The COVID-19 public health alert has made a shambles of Norfolk County’s 2020 budget.
Newly-installed CAO Jason Burgess said the ultimate impact depends on the duration of the emergency and the demands it makes while the threat persists.
Burgess said the combination of lost revenue and extraordinary costs could be as high as $4.5 million, depending on what happens on a daily basis this year.
With each one per cent increase in the levy representing $899,000, the impact on the 2020 operating budget, which was approved in January, could be as high as five per cent.
The budget allowed for an 8.6 per cent increase in residential taxes. The global pandemic has upset these calculations, with Burgess describing a fluid situation that requires day-to-day assessment.
With the federal and provincial governments racking up unprecedented deficits in response to the virus, Burgess warned that municipalities will be expected to cope with minimal assistance from senior governments.
“I’m not making any assumptions that we’ll get money from the province and federal government,” Burgess said. “They have poured significant resources into the system, so receiving support from them is something I would not expect at this time.”
The county can take steps to minimize the fallout. Burgess said many county workers have been idled and face layoff.
As well, by law, municipalities are not allowed to run budget deficits. But Burgess reports the province’s thinking in this area is evolving in light of the COVID-19 shutdown. All senior managers at Governor Simcoe Square are making decisions with cost containment in mind.
Burgess also warned that Norfolk will feel the impact of this shutdown long into the future.
“It’s a double whammy,” he said. “It’s a hit to the taxpayer but the taxpayer community is hurting. I’m not viewing this as a one-year item.
“This significantly impacts our expectations for next year, too.”
The health emergency strikes at an especially difficult moment for Norfolk. During January’s budget deliberation, council heard that the municipality’s reserve funds were effectively depleted. Burgess said Norfolk doesn’t have rainy-day money readily available and will have to govern itself accordingly.
Delhi Coun. Mike Columbus pointed out some relief may be found in the relatively mild winter just passed. Columbus said the absence of significant snowfall since Jan. 1 will free up cash in Norfolk’s winter control budget. He estimated savings in the range of $500,000.
That may be so, Burgess replied, but Norfolk’s winter-control planning for 2020 doesn’t end till Dec. 31. A snowy November and December could wipe out savings from earlier in the year, Burgess said.
This was Burgess’s first council meeting as Norfolk’s top administrative officer. Before he was hired as CAO, Burgess – a St. Catharines-based consultant – served as the county’s interim general manager of finance and corporate services.
Mayor Kristal Chopp welcomed Burgess to his first meeting as CAO by noting the unusual circumstances. This included council members social distancing in the council chamber, with three councillors participating by teleconference – a first for the council.
The general public was also forbidden from attending the April 7 meeting due to public health concerns. Sections of the council chamber were marked with yellow caution tape to denote social-distancing requirements.
With Burgess in place as chief administrative officer, Chopp thanked Bill Cridland, Norfolk’s general manager of community services, for taking “the wild ride” in recent months as Norfolk’s acting CAO while council searched for a replacement.