Penticton will be coming in under budget for revenues and expenses for 2020.
Despite COVID-19 causing a reduction of revenue for the city, the reduction in costs caused by the pandemic won’t leave the city in the hole according to the Nov. 3 financial update provided to council by city staff.
The city originally had a budget of $81 million for the year, but with COVID-19 is expecting to come in at $4.3 million below that figure for the end of the year.
The budget is expected to be balanced, with reductions to revenue offset by a combination of reductions in expenses and transfers to reserves.
In the reduction of revenue for the city, the largest hit was to the gaming revenue from Cascades Casino.
With the casino closing earlier this year, and predicted to remain closed for the rest of the year, the city is expecting to only receive $340,000 from their predicted $2 million this year.
Recreation revenue also saw a significant decline of $1.32 million, largely due to the community centre being fully closed from March through to August, and the restrictions in service since then. With the physical distance and other safety requirements, the city is expecting 55 per cent lower budgeted recreation revenue.
Parking revenue is expected to be 55 per cent lower, due to the free street parking, as well as fewer fines and pay station usage. Planning application fees are also expected to see a 50 per cent reduction for 2020.
In the Nov. 3 financial update, the city also laid out the expense-saving measures that were put in place to offset the loss in revenue.
The city made $1.71 million in payroll reductions, with 44 full-time and 46 part-time employees laid off during the pandemic. The report noted that the majority of the full-time employees have been recalled to various levels.
With the expected drop in casino revenue to $340,000, the city also reduced the planned transfer to the gaming fund from 1.8 million down to 306,000. The other $34,000 of casino revenue going to the Penticton Indian Band as required.
Other reductions included fewer event grants being issued, a reduction to the city’s contribution for Ironman for 2020, reducing the hours that City Hall is open and other restrictions.
In May, 2020, city staff had presented a financial forecast with a $8.1 million reduction of capital spending through deferring certain capital projects. Those projects will instead be included in the 2021 capital budget.
Planning for the 2021 budget is expected to begin planning in Nov, with community engagement currently expected to be open on Nov. 16 and 18.
City staff are expecting revenue to remain low in 2021 and are taking that into account when building a balanced budget.
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