2014-04-25 at NOON
City manager Tim Commisso addresses council in this June 2013 file photo.
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THUNDER BAY -- The city budget has taken a beating from Mother Nature this winter and administration is recommending a deficit management strategy to address a projected $5.7 million shortfall.
The report, which will be addressed at Monday's council meeting, outlines options to tackle the overruns found primarily in the winter control budget, but also in legal, insurance and fuel costs.
One option is a one per cent tax increase that would bring the tax levy to $1.6 million and bring the 1.69 per cent tax rate hike already approved in this year's budget to almost three per cent.
"We don't have a balanced budget right now and by law, we're required to have a balanced budget," said city manager Tim Commisso.
If council doesn't choose to increase the tax rate, they can use reserve funds to address the shortfall but Commisso said they'd like to avoid that since it was used to address last year's shortfall.
A $2.5 million shopping list of restraint measures has also been outlined in the report being given to council. Those items include hiring freezes and trimming travel budgets.
Whatever decision council makes, Commisso said they will have to look at prioritizing the winter budget for next year.
Mayor Keith Hobbs said he's not in favour of a tax increase, but the city does need to balance the budget.
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"We fought hard to get the tax revenue increase to 1.69 per cent this year," he said, adding they are looking at cutting spending in other areas like travel budgets.
The mayor has trimmed his own travel budget the past three years and says he plans to again this year.
"I think councillors have to lead by example as well," he said.
"We're asking managers to tighten their belts and squeeze their departments and they've been doing that."
Hobbs said they do need to rework the operating budget to adjust the winter budget since climate change has hit the city hard the last three years with two brutal winters and the 2012 May flood.
"Mother Nature definitely kicked us in the butt this year and last year," he said.
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