City's year-end surplus nearly $1.35M

The City of North Bay is reporting a 2020 surplus of $1,348,629.

At its last regular meeting, North Bay City Council authorized the Chief Financial Officer to transfer the $1,348,629 year-end surplus to the City's Tax Stabilization Reserve Fund. 

This reserve fund's "balance of $2,887,718 is currently well below the City’s targeted level of 5% to 10% of the total municipal tax levy being $4.7 million to $9.4 million for 2020," according to the associated report to council.

The City closed 2019 with a deficit, the first since 2014.

Deputy Mayor Tanya Vrebosch said the City has been prudently navigating the financial challenges presented since last March while the staff report advises several actions have been taken to mitigate the City’s losses as it weathered the COVID-19 pandemic.

"Mid-last year we kind of thought 2021 would start and we would be back to normal and here we are in May and things are not back to normal," said the budget chief. "We are cognizant this will be another challenging year for us and staff are doing an excellent job making sure we come out of this in a positive way at the end of the year."

A projected deficit late last summer was avoided as the City received $2,978,900 in Municipal Phase 1 Safe Restart Agreement funding and $1,201,515 in Transit Phase 1 Safe Restart funding. 

"The full amount of the Municipal Safe Restart funding was used in 2020 to offset COVID-19 related revenue losses and operating costs. A total of $672,755 in Transit Phase 1 Safe Restart funding was utilized in 2020 and the balance of funding received in the amount of $528,760 remains in reserves at year-end to offset future impacts to the transit operations," reads the report.

The City of North Bay opted to use  Phase 1 funding prior to the use of reserves for the 2020 fiscal year in an effort to ensure that sufficient reserves remain available for 2021 and future years.

"These mitigation steps along with the Federal-Provincial Safe Restart funding enabled the City to continue to provide services at reduced levels to ensure the safety of citizens and staff and also assisted in minimizing 2021 budget increases." 

The financial reports from each department are heavily influenced by the pandemic and the amount of Municipal Phase 1 Safe Restart funding received. For a detailed departmental report on spending and revenues during the pandemic, click here.

See related: City gets over $4 million in emergency COVID relief

And: North Bay, area communities receiving additional operating funding from province

The year-end financial report from each department:

• Community Services: a surplus of $636,112
• Corporate Services: a surplus of $489,303
• General Government: deficit of $575,664
• Infrastructure and Operations: a surplus of $498,829
• Service Partners: a surplus of $300,049

Vrebosch advised all of the agencies, boards, and commissions "came in on budget or under budget. Some of them had some provincial or federal funding to assist them." 

Safe Restart funding was used to support the North Bay Police Service, the North Bay Public Library, Jack Garland Airport and the North Bay chapter of the YMCA.

Some notable points reported by the City of North Bay in the year-end financial report:

• Various operating expenses increased due to the pandemic including the impact of social distancing on operations, the need for social distancing barriers, increased pay and display maintenance expenses and increased sanitization.
• Parks and arena revenues have been significantly impacted by COVID-19 as West Ferris Arena remained closed and ice rentals within Memorial Gardens and Pete Palangio Arenas occurred while adhering to strict guidelines to ensure the safety of both the participants and staff.
• Pandemic-related extensions have largely reduced revenues from Provincial Offences (POA) Courts in Ontario in 2020 and the revenue reductions are anticipated to continue into 2021.
• Factors contributing to the projected deficit in General Government include lower revenues from dividends, methane sales, MAT, reserve transfers, penalties and interest, and higher write-offs.
• The City’s winter maintenance file ended the year with a deficit of $33,162. Currently, the balance in that reserve is nil as the full balance was used in 2019 to offset the winter maintenance shortfall.
• A new WSIB rate model came into effect on January 1, 2020, changing the way employers are classified and how premium rates are set and adjusted.
• Transit revenues have been significantly impacted by COVID-19.
• In October 2020, the YMCA of Northeastern Ontario forwarded a financial request to Council seeking support from the City in the amount of $173,725 to cover the deficit incurred as a result of the lockdown period from March 17 to September 30.
• COVID-19 has had a negative impact on parking revenues since March 2020. In 2020, metered and permit parking revenues were down 18% and 16% respectively.
• By-law enforcement was greatly reduced during lockdown periods. The five-year average for the number of parking tickets issued is 15,373. In 2020, only 9,958 tickets were issued, which is a reduction of 35%.
• Parking ticket convictions were halted by the Province. Realized revenues were lower than budget by approximately $97,300.
• Cost savings were achieved through reduced summer staff and using City staff to complete historically contracted work.

According to the City, its reserve policy forms a critical component of the municipality’s long-term financial plan. Reserves are intended to be used to offset one-time expenses and reduce the risk to the taxpayers of significant budget impacts arising from uncontrollable events and activities.

"In the early 2000s, the City of North Bay had no reserves. Through prudent financial planning and the implementation of a Reserve Policy, Long-Term Capital Funding Policy and other related financial policies, the City fulfilled a requirement to implement long-term financial planning and to establish a stable balance sheet," according to the associated report, and thanks to those steps, the "City has now accumulated reserves to a level that is considered healthy. To be prudent, given the uncertainty and the unknown duration of COVID-19, the City is planning to use reserves in the 2021 budget and possibly the 2022 budget as a means of funding the temporary loss of user fee revenues while the economy recovers."