Tuesday, May 11, 2021

COVID-19 pandemic impacts on Langley City’s 2020 finances

As per provincial law, municipalities in BC must reconcile their previous year’s budget with their actual financial results. Municipalities must also have their financial results independently audited annually.

Langley City’s independent auditor presented to Council about her audit of the City’s financials. She did not raise any red flags to Council.

The following sections highlight some of the significant differences between the 2020 budget, which Council approved, and staff developed before the COVID-19 pandemic.

Staff budgeted $7.2 million in gaming proceeds from the casino, but because the casino closed at the start of the pandemic, the City only received $1.5 million in proceeds. However, the federal/provincial COVID-19 Safe Restart Grant of $4.2 million that the City received helped offset this loss in proceeds.

City staff budgeted $31.8 million in property tax revenue for 2020. Instead, the City collected $30.4 million in property tax. This $1.4 million gap was due to the COVID-19 pandemic creating financial hardships for property owners.

Overall planned spending was reduced from $52.9 million to $48.5 million, a difference of $4.4 million. This reduction was mainly due to unfilled staff positions and closures due to the COVID-19 pandemic.

Also interesting to note was a reduction in water usage in 2020. In addition, the City’s conversion of streetlights to LED resulted in a $49,000 reduction in maintenance costs. Costs associated with vandalism and expenses related to cleaning up campsites in our parks were $58,000 over budget in 2020.

The City transfers a portion of the revenue received to reserve accounts. Reserve accounts are used to fund building and renewing City infrastructure and one-off initiatives such as updating the Offical Community Plan.

The City transferred the cost savings of $494,583 in policing to the “future police costs” reserve account. The City also topped up the prosperity fund by $1 million. While the City transferred $5.6 million less to the gaming proceeds reserve than budgeted, it transferred $5.3 million more than budgeted to the capital works reserve due to the COVID-19 Safe Restart Grant and operational savings.

Overall, the City is in good financial health.

For more information, please read the staff report on the 2020 financials as well as a draft of the 2020 Consolidated Financial Statements.

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