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2014-04-28 at 22:48

No tax increase

By Matt Vis, tbnewswatch.com
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THUNDER BAY -- City council will not be raising taxes to control budget overruns.

Instead, council on Monday voted to implement restraint measures and to withdraw as necessary from the city’s stabilization reserve fund rather than impose a proposed one per cent increase to the tax levy.

As of March 31, city administration was projecting more than $5.7 million in excessive spending for this year and a net budget overrun of a little more than $3.2 million.

Many councillors said they did not see the point of raising the tax levy when the reserve fund was established for a such a purpose.

Coun. Larry Hebert was one of the first to express opposition to any increase in taxes.

“In my view, reserve funds are rainy day, or in our case, snowy day funds,” Hebert said. “I think this is an appropriate time to use reserves.”

City manager Tim Commisso told council chambers this was the first time in his career he had to present a report showing such a serious overrun report so soon after a budget was ratified.

It was an “unprecedented” situation, he said.

It was also said to be an “unprecedented” winter that led to the infrastructure and operations department exceeding its budgeted snow allotment by more than $3.3 million.

Commisso said the past two seasons are an indication that the amount set aside to deal with winter conditions needs to be increased beyond the current five-year average formula, even if it means they overestimate.

“We may very well bump that budget up and have an easy winter and we have a surplus that gets transferred back into the stabilization fund. It’s kind of like a vicious circle,” Commisso said.

“I think what we realized is that it was two bad years in a row, we need to bump that number up.”

Council voted by a 9-2 margin in favour of rejecting the tax levy increase, with Coun. Iain Angus and Paul Pugh the dissenting votes.

Both had concerns about drawing from the reserve fund for a second year in a row and said it would end up costing taxpayers eventually anyway.

“Will we just be putting off the inevitable?” Angus asked council.

“We pay now or we pay later.”

Pugh said sometimes the right decisions are the hardest to make and said the city needs to find a more long-term solution than reserve funds and temporary spending cuts.

He said he was fearful if the city were to find itself in a similar position in a couple years that nothing would be different, except having a diminished reserve pool to draw from.

“I ask that we not succumb to the temptation to dip into those funds just because it’s unpopular,” Pugh said.

The city ended the 2013 year with an unfavourable variance of $8.2 million, or 4.5 per cent of the net operating budget. For the first time since its creation in 2004, the city had to withdraw from the stabilization fund, to the tune of $6 million.

To attempt to bring this year’s budget back into the black, council passed a host of measures to contain or reduce spending.

Included in the resolution is close to $2.5 million in a deficit management strategy, where different departments found savings from non-essential spending. These included measures such as a hiring freeze on all non-essential positions, reduction of travel budgets and postponing or cancelling some projects and programs.

Council also approved more than $1.6 million in cost containment strategies, including more than $400,000 from the facilities, fleet and transit services department and close to $200,000 in the infrastructure and operations department.

Some, such as Coun. Andrew Foulds, were concerned about the severity of the reductions and said they were worried about eroding the quality of service.

“People are going to feel the impact of this,” Foulds said. “We can sugarcoat this any way we like but it’s putting lipstick on a pig.”

Mayor Keith Hobbs said he would like to see a reduction in the budgets of police, fire and EMS. He said it seems every department except for emergency response continually has their budgets squeezed.

He called the involvement of Thunder Bay Police Service chief J.P. Levesque serving as a vice-president on the Ontario Chiefs of Police and Superior North EMS chief Norm Gale as president of the Ontario Association of Paramedic Chiefs as “luxury” items that result in extra costs.

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Comments

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chezhank says:
One thing the mayor,council and administration did not want to talk about last night was that for the year ended December 31, 2013, there was an overall unfavourable variance from operations of $8.2 million on the 2013 operating budget.
That report just quietly slipped by council.
What's $8.2 million for this council.
4/28/2014 11:00:28 PM
S Duncan says:
Why do they never actually reduce their spending? Throughout the meeting all we hear is how desperate they are for more money, but its never how can we spend less, its how they can get their greedy mitts on more of ours.

