Cutbacks by the town will not be enough to offset the cost of financial supports and a reduction in anticipated revenue during the COVID-19 pandemic.
Even by implementing cost-saving measures of $1.5 million, the town anticipates it will fall $1 million short of balancing the ledger. Because it has utilized funds from reserves, it will have no immediate impact on property taxes.
The town anticipates $2.5 million less in revenue than originally budgeted.
Interim town CAO Drew Hyndman didn't downplay the impact.
"When you look at the grand total, that's about $2.5 million. So, some pretty significant impacts for COVID," Hyndman said in his presentation to town council.
One of the biggest anticipated hits is a $550,000 reduction in revenue from the Cochrane RancheHouse.
It also may be providing the Spray Lake Sawmills Family Sports Centre up to $1.5 million to allow it to cover base costs until slowly reopening the entire facility. While those funds are being taken from a town reserve, repayment is expected to be derived from future property taxes.
An easing of penalties on taxes and utilities plus a change in the water tiering charges will total about $223,00 less in revenue.
The town also expects planning revenue to drop by $210,000.
Countermeasures were taken to find efficiencies and, in some cases, delay initiatives.
"There's a significant amount of savings and efficiencies that we look at, trying to create," Hyndman told town council. "I think this demonstrates the commitment of staff to address the challenges of COVID."
Chief among them is reducing its workforce by delaying hiring and not backfilling leaves. For example, the town currently employs 12 seasonal workers and traditionally hires 27.
Some reductions are a natural spinoff from a reduction in business activity. There's less travel, fewer conferences, and using fewer supplies used.
Other savings will have a long-term implication. They've held back on contributing $104,300 to reserves for future need, cut back on routine maintenance of road equipment, and reduced tree planting and pathway repairs on public land.
Setting gears in motion for the next budget
The stifling of the economy by COVID-19 in combination with a struggling energy sector will have an impact beyond the current budget year.
Known as one of the fastest-growing communities in Canada for years, Cochrane is now working on projections of under one per cent growth for it's coming budget. That amounts to only an additional $290,000 in tax revenue to work with.
"It will be quite the adjustment when you're used to having some growth to allow us to be more nimble," said Katherine Van Keimpema, general manager of corporate services. "We're going to have to be quite innovative this year."
Council has approved the timetable for the 2021-23 three-year budget.
They've put in place a modified public engagement process that takes into account COVID-19 protocol.
Council approved the following:
- Public engagement initiatives during the period of Oct. 27 to Nov. 12
- Draft Budget - details to be determined
- Infographics to communicate draft budget highlights
- Online feedback from public throughout process
- Providing information directly to community associations