How some B.C. municipalities are handling the financial impacts of COVID-19
Some, such as Kamloops, plan to run major deficits, while others say they’re in good shape
Municipalities across the province are re-evaluating their financial situations as COVID-19 continues to keep municipal facilities closed and has put other revenue streams on hold.
That means drawing on surpluses in budgets, cancelling events, laying off staff and postponing projects to make sure ends meet.
"I think most municipalities, including Ashcroft, were in the position of pretty much having their budget for 2020 done and dusted and almost ready to go," Ashcroft Mayor Barbara Roden told Daybreak Kamloops host Shelley Joyce.
"And then suddenly a global pandemic hits and we're trying to, in a few weeks, go over the process of months. One of the huge things that we're finding of course is that we have no idea how exactly the pandemic is going to end up affecting our bottom line."
Earlier this month, the provincial government authorized municipal governments to borrow, interest-free, from their existing capital reserves to pay for operating expenses, meaning they can temporarily run deficits, which is typically not allowed.
In Kamloops, Mayor Ken Christian said the city expects a deficit this year of up to $12 million.
"My concern is that a lot of the initiatives I've seen from the province of British Columbia and the federal government really kind of pushes this problem down the road, and at some point in time we're going to have to pay the piper," he said.
He worries there will be tax increases for residents in 2021 and 2022 to make up for this year's shortfall.
The City of Prince George is losing up to $1.3 million each month.
This week, city council voted to eliminate a planned pay raise for council members to try to make up for some of the lost revenue.
"We have to understand what else is going on in the community, and I think given what's happening with many people in the city of Prince George it was right for us to do that," Mayor Lyn Hall said.
In both Ashcroft and Williams Lake, the mayors say that having a balanced budget, rather than running a deficit, is a priority for them.
"We've seen something like this can hit in a heartbeat and we won't even talk about the effects of natural disasters like floods and fires," Roden said. "It could leave a lot of small municipalities in a really difficult position."
Concerned about small businesses, tourism sector
Though the municipalities are cutting costs and could run deficits, all four mayors are concerned about other sectors in their communities.
Hall, Roden and Cobb are primarily concerned with how the pandemic will affect local businesses.
"It just scares the heck out of me that we could very easily lose a number of businesses in our community," Hall said.
"I'm hoping that people who are shopping locally here in Ashcroft will remember the small, local businesses that stayed open and allowed them to get what they need without having to make unnecessary trips, and will keep being loyal to them even when things go back to something like what they used to be," Roden said.
Christian is concerned about the lasting impact the pandemic will have on the local tourism industry.
"People are not going to come back in the numbers that we saw prior to this event," he said.
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