COVID-19 Supplementary Budget & Relief Programs Council Scott Conrod Greg Barr Rob Frost CAO Director of Finance DCAO May 20, 2020
Confidentiality The contents of this Request for Decision are based on the public portions of a Request for Decision Report. Additional information has been released privately to Council in accordance with s.22 (2) (d) (e) and (g) Municipal Government Act.
RFD Overview • Response to the COVID-19 pandemic • 2020/21 Supplementary Budget • Community based and ratepayer relief programs • Improved municipal cash flow • $380M Province of NS loan program 3
Background – DSE & Budget • Maintaining sustainable cash balances to fund essential services is a requirement of the DSE • Supplementary budget process as method to develop pandemic response while ensuring cash sufficiency 4
Background – Uncertainties • Municipal cash flow projections (Table 1) • Projected depletion of non-committed operating reserve by early July • Realigning budget line item expenditures doesn’t guarantee sufficient cash 5
Background – Uncertainties • Potential significant cash flow decreases in future due to assessment declines in commercial and residential properties • Combination of possible increased receivables and lower assessments can erode future cash position (Table 2) 6
Background – Tax Rates • Council accepted that a general tax rate decrease would not facilitate delivering relief to those most in need • Counter productive in maintaining cash flow for funding/delivery of essential services 7
Background – Capital Res. • Municipality’s Capital Reserves should be maintained: Participation in any forthcoming • infrastructure stimulus Investing in municipal infrastructure within • Growth Centres and Villages 8
Municipal Comparisons • Cost Recovery Structures can vary significantly among municipalities • Expenditure reduction due to reduced revenue from deed transfer taxes • Lower revenues and cash flow due to service reductions or waived fares 9
Municipal Comparisons • Variations also exist with: Water and wastewater infrastructure • operated Public space/parkland maintained • Administrative burdens for program delivery • and municipal services 10
Municipal Comparisons • Scale and program variations: Program intake volumes • Scope of services provided • Activities not restricted by DSE • Almost 60% of MoK workforce directly • involved in delivery of public works and inspection services 11
Supplementary Budget • Requirement to maintain cash balances for essential services • Recommendations for operationalizing anticipated DSE requirements and relief objectives 12
Expenditure Abeyance • Reduce expenditures to protect the Municipality’s cash position • Transfer or “park” certain items within a COVID-19 Reserve for possible future use and/or redeployment 13
Expenditure Abeyance • Use of reserve or redeployment contingent on status of DSE and known cash position post interim tax bill payment deadline (July 31 st ) • Allows Municipality to be agile in its future response and efforts 14
Expenditure Abeyance • Funds available, at Council’s discretion, for further relief or to reinstitute Municipal programs Progression of the Declared State of Emergency Long Run DSE Short Run DSE Greater need for Greater need to reinstate further relief measures Municipal programs Municipal Response 15
Expenditure Abeyance • Appendix D – Line Item Transfers to COVID-19 Reserve Fund • General & Program Adjustments - $464,008 • AVRL Discretionary Increase - $26,300 • Grant Programs - $563,670 16
Expenditure Abeyance • Purchased Services - $122,970 • Materials, Supplies, & Utilities - $107,833 • Debt and Transfers - $1,007,148 • Total Transfer - $2,291,929 17
Community Based Programs • Administered primarily through the not- for-profit sector and be open to property and non-property taxpayers and community based organizations 18
Community Based Programs • Support for Business – Business Retention and Expansion (BRE) Officer ($100,000) • Support for Food – Local food banks or local organizations that provide food support ($100,000) 19
Community Based Programs • Support for Community Groups – One time funding to help cover fixed overhead costs bourn by not-for-profit community groups ($150,000) • Support for Community Groups – One time increase in CGTO ($72K to $150K) 20
