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City of St. John’s forecasts $18M deficit by year’s end

In a virtual scrum with reporters Monday, St. John’s Mayor Danny Breen said pandemic-related revenue losses and the January blizzard contribute to the ballooning deficit. -Computer screenshot
In a virtual scrum with reporters Monday, St. John’s Mayor Danny Breen said pandemic-related revenue losses and the January blizzard contribute to the ballooning deficit. -Computer screenshot

Council defers spending amid COVID-19 pandemic

Tensions ran high during Monday’s St. John’s city council meeting as councillors voted to defer some spending amid a mounting projected deficit.

“We need a significant amount of flexibility in dealing with the financial fallout from COVID-19,” Mayor Danny Breen told reporters. “We need whatever flexibility we can get in order to get through this time.”

Breen said the city projects an $18-million deficit by year’s end, largely due to revenue losses.

Mile One Centre and the Convention Centre have been closed since March with no sign of reopening, other than the possibility of basketball in December.

Add to that property tax deferrals and a lingering $7-million bill from the January snowstorm — Breen said the city still hasn’t received disaster relief from the federal government for that.

However, he’s hopeful there might be federal relief coming by way of the Federation of Canadian Municipalities request for assistance for towns across the country dealing with pandemic-induced shortfalls. He said negotiations are ongoing.

Meanwhile, during Monday’s city council meeting, decisions had to be made about whether or not to defer some previously approved projects in order to create that flexibility the mayor mentioned.

Council voted to defer two capital projects that were approved March 9, just before the pandemic hit the province: a trail connection between McNiven Place and Dureness Street that’s been in the works for a few years, according to Deputy Mayor Sheilagh O’Leary, as well as observation decks at Bowring Park. That freed up $145,000.

Coun. Jamie Korab  — TELEGRAM FILE PHOTO
Coun. Jamie Korab — TELEGRAM FILE PHOTO

Korab threatens to leave meeting

Councillors butted heads, however, when Coun. Dave Lane motioned to defer a decision on $377,923 in spending for the first phase of the bike master plan — turning Kelly’s Brook trail into a shared-use path — until the city gets information from the feds about a cost-shared arrangement.

That project was already spared during an initial round of capital-project deferrals last month.

As mentioned at that time, Lane again reiterated the city is awaiting information from the federal government about what funds it can contribute to help complete the $2.5-million project. Lane said there’s been some discussion with the feds and he’s hoping there should be information from them soon.

The city’s rules dictate that a motion to defer can’t be debated — councillors are expected to simply vote on the motion.

Coun. Jamie Korab threatened to leave the meeting if they couldn’t debate Lane’s motion because, he said, the deferral might mean council will not talk about this bike plan spending until next year.

He called it a roundabout way for councillors to approve something by deferral. Coun. Debbie Hanlon agreed.

Lane’s motion passed with a 6-5 vote. Voting in favour of deferral were Breen, O’Leary, Coun. Maggie Burton, Lane, Coun. Hope Jamieson, and Coun. Ian Froude. Voting against were Coun. Wally Collins, Korab, Coun. Deanne Stapleton, Hanlon, and Coun. Sandy Hickman.

In the end, Korab didn’t leave the meeting — but he again reiterated his annoyance with the process.

For now, Breen said the $377,923 technically still sits in the city’s general capital funds until council makes a decision pending federal funding.

“But if we were to need that money, we would go back and have the ... deferred motion brought forward again to take the money from the trail. One of the things with these discussions is that council can change things at any moment in time. So, right now, we don’t need the ($377,923), so (if) it comes (to) a point that we do, then the motion that was deferred will come back into play.”

juanita.mercer@thetelegram.com
Twitter: @juanitamercer_

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