THUNDER BAY – The city is banking surplus dollars from last year in anticipation of leveraging provincial and federal infrastructure funding, though some councillors are concerned about the continually increasing residential property tax burden.
Thunder Bay city council on Monday night signed off on directing the $3.4 million 2018 positive budget variance into reserve funds, while also approving the 2019 tax strategy that sets out how much each property class contributes to the overall municipal tax levy.
Most of the surplus funds - $2.5 million – will be allocated to the Renew Thunder Bay reserve fund to potentially tap into the Investing in Canada Infrastructure Program, which will have funding streams available for public transit, green infrastructure, community, culture and recreation infrastructure. The remaining amount includes $800,000 to the insurance reserve fund and $100,000 to the Pioneer