Community Based Programs • Support to the Arts and Culture Sector – Commissioning of artwork and proceeds from the auctioning of the pieces would support community initiatives ($50,000) 21
Municipal Taxation Relief • Target relief measures to those taxpayers most in need • Have the programs be structured in a manner that incentivizes taxpayers to remit payment to Municipality 22
Municipal Taxation Relief • Impact of s.57(2) MGA • Municipality will have to rely on s.113 MGA • Budget cap ($825,000) has been set 23
Municipal Taxation Relief • Roll-out relative to Provincial and Federal programs • Proposed staggered release dates with Community Based Relief Programming due to several reasons 24
Municipal Taxation Relief • Residential Taxation Incentive Rebate • One-time incentive rebate for qualified residents that pay residential property taxes • Rebate amount based on participation • Other requirements as outlined in RFD 25
Municipal Taxation Relief • Residential Ratepayer Relief Calculation Residential Taxation Incentive Rebate Projected Eligible Residential Properties 4,446 Projected Rebate Amount $ 125 Percentage of Average Residential Interim Tax Bill 21.10% Total Projected Residential Program Cost $ 556,500 26
Municipal Taxation Relief • Commercial Taxation Incentive Rebate • One-time incentive rebate for all commercial property tax accounts • Rebate amount fixed at $250 • Other requirements as outlined in RFD 27
Municipal Taxation Relief Commercial Taxation Incentive Rebate Kings Commercial Properties (< $250,000) 819 Kings Commercial Properties ($250,000 to $500,000) 122 Proposed Rebate Amount $ 250 Proposed Rebate Amount $ 250 Percentage of Average Interim Tax Bill 27.60% Percentage of Average Interim Tax Bill 6.20% Commercial Subtotal Cost (< $250,000) $ 204,750 Commercial Subtotal Cost ($250,000 to $500,000) $ 30,500 Kings Commercial Properties ($500,000 to $750,000) 51 Kings Commercial Properties ($750,000 to $1,000,000) 25 Proposed Rebate Amount $ 250 Proposed Rebate Amount $ 250 Percentage of Average Interim Tax Bill 3.50% Percentage of Average Interim Tax Bill 2.50% Commercial Subtotal Cost ($500,000 to $750,000) $ 12,750 Commercial Subtotal Cost ($750,000 to $1,000,000) $ 6,250 Kings Commercial Properties ($1M to $2M) 33 Kings Commercial Properties ($2M to $4M) 11 Proposed Rebate Amount $ 250 Proposed Rebate Amount $ 250 Percentage of Average Interim Tax Bill 1.60% Percentage of Average Interim Tax Bill 0.70% Commercial Subtotal Cost ($1M to $2M) $ 8,250 Commercial Subtotal Cost ($2M to $4M) $ 2,750 Kings Commercial Properties ($4M to $10M) 12 Kings Commercial Properties ($10M+) 1 Proposed Rebate Amount $ 250 Proposed Rebate Amount $ 250 Percentage of Average Interim Tax Bill 0.30% Percentage of Average Interim Tax Bill 0.00% Commercial Subtotal Cost ($4M to $10M) $ 3,000 Commercial Subtotal Cost ($10M+) $ 250 Total Projected Commercial Program Cost $ 268,500 Total Projected Residential Program Cost (Table 5) $ 556,500 28 Total Projected Program Cost $ 825,000
Financial Impact- Summary Funding breakdown Amount Residential Taxation Incentive Program $ 556,500 Commercial Taxation Incentive Program 268,500 Ratepayer Relief - See Section 4.2 $ 825,000 Increase in Council Grant to Organization Program * $ 78,000 Valley REN BRE Officer 100,000 Local Food Program 100,000 Community Groups Program 150,000 Art Projects Program (Food Bank Support) 50,000 Community Support Contributions $ 478,000 * Brings total Council GTO to $150,000 29
Financial Impact- Summary Emergency Response Reserve Future Relief, Reinstatement of Community Municipal Programs Support Ratepayer or Return to Capital Contributions Relief Reserve Line Item Transfers Staffing and Program Adjustments $ 464,008 $ - $ 193,174 $ 280,834 AVRL Discretionary Increase 26,300 - 26,300 - Grant Programs 563,670 478,000 53,670 32,000 Purchased Services 122,970 - 122,970 - Materials, Supplies, Utilities 107,833 - 107,833 - Debt and Transfers 1,007,148 - 321,053 686,095 $ 2,291,929 $ 478,000 $ 825,000 $ 988,929 30
Financing Program Overview • $380M announced by Province of NS on April 28 th • Aimed at providing assistance to ratepayers while easing cash flow concerns for Municipalities 31
Financing Program Overview • “Municipal Operating Loan Program” developed by NSFM/AMANS/DMAH • Meeting held by NSFM, AMANS, MFC, and DMAH with CAOs and DOFs on April 29 th 32
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