COVID-19 impacts cash flow

In a report outlining Clarington’s financial situation, Clarington Council was told that the municipality’s cash flow would be $7.7 million short for 2020 fiscal year as a result of the COVID-19 pandemic. And as we are still in the pandemic; we have been told that a clear financial picture will be available once staff understands the full impact of COVID-19.

The biggest impact is on the revenue side. A municipalities’ main revenue is property tax, up to half of their total revenues. Clarington’s tax levy is approximately $62.6 million – which included $8.3 million to capital projects and $3.8 million to reserves and reserve funds.

Clarington has – as have many municipalities across Canada, brought in property tax deferrals. In other words, when you get your tax bill, you don’t have to pay it for 60 or 90 days. There’s no interest, no penalty. The interest and penalty revenues are lost but also the property taxes aren’t coming in. The municipality is also taking another hit with the cancellation of spring programming, loss of user fees and loss of sport field rentals.

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