(Alison Sandstrom/paNOW Staff)

By Alison Sandstrom

COVID-19

Cost of pandemic increases but Prince Albert covered

Dec 3, 2020 | 7:00 AM

The impact of the pandemic on Prince Albert’s finances has been upgraded, but the city’s director of financial services says she feels comfortable heading into the new year.

Prince Albert’s finance department is now forecasting the City will lose $1,493,783 by the end of 2020 due to COVID-19. That’s up around $400,000 from the most recent previous estimate. The shortfall, however, will be more than covered by federal and provincial funding to help municipalities deal with COVID-19.

Director of financial services, Cheryl Tkachuk told council much of the increased estimated cost is due to a lower interest rate from the Bank of Canada, which the department did not previously include in their calculations. While the low-interest rate is expected to take $194,285 out of the city’s operating revenue, it will likely save Prince Albert money overall by reducing the price of borrowing for capital projects, Tkachuk explained.

“A one percent difference can make a huge difference to the price of a project,” she said, speaking to reporters after the meeting. “So I’m kind of looking at it that positive way, it’s kind of good timing for us in some ways.”

Additional costs associated with the election, including personal protective equipment, cleaning, and extra staff for drive-thru advance voting, cost the City $30,000.

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A final tally of the cost of COVID-19 during 2020, which could increase to $1.7 million, will be available in March, said Tkachuk.

Help from the feds and the province

After covering the current estimated $1.5 million shortfalls, the city will still have $2.9 million left over from federal and provincial COVID-19 relief money.

Tkachuk said that puts Prince Albert in a good spot.

“I feel a lot more comfortable, especially since we’ve gotten the additional funding -especially if we can keep it for the next year or two – I feel very comfortable that we have a little bit of money set aside for those things we know are doing to have an effect on us,” she said.

Advantages of a smaller city

Prince Albert appears to be in a much better financial situation heading into the new year than some other municipalities in the province. Saskatoon is facing an approximately $20 million deficit.

Tkachuk explained larger cities have a much bigger user base for their services so they don’t have to subsidize them as heavily. For example in Saskatoon, ticket revenue might cover the cost of transit, so when ridership drops, the financial hit is severe.

“Because our transit is subsidized to a certain extent by the city, we don’t see quite as big of an effect there,” she explained.

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alison.sandstrom@jpbg.ca

On Twitter: @alisandstrom