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Sudbury council sets aside special tax money for COVID-19 costs
Public washrooms at area beaches open Friday, Greater Sudbury has announced, as the city gradually restores services as part of the province's Phase 2 restart plans. (File photo)
SUDBURY -- With COVID-19 expected to create a $14 million deficit in Greater Sudbury by the end of the year, city councillors voted Tuesday to set aside $4.1 million in case it's needed to balance the books.
The $4.1 million will come from a 1.5 per cent levy approved this year, with an eye on making a dent in the billion-dollar roads and other infrastructure deficit.
On Tuesday, the city's finance committee was expected to vote whether to spend the money or use it to leverage a much larger bond to do more repair and replacement work.
Mayor Brian Bigger, who opposed the special tax during last year's budget meetings, said at the meeting that with COVID-19 pummelling the city's finances, keeping the money, for now, is the responsible thing to do.
"For the duration of this COVID crisis, I'm thankful we have some money to use to offset lost revenues," Bigger said. "This is a very valuable source of funds to help us deal at year-end to help us deal with COVID challenges."
Councillors heard that thanks to several cost-saving measures, the budget shortfall until the end of June had been reduced to $5.1 million, down from an expected $6.8 million.
The city's Chief Administrative Officer, Ed Archer, said not filling municipal job vacancies would save about $2.5 million and combined with cancelling plans to hire summer students and a restart in revenue from landfill has eased the budget crunch.
However, there are still huge challenges since the city can't run a deficit under provincial rules.
While the city has taken steps to reduce expenses, losses in revenue from mostly city-run programs are still pilling up.
"We anticipate that $5.1 million could become $14 million by the end of the year," Archer said. "This is a revenue-driven problem."
Councillors also approved a plan to use more than $5 million found in cancelled capital projects and existing ones that are coming in under budget. However, a plan to remove $300,000 from a reserve for a therapeutic pool planned for Azilda was removed, in case upper levels of government agreed to support the $5 million project.
"It shows commitment and that the City of Greater Sudbury is behind this project," said Ward 3 Coun. Gerry Montpellier. "And if we don't use it, we still have it."
While Sudbury is being affected like other communities by the pandemic, Archer said Sudbury is among six cities the Conference Board of Canada expects to continue growing. A strong sign is the fact housing starts increased by 23 per cent in April compared to the same time in 2019. And the city's unemployment rate is lower than both the provincial and national average.
"According to their findings, nearly 60 per cent of Canadian metropolitan areas have negative short-term and long-term expectations," a staff report said. "There are only six municipalities out 28 with positive trend expectations for both the short and long-terms and Greater Sudbury is one of them, showing positive prospects for both short and long-term growth."
Unlike some other communities, Greater Sudbury doesn't have a cash flow problem, Archer said.
While some commercial property owners have been denied when they asked for tax relief, the city has agreed to defer payments for those in need.