While many municipalities continue to struggle with deficits and revenue losses from the ongoing pandemic, the City of Kawartha Lakes is actually sitting in an enviable position.
Despite the pandemic, it ended 2020 with a $4.59-million net surplus.
At its council meeting on June 15, treasurer Carolyn Daynes stated it was largely due to how well the municipality weathered the pandemic financially, including decisions made by council at the time.
“When we were going through the first phase of the pandemic, just before the summer (in 2020), we weren’t guaranteed any government funding for the pandemic,” Daynes said.
“We weren’t informed we were getting government funding until August or September 2020. The year unfolded that we were trying to save as much as we could in every budget and only doing essential projects.”
The money received for COVID-19 relief was around $5.8 million and that included money specifically for long-term care and paramedics.
Revenue losses for 2020 were approximately $2.5 million for the City of Kawartha Lakes, much less than previously expected at the outset of the pandemic.
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Daynes pointed to staff training, utilities from the closure of buildings, vehicle fuel and no summer student program as under-budget items that helped contribute to the surplus.
Savings in utilities were approximately $930,000 and vehicle fuel cost savings were $380,000, Daynes reported.
Short-term layoffs and the cancellation of the summer student program as well as leaves and hiring freezes saved the municipality $2.5 million in 2020.
“We weren’t necessarily surprised. Early on in the pandemic, council directed we budget our budget. We did that deliberately but also not knowing the support funding from upper levels of government. We wanted to take a self-sufficient approach and it paid off,” chief administrative officer Ron Taylor said in an interview with Global News Peterborough on Monday.
“We’re still in that mode of really trying to balance the budget independently. Now it’s going to put us, I think, in a good position in future years.”
Despite operating at minimal levels during 2020, the economic recovery task force recommended major construction projects in downtown Lindsay and Fenelon Falls go ahead and be included in the 2021 budget to spur on the economy during the tough times.
“We were able to fund that entirely from our savings the year prior. In 2019, pre-pandemic, we had a surplus of nearly $3 million. We invested that and that money was put entirely into recovery efforts,” Taylor said.
“That was inclusive of major downtown projects where we could accelerate investment and both of those projects in those phases exceeded $2 million.”
Council voted to transfer $1 million of the 2020 surplus to a stabilization reserve for future winter control, $300,000 for stabilization for Workforce Insurance and Safety Board (WSIB) claims and the remaining $3.2 million into capital reserves.
“That will invest back in capital whether it’s critical infrastructure, roads and improvements. Really, we want to look at a catch-up strategy in subsequent years. It was a great decision to put it entirely in capital. We were, pre-pandemic, constrained and those reserves were low,” Taylor said.
Taylor added it will make budget planning easier for next year.
“We have a typical spend for capital. Rather than burden the ratepayer, we’re able to partially fund the capital program from this reserve. It should allow us ultimately to stabilize the tax increase to ratepayers,” Taylor said.
“It also allows council, if they want to invest in particular areas for recovery or to speed up or expand on capital, the ability to do that next year. We want to catch up on our roads and I suspect council will want to invest in that.”
The 2022 budget process is underway and public meetings will be held in the fall.
Council will likely adopt the capital and operating budgets by the end of the year.
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