Fiscally sound B.C. cities furloughed auxiliary staff, delayed facility openings

Explore a digital map of B.C. to see how municipalities are doing financially and how they have responded to the pandemic since March

B.C.’s municipal managers, councillors and salaried staff largely avoided COVID-19 cost-cutting measures while the lowest-paid city hall employees have borne the pandemic’s brunt, a Glacier Media analysis shows.

Six months into the pandemic, municipalities have weathered social distancing’s economic impact by furloughing thousands of auxiliary and temporary staff and keeping public facilities shut down months beyond the province’s “Phase 3” reopening plan.

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Glacier Media canvassed the 25 biggest cities across B.C., including most in Metro Vancouver. Burnaby, Kelowna, Maple Ridge, Nanaimo and Pitt Meadows failed to respond in full after being given three weeks to answer questions on their COVID-19 response.

In total, municipalities reported terminating less than 50 salaried staff members, However, thousands of lower-paid temporary and auxiliary staff typically working in civic facilities such as pools and community centres lost employment. And council members only in Vancouver, New Westminster and District of North Vancouver reported taking a pandemic pay cut.

However, residents are now seeing many auxiliary employees, such as lifeguards and program teachers, returning to implement restart plans that have significantly altered how we enjoy municipal services.

Gone are the days of perusing library stacks with neighbours and sitting down to read a magazine. Rather, for the foreseeable future, you could be directed to borrow online and use a curbside pickup and drop-off service, as most libraries offer limited services with restricted occupancy, as is the case in Burnaby, Vancouver and Langley.

Many pools have opened in the past two weeks, but with limited capacities and online registration – just one example of how municipal staff is managing residents through technology. In Richmond, people are directed to register online for time-limited swims, although there’s room for drop-ins. But in Burnaby, drop-ins are forbidden and Burnaby residents get online registration priority.

And, if you go to a pool or ice rink, many services may not be fully available. For example, at West Vancouver’s aquatic centre, the lap pool is open but the change rooms, hot tubs, sauna, and steam room remain closed. Social distancing guidelines will alter the way we play, such as limiting the number of players on hockey teams and ushering in stricter rules to discourage body contact.

Some cities reported holding more registered activities outdoors. Port Coquitlam extended outdoor pool season and its public squares will host arts programs through the fall. In Fort St. John, fitness classes and programming resumed in July, but outdoors.

Municipalities have also moved at different paces based on their own restart plans.

Most reported plans to reopen most facilities in September, roughly three months after the provincial government implemented its Phase 3 Restart Plan, which included opening hotels and private recreational facilities.

By late August, in Cranbrook, you would have been able to skate before being able to swim. But in Richmond, pools opened before rinks. Vancouver’s plan is to open all pools and fitness centres by October 13 at the latest but with standard COVID-19 guidelines. Surrey began opening some facilities in August, with no stated opening date for Grandview Heights Aquatic Centre. And Pitt Meadows, like many municipalities, opened its fitness programs by September’s end.

It’s not just how we keep fit physically that’s changed, but also how we engage with our community leaders. Just 10 municipalities reported having a plan in place last month to conduct safe, in-person council meetings with public attendance, after months of online decision-making. Residents are encouraged to watch meetings online and use a phone to comment at public hearings.

Union of BC Municipalities (UBCM) president Maja Tait said municipalities worked quickly to protect communities and staff from pandemic impacts.

She said initial work concentrated on keeping staff, managers and councillors safe, and that municipalities also worked together through the UBCM.

“We rolled up out sleeves and got in this together,” the Sooke mayor said.

 

B.C. cities in sound financial shape

Another key concern expressed by municipalities across the province has been the health of municipal finances and the ability to keep building infrastructure.

Local residents may be wondering what lies ahead for that promised new community centre one, two or five years down the road. Most cities report their 2021 projections are coming this fall.

“The pandemic has blown a hole in local government budgets, particularly large and mid-size communities with public transit services,” Tait said in a statement.

But municipalities appear to be in sound fiscal positions overall, based on financial information provided by the Ministry of Housing and Municipal Affairs.

