The City of Nanaimo is putting in place cash-flow contingencies as a pandemic precaution.
City council, at a special meeting Thursday, voted unanimously to pass three readings of a revenue anticipation borrowing bylaw that would authorize the borrowing of up to $50 million.
The vote followed a presentation from staff about the uncertainty – including potential financial impacts – of the COVID-19 pandemic.
Shelley Legin, general manager of corporate services, said there’s an “era of uncertainty” right now around how long the pandemic will persist and how long economic recovery will take.
“We want to flatten the pandemic curve, we want to put … measures in place to limit the depth of economic impact that we have in our community and come out with a rapid economic recovery,” she said.
Legin said the community charter sets out a provision for municipalities to essentially have borrowing pre-approved in certain circumstances.
“We will only exercise that if necessary. We will not be going out and borrowing $50 million today or tomorrow,” she said. “In fact, we are optimistic that we will not need it, but we need to put it in place to be diligent in our fiscal management.”
Mayor Leonard Krog said the city is “conscious of the strain on everyone’s finances in the community” and said council intends to move with prudence. He said the revenue anticipation borrowing bylaw is comparable to a line of credit.
“This is simply to allow us to have the money in the bank to meet payroll, to pay our contractors, to pay our expenses,” he said. “It doesn’t mean we are going into debt.”
The city doesn’t know what impacts the pandemic will have on its ability to collect property taxes, and is anticipating provincial direction regarding property tax deferral. The city has approved a utility bill due date deferral, and has discussed reducing penalties for late payment of property taxes this year.
Legin said nearly all of the municipality’s major revenue losses – not accounting for tax revenue changes – would come from loss of casino, conference centre and investment income revenue, building permits and fees, and recreation facility rentals. Those would be partially offset by savings in utilities, staffing and other operational costs.
Jake Rudolph, the city’s chief administrative officer, said the city has suspended non-essential expenditures such as training and travel, and said staffing vacancies are to be filled on a case-by-case basis. He confirmed that more than 200 city employees have been impacted by layoffs or “non-assignments,” primarily in the parks, recreation and culture department.
“We’ve made a significant effort to redeploy people where we can into roles we anticipate are necessary,” Rudolph said.
Legin said the city is working with the union “to make sure that our collective agreement is aligned with our measures going forward.”
City councillors, at Thursday’s special meeting, were also updated on capital projects and the mayor summarized that there was “unanimity” among council that projects should continue as scheduled. The list of projects mentioned by staff included the Metral Drive street improvements, the Front Street cycle track, the Haliburton multi-use trail, downtown way-finding and LED streetlight upgrades.
Bill Sims, the city’s general manager of public works and engineering, pointed out that “the vast majority” of projects use local contractors, local suppliers and supports local jobs.
Council agreed that those were important considerations right now and in terms of economic recovery.
“I imagine the federal government and the province will be taking a capital investment approach to stimulate the economy as well, so the more shovel-ready projects that we can have and be ready to jump on opportunities as announcements are made, I think is critical,” said Coun. Ben Geselbracht.
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