April 27, 2020
Council Adopts 25 Point Economic Stimulus and Financial Stability Plan
Nelson, BC - At a special Council meeting held Thursday, April 23, Mayor and Council adopted a 25 point Economic Stimulus and Financial Stability Plan. At this meeting, the City’s Chief Financial Officer (CFO), Colin McClure, informed Council that the City will face a revenue shortfall between $830,000 and $1,200,000 depending on the length of time and the nature of the restrictions remaining in place. In its initial response to COVID-19, Council eliminated a proposed 2% taxation increase for 2020, which increased the deficit to $400,000 in the City’s preliminary 2020 budget. The combination of the two means that the City is facing a financial deficit of up to $1,600,000 for 2020.
“The City is facing a significant financial challenge, and our first priority is to ensure we manage our financial sustainability going forward,” says Mayor Dooley. “We are fortunate that we were in a relatively strong financial position prior to the pandemic; many other local governments will really struggle.”
In response to this anticipated revenue shortfall, the City’s CFO had been working with all City departments over the past number of weeks to identify areas where expenditures could be reduced while maintaining essential services. At the April 23rd budget meeting, Council approved several recommendations to cut and defer expenditures while prioritizing spending in the City, protecting the City’s long-term financial stability and to ensure the City has the financial flexibility to weather a more prolonged shutdown.
“It is very challenging to project our revenues with all the uncertainty on the duration and extent of restrictions,” stated Chief Financial Officer Colin McClure. “This Financial Plan is built on a most likely scenario and maintains the City’s financial capacity to respond to the impact of a longer pandemic shutdown and the resulting economic fallout.”
The key highlights of the financial stability plan include:
The above cost containment strategies will result in financial savings of a net $700,000 to $830,000 depending on the length and severity of the pandemic. Council will need to draw down reserves by as much as $800,000 to balance the 2020 budget. The plan is contingent on working with all its employee groups to achieve these savings.
Along with putting its own house in order, Council also adopted a number of recommendations to support our local businesses, non-profits and the broader community. This included an economic stimulus program that goes hand in hand with those being rolled out by senior levels of government and our regional partners, including the RDCK and CBT.
In terms of the economic stimulus and community support aspects of the plan, staff is currently working on the mechanics of these strategies and will release to the public this week.
“Initial feedback from our Business Outreach Project has been well received and has identified where our community needs additional support,” stated Mayor Dooley “while we have limited financial capacity to directly support our community, we believe we have found some creative ways to help out and stimulate the economy going forward.”
See Addendum Below:
Mayor John Dooley – (250) 352-8236
Colin McClure, Chief Financial Officer – firstname.lastname@example.org
Addendum – Financial Plan and Taxation Points