In all honesty the whole lot of them need to go, and that includes Commisso. He has been blinded by his desires of welfare hockey and has led this city down a path that it might not be able to come back from.

Our debt and problems have ballooned immensely since his hiring, and we citizens have no accountability for his actions.

Thankfully Hebert is not so distanced from reality like Angus and Pugh obviously are. Those two are more interested in pushing forward their own agendas rather than working for the people they supposedly represent.

Now, use the reserve funds until you can get spending and taxes back under control and then perhaps we can think about putting more food on our plates, because we are way over our heads now, let alone the welfare dome ideas.
4/28/2014 11:37:00 PM
fastball says:
You did catch the bit about the unprecedented winter costs, right? It's not as if they decided just on a whim to plow the roads once or twice a weeks or thaw out 100 broken/frozen water lines.
4/29/2014 7:40:33 AM
cob says:
How was last (2012-2013) winter unprecedented? We had a snow storm in April and suddenly that winter was unprecedented. They p***ed away the budget previous to that storm and suddenly found themselves short. Why does Roads insist on doing things the same old way as always instead of doing their job effectively, with some care and thought as to what they are doing? The number of times that sidewalk plow went around our neighbourhood without accomplishing anything was mind boggling. It was just easier to send them out to do their route than to think of something worthwhile to do. Cheaper to pay them to sit in the yard than to go out and burn fuel, accomplishing nothing!
What happened to the "core review"? How about some efficiency, maybe then the budgets won't get overspent? No, it is easier to just blame it on the weather. This past winter (2013-2014) has been more severe, but there is still no way we would be as bad off if the managers were not so incompetent.
4/29/2014 1:08:39 PM
fastball says:
How was the 2012-13 winter unprecedented??
On the average, TBay gets about 9 cm of snow in April. Last year's April gave us 79cm. That almost TEN TIMES the average. The city had to bring out all the ploughs, the sanders and sidewalk cleaners for a full month extra - that's above and beyond their budgetary expectations. You budget for the average - nobody budgets for getting 10x more.
That's what was "unprecedented".
4/29/2014 5:50:26 PM
cob says:
Yes April 2013 was unprecedented, but as a winter overall, no way. As I said, if they were effectively managing their resources from the beginning, April would not have stung so badly. Read my whole post, carefully this time.
4/30/2014 7:38:07 AM
fastball says:
Well, if your hydro bill averages 200 a month during the winter - you budget for that amount. You look at what you've spent for the past years, and put that money aside for your hydro bill. But who realistically "budgets" for a surprise 1500 dollar bill when you expect 200? But you still have to find the money to pay the bill, right? So you take it from your rainy day fund - or decide to put off fixing the roof this summer.
You figure on getting 10 cm of snow, because that's the average for the season. But you get 700 percent more snow than the average. That's not lousy planning...that's just life and you adjust your budget accordingly.
If April had been "average", we wouldn't be having this conversation, right? The city would have looked like responsible planners - instead of the idiots you portray them to be.
4/30/2014 11:17:59 AM
Eastender says:
Fastball. Stupidity and blatant irresponsibility in the spending and administration of this cities finances is indefencible. Yet you unceasingly continue to make excuses for this blundering. What makes you champion a losing horse?
4/29/2014 1:26:11 PM
john says:
Any facts to back up your claim of ballooning debt?

Standard & Poors have upgraded the City credit rating the last two years claiming "robust liquidity, healthy budgetary performance and moderate debt".

+Government/Finance+$!26+Budgets/docs/2013+Standard+$!26+Poor$!27s+Credit+Rating.pdf

+Government/Finance+$!26+Budgets/docs/2012+Standard+$!26+Poor$!27s+Credit+Rating.pdf
4/29/2014 12:01:16 PM
S Duncan says:
yes, but first you must learn that a credit rating is based on your ability to pay back money you borrow. It is not a number that benefits us, its a number that benefits the lenders, not the borrowers.

What this shows is how the city is willing to tax its way to paying bills. It doesn't show us how effectively our money is used, or display any proficiency whatsoever.

