The Municipality of Chatham-Kent has estimated how much of a hit its budget will take because of the COVID-19 crisis.
Chief Administrative Officer Don Shropshire told the media during a briefing on Thursday morning the overall hit to the budget is anywhere from $2 million to $5 million depending on how certain things play out the rest of the year.
A full report on the fiscal fallout will go before CK council on May 11. Shropshire said last week the report will contain costs and expenses incurred during the crisis, including extra staffing hours.
Shropshire said the administration is trying to find a balance through different strategies to address the estimated shortfall because municipalities can't run a deficit.
He added the municipality usually gets $1.6 million a year for hosting Cascades Casino, but this year it will likely be less, citing the first quarterly payment in 2020 was just over $300,000. Shropshire said the full impact of lost revenue at the casino on the budget has yet to be seen and it depends greatly on when emergency measures are lifted by the province to allow the economy to gain traction again.
"How much it's going to hit our bottom line is going to be a big factor, when they reopen and when revenue starts to come back again," Shropshire said.
He also said it's up to councillors to determine if they want to dip into the reserves or reduce costs by eliminating services if there is a shortfall. Shropshire admits some municipal programs and services could be on the chopping block depending on how long the pandemic goes on.
"Are we going to be in a position to run summer programs? If we don't run summer programs there's a cost-saving to the taxpayer and the municipality, " added Shropshire.
Shropshire said most municipal services continue operating, albeit in different ways to keep citizens and employees safe from the virus. The only services that have closed have been shutdown under the direction of CK Public Health.
Shropshire said reserves are there in case of an emergency and council always has the option to draw from them in this emergency or trim the budget.
"Things like flower planting and so on will be on the list of things that we say, 'you know what this year we don't have the staff that are going to be out watering the flowers and taking care of them.' So, let's avoid that cost this year," he said.
The Federation of Canadian Municipalities has been calling on upper levels of government to provide emergency funding to help municipalities during the COVID-19 crisis. The FCM said municipalities are facing an unprecedented financial crunch and need direct financial support now to keep vital services running strong and to keep protecting our most vulnerable. The FCM added a one-time property tax hike is not the answer to the fiscal shortfall faced by municipalities.
"The increase required would have a significant impact on households trying to weather the economic downturn," it said.
The FCM emphasized communities are working flat out to support residents and need emergency funding because of plummeting revenues during this unprecedented pandemic.
