Finances still tracking to be on target despite pandemic expenses.
The Town of Coaldale is pleased to provide a financial update regarding the Town's operations and capital projects for Quarter 2 ending on June 30, 2020.
The 2020 budget was developed pre-pandemic; consequently some unexpected adjustments had to be made to account for necessary changes resulting from the impact of COVID-19. Some examples of financial adjustments made by the Town include the deferral program which delayed the collection of tax payments from June to September as well as a decrease in investment income due to a decline in interest rates. Despite these setbacks, the Town’s budget is still expected to be on target by the end of the year.
“We recognized very early on that COVID-19 was going to impact our operations, but it was also going to impact the lives of our residents and businesses” said Cam Mills, Manager of Economic Development. “Our team and elected officials responded swiftly to these challenges to ensure that deferrals on payments and penalty reductions were in place, along with a host of other programs, to help ease some of the burden caused by the pandemic. Those measures, combined with a second year of no tax increases, meant we needed to be sure we took every reasonable measure to contain costs, and this update suggests we have succeeded at that.”
One point worth highlighting is the fiscal management of large debentures, particularly pertaining to the Multi-Use Recreation Centre. While the loan taken out for this project has accumulated interest over time, these costs are largely offset by locking the funds into a Guaranteed Investment Certificate (GIC), allowing the Town to collect revenue on the initial loan and balance out any interest that accrues. The net interest rate paid on the $10 million loan within the first six months sits at .207% or $10,346.
With a greater degree of uncertainty in 2020 resulting from COVID-19, it is difficult to understand the full impacts the pandemic will have on our economy. However, early projections show that the Town's year-end results will be close to budgeted amounts and continue to maintain the commitment to a healthy economy and good governance.