Fredericton looking at $3.4M COVID-19 budget shortfall

The city of Fredericton is looking at a $3.4 million shortfall in their budget due to the COVID-19 pandemic, according to the chair of the city's finance and administration committee.

The city has seen less than expected revenue in terms of parking fees, transit fares and recreational fees because of the state of emergency.

"It's interrupted our non–property tax–based revenue, which is about 15 per cent of our annual budget," said Greg Ericson.

The city was hit particularly hard when it comes to parking fees.

The city estimates a $73,304 drop in parking meter fees, $124,877 less in parking garage and lot use and a $152,910 shortfall on transit fees.

The city blames these shortfalls on a lack of parking enforcement during COVID-19 as well as low usage of these services during the pandemic, with more people working from home.

There were some savings because of COVID-19, including lower fuel costs on Dial-A-Bus and fixed route transit as well as savings incurred by not having to staff or maintain recreation facilities.

Cutting costs

Ericson cautions that the $3.4 million figure is just an estimate based on the "worst case scenario" going forward for the rest of the fiscal year.

Still, the city is looking at ways to cut costs.

Ericson said the city plans to cut some new capital projects, but not on renewal projects.

"It's never really a good idea to start cutting your capital budget when you're replacing, rebuilding or renewing things," said Ericson.

"We need the services and infrastructure we have out there to perform."

Some capital projects that have seen cuts are aspects of the Officers' Square revitalization, human resources programs and the land development projects at the New Brunswick Exhibition Grounds.

The city estimates they can defer $1.4 million in capital projects. It also has found $635,935 of "other net savings."

This still leaves almost $1.4 million of needed cuts to make up the estimated shortfall.

"I'd point out...that that's exactly what the province charges the city for collecting property tax," said Ericson.

"If they wanted to do that for free this year, we could balance our books and still extend these new capital projects to our residents very easily."

Raising revenue difficult

Ericson said there are no plans to cut the city's operations budgets, which includes snow plowing and other city services.

City staff have recommended a hiring-freeze on non-essential positions and borrowing money sooner to help complete the new aquatic centre.

The city is still waiting to hear from the federal government on funding for the summer jobs program, so those positions are still up in the air.

Ericson said it's unclear how much extra revenue could be raised by the city during the pandemic.

"We have to be very sensitive to the fact that the COVID-19 impacts on our community have affected every household and every business and their capacity to earn revenue," said Ericson.

"The tolerance or the ability of our community to come up with extra tax revenue is going to be very limited in itself."

Ericson said there are currently no plans to raise taxes.