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Hamilton Budget Chief warns of $24 Million cash crunch

Hamilton Budget Chief warns of $24 Million cash crunch

Hamilton is facing a budget shortfall of nearly $24 Million according to Finance GM Mike Zegarac. The main reason is a $35 Million over-spend in the Healthy and Safe Communities because of COVID. With savings captured from other departments, the deficit is whittled down to the $24 Million figure.

Actually, the City has $35 Million in a reserve, gained when not all senior government emergency COVID funding that was received since the pandemic began, was spent. The city set up a reserve fund against the day when the senior governments are no longer prepared to support municipalities as they have in the past. GM Zegarac says that day may now be upon us. He said in recent meetings with senior governments the signs are not as encouraging and cities may have to brace themselves for covering these costs, even as recent indications are that COVID is likely to increase again this fall.

Zegarac says while there is enough in reserve to cover this year’s shortfall it would leave nothing to meet any continuation of the pandemic. The information was delivered in a budget variance report that finance provides council on an ongoing basis. Councillor Lloyd Ferguson remarked that from past experience, as the year goes on these variance reports tend to look better.

The report made no recommendations other than to suggest the city continue to band with other municipalities in seeking continues senior government support for the extraordinary costs that have been incurred over the last two years of pandemic. Zegarac suggested senior governments need to take a new look at how cities are funded, noting that senior governments are allowed to borrow to cover operating losses, something municipalities are forbidden from doing.

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