City hoping for funding to offset transit revenue drop during COVID-19

The Owen Sound Transit terminal on 3rd Avenue East. Denis Langlois/The Owen Sound Sun Times/Post Media Network Denis Langlois / Denis Langlois/The Sun Times/Pos

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City officials expect a significant chunk of Owen Sound’s 2020 operating deficit due to COVID-19 – now projected at about $600,000 – will be caused by reduced transit revenue during the pandemic.

“I think we’re going to be short in the neighbourhood of $200,000 this year on transit fares alone,” corporate services director Kate Allan said in an interview.

However, she said the city is hoping to be able to recover at least some of those losses with emergency funding from the provincial and federal governments.

The province announced Monday that it has reached a “historic agreement” with the federal government to provide up to $4 billion in “urgently needed one-time assistance” to Ontario’s 444 municipalities.

Up to $2 billion will be allocated to help fund public transit systems, which the province says have seen 90 per cent fewer riders during the pandemic along with added cleaning and other COVID-related costs.

The province says details on specific allocations will be provided in the coming weeks.

Allan said while she expects most of the funding for transit will be used to assist systems in larger urban centres, like the Greater Toronto Area, she is optimistic Owen Sound will get some of the financial relief.

“Because we get some of the provincial gas tax, we’re obviously a registered transit system in their mind, so I do expect some of that will be filtered to us. Maybe even using the same formula that they deliver the gas tax funds. It would make sense to me for them to do it that way,” she said.

The province says the other $2 billion will go towards things like long-term care and public health, but Allan said she hopes there will be a program within that funding envelope that will result in Owen Sound receiving some of those funds as well.

She said about $150,000 of Owen Sound’s anticipated operating deficit is directly related to COVID-19 costs, such as for personal protective equipment for staff.

Those expenses and the losses in transit revenue are probably the most likely costs within the deficit that will be recoverable through the federal-provincial funding, she said.

“Anything over and above that we’ll likely be funding ourselves,” Allan said. “But my hope is that that is where we’re going to see support from the province directly.”

Owen Sound waived its transit fares for about three months – from March 19 to June 18 – due to the COVID-19 pandemic.

City officials said the intent was partly due to safety – ensuring workers didn’t have to handle cash until proper procedures could be implemented and to avoid passengers having to come in close contact with drivers while depositing cash in the fare boxes. But the aim was also to reduce the financial burden on residents whose incomes were impacted by COVID-19.

Allan presented council Monday with her fourth monthly COVID-19 financial forecast since the pandemic began.

She said the “upper limit with revenue at risk” of the projected deficit has dropped since her June update from about $1.1 million to about $870,000 thanks to the reopening of city facilities, including the Julie McArthur Regional Recreation Centre.

“The big unknown now is what’s going to happen with pretty much all organized sports in the fall, including the OHL but also minor sports,” Allan said.

The upper limit could be reached if the city doesn’t see facility booking revenue this fall.

The city is currently forecasting a roughly $400,000 shortfall in facility booking revenue due to the pandemic.

The Harry Lumley Bayshore Community Centre has not yet reopened to the public. Council voted in late June to extend to Sept. 30 its agreement with Grey Bruce Health Services to use the facility as a temporary field hospital.

Allan said the city has enough funds in reserves to cover the projected deficit without having to debenture the shortfall. Staff will continue to monitor the 2020 capital program, she said, and it “may be adjusted should it be required to cover an unfunded deficit.”

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