Canada-BC Safe Restart Grant Allocation
A report evaluating options for the allocation of the Safe Restart grant funds to mitigate fiscal impacts from the pandemic, specifically lost casino revenue.
TOWN OF VIEW ROYAL
COMMITTEE OF THE WHOLE REPORT
TO: Committee of the Whole DATE: December 3, 2020 FROM: D. Christenson, Director of Finance MEETING DATE: December 8, 2020
Canada-BC Safe Restart Grant Allocation
RECOMMENDATION:
THAT Council confirm the allocation of the Canada-BC Safe Restart grant to the Casino reserve to replace 2020 and future revenue lost due to the closure of the Casino in response to the COVID-19 pandemic (Option 1).
CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:
I concur with the recommendation.
PURPOSE OF REPORT:
To confirm the allocation of the Canada-BC Safe Restart grant.
BACKGROUND:
In November, the Province advised it would be disbursing a total of $2.613 million to View Royal under the previously announced Canada-BC Safe Restart grant. This joint federal/provincial program is intended to assist local governments with the fiscal impacts that COVID-19 has placed on local service providers.
Under this program, grant funds may be used to address:
- revenue shortfalls;
- facility reopening and operating costs;
- emergency planning and response costs;
- bylaw enforcement and protective services;
- computer and other electronic technology costs that improve interconnectivity and virtual communications;
- services for vulnerable persons; and
- other related costs.
These grant funds were received on November 19, 2020. View Royal is required to annually report on how it spent these grant funds. We will include a report with the audited financial statements that disclose the amount received, the use of the funds, and the year-end balance of the unused funds. We will include this report annually until the funds are fully drawn down.
DISCUSSION:
There are several options in allocating these Safe Restart grant funds. View Royal has and likely will continue to experience fiscal challenges relating to COVID-19 in excess of the grant amount. In considering the options, Council should select the option that allocates funding to meet the greatest need while not adding an excessive administrative burden to track and report the use of the funds.
The following table suggests two options for allocating the Safe Restart grant funds with associated implications and relative administrative burden:
| Option | Description | Details | Implications | Admin burden |
|---|---|---|---|---|
| 1 | Add to Casino reserve to replace Casino revenue lost during shutdown; use to fund only projects originally approved with funding from Casino reserve | Replaces some of the difference between budgeted and actual Casino revenue in 2020 ($1,655,634), and anticipated in 2021 ($2,050,000); a total of about $750,000 in capital and several operational projects were deferred to future years | Operational costs relating to COVID-19 that are not covered by EMBC would be funded by prior year surplus; some previously deferred projects could proceed as originally planned | Lower |
| 2 | Track in a discrete reserve account and use to replace Casino revenue lost during shutdown AND fund operational costs related to COVID-19 | Projects originally funded from Casino revenue that were deferred would be re-evaluated for funding; operational costs related to COVID-19 not covered by EMBC would be funded | Reduced need to use prior year surplus to fund operational costs relating to COVID-19; some previously deferred projects could proceed as originally planned | Higher |
The difference between these two options and the effect on the Casino reserve and surplus can be described using the following examples:
| Cost | Option 1 – Use to replace Casino revenue only | Option 2 – Use to replace Casino revenue AND fund operational costs |
|---|---|---|
| Proceed with previously deferred projects that were originally funded by Casino revenue | Casino revenue ↓ More funding available for Casino deferred projects than with Option 2 |
Casino revenue ↓ Less funding available for Casino deferred projects than with Option 1 |
| COVID-19 operational costs | Surplus ↓ | Surplus ↑ |
| WSPR additional funding | Surplus or other reserve ↓ | Surplus or other reserve ↑ |
Over the long term, the allocation of this grant funding most significantly impacts View Royal’s surplus balance and the timing of projects. Based on the annual $15 million general operating budget, the Reserves and Surplus policy approved by Council recommends a range of $ 2.50 – $3.75 million be retained in the general operating surplus to support ongoing financial stability. At the end of 2019, View Royal’s general operating surplus was near $3.5 million. A cautious approach would minimize future draws from surplus and include consideration of other available reserves on a case by case basis.
In general, we can conclude that the Safe Restart grant funding will allow certain projects to proceed that would otherwise be deferred. Using grant funding to replace Casino revenue only (Option 1) means that more projects could proceed than would be the case if we used some of the grant funding to support COVID-19 related operational costs (Option 2).
RECOMMENDATION:
THAT Council confirm the allocation of the Canada-BC Safe Restart grant to the Casino reserve to replace 2020 and future revenue lost due to the closure of the Casino in response to the COVID-19 pandemic (Option 1).
SUBMITTED BY: D. Christenson, Director of Finance
REVIEWED BY: K. Anema, Chief Administrative Officer
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