The COVID-19 pandemic is expected to cost the City of Victoria $12.5 million to $17.5 million this year due to revenue shortfalls, additional cleaning expenses and the cost of dealing with camps for people without homes.
A budget update going to the city’s committee of the whole on Thursday shows that reduced parking revenues will have the biggest impact with losses ranging from $8 million to $12.8 million.
At the start of the pandemic, the city was losing about $1.2 million a month in parking as businesses closed and people were advised to stay home. With the economy re-opening, parking losses have decreased to about $950,000 a month.
The Victoria Conference Centre, meanwhile, is expected to post revenue losses up to $2.5 million this year, while the closure of the Save-on-Foods Memorial Centre means the city will lose about $250,000 in ticket sales.
On the expense side, the city expects to incur $850,000 in additional costs associated with bylaw enforcement, public works, parks and facilities. That’s over and above $300,000 that the city already allocated for pandemic-related costs.
Some of the extra expenses are due to increased cleaning of facilities to prevent the spread of COVID-19. But many of the costs are related to the various encampments for people without homes that sprang up across the city as shelters closed or allowed in fewer people each night.
City councillors will decide Thursday how best to manage the falling revenues and higher costs while still protecting government services.
Mayor Lisa Helps said the numbers, although sobering, are better than what was projected in April when staff said revenue losses could reach $22 million. “Things are not as bad as we thought they were going to be, but we’re still going to need to make some decisions on Thursday,” she said.
Staff are recommending a number of strategies to offset the shortfall, including deferring capital projects, postponing other initiatives and using money from unspent expense budgets.
Councillors agreed in April to provide relief to business and residents by eliminating this year’s property tax increase. At the time, they also made a preliminary decision to defer more than $20 million worth of capital projects, some of which can be used to offset the projected revenue losses.
Helps said the city should be able to avoid further layoffs barring a second wave of COVID-19. In April, the city reported that 163 auxiliary staff and on-call staff were told there was no work for them due to the pandemic.
“Who knows what a second wave if it shows up could look like,” she said. “But I think most of the essential services the city’s providing would need to continue.”
Stan Bartlett of the Grumpy Taxpayer$ of Greater Victoria said council should be taking bolder action in light of the pandemic’s devastating impact on city revenues as well as the economy.
He urged a review of core services and staffing so that the city can reduce its overall budget. Instead, council appears intent on “kicking the can down the road” and hoping for a federal or provincial bailout, he said.
“Our economy and society is suffering a major heart attack as a result of the pandemic, but the city is suggesting it’s a common cold, telling the patient. ‘Take two aspirin, go to bed, and wait and see if all will be well.’ ”
Coun. Geoff Young, however, said staff’s recommendations appear reasonable and that all councillors will have to give up on some of the new programs and hiring that they had hoped to see this year.
“We certainly want to try and avoid layoffs,” he said. “We don’t want to add to the economic gloom, that’s been created.
“But, conversely, I think adding staff and getting people to move here from other parts of the province, of the country, perhaps, isn’t really what we should be planning at the moment.”
Young said one of the striking aspects of the budget update is the significant costs associated with managing the encampments for people without homes.
“I’ve made no secret that I feel Victoria shouldered too much of that burden; that we should not have, alone in the region, allowed daytime camping in desirable camping spots,” he said. “It’s created enormous impacts in the downtown and in the parks. … And we’re now seeing, in the report we’ve just received, it has a very substantial financial impact as well.”