The new coronavirus pandemic has produced vast economic challenges for the City of London, but according to its latest credit rating from Moody’s Investors Service, the city has accepted the challenge.
Moody’s maintained London’s triple A credit rating, the highest possible rating, for the 44th consecutive year.
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“The City of London has a long and proud history of financial stability and prudent fiscal management,” said Mayor Ed Holder.
“The fact that we have been able to maintain this coveted rating during a pandemic and significant economic pressures is a testament to our board members, our senior management team and our talented finance team.”
In late April, city staff estimated the pandemic could cause a $ 33 million financial blow to the city by the end of August. That number has now dropped to $ 22 million thanks to measures taken – including impacts on staff and the redistribution of surplus funds in 2019 – and city staff have since suggested further measures to further reduce the deficit to around $ 7. 4 million.
In mid-August it was announced that the City of London would receive just over $ 40 million from top levels of government as part of a multi-billion dollar funding announcement made in late July.
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At a September 22 meeting of the Strategic Priorities and Policy Committee, city staff actually forecast a property tax-backed year-end budget surplus of $ 15.3 million and recommended various ways to use those funds. , including suggestions for reallocating portions to a contingency reserve or restoring some previously deferred investments, for example.
“Although COVID-19 has a total impact of $ 68.4 million, which is still higher than the grant funding related to COVID-19,” the report states, “service level decisions and other factors are expected to operating cost savings will ease the pressures endured through the end of the year. “
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Holder says the city prides itself on “using and allocating taxpayer dollars responsibly” and the credit rating validates this approach.
According to a city release, Moody’s pointed to the city’s tax plan and practices, including its multi-year budget format first introduced in London in 2016, “which contributes to stable operations.” The city says Moody’s also mentioned London’s “recent history of positive operating results, the application of strict controls on debt issuance and a conservative approach to the city’s debt and investment policies.”
“The city’s achievement of the Aaa credit rating for the 44th consecutive year is a reflection of the city’s sound financial policies and prudent financial planning,” said Chief Financial Officer Anna Lisa Barbon.
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