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Report: COVID-19 impacts to Erin's cashflow projected to be over $1 million

Director of finance projects about $4 million in taxes will go uncollected based off outstanding taxes from March 31
Keegan Kozolanka/GuelphToday file photo

TOWN OF ERIN – A report at a May 5 Erin town council meeting projects that COVID-19 impacts will total about $1.2 million. 

Ursula D’Angelo, director of finance, said to council this projection assumes they won't collect about $4 million in taxes out of $27 million they collect for different levels of government. The town's share of this $1.2 million.

"I'm hoping I'm wrong but this is based on the March 31 outstanding taxes," D'Angelo said to council. 

Another assumption was based on that 38 per cent of residents pay through pre-authorized payments meaning leaving 62 per cent of residents as unknown if they can pay or not. 

Councillor Michael Robins told council he is concerned because the 2020 budget forecasted $10 million in cash or cash equivalents by the end of the year. 

“The forecast we have now is $4.5 million, close to a $6 million drop in cash,” Robins said to council, noting that $1.2 million is because of financial conditions of the COVID-19 pandemic. “This is something we have to respond to.”

D’Angelo told council that this forecast assumed all payments to the county would be made in full. If they paid the county proportionally based on the amount of taxes collected, that would increase their cash. 

Councillor John Brennan said to council he liked the idea of making transfers to the county proportionally but acknowledged they wouldn't have the final say on if they could do that. 

Robins said he’s unsure of the implications going forward but suggested looking closely at spending.

“Perhaps what we need to do is reconsider our expenditures more so in terms of our capital and any other expenditures that will be necessary to make sure that our operations into 2021 and beyond are safe-guarded,” Robins said to council. 

D’Angelo’s report included some measures that have been put in place to mitigate impacts to cash flow. Construction on some structures have been delayed to 2021 as well as some hirings. 

At council, Brennan took the time to address the idea of revisiting the budget which has been suggested by some members of the community. 

“I don’t see a value in revisiting the budget, I do see a lot of value in what we are doing and that is revisiting the expenditures,” Brennan said to council. “That is what will make the most difference in terms of how we get through the year and the kind of position we are going to be in next year.”