Mu­nic­i­pal rev­enues have plunged due to pan­demic

Mayor looks to se­nior gov­ern­ments amid warn­ings of $235M short­fall

Calgary Herald - - FRONT PAGE - MADE­LINE SMITH ma­ Twit­ter: @mek­smith

Cal­gary is star­ing down a pos­si­ble $235-mil­lion hole in city cof­fers this year — and there are likely more fund­ing short­falls to come.

City coun­cil looked at sev­eral pos­si­bil­i­ties for their fi­nan­cial fu­ture Thurs­day, with a gap that gets wider the longer pub­lic-health re­stric­tions last dur­ing the COVID-19 pan­demic.

In the best-case sce­nario pre­sented to coun­cil, if Cal­gary’s lo­cal state of emer­gency lasts two more months, the city faces a $145-mil­lion short­fall.

If it goes un­til the end of the year, that num­ber jumps to $235 mil­lion.

And that’s be­fore fac­tor­ing in money civic part­ner non-prof­its are los­ing, lost prop­erty tax rev­enue from home­own­ers and busi­nesses who won’t be able to pay, and the fis­cal hit to the Cal­gary Po­lice Ser­vice.

An in­ter­nal city doc­u­ment pre­vi­ously ob­tained by Postmedia es­ti­mated that civic part­ner agen­cies such as the Cal­gary Pub­lic Li­brary, Cal­gary Zoo and Arts Com­mons could lose a com­bined to­tal of $131.9 mil­lion of rev­enue over the next year.

The new num­bers laid out for coun­cil Thurs­day aren’t quite as dire as a pre­vi­ously pro­jected op­er­at­ing short­fall of up to $400 mil­lion for 2020, but city of­fi­cials warned that still isn’t out of the ques­tion.

“The gap is big,” city man­ager David Duck­worth said.

“We were hav­ing dif­fi­culty as an or­ga­ni­za­tion, as a city, as a prov­ince, PRE-COVID. It’s much worse now.”

Cana­dian mu­nic­i­pal­i­ties are call­ing for the fed­eral govern­ment to roll out an aid pack­age specif­i­cally to help ci­ties weather the fis­cal storm of COVID-19. Be­cause ci­ties in­clud­ing Cal­gary can’t run a deficit, they face an im­pos­si­ble sit­u­a­tion in 2020 as they try to make up the fi­nan­cial ground from ma­jor rev­enue streams such as tran­sit fares vir­tu­ally dry­ing up. At the same time, city chief fi­nan­cial of­fi­cer Carla Male said de­mand for most city ser­vices is steady, or even in­creas­ing, de­spite the pan­demic.

The Al­berta govern­ment has floated the pos­si­bil­ity of giv­ing ci­ties the tem­po­rary power to run a deficit. Mayor Na­heed Nen­shi said while that might help in the short term, it will mean rais­ing taxes in the fu­ture when the com­mu­nity is try­ing to re­cover from the cri­sis, and the bet­ter op­tion is di­rect fi­nan­cial help from the provin­cial and fed­eral gov­ern­ments.

In Cal­gary, trans­porta­tion gen­eral man­ager Doug Morgan de­scribed the city’s pub­lic tran­sit short­fall as “cat­a­strophic.” There are still 100,000 peo­ple rid­ing the bus and Ctrain ev­ery day — down from around 600,000 daily users.

This year’s tran­sit losses, Morgan said, could push $90 mil­lion.

The city has al­ready laid off about 10 per cent of its work­ers, most of whom would have been work­ing in recre­ation cen­tres and rinks that are closed.

Tran­sit ser­vice has also been re­duced across the sys­tem to match the drop in rid­er­ship, and prop­erty taxes and util­ity bills can also be de­ferred past their dead­line for Cal­gar­i­ans who need more time to pay.

Nen­shi said cuts alone won’t be enough to fix the city’s prob­lems dur­ing the cur­rent cri­sis.

“We’re look­ing at cuts ev­ery­where. Right now we’re in an emer­gency, and empty sym­bol­ism is not what I’m in­ter­ested in,” he said, point­ing to peo­ple who might push to cut any fund­ing to arts or­ga­ni­za­tions as a way to save money.

“Even if we did, it would solve maybe one per cent of our prob­lem — 99 per cent is still out there even if we got rid of the whole darn thing.”

Coun­cil voted in favour of a hand­ful of ad­di­tional re­lief mea­sures Thurs­day, tak­ing money out of dif­fer­ent re­serve funds to re­move fees for some de­vel­op­ment per­mits and busi­ness li­cence re­newals.

Fur­ther aid pulled from re­serves is still on the ta­ble, in­clud­ing $6 mil­lion for com­mu­nity as­so­ci­a­tions and $15 mil­lion to help the city’s part­ner non-prof­its. Coun­cil will re­visit that on May 11, when they’re due to talk about what COVID-19 means for their cap­i­tal bud­get.

As the prov­ince an­nounced the roadmap for open­ing the econ­omy Thurs­day af­ter­noon, Nen­shi said that will also guide the city’s ap­proach to the com­ing months.

Golf cour­ses will be al­lowed to open as early as Satur­day, but Nen­shi said there’s “no way” the city’s fa­cil­i­ties will be ready by then. “We’ve laid peo­ple off. Those are the peo­ple who would be prep­ping the greens.”


“The gap is big,” city man­ager David Duck­worth told city coun­cil on Thurs­day.

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