They generally have the reserves to pay for new infrastructure to accommodate new developments already underway, and their pandemic-related losses are relatively small compared to their operating budgets. Furthermore, their biggest revenue generator – property taxes – appears to have been unscathed.

For instance, cities that reported the most up-to-date property tax payments, and with a past due date, showed relatively minor delinquencies. Only 2.5% of property taxes remain unpaid in Victoria; 3% in Kamloops; 3.8% in the City of North Vancouver; and 4% in Abbotsford. Many cities have due dates of September 30.

As for lost service revenues, civic facilities operate at a loss regardless, with expenses made up by other revenue – chiefly property taxes. For instance, in 2019 Vancouver recorded a $70.2 million net loss in its parks and recreation department, financial statements show. But the pandemic-related closures augmented such losses, particularly as the bureaucracy, outside of furloughed auxiliary workers, was maintained.

Municipalities received Victoria’s permission to borrow from collected school taxes to bolster 2020 shortfalls. No cities reported using these funds but some – including the City of North Vancouver, which “projects relatively little financial impact, to date” – have taken out lines of credit as a precaution.

B.C. cities are also sitting on billions of tax dollars.

 

The province’s 162 municipalities recorded $6.5 billion of net financial assets in 2018. Annual reports for 2019 for the 25 canvassed municipalities show 9% growth in net financial assets. Among those assets in 2018 was $4.4 billion in reserves.

 

Casino closures have hit some communities hard. Last year, 36 cities raked in $98.4 million for their 10% host share of casino revenues. Half of this year’s revenue has already been lost with no indication when players might return to tables or slots.

As each financial quarter goes by the biggest losers, based on last year’s quarterly averages, are Richmond ($3.8 million), Burnaby ($3 million), Coquitlam ($1.9 million) and Langley ($1.9 million). Cities have historically invested most of their gambling proceeds into capital infrastructure. For instance, Richmond recently opened Metro Vancouver’s most expensive pool – an $80 million multi-use facility paid for in part by $50 million from gambling.

Replying to a query from Glacier Media, the City of Langley specifically addressed its casino conundrum: “The casino proceeds shortfall of $5.7 million will affect the 2021 Capital Improvement Plan and the projects will be reprioritized and some projects will be deferred. This analysis is not completed yet.”

And so, residents may not benefit from as many future facility upgrades, or will have to pay more taxes for them – that is, if municipalities want to maintain their existing reserves and staff levels.

Municipalities generally maintain their reserves are for future capital infrastructure projects and some accounts have statutory uses. For instance, Burnaby’s $1.6 billion in reserves are largely from development contributions and much of it is earmarked for future amenities over the next 10 years (although all accounts appear healthy, such as the $9.3 million snow removal reserve, which is about three times the annual cost of snow clearance). Vancouver has $1.3 billion in reserves and also claims much of it is already earmarked for various spending commitments, although it has $146 million in the “general revenue stabilization” fund. Vancouver has net financial assets of $649 million, thanks to recent annual surpluses, after having just $73 million in 2015.

The presence of reserve funds is important for municipalities, Tait told Glacier Media.

“It’s always a reality: how do we keep on with the big work we need to do,” she said. “We plan ahead.”

Yet regardless of the billions of dollars B.C. municipalities are sitting on, senior governments have intervened, as of September, to provide $540 million in extra funding to support local governments with COVID-19-related costs.

“This funding will provide some needed relief to sustain the delivery of service and is good news for B.C.’s communities,” according to a UBCM statement on September 17.

Local governments will receive $425 million “to address local government facility reopening and operating costs, emergency response costs, lost revenues and other COVID-related impacts.”

A further $100 million will go to cities to “address the needs of vulnerable populations, the challenges posed in local communities by homelessness, and community concerns with street disorder and safety.”

Minister of Municipal Affairs and Housing Selina Robinson said in an emailed statement that the provincial government “recognizes that local governments across B.C. have been facing unprecedented challenges as a result of COVID-19.”

“We recognize the critical role local government councils and boards, and local government staff, continue to play in responding to this crisis, helping people in need, providing essential services and helping restore economic activity,” Robinson said.

 

gwood@glaciermedia.ca

jhainsworth@glaciermedia.ca

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