Coronavirus COVID-19 pandemic response impacts on City Budget

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Brantford City Hall

BRANTFORD, ON: Municipal budget decisions have a profound impact on the daily lives of our residents. From how the City responds to an emergency such as the current COVID-19 pandemic, to essential services such as garbage collection, public transit and the safety of our neighbourhoods, city budgets sit at the heart of a community’s development and residents’ quality of life.  

Strong fiscal management and financial stewardship guide the City’s decisions and actions as we continually renew and develop our community to keep pace with the needs of a growing population. In recent years, Brantford has seen the largest construction and investment plan in its history. Upgrades and repairs to the City’s infrastructure and assets such as our Transit System are essential as redevelopment ensures we are using the latest technology and knowledge to make improvements in a sustainable manner.

“Building a great city demands financial stewardship and leadership”, said Brantford Mayor Kevin Davis. “While this sometimes requires tough fiscal decisions to be made on behalf of the citizens we serve, our goal is that this process always occurs in an open and transparent way. Holding the public’s trust though inclusive, responsible, financial management, superior service delivery, and open, effective communications continue to be our hallmarks of good governance, especially during challenging times.”

Municipalities present balanced budgets on a yearly basis. The net expenditure (expenses less all available revenues) required to operate the City for the year is determined and used to determine a tax rate. This tax rate is levied on all properties to raise the net expenditures required and is set at the beginning of the year during the budget process. Unlike other levels of government that can run a deficit, municipalities are not able to run a deficit and cannot borrow money to fund operating expenses.

Mandated Essential Services

It is important to note that nearly 80% of The City of Brantford’s expenditures are invested in legislated and/or required essential municipal/business functions. The City of Brantford holds the least amount of discretionary reserves per household amongst its comparators as provided by a recent KMPG analysis. Discretionary reserves are funds that have no specified use and are held to cover unexpected expenditure as the City cannot raise more revenues during the year. These reserves are the difference between the Budget Net Expenditures and the Actual year end results. The City has traditionally set budgets that are extremely close to the yearly actual expenditures and in fact, most years, the surplus has been below 1% of the approved net budget expenditure. This implies that the rate of taxation is very close to the amount required and over-taxation has not occurred. It is also important to note that the City of Brantford has the third highest residential home values (Current Value Assessment) of its comparators, as also noted in a recent KPMG analysis of City services.

Impacts of the COVID-19 Pandemic on City Finances

The City of Brantford obtains revenue from few sources including, property taxes, grants, transit fares and user fees for recreational services. In a concerted effort to reduce the spread of COVID-19 in our community, in the past several weeks, the City has closed City Hall and all recreation centres, as well as cancelled all camps, and most fee generating programming. Furthermore, the Province has closed the Elements Casino in Brantford reducing revenues to the City by $100,000 per week. Invariably, these closures will have a significant impact on the City’s revenue stream and on the various community organizations and reserves that benefit from the Casino Legacy Fund. Additionally, financial markets have experienced turbulence in the past six weeks with interest rates seeing a large decrease, thus reducing investment income that the City had built into its original 2020 budgeted revenue stream. 

City staff have reviewed the financial position of the City with respect to the significant impact that our response to the COVID 19 pandemic is having on revenues and expenses and will provide a comprehensive report of this review to City Council on April 28th. 2020. Various mitigation measures to address these revenue shortfalls  will be taken. To help manage the potential  financial downfall, the City will be  reviewing all   service offerings. As a result, thus far, 380 City of Brantford staff have been placed on unpaid leave.

Relief provided to date

To help mitigate the negative financial impact of the current crisis the City has provided tax and ratepayers relief as follows:

  • 120-day deferrals of water, sewer and miscellaneous Accounts Receivable payments with no late payment fees
  • Waiving of late payments and penalties on taxes until further notice
  • Opportunity to extend due dates and waive rent and interest on real property leases

Mitigation Efforts

The City will continue to monitor this dynamically fluid situation to look at the most effective and efficient ways of delivering essential services and deploying staff in the most effective way possible based on current situation conditions. 

More information regarding additional revisions recommendations to the City’s 2020 operating expenditures  and further mitigation efforts will be shared publicly in tandem with the budget report that Brantford City Council will consider on April 28th, 2020.

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Media Contact:

Maria Visocchi - Director, Communications and Community Engagement
City of Brantford | 519.759.4150 ext. 5754 |  mvisocchi@brantford.ca

  

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