Layoffs, facility closures likely as city works to balance budget amid COVID-19 impacts

“Unfortunately I can’t say too much because this is people’s lives, and it’s tough times,” he said.

When pressed more on the topic, Clugston declined to go into details about when city employees will be notified of the layoffs and what departments will be affected, citing tough times.

The city’s management report indicated the city’s Energy and Utilities Division stands to lose a projected $5.5 million by the end of the year due to lower revenue trends, higher than budgeted fuel expenses, deferred maintenance and delayed regulatory fee billing.

While on the topic of layoffs Clugston noted that the city laid off 100 out of 125 employees in the NGPR (Natural Gas Petroleum Resources) department since 2017-2018 as a cost-control measure. The city is also working to abandon wells that are deemed uneconomic.

The financial impact of the pandemic could also mean the permanent closure of some city facilities, according to Clugston.

“Crestwood is up in the air. I’m going to tell you that. Don’t cross your fingers. Moose requires a fair bit of work for the ice slab so we will see,” Clugston said.

As for the Veiner Centre, which was the centre of a protest due to its closure, Clugston said it is the city’s goal to get the Veiner Centre back open.

“We are being very, very, careful with the Veiner Centre as it is our most vulnerable community but it will not be closed permanently,” Clugston said.

The management report indicated that while the city saw some savings earlier on in the pandemic due to facility closures, and temporary layoffs, they now stand to lose a projected $1.4 million by the end of the year due to facilities operating at a reduced capacity.

Another division also took a hit during the pandemic. Invest Medicine Hat, saw a loss in earnings of $1.2 million. The city said the loss is due to lower than budgeted residential sales.

Figures from the Medicine Hat Real Estate Board show residential sales and listings in the city are up from June thru to September. Clugston acknowledged the figures but said while sales are up elsewhere in the city, new home construction is still lagging. He also attributed the 1.2 million loss to start-up costs.

“The old Invest Medicine Hat they had maybe a $400,000 budget but it was external. Now the new Invest Medicine Hat of course has the land and properties division under it. It also has the communications, as well so it is a much bigger department than it was before,” he said noting a few more real estate sales could reduce the negative variance sustained by Invest Medicine Hat.

When asked about how the city is mitigating the lost revenue due to the pandemic, Clugston said he is very pleased with how the city is handling the crisis.

“Better than any other municipality in the province. We made payroll. We didn’t have to go beg the province to help us out and of course, we gave back, held taxes at zero and of course gave back investment to the business community,” he said.

The city has also applied for the Municipal Operating Assistance Grant that if approved, according to Clugston, could significantly reduce the loss in earnings.

The pandemic has impacted all levels of government. Recently the provincial government announced wage cuts, with premier Jason Kenney agreeing to a 10 per cent wage cut. MLA’s and political staffers also agreed to cuts. When asked if he and council would consider a wage cut due to the impact of the pandemic on the city’s bottom line, Clugston said:

“We already did. Our position has been that we don’t make political hay about it. We’ve just been doing it quietly behind the scenes. We have been taking zero wage increases since 2013 I think six out of the last seven years. Council has just quietly done it,” Clugston said.

Council remuneration discussions were held behind closed doors, but more details are expected to be revealed to the public.

by Tiffany Goodwein

Layoffs, facility closures likely as city works to balance budget amid COVID-19 impacts

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