We have a city that takes from us to pay its bills which have ballooned at a ridiculous level. Our staff levels, our expanding control and welfare programs, and our ever-nauseating subsidizing of stupidity like bike repair stations.

Our city is ballooning, but not with taxpayers, but with misuse of taxes.

Merely looking at nonsense like you linked to is claiming your headache is gone now that your foot got ran over by a bus.
4/29/2014 5:23:36 PM
signman says:

All Thunder Bay Taxpayers should be outraged that Commisso even suggested raising taxes again.

City council and administration need to get their priorities straight.

NO wonder so many taxpayers are on the brink of disaster!

No wonder businesses do not want to locate here !

Thanks to the Chamber of Commerce and Charla Robinson for stepping up to the plate!
4/29/2014 1:42:55 AM
Wolfie says:
"NO wonder so many taxpayers are on the brink of disaster!

No wonder businesses do not want to locate here!"

You keep making these statements, but haven't posted proof of either them.

Please do.
4/29/2014 9:32:59 AM
signman says:
The Concerned Taxpayers of Thunder Bay would like to thank Charla Robinson and the Chamber of Commerce for their stand on this issue.
4/29/2014 2:17:04 AM
Tbaylifer 1 says:
I believe it is time to look at non union wages and positions. Urban forester and active transportation coordinator are two positions we could do without. From hiring a consultant to count the trees and a policy better suit for T.O. Along with painted white lines on the roads. Not to mention the high cost of administrators and their assistants. Too many over paid little worked positions.
4/29/2014 6:24:21 AM
Wolfie says:
Why would we only look at the non-union wages? The two positions you mentioned are a fraction of the wages spent on the unionized staff. It's time to stop making such generous offers to public sector unions.
4/29/2014 9:31:11 AM
hadenough says:
The Forester position is a CUPE "A" inside worker position.
This is not the first time that you've taken a shot at this person on this forum. Seems you have a bit of an axe to grind. Why is that?
4/29/2014 4:26:20 PM
Blah blah says:
Nice, even when council does what you want you guys turn it into a negative.
4/29/2014 6:33:05 AM
musicferret says:
An $8.2 MILLION variance.

How on earth does a city our size miss the mark by so much?

Take note everyone: they are incompetent and they will be trying to build an $100m multiplex if they get back in.
DO NOT LET THEM BACK IN. VOTE THEM OUT.

If this was anywhere but the public service, pretty much every one of them would have been fired by now.
4/29/2014 7:19:57 AM
brandon says:
Legal fees are up..... is this part of those many lawsuits against the city?
I believe we're being sued for over $500,000,000.00, but we never hear a peep about how thats going.

Even if we win each lawsuit (unlikely), we are still probably stuck paying tens of millions in legal fees over the next few years.

Can anyone comment on the 'legal' overruns that were part of the amount in this story?
4/29/2014 7:36:12 AM
Wolfie says:
"Even if we win each lawsuit (unlikely), we are still probably stuck paying tens of millions in legal fees over the next few years."

Usually the losing side pays the legal costs of both sides.
4/29/2014 9:34:37 AM
RicknB says:
How about the council look at the top heavy, City Management.

Cut some jobs,at the top! That's where the savings are.
4/29/2014 8:59:10 AM
Kam River says:
Coun. Iain Angus and Paul Pugh along with Foulds are the ones plushing to spend more and more. And digging the city deeper and deeper in debt.
Now is the time to start making small staff cuts otherwise with in two years.
The city is going to have to face some major down sizing.
Like Detroit we have lost a great deal of good paying jobs at the Paper Mills, the Grain Elevators and on the Railways.
And this council is fighting our only remaining paper mill trying to force them to pay even higher taxes.
If this council wins in tax court more jobs will be lost but they do not care as long as their pet projects go ahead.

4/29/2014 9:03:26 AM
old vienna says:
If Foulds loses to Gravelle, he'll want back in as current river councillor. David Noonan,president of NDP thunder bay superior north riding association, is running for red river ward councillor. Could be 4 members of the NDP clique on council. What a financial disaster that would be. Those 4 would send us all to the poor house.
4/29/2014 9:42:29 AM
DougMyers says:
"And this council is fighting our only remaining paper mill trying to force them to pay even higher taxes."
FYI
The city is not fighting to have them pay higher taxes, only to continue to pay their current taxes.

