Pandemic costing City of Kitchener $11 million

KITCHENER — The COVID-19 pandemic is costing the City of Kitchener more than $11 million in lost revenues, the city’s chief financial officer warned in a report to council.

The biggest hit for the city has been a huge loss of revenue from recreation fees, for things like swimming lessons, March break camps and arena rentals. The loss of that revenue is expected to amount to $7.4 million by the end of the year.

But revenues are down in departments across city hall: city parking lots and garages have collected $1.5 million less, as commuters work from home; city golf courses are closed and facing deficits; fines from bylaw enforcement are one-10th of what they normally are for April and May, as bylaw officers focus on safety issues rather than writing parking tickets; revenues from planning permits, business licences, special events licences, market vendors and even marriage licences are all down.

The city has tried to limit the damage by cutting costs. It has trimmed staff costs by about $4 million, laying off more than 900 employees, such as Kitchener market employees, crossing guards, and recreation staff, among others.

The city has saved on utility costs because no-one is flushing toilets or turning on lights in city buildings.

Those measures, along with cost-cutting for things like mileage, meetings and office supplies, mean the net hit to the city is a projected $5.7 million deficit in 2020 because of the pandemic.

The city will draw on its reserves to cover the deficit, since cities must submit balanced budgets.

The move will wipe out the city’s $4.5 million tax stabilization reserve, which the city draws on to avoid sudden tax increases.

“The goal will be to try to cover the deficit within the current year,” said Jonathan Lautenbach, the city’s finance chief, in the report. “This may require that funding be transferred from other reserves and highlights the need for other levels of government to provide financial assistance to municipalities.”

As the province allows city facilities to reopen, the city should be able to collect some recreation fees, but restrictions on the numbers of people allowed in public spaces will mean revenues won’t bounce back to where they were, while the city faces extra costs for things like protective barriers, installing signage and floor markings and extra cleaning, he said.