Saint John could see revenue losses of between $5 million and $12 million in 2020 due to the impacts of COVID-19.
A presentation from Finance Commissioner Kevin Fudge during Wednesday’s finance committee meeting looked at best-case and worst-case scenarios for the city.
In the best case, the city is preparing for three months of lost revenue, accounting for $5.3 million. The worst-case scenario would be a nine-month shutdown, affecting the remainder of 2020, and totalling $12.2 million in lost revenue.
“The bottom line is (these are) very uncertain times,” Fudge said. “We don’t know how long this event will last, how many phases, and what the potential economic outfall will be.”
Between $4.2 million and $8.9 million of lost revenue is expected to come from the general fund and transit revenues, which includes hotel levies, and revenue from permits, parking and real estate.
Fudge’s presentation also included a cost mitigation plan of $4.2 million to $8.9 million to help alleviate the shortfall.
The cost mitigation plan included staff layoffs, cuts in purchased goods, and adjustments by Saint John Transit.
Despite the daunting revenue loss, City Manager John Collin says there is reason for optimism among the doom and gloom.
“We have the possibility to put in place mitigating measures to address that entire $5 to $12 million,” he said. “In short: the sky is not falling.”
Collin recommended redesignating the $2 million winter weather reserve as an emergency service reserve, converting 80 per cent of the growth reserve into a post-COVID-19 recovery fund, and reducing Saint John Transit services by 25 per cent by May 15 to help curb the expected financial hit to the city.
Mayor Don Darling said despite the downturn in revenue, he sees this as an opportunity for Saint John to work together with the provincial government.
“I think we have many challenges right now,” Darling said. “But I am really optimistic that this presents an opportunity to come together like we never have before.”
