PEI

City of Summerside will try to mitigate $450K deficit

Officials with the City of Summerside say the municipality is dealing with a $450,000 deficit after the first quarter of the 2020-21 fiscal year.

City will try to avoid cuts to programming or staff

In April, all utility customers within Summerside were given a $25 rebate, which was applied to monthly bills as a credit, to help residents better absorb the financial burdens accompanying the pandemic. (CBC) (CBC)

Officials with the City of Summerside say the municipality is dealing with a $450,000 deficit after the first quarter of the 2020-21 fiscal year.

The city attributes the deficit to lost revenues and extra spending throughout the COVID-19 pandemic. Municipalities in P.E.I. are not allowed to run a deficit. 

"That's not unexpected due to the expectations of the impact of COVID-19 pandemic on operations city-wide,"said Deputy Mayor Norma McColeman, who also chairs the city's finance committee. 

"We certainly will be reviewing these results with individual departments to determine options that are available to mitigate against the loss of revenue and increase in costs."

The $450,000 debt was racked up from April 1 to June 30. Anything spent on pandemic reaction and relief in March would be counted in the 2019-20 fiscal year.

With another three quarters to go, McColeman said the city is now searching for ways to mitigate the deficit, but will try to avoid cuts to programming or staff.

"We would not even want to go there unless it was something that was, you know, a situation that just was not possible any other way," she said. 

The deputy mayor said the city has reassigned employees based on need. This avoids laying people off and spending new money to hire. 

"Maybe they had them doing things like cleaning up the beach, cleaning up around the community any where they could give them hours so that they wouldn't be laid off is what they were trying to do to mitigate expenses," she said.

"It doesn't save money but it's not new money being spent."

Lost revenue

The deputy mayor also said the loss of revenue from the Credit Union Place has had an impact on the city's finances. Many sporting events, concerts, programs and city projects were cancelled due to the pandemic. 

"We're hoping that the projects that were delayed, you know, they will start up again when things start to return to some resemblance of normal," she said. "Everybody is in the same boat.

"We can't push it any faster. We have to wait."

McColeman said the city will not be looking into dipping into their reserves unless necessary.

"You try to save a bit for a rainy day," she said. "We hope that we don't have to touch those because we really try to rely on those for, you know, very important emergency situations like underground work or sewer backups or, you know, new pipes."

Absorbed utility costs

In April, all utility customers within Summerside were given a $25 rebate, which was applied to monthly bills as a credit, to help residents better absorb the financial burdens accompanying the pandemic. 

The council unanimously voted on the rebates, which amounted to approximately $210,000.

In addition to the rebate, Summerside decided not to disconnect any services due to missed payments during the pandemic, and had also waived all late payment charges.

In a council meeting on Monday, McColeman reported that as of July 30, the city-owned utility's overdue payment balance was $335,200, with most of that making up payments missed in the last three months. 

Summerside Electric, the city-owned utility, generates power through wind and a diesel generation plant. (John Robertson/CBC)

About $65,400 of that were payments that were overdue by more than six months, which includes 33 residents and four commercial accounts. 

Last month, CBC News reported that the Summerside Dixie Lee, jointly owned by Mayor Basil Stewart and his son, owes the city's electric utility more than $40,000.

The city is encouraging anyone with outstanding balances to apply for their COVID-19 Utility Support Program, which allows residents to pay their balance over a year-long period. 

McColeman said that customers who have outstanding balances and do not apply for the program will be subject to the collection process or be disconnected from the utility.

More from CBC P.E.I.

With files from Wayne Thibodeau

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