$ 25 million ‘anvil’ unlikely to be funded by federal, province

by

City councilors took a shocking blow earlier this week when they learned that the feds and the province are unlikely to cover $ 25 million in forecasted COVID-related spending in 2022, at least not at the level provided in 2020 and 2021.

“Guys, we have a $ 25 million anvil hanging over our heads here,” Mayor Drew Dilkens said Monday during budget deliberations on the potential impact the unfunded deficit could have on city finances.

In the previous two years, the City of Windsor suffered significant losses due to COVID, but these were almost entirely covered by higher levels of government. Clearly that won’t happen in 2022, city managers told councilors.

“Both levels of government continue to indicate that there will be no significant funding as we saw in 2020 and 2021,” said CAO Jason Reynar. Typically, when there’s a big funding announcement on the horizon, city staff hear rumors ahead of time, he said. “We are not hearing that at all.”

Chief Financial Officer Joe Mancina, left, and Managing Director Jason Reynar, far right, join Mayor Drew Dilkens in a press conference to outline the 2022 municipal budget framework at City Hall, Friday, 19 November 2021.
Chief Financial Officer Joe Mancina, left, and Managing Director Jason Reynar, far right, join Mayor Drew Dilkens in a press conference to outline the 2022 municipal budget framework at City Hall, Friday, 19 November 2021. Photo by Dax Melmer /Windsor Star

Treasurer Joe Mancina said last year at this time that there was more clarity on what dollars would come to the city.

“Certainly that is not what we are seeing now,” he said. “We don’t have any level of certainty regarding additional funding,” other than some social services funds for 2022 that run out at the end of March.

“Our hope is that maybe funding will come our way, but that’s less and less as time goes on.”

Ward 1 Coun. Fred Francis said the bad news was a surprise.

“That scares me a little bit more about what’s to come,” he said.

The city’s significant COVID costs projected for 2022 include:

  • $ 5 million in additional losses at Transit Windsor, which continues to suffer a 50 percent loss in passenger numbers;
  • $ 6.8 million in lost revenue from the city-owned tunnel and airport, which is typically profitable and sends $ 1 million dividends to city hall, and from the distressed Caesars Windsor, which typically provides millions in payments;
  • $ 4 million in improved cleanup costs;
  • $ 7 million in lost recreation user fees;
  • $ 1 million in additional costs to help the homeless;
  • and $ 1 million in lost parking revenue.

These do not include the ongoing losses in the tunnel and bridge, which in 2021 totaled around $ 10 million. In early December, city officials warned that if the $ 25 million deficit were passed on to taxpayers, it would increase taxes by five percentage points. That would bring the 1.86 percent tax increase for 2022 approved Monday to nearly seven percent.

But a tax increase is an unlikely way to deal with such a rare expense. Mancina said a more likely route would be to dig into reserves and retain some capital projects.

“But at this point it is premature to identify and act on those elements until we are absolutely certain what the final numbers would be,” he said. Some of the additional expenses could be mitigated by improving operational efficiency and reducing costs. “Those are the things that we are going to pursue,” Mancina said.

But he said mitigating expenses related to COVID is becoming increasingly difficult.

“Unlike before in the pandemic, when some services were significantly reduced or stopped, they are now open and, to varying degrees, trying to normalize service levels, making it difficult to extract operational savings,” he said.

Reference-windsorstar.com

Leave a Comment