City weathers COVID-19’s financial storm well

By COLLIN GALLANT on April 14, 2021.

cgallant@medicinehatnews.com@CollinGallant

The City of Medicine Hat wound up in a turbulent 2020 financial year with a $100,000 operating surplus, and will keep a $6.9-million provincial grant for lost revenue and COVID costs in hand for potential lingering losses in 2021.

That was revealed Monday as city hall’s year-end financial report was presented to the council’s audit committee.

It states that finance officials believe the actual cost of lost revenue and higher expense for cleaning and staffing was about $1.7 million.

Facility closures, staff layoffs and other vacancies, along with general mitigation efforts in the budget, totalled $1.6 million.

“We’re essentially right on budget,” said managing director of corporate services Dennis Egert. “We monitored the situation monthly during the pandemic and reduced our expenses.”

The city delayed property tax collection last year as well as dealt with a host of facility closures, lost revenue in transit and at the Medicine Hat Airport, lower business permit fees, as well as higher operating costs.

Counteracting that were lower than expected wages from layoffs and a negotiated wage freeze with the city’s largest union, a favourable snow-clearing season and delayed projects.

“It’s amazing that we can still do the heavy lifting and still spare the taxpayer,” said committee chair Coun. Darren Hirsch.

Coun. Jamie McIntosh questioned Egert about how the city was recording $6.9 million in grant funding meant to help municipalities bear expenses and make up for lost revenue due to the pandemic.

Last September, the province and federal governments came to a $1.3-billion “ReStart agreement,” which requires municipalities to submit qualifying expenses at the end of March in 2021.

That aligns with the end of the province’s fiscal year, but since the city’s fiscal year follows the calendar, amounts can’t be included in the 2020 numbers.

Egert said the extent of pandemic conditions is still being analyzed and may continue into the summer or fall.

“It will be realized (in the financial accounting) when it’s required,” said Egert. “But we don’t really know yet what the post pandemic outlook is for the city. Time will solve some of that, but we still have a long way to go.”

That includes business confidence that could affect permit numbers, or the level of unease of the general public to return to large gatherings, like at fitness centres or Co-op Place.

The operating surplus does not include $8 million taken from reserves to provide a “COVID Support” program, approved last May, that cancelled a planned property tax increase, put $2 million toward business grants, $1 million toward charity endeavours and $1 million to general economic development.

Last December, council approved an administration plan to cut an additional $14 million from the budget to meet its “Financially Fit” plan of reducing annual reserve spending as well as maintain current taxes at 2019 levels.

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