Hamilton averts major COVID-19 debt to end the year with a surplus

Amid a difficultpandemic, it's a moment of rare good news. The City of Hamilton, which previously thought COVID-19 would put it $61 million in the hole, will actually finish the year with a surplus.

Thanks to a combination of emergency money from Ottawa and the province, delaying some projects for laterand other cost-cutting measures, the city should end December with a surplus of about $420,000, says Mike Zegarac, head of finance.

Zegarac broke the news at a city council general issues committee meeting Wednesday. City councillors were so happy that they were ready for celebratory drinking.

"I wish we could adjourn now so I could go have a beer after seeing this presentation," said Coun. Lloyd Ferguson (Ward 12, Ancaster).

"There should be a collective sigh of relief over the city right now," he said. Before Zegarac's report, "Iwas holding onto my chair."

Chad Collins, councillor for Ward 5 (Centennial), said for as much as the city complains about the federal and provincial governments, they deserve praise now.

"I want to thank both of them for living up to their promises," he said. "When they said they'd be there for municipalities, they definitely came through."

The city was facing a dramatic budget shortfall earlier this year, when it had to cancel money-making programs and stop charging transit fare because of COVID-19. It also spent more money on public health costs, staffing, cleaning and personal protective equipment.

With fewer cars on the road, the city even lost millions in parking and red-light camera revenue, not to mention the lost revenue from the slots at Flamboro Downs. The city also temporarily waived interest charges for people who couldn't pay the latest instalment of their property taxes.

"We've always been taught in life to save for a rainy day," Coun. Tom Jackson (Ward 6, east Mountain) said in April. "And boy, have we been poured upon."

Mayor Fred Eisenberger, through organizations such as the Large Urban Mayors' Caucus of Ontario (LUMCO), put out numerous pleas for federal and provincial help.

"I'll do a little victory lap here for mayors across the country," Eisenberger said. "It took an awful lot of lobbying effort to convince them This is billions and billions of dollars that has gone out the door,by the federal governmentpredominantly."

So far, the city has been promised just over $44.8 million through a joint federal-provincial "safe restart agreement," Zegarac said. Hamilton doesn't know yet how much it will get from the second phase. But that money, combined with citycost-cutting measures like leaving some jobs vacant for now, should put Hamilton in the black.

This means the city shouldn't have to dip too heavily into its reserves, including an $11 million federal gas tax reserve, Zegarac said.That "gives us some flexibility moving into 2021."

Eisenberger said the news is a bright spot in "a difficult and complicated 2020."