Background:
Annual operating budgets for all City departments are set at the beginning of the calendar year based on Council direction. Professional estimates, the current legislative environment, macroeconomic trends (such as currency fluctuations, commodity prices, unemployment figures and business investment, etc.) and other local information available at the time are significant inputs to the operating budget recommended to City Council by administration.
For 2020, the significant unanticipated variable has been the impact of the COVID 19 global pandemic. Since January of this year, the pandemic has spread around the world causing significant uncertainty, and impacting human behaviour and the world’s economy.
It important to note that the Province and City are still dealing with the uncertainty of the pandemic and the US Border restrictions have been extended to at least November 21, 2020. Furthermore, while the City of Windsor has moved to Phase 3 of the provincial re-opening plan, many other regions have reverted to a Modified Phase 2 status, requiring increased restrictions on daily activity.
As a result of this crisis, many of the City’s operations have been suspended, altered, continued with major restrictions, or increased to meet the demands resulting from the pandemic. An administrative report to Council on July 13, 2020 provided a preliminary status of the financial challenges. This report provides an update to the COVID 19 financial challenges provided in July and includes other Non-COVID related Y/E variance projections by each area.
All departments monitor revenues and expenditures on an ongoing basis and project through to the end of the year to ensure they remain at or as close to their approved budget as possible. This assists in mitigating all material variances as effectively as possible. As is typical with most forecasts, accuracy tends to increase as the year progresses and more information and data becomes available.
The City’s 2020 annua l budget includes a $1.5 million corporate contingency line item to help offset any unforeseen variances and contingent liabilities that might materialize throughout the year.
In addition to the City’s main operating budget, which is funded by the property tax levy, certain expenditures are funded by specific non-property tax levy sources such as Legislated Building Permits, On/Off Street Parking Operations and the Sewer Surcharge Operating Fund. It is noted that for this report, YQG and Windsor Tunnel operations have also been included in the variance projections given the magnitude of financial impacts these two entities are facing and in order to communicate the shortfalls they face as a result of the COVID 19 travel restrictions. The discussion section of this report provides additional detail and analysis of the current and projected status of these other entities.