Newmarket mayor 'cautiously optimistic' about town's financial situation

But it's difficult to predict outcome as pandemic wears on, John Taylor says

Newmarkettoday.ca
August 18, 2020
Kim Champion

A $1.8-million boost from the provincial and federal governments will help the Town of Newmarket whittle down a deficit that has so far grown to nearly five times that amount as it responds to the COVID-19 pandemic, Mayor John Taylor said.

The town will receive the funding in September as part of the first phase of the Safe Restart program, which aims to provide some financial relief on a per-capita basis to all of Ontario’s 444 municipalities.

Of the nearly $1.4 billion available in funding, half will go out to municipalities in September. A second phase allows local governments to apply for additional assistance based on demonstrated financial need, for which the town will apply, said Taylor.

“The funding certainly improves our outlook and we’re very appreciative of the (Aug. 12, 2020) announcement from the provincial and federal governments,” said Taylor.

The mayor said he’s feeling “cautiously optimistic” about the town’s financial situation but will have a clearer picture of the pandemic’s impact to its bottom line in late August or early September when an update is expected to come before council.

A May 19, 2020, financial report estimated the coronavirus crisis could leave town coffers short about $8.5 million this year alone as extra costs are incurred and revenues decline. But municipal budgets are required to be balanced under the Municipal Act.

“We’re looking at all kinds of ways to try to reduce that number,” said Taylor. “We’re experiencing probably the most significant financial challenge this municipality has ever faced. There’s a lot of work to be done.”

Taylor said the town has three options to bring costs and the deficit down that include additional service-level cuts or reductions, drawing on reserves, increasing taxes, or some combination of the three.

“We’ll have to look at all of those and weigh them out when staff give us the final numbers,” he said, adding that it’s difficult to predict the outcome as the pandemic wears on.

The town has already rolled out cost-saving measures in an effort to balance the books, Taylor said, including laying off more than 400 part-time staff, redeploying permanent full-time staff to other critical service areas, instituting a freeze on discretionary spending, as well as reducing non-essential services.

“The vast majority of people seem to be OK with that in a COVID environment, and most people respect that we’re trying to find ways that are only a little bit impactful, but if you do a lot of small measures it can add up,” Taylor said.

While the municipal office remains closed to the public and the vast majority of town staff continue to work at home for now, a reopening of the facility is being considered in a gradual and phased manner.

“We’re managing to deliver the services, we’ve pivoted well and we’re managing to keep the town moving forward,” said Taylor. “But as we bring services back on and are opening more all the time, as the economy reopens, as schools reopen, we need people now more than ever to stick with mask-wearing, social distancing, and hand hygiene.”

Taylor cautioned pandemic-fatigued residents not to relax as restrictions ease, and said he believes the next 60 to 90 days are “arguably the most important time in all of this experience to be following those guidelines”.

It has not yet been decided where exactly the $1.8 million in funding will be allocated given the changing landscape of the COVID-19 pandemic and the potential for a second wave of the virus, town officials say.

But Taylor said Newmarket council and town staff will continue to take action to mitigate the financial impacts as it “strives to maintain its own ongoing target of having a per-capita tax rate of 10 per cent below the Greater Toronto Area average”.