A loss of revenue due to facility closures is being looked at in Lake Country. (File photo)

COVID-19 throws a curve ball at Lake Country finances

Reduced revenues halt funding for the remainder of the year

A number of unknowns remain for the final six months of the year as local municipalities take a look at their financial well being amid COVID-19.

With that in mind, Lake Country council is not being asked to approve any funding at this time.

“Dealing with the many aspects of the COVID‐19 pandemic has resulted in the delay of some strategic priorities and capital projects,” finance and administration deputy CAO/CFO Tanya Garost said.

“Additional expenses were incurred for changes to the Municipal Hall, safety equipment and IT infrastructure among others. Some savings have been recognized by delaying hiring for vacancies and operating costs not incurred to support revenue generation.”

The cancellation of events and services saved the district in the following: $60,000 for theatre shows, $24,000 for recreational program delivery, $16,000 in reduced transit and $13,000 in transportation for council to conferences.

But it cost the district with the following loss of revenues: $115,000 with the closure of the Winfield Arena and Curling Club, $57,000 in transit, $48,000 in theatre, $38,000 in recreation and $9,000 in parks.

“The revenue that would have been received in that period from user groups is now lost revenue and cannot be recovered when operations resume,” Garost said. “There is a reliance in the budget on these revenues as they offset the amount of property taxation collected.”

As of the end of June, the total amount of funding required to cover the revenues losses and additional expenditures is $383,100. This is offset by the savings of $291,373 for a current estimated shortfall of $91,727. As of Dec. 31, 2019, the General Fund Surplus balance was more than $3 million, which is more than adequate to cover the current shortfall.

But if situations change, council may look at a use of other reserves, service level cuts or added taxation in 2021.

“Under legislation, local governments are not permitted to run deficits annually,” Garost said.

A final report will be provided to council prior to the completion of the 2020 year end to fund shortfalls caused by the COVID‐19 pandemic.

READ MORE: Shopping local urged in Lake Country

READ MORE: 4G tower coming to Lake Country neighbourhood


@VernonNews
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