Victoria city councillors agreed Thursday to defer dozens of capital projects and other initiatives to cover revenue losses and higher costs this year due to the COVID-19 pandemic.
Staff were projecting an overall shortfall of $12.5 million to $17.5 million, with the biggest impact caused by reduced parking revenues.
Mayor Lisa Helps said council managed to negate the looming deficit, while still leaving considerable money in the city’s capital reserves. “Overall, I think council did extraordinary work, going above and beyond the staff recommendations and making sure our reserves are healthy, because we don’t know how long this pandemics is going to last.”
Councillors decided in April to postpone more than $20 million worth of capital projects so that some of the money could be used to prevent a deficit. They largely stuck to that decision Thursday, but did vote to push ahead with building new skateboard and bike skills parks at Topaz Park.
“This is a project that has been in the works for a while and is ready to go out,” Coun. Jeremy Loveday said. “We’ve heard from a number of community members and neighbourhood groups who would like to see this project prioritized.”
The project is expected to cost $3.8 million, but only the design work would begin this year at a cost of $600,000, staff said. The rest would likely come due in mid-2021.
In a more hotly contested motion, council decided to proceed with the hiring of two senior staff for a new office that will work to build a more equitable, diverse and inclusive city.
The city had planned to hire five people for the Office of Equity, Diversity and Inclusion this year, but put those plans on hold when the pandemic hit.
Coun. Ben Isitt said hiring two people instead of five represented a “compromise between doing nothing and doing something versus doing the whole approach.”
Loveday described it as a “reasonable” way forward in light of the city’s financial situation.
“I don’t think we can afford to move forward with all five right now,” he said. “I think we simply do not have the money.”
But he said it’s important the city get started establishing the office. “We need to make our community more equitable and inclusive and these roles will help get there,” he said.
Coun. Geoff Young, however, objected to council’s “profligate spending” and new hiring given the negative impacts of the pandemic on downtown businesses and commercial buildings.
“That’s half our tax base and we are acting as if nothing is happening and that things are just going to go on,” he said.
Young said the city should be going in the opposite direction and considering a hiring freeze for some departments. “I think that moving in this direction, either to hire people or to plan to have major increases in the size of our staffing, is very foolish,” he said.
Staff expect the city to lose $8 million to $12.8 million in parking revenue this year alone. 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 reopening, parking losses have decreased to about $900,000 a month
The Victoria Conference Centre, meanwhile, is expected to post revenue losses of 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 from 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.