledge that senior government programs and announcements change on a daily basis, so the analysis was done based on estimates and assumptions.
Legally, municipalities are not able to run deficits. A one-time special tax levy for Chatham-Kent residents should be expected in 2021 if they cannot recover the loss.