The City of Surrey is tackling an estimated $40 million deficit this year due to COVID-19 in part by keeping civic facilities, parks and libraries shuttered through the summer; delaying the opening of a new community centre; and dipping into reserve funds such as snow removal and tree planting.
“At this time, staff are taking several significant proactive measures to mitigate the budgeted shortfall,” stated city manager Vincent Lalonde in a June 10 staff report presented Monday night to Surrey city council.
“The City has taken a philosophy that a series of short term and temporary actions to mitigate the budgeted shortfall is more beneficial to the long-term economic health of the City than a prolonged series of actions in future years to repay shortfalls from 2020,” added Lalonde.
Management will look to slash $8 million in discretionary spending from their departments and save a further $2 million by delaying hiring of vacant positions.
The next largest cost saving measure is transferring $8.3 million earmarked from the now mothballed YMCA community centre.
The city will save a further $6 million by keeping major community centres, parks and libraries closed through the summer.
Cancelling Newton Urban Park, deferring Newton Athletics Fieldhouse and cutting other smaller capital projects will save a further $4 million.
The city will also now delay opening the new Clayton Community Center until winter of 2021, saving an additional $2.5 million.
That leaves $8.7 million for the city to find from its reserves, which the report concedes are low.
“Reserve levels for the City have been maintained, however not necessarily at ideal levels due to fiscal limitations we now face. Staff may have to resort to utilizing a portion of the following non-statutory reserves on a strictly one-time basis to mitigate the forecasted budget shortfall in 2020,” the report states.
The city’s non-statutory reserve funds (money not associated with development) have dwindled by 44% since 2017, according to annual financial statements. As of last December the city had $57.5 million whereas in December 2017 the city had $103 million. The city had projected operating expenses (excluding utilities) of $483 million for 2020.
Reserves are low because the city has, for decades, been operating with low taxation and ‘pay-as-you-go’ policies, while often borrowing from the Municipal Finance Authority for capital projects. Among 21 Metro Vancouver municipalities, Surrey has the lowest 2019 municipal property taxes at $2,028 per average household (By comparison Vancouver charges $3,059; Burnaby, $2,409 and Richmond, $2,592).
Reserves the city is looking at dipping into include the “green city” reserve, which is a sum of money paid by developers to replant trees they cut down; equipment replacement; corporate contingency and revenue stabilization.
The report was accepted by a majority of five on council, from the Safe Surrey Coalition.
The report drew criticism from various groups.
Independent councillor Steven Pettigrew voiced concern Monday about the loss of trees due to development and said the tree planting reserve is important to mitigate those losses.
Coun. Brenda Locke, of Surrey Connect, asked staff to re-assess the tree planting fund, and called the report “devastating” for the environment and for families, as it “guts” civic services.
Cloverdale Minor Hockey Association said on Twitter following the council meeting that the delayed openings to ice rinks would impact minor hockey associations and skating clubs. “Recreation is a key factor to the mental health of our youth,” said the association.
The newest service and capital cost cuts are in addition to last year’s pre-pandemic cancelled projects, including two new ice rinks in Cloverdale, and a hiring freeze on more firefighters and police officers.
Despite the cuts, residents will continue to be looking at a 2.9 % property tax increase and a budgeted two-year $45 million plan to transition from the RCMP to the envisioned Surrey Police Department — a contentious matter for those opposed to the austerity measures.
White Rock pier re-opens
Elsewhere, the White Rock pier and waterfront will reopen next week, after White Rock city council decided Monday on a cautious reopening plan.
All parking along the popular beach and restaurant promenade will also be opened up, except for the west beach parkade.
Should city staff decide physical distancing for COVID-19 is not being followed the pier will close again.
The pier was closed all summer last year as it underwent repairs from damage caused by a storm in December 2018.