The coronavirus pandemic is shaping up to be a big-budget headache for the City of London.
A staff report made public on Wednesday predicts the impact of COVID-19 on the city's finances to be up to $33 million by the end of August. The report points to lost revenue and increased costs associated with the pandemic. One of the biggest budget hits stems from how the London Transit Commission has responded to the pandemic. It is estimated that lost revenue, as well as increased costs related to cleaning buses, will add up to a $12 million impact on the city's coffers. The LTC effectively stopped collecting fares last month when it began having riders enter and exit buses from the rear door.
The report also points to $3.1 million in lost investment income due to lower interest rates set by the Bank of Canada, $2.8 million in lost water revenue as fewer businesses are open and using water, $2.6 million in increased policing costs, and a loss of $2.6 million in gaming revenue from the Western Fair.
"Like many other businesses, the COVID-19 pandemic is having significant financial consequences to the City of London," the report says. "These financial impacts can be categorized as either additional costs that would otherwise not have been incurred or lost revenues that will not be realized. In some cases, there may also be cost savings to the city as operations are not running as they normally would."
Staff is recommending that council address the shortfall by using the city's surplus and funding from assessment growth. It also recommends holding off on all but critical new hires, reducing the amount of training for city employees, and delaying the purchase of new equipment.
In a tweet on Wednesday afternoon, Mayor Ed Holder said the report should not lead Londoners to be alarmed about future service reductions.
"Let me be clear: despite these costs, essential services will continue. They are deemed essential for a reason. They will not cease. Let me also be clear: despite these unprecedented costs, we are not going to hike property taxes beyond what's already been approved," he said.
The full report, which will be addressed Tuesday by the Strategic Priorities and Policy Committee, can be found here.
