THUNDER BAY -- The city could be up to $1.7 million over budget by the end of the year.
Revenue shortfalls mainly due to lower than expected consumption in water, wastewater and solid waste has also put the city $429,000 in the red on the rate-supported side.
That's the latest update council will hear Monday night in its third-quarter variance report. Every city department has been directed to defer hiring whenever possible, stop discretionary spending, watch overtime and review capital carryforwards.
The projected shortfall could be as low as $1.1 million depending on the city's legal fees and winter control costs.
It's illegal for cities to run a deficit, which is why Thunder Bay has a rate stabilization reserve fund as a last resort to makeup budget shortfalls. But the city has leaned heavily on that reserve for the past two years, leaving $1.7 million in that fund. It's hoping to have a target number and plan by the second quarter of next year to put money back into the reserve fund.
The city expects legal fees to be anywhere from $968,000 and $1.3 million over budget, mainly due to needing lawyers for complex litigation. A large number of claims, including leftover deductibles from the May 2012 flood, have pushed insurance costs fro the city $1 million over budget. Police are $639,000 over budget mainly due to labour, legal fees, computer costs and training.
Parks, $210,000, winter control, $66,200 and engineering, $50,000 also add to the overruns, while golf revenues are about $500,000 under budget. The city says if it's hit hard by weather, winter control could cost up to $316,200 by the end of the year.
Helping out, the city will see a one-time $2.2 million in supplemental taxes mainly from the new courthouse.
On the rate-supported side, wastewater will see an unfavourable variance of $270,000 because of revenue shortfalls. That's the same reason for a $255,3000 shortfall on the Waterworks side, along with frozen waterlines and watermain breaks last winter.
Solid Waste is projecting a $95,400favourable variance thanks to vacancies and revenue from Diversion Ontario.
For that side of the budget, it just means less money for capital reserve funds next year.
