The City of Quesnel will be receiving $2.5 million in provincial funding through the COVID-19 Safe Restart Grant for Local Governments, and council has approved using about $1.3 million of that funding to replace lost revenue and offset a potential tax increase next year.
At its Nov. 17 meeting, council approved spending up to $905,000 of this grant money to replace lost casino funds in 2020-21, to be used for general capital projects. If the Billy Barker Casino re-opens, the city would not need that full amount, noted Kari Bolton, the city’s director of corporate and financial services.
Council also approved using up to $30,000 to cover the anticipated airport deficit in 2020 and $82,000 to cover the airport capital allocations that would have been made in 2020 if revenue was sufficient.
Council approved spending up to $200,000 to cover the anticipated general operating deficit in 2020 and approved spending $80,000 to upgrade the technology in the council chambers to enable video conferencing. This technology project was already approved earlier this year, but the funding was previously going to come from the city’s council projects account. These funds can now be returned to the council projects account for other strategic uses.
During the meeting, council also approved up to $200,000 to be used from the grant to offset the reduced revenue in the North Cariboo Recreation and Services budget and prevent service reductions and layoffs.
The North Cariboo Joint Advisory Committee (NCJAC) has requested that the city and the Cariboo Regional District (CRD) contribute funds to North Cariboo Recreation and Parks Services to prevent service reductions from having to occur in January 20201 to balance the budget, explained Bolton.
The CRD is receiving $837,000 through the Safe Restart Grant. The CRD board discussed the grant at its Nov. 13 meeting and voted to hold a special board meeting Friday, Dec. 11 to discuss potential uses for the grant funding, including using some of that funding to prevent service reductions at the Quesnel and District Arts and Recreation Centre.
“My suggestion to council is if our spirit and intent as partners in the North Cariboo Recreation function was to prevent layoffs, to stabilize the schedule for the rec function and to back-fill lost revenue to allow that function to come back up during this first COVID winter, then we’re committed to $200,000 regardless of whether the CRD is coming in or not,” said Mayor Bob Simpson. “We can make a decision earlier than them, and if the decision is made by us to put $200,000 of our $2.5 million towards the North Cariboo Rec budget, then we achieve our intention of stabilizing that staff, stabilizing the schedule, allowing the rec function to continue to attract people back into it as we get through this winter, and then let the CRD deal with their situation in December.”
Coun. Scott Elliott was supportive, noting how important the Quesnel and District Arts and Recreation Centre is for people.
“I think people need to have a little bit of normal out there and be able to go to the pool and the rec centre in general,” he said. “I think we’re using the funds exactly as it’s been put forward to us.”
Coun. Martin Runge noted the centre serves people in the outlying areas as well, not just within the city.
“For me, it’s a given that we have to keep this going,” he said. “It’s also for the kids in this community, and I don’t mean just Quesnel; I mean the surrounding area as well.”
The city’s financial sustainability and audit committee will review and discuss how to use the rest of the COVID-19 Safe Restart Grant as part of the Budget 2021 process.
The COVID-19 Safe Restart Grant is meant to support local governments as they deal with increased operating costs and decreased revenue due to COVID-19. Eligible costs include addressing revenue shortfalls, facility reopening and operating costs, emergency planning and response costs, bylaw enforcement and protective services like fire protection and police, computer and other technology costs, services for vulnerable people, and other related costs.
City manager Byron Johnson noted that saving the grant funding is not an eligible use identified by the provincial government.
“What is not included in those eligible costs is creation of a rainy-day fund or creating tax relief specifically just for the idea of relieving taxes for our taxpayers, and yet, when you hear about how other municipalities are handling these grants, those two topics come up quite often, so it’s a bit of a trap that council could fall into, thinking let’s save the money in case it gets worse,” he said. “That is not the intent.”
Bolton told council the loss of operating revenues and extra COVID-19-related costs alone would have likely resulted in an estimated 3.5-per-cent tax increase next year, and an even higher tax increase would potentially have been required to cover needed capital projects that no longer had casino funding. This grant offsets that potential tax increase.
The closure of the Billy Barker Casino and the cessation of Central Mountain Air flights to and from the Quesnel Regional Airport due to COVID-19 has had a big impact on city finances.
The city receives approximately $500,000 per year from casino funds, and that money goes towards general capital projects, explained Bolton.
“The city is currently working on the 2021-2025 capital budget, and without those funds, the capital budget would be very difficult to balance, “she told council.
Bolton says the airport is expected to have a deficit this year due to the loss of its commercial carrier. As well, the excess funds will not be available to put into the airport capital reserves, which pay for future airport capital projects, including some proposed in the 2021 capital budget.
READ MORE: North Cariboo Recreation and Parks plan proposes 4% tax increase to grow capital reserves
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