The new MPAC industrial system is a farce at best.

We no longer use this part of the mill so should not pay taxes on it. So that should mean when my kids move out of the house I should get a tax break on the two rooms no longer in use as well as a percentage of all other rooms and land.
4/29/2014 11:05:34 AM
Robert Bob says:
City Hall and Commisso must like to poke the Taxpayers before this years election. They are starting to fear. CUTBACK's it's time to TRIM the Fat and Pork big time, get tough with Unions, roll back pay increases. Reduce benefits and workforce. Less Service is OK. So are lower Taxes. Do we need high cost city workers cutting lawn at City owned Golf Courses. This is seasonal work , part time. There are all kinds of Saving to be had , but Frist you have to make tough decesions. Its musch easier to Raise Taxes each and every year than propose cost cutting measures and Tax saving. Tax and Spend (101) is how to Run any city Government
4/29/2014 10:17:53 AM
gremlin says:
Tbaylifer 1:

You're completely missing the mark. The biggest savings would be in the "unionized workers" all departments including police & fire. As I've stated in an earlier story OVER BUDGET, there needs to be

1 - 20% cut in workforce (all departments) including management

2 - 20% cut in pay & benefits

3 - get rid of the unions

4 - put a "hold" on big projects until our financial house is in order.

WAKE UP, we're headed in the same direction as many US cities have already gone which is BANKRUPTCY & the biggest reason is "unionized labour costs". Its destroying cities & our province.

Its the "unionized government workforce" that's driving up taxes with their generous wages, benefits & pensions.
4/29/2014 12:08:03 PM
fastball says:
Yes - go ahead and try to cut wages by 20 percent. I dare you to break a contract - you'd be spending the next decade in court while your snow piles to the treetops and your garbage becomes visible from space.
You're not going to save much over the long haul with non-unionized workers. You might save some money right off the start - but you're not going to keep people around forever at what pittance you're advocating paying them.
All you pay is peanuts - all you'll get are monkeys. And boy, we want monkeys doing those services.
Go get a degree in financial administration and work in a city environment and then see what your realities are before you throw out such simplistic pap.
4/30/2014 11:04:52 AM
averagejoe says:
Eliminate positions, get rid of unions, and cut pay? So you propose to solve our problems by eliminating good paying jobs?

Will everyone be happy when we're all working at a fast food joint or the call centre?
4/30/2014 1:25:31 PM
the Beaver..... says:
off of the subject for a minute
The other night at the Detroit Hockey Playoff game it was very evident that maybe half of the seats available were empty. Detroit is a City of over 700.000 even today, with another 4 million within easy driving distance.
4/29/2014 12:23:53 PM
ring of fire dude says:
I wonder if there's any chance the citizens can petition the Feds to have a third-party manager come in to oversee the financial aspect of City Administration , just like in Attawapiskat ?
4/29/2014 12:51:04 PM
MACK2 says:
Cleaning house at City Hall is sure overdue for both Administration and all of City Council.
4/29/2014 1:15:14 PM
fastball says:
Bottom line - they had to find a few dollars extra.
Commisso would not have been doing his job if he didn't put ALL the options forth for debate - even the unpopular ones.
I don't think he was ADVOCATING a tax increase - but merely suggesting it as one of several options.
4/29/2014 5:40:36 PM
Dan Dan says:
The only thing worth increasing taxes over is the proposed events centre.
4/29/2014 9:02:32 PM
signman says:
Taxes need to be lowered!

Having one of the highest tax rates in Canada is making Thunder Bay a very unaffordable city to live in.

When will the city start listening to its citizens and the Chamber of Commerce? Taxes are at alarming rates!

Most businesses don't want to locate here as the tax rate makes it unprofitable!

Why are so many young people leaving?

No Jobs!
4/30/2014 5:27:56 AM
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