City of St. John's posts surplus, as mayor warns of challenging years ahead

The City of St. John's has recorded a nearly $14-million surplus for 2019, money themayor says will be badly needed in the not-too-distant future.

The details of the savings were unveiled on Monday night's council meeting.

"We have a very, very challenging several fiscal years ahead of us and we are going to need every resource we have to get through those," Mayor Danny Breensaid to reportersin an online scrum after the meeting.

The city attributeda few factors to the surplus: it has spent a lot less money on environmental health services, as well as on maintenance of parks, pools and sports facilities, and alsohas a number of vacant positions within the city.

Breen said surpluses would usually be cut into half,with one chunk going to fund a major one-time project, and the remainder left to cover unexpected expenses "to put away for the rainy day," he said when addressing council.

"This year we had a monsoon and we are going to need every penny that we can get to get us through not only 2021 but 2022 and onwards."

Challenges ahead

According to Breen, the City of St. John'shas an accumulated deficit of $22 million,which is only going to grow thanks, in large part, to the COVID-19 pandemic.

"We are looking at a deficit somewhere in the range of 18to 20 million dollars for 2020," said Breen.

I think we can call 2020 the year of unforeseen circumstances.- Danny Breen

That means the surplus will give the city a little bit of breathing roomwhen its budget is released in December.

"The challenge we have is the unknown," Breen said.

"We don't [know] how we are going to collect [taxes] or how the collections of taxes will work going into the next year and the following years."

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At this stage, council and staff don't fully know the effect the pandemic will have on the city's coffers in respect to businesses shutting down, vacancies and property values roughly 70 per centof its revenuecomes from property taxes.

Breen called2020 a challenge the City of St. John's has never seen before.

"I think we can call 2020 the year of unforeseen circumstances," he said.

Earlier this year the city deferred interest for home and businesses owners to give people relief from challenges caused by COVID-19.

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