Edmonton faces $260M cost if COVID-19 response persists past December

Responding to the COVID-19 pandemic could costthe City of Edmonton $260 million if the crisispersists past December, councillors were told at a meeting Wednesday.

That's the worst-case scenario presented by Mary Persson, the city's chief financial officer.

But Persson said she is focusing on the city getting back to business by September. She estimates the city would face about a $168-million shortfall from the previously approved 2020 budget if facilities andbusinesses are closed until then.

She also projects costs of $95 million if the city were to fully re-open by mid-June, but said that scenario is unlikely.

"If we do not assume that we flip a switch and return to normal in September, we have to consider the longer term effects in the year," Persson said.

Measures specificallydealing with COVID-19 are estimated to cost the city $14 million.

We do not have a scenario that contemplates a full recovery in 2020.- Mary Persson, Edmonton's chief financial officer

Those costs include buying cleaning materials, personal protective equipment for employees and redeploying city staff to other operations.

Persson told council the scenarios she presented are meant to show a "magnitude of varying outcomes," but that it's very difficult to predict the most probable one.

"We do not have a scenario that contemplates a full recovery in 2020," shesaid.

Persson also calculated the costs of thecity gradually returning to full operations: returning to regular schedules in public transit,re-opening community and recreation facilities and re-installing services such asissuing building permits and business licences.

If operations are back to 75 per cent of normal by December, the city faces losing $193 million. That would increase to a $217 million hole if operations are back to 50 per cent, and $260 million if the impacts go beyond December.

Mayor Don Iveson said the possibility of losing $260 million translates to 10 per cent of the city's operating budget.

"That starts to become very, very difficult to trim or offset," Iveson told media at a news conference.

In tax-support revenue alone, the city faces a $142-million drop by Septemberthat includes $57 million less from public transit, $38 million in less in admission, rental and program fees at community recreation facilities and $14 million less from operations inparks and roads, including revenues from parking and a drop in fees private companies pay to do on-street construction.

"We are working to reduce expenditures to offset these dramatically lower revenues," he said.

Layoffs to come

The city is considering more layoffs. Two weeks ago it temporarily cut 2,100 jobs from recreation centres and libraries.

"Further temporary layoffs are one of the scenarios we're looking at in the coming weeks," Iveson said.

The mayor expects an announcement on jobs next week.

He noted the city's ability to rebound is directly related to the province lifting restrictions on businesses and public activity.

"The notion of going back to the previous normal I think is a challenging premise," he said. "I think it's time as a community we start to wrap our heads around the idea that normal after this may be quite different."

Ivesonstressed that the city is tailoring its adjustments to keep tax increases at or around 2.1 per cent as approved in the 2020 budget.

• City of Edmonton, public library laying off nearly 2,100 employees

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