CAO Second Quarter Report gives council firm footing for the future



Prince Edward County Council was recently provided with CAO Marcia Wallace’s Second Quarter (or, Mid-Year) Report. The CAO had committed to quarterly reports during 2020 budget deliberations back in January of this year. The report in question spans the time from April to June. It was received as a Bailey/Harper motion.

In her report, Wallace summarizes the intent being to provide council with an update as to key activities and challenges faced during that particular time period. It is also noted that reports do not reflect all work done by staff, but rather the effects (particularly budgetary) of the decisions made by council.

Although much of the first quarter was focused on pandemic emergency response, as Wallace points out, during the second quarter, staff have largely been concerned with recovery.

Despite the many challenges over the past few months, the finances at Shire Hall remain in a neutral to positive position, stated Wallace.

“Overall, the County remains in a neutral to positive position financially,” Wallace wrote. “Despite additional expenses and challenges, staff have effectively deferred projects and delayed large procurements to manage cash flow, while maintaining those services that are most required.”

Apart from being an overview, the CAO’s Report is also a forecast of what’s to come. She notes, pending possible financial help from upper levels of government, decisions regarding which projects and procurements can move forward will need to happen.

Ameliasburgh Councillor Janice Maynard. (Jason Parks/Gazette Staff)

Speaking to the issue of deferring projects and procurements was Councillor Janice Maynard who inquired about finding a way to make sure deferring these things is not a death sentence.

“I know typically operational things don’t get carried forward, but in this case if they just don’t quite trigger capital but are ongoing or are necessary maintenance things and they don’t necessarily get thrown into the 2021 budget…Is there a mechanism for finding those procurements and projects to be carried forward into 2021,” asked Maynard.

In her response, Wallace referred to a possible short term construction loan and noted more will be known about municipal finances in the fall when cash flow has hopefully improved.

“The report speaks to a possible construction loan to cover a number of procurements that we cannot cover. We are making a fair bit of progress as people begin to pay their taxes. We’ll know better in the third quarter about how much we will need. Assuming we can manage the difference through a short term construction loan we may not require pushing those projects forward,” said Wallace.

Within her overview, Wallace stated the operating revenues are lower than the budget by over $1,000. This is due to COVID-19 efforts put in place to help the financial burden of the pandemic on ratepayers. These efforts include deferral of tax bills until September and November and the free bag of garbage for curb-side pick-up.

Also worth noting in the report is the municipality having received $399, 865 worth of pandemic pay from the province and having incurred unbudgeted expenditures of $409, 125 for costs related to personal protective equipment, pandemic pay and safe, physically distanced work spaces for staff.

Apart from the overview, the detailed report is broken down into several categories: General Community Service Provision, Infrastructure, Roads, Development and Fire Services and Administration and Staffing.

With regard to roads, Councillor Brad Nieman inquired about crack sealing.

“We put the tender out and there was no bids…from the Good Road’s Conference we’d brought back material to seal the cracks that we can use ourselves, with our forces, so I’m just wondering if we aren’t getting any bids for crack sealing, can we not use that money to buy the equipment to do it ourselves,” Nieman asked.

Wallace indicated she is “not a roads expert” but would be taking Nieman’s query to the new Director of Operations.

Despite the municipality remaining in a neutral to positive financial position, the effects of COVID-19 cannot help but be felt and are apparent throughout the report, especially when considering the future.

“The primary pressure on the current budget has been the impact of COVID-19,” stated Wallace in her report. “The municipality will experience cash flow constraints in the coming months as a result of giving people the option to defer their final tax bills until September 15 and November 16 and not charging interest or penalties on any unpaid taxes or utility bills.”

Furthermore, the municipality is losing out on upwards of $600,000 in revenue with most municipal customer counter services temporarily suspended, parks, arenas and other facilities closed as well as the unavoidable financial pressure caused by COVID-19 associated costs.

With this in mind, the CAO is careful to note that the second quarter of 2020 has been challenging in many ways.

“Although cash flows have been managed by the careful review of procurement and the deferral of non-essential works to future years, there will still be constraints on the County’s cash flows,” said Wallace.

The CAO Report points to planned debt servicing, debt related to the municipal contribution for the new hospital and deferral of taxes as all having an anticipated effect on finances.

The next CAO Report can be expected in late October, 2020. As with all the CAO Quarterly Reports, they are available for public perusal on the County’s website here: The most recent report can be viewed here: .