COVID-19 impacts on 2022 budget and beyond

The budget horizon continues to project uncertainty as the City of Guelph and community continue to manage through the COVID-19 pandemic (COVID). The pandemic impacts are pervasive to the City’s services (including our local boards and shared services) and will require us to look at how we deliver services, assess the permanency of social and legislative impacts, and plan for an extended recovery period that may take as long as five years.

Keeping consistent with the approach taken in 2021, the 2022/23 Budget reflects permanent service level changes resulting from COVID. Temporary revenue losses for 2022 and 2023 are estimated to be about $4.6 million and $2.1 million respectively. Temporary increased costs due to additional cleaning requirements are estimated to be about $874,000 in 2022 and $887,000 in 2023. Staff is proposing to continue managing variances related to COVID through expense mitigation strategies, shifting work plan priorities, and temporarily reducing service to offset the revenue loss. Budget monitoring reports to Council throughout 2022 and 2023 will continue to capture these impacts and the contingency reserves will be used to manage this financial risk.

The Safe Restart Emergency funding, including the special transit stream received from the federal and provincial governments, has enabled the City to manage through the fiscal impacts of COVID during 2020 and 2021. At this point, there have been no announcements for emergency funding programs extending beyond 2021, which creates increased risk for the City’s contingency reserves.

COVID recovery scenarios

Further, City revenues from various services and programs will recover at a different pace. For example, transit ridership recovery is difficult to predict; however, the approval of the U-pass effective January 1, 2022 by the University of Guelph student population and the success of the On-demand transit service should help bridge the financial impacts until citizens’ confidence increases as vaccination rates continue to rise. Parking services will be undergoing a master planning exercise in 2022 to determine the business impact of COVID and reassess the market in which they operate. Finally, culture and recreation programming have started to recover. However, provincial restrictions will guide how quickly that will go.

City COVID business assessment plans

In response to the recovery uncertainty and understanding that the City’s reserves are only a temporary, short-term solution for what is expected to have longer-term impacts, the City implemented a four-part strategy to support our internal businesses in assessing and responding to the changing municipal landscape.

As a foundational understanding, City staff is closely monitoring and evaluating how COVID-related impacts are changing our municipal operations and services. The four-part corporate strategy includes:

1. Applying a COVID-lens to master planning, and facility and open space design. Across the City, many departments are in the middle of master planning that inform and will respond to Shaping Guelph—Guelph’s growth management strategy and deliver objectives in the Strategic Plan. Further, the City is working on a number of significant facility and open space projects where programming assumptions will be required to consider the long-term impacts of COVID. Examples include the Transportation Master Plan, Downtown Parking Master Plan, Water and Wastewater Servicing Master Plan, Stormwater Management Master Plan, Parks and Recreation Master Plan, Operations Campus facilities and the South End Community Centre. The City has also tested out newly designed workspaces that will support a hybrid workforce and the business case findings from this will inform future facility design.
2. Applying a COVID-lens to planned policy and bylaw development. Many City departments are also engaging in work that will result in updated or new policies and bylaws through 2022 and 2023 for Council consideration. It is imperative that the design of these governance documents considers the social, legislative, and financial impacts of COVID. Examples include updates to the Parkland Dedication Bylaw and the investigation of a new Community Benefit Charge Bylaw, and the development of a Corporate Revenue Budget Policy to guide appropriate use of new revenues and evaluate user fee subsidization levels.
3. Applying a COVID-lens to the opportunities identified in the Service Rationalization Review, which was completed in July 2021.
4. Embedding continuous improvement into the City’s culture. Using a Lean approach to continuously improving organizational effectiveness through process analysis focused on the customer experience will ensure that COVID impacts on service delivery are considered in everything we do.

2022 and 2023 COVID community and business response

We know COVID has also impacted our community and businesses. The City’s $10 million Smart City award has enabled unique programs to provide businesses with grants to stimulate innovation in emerging sectors and help keep the local economic engine churning.

In 2022 and 2023, the City is focused on using its capital plan, most notably major infrastructure projects including the Baker District redevelopment and South End Community Centre, which will provide local stimulus by creating new jobs, contributing to new housing and generating economic vibrancy. The City’s Economic Development and Tourism Strategy will also be implemented in 2022, if approved by Council in December (2021), which will provide a path forward for evolving the City’s response to changing economic conditions and new challenges and opportunities.