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Pandemic pervades municipal finances as second quarter financial update delivered

Covid-19 has affected nearly every area of city operation and administration this year and has tainted and adjusted normally consistent budgetary figures — revenue, expenses, capital and net surplus. — Photo illustration: Creative Commons

For the financial second quarter of the year the city has not been in the red or the black, but in the corona virus.

Covid-19 has affected nearly every area of city operation and administration this year and has tainted and adjusted normally consistent budgetary figures — revenue, expenses, capital and net surplus.

City chief financial officer Colin McClure delivered his second quarter update on the city’s operations and noted the effect of the corona virus on the bottom line.

“As expected and reflected in the 2020 budget, covid-19 has had a significant negative effect on the sales of services revenue,” he told city council at their last business meeting in council chambers.

Overall there has been more than a $300,000 drop in revenue for parking meter, city parkade, city campground and youth centre revenues over the prior year, McClure added.

However, the drop was partially offset by the one-time $140,000 increase in waste recovery fees to fund the purchase of recycling blue bins in 2020.

Nearly a half of a million dollars in “other revenue” has been lost this year compared to last year, with a $470,000 difference in utility connection revenue being a major factor, explained McClure.

“In addition, as part of the 25-point action plan, sidewalk rental fees were waived this year, which coupled with the drop in parking ticket revenue, due to the economic shut-down for over two months, has also had a negative impact on other revenue,” he said.

The pandemic created a hush over transit services as revenues for transit fell by 38 per cent as a direct result of the drop in ridership due to covid-19, the report stated, and the order from BC Transit to not collect fares from mid-March to the end of May.

As a result, transit is over budget and higher than in the previous year mainly as a result of the extra staff time and supplies required for pre and post trip bus cleaning due to covid-19.

That revenue is expected to recover once September arrives and school begins.

One of the areas that was expected to be hardest hit when the pandemic gripped the city was recreation, with revenues falling and the decision was made to lower the recreation and culture services budget to find offsetting cost savings.

“Areas that were affected were the campground, youth centre and in particular parks where the parks maintenance, grass cutting, flowers and hanging baskets were scaled back,” McClure said.

On a positive note for the month of July, he added, parking meter and campground revenues were back to comparable amounts to last year.

After fielding a request from Coun. Jesse Woodward for further metrics from the hotel and retail sectors, McClure said the city was gathering information on how the city economy was affected as a whole during the pandemic.

Woodward felt that information would be invaluable to give some perspective for people who are still feeling uncertain.

“How do you judge that? How do you find that place where we say we are recovering?” he said.

Things are trending, as was expected when the virus grew to a pandemic state, McClure said.

“(But) the city is on target to end the year in line with the budgeted operating revenues,” he said.

Immune to the virus

  • Nelson Hydro is on budget and almost on par with prior year revenue and with a similar weather pattern as 2019 and a zero rate increase for 2020.
  • Library revenue is higher as compared to the prior year as a result of $30,000 in additional grant funding being received. This funding has partially offset the loss of photocopy, fine and other operational revenue that dropped significantly as the library closed due to the pandemic.
  • General government spending was similar to last year even during the pandemic, said McClure, and was in line with the budget.

“There have been some savings realized from reduced travel and conference fees, as planned and adjusted in this year’s budget,” he said.

— Source: Colin McClure, City of Nelson

Capital costs

  • The city hasn’t been on a spending spree when it comes to adding vehicles to the municipal fleet. Covid-19 has dampened the rubber tire traffic into the municipality, although Nelson has received a tandem dump truck, an F250 crew cab and the very first full electric vehicle, a Polaris ranger, for parks use. A new hybrid police SUV has arrived and is currently being outfitted with lights and sirens by the city’s garage — to be in service by mid-September.
  • Although it is unfortunately not going to be used this market season, due to the virus, The Cottonwood Falls park stage and band shell is installed. Staff await an engineering report looking at floodplain mapping and riparian zone questions regarding the location of the washroom at the park.
  • The city has received a CBT grant for $500,000 to do a “significant redesign and improvement” to the City Pier. This project is also in the detail design phase with the expectation that the project would start in 2021.
  • Airport fuel pumps have been installed and are operational.
  • The new bridge at the Hydro power plant has been installed and the major concrete work project on the archway and fore bay are underway, with completion expected by the end of September.
  • In a major milestone the Lakeside substation has been decommissioned and the area has been paved, increasing the much needed parking area at Lakeside Park.
  • The 2020 ICI water metering installation program has resulted in 90 per cent of ICI properties now completed.
  • Piping of the secondary water source from Selous Creek to the Mountain Station Reservoir is underway and will continue into late 2020. Other Mountain Station Reservoir preparation work is also underway with the phase two portion of the project, being the piping from Anderson Creek to the reservoir, scheduled for 2021.
  • The sewer master plan update project is with the engineering firm with the projected draft report to be completed by late fall this year.

— Source: Colin McClure, City of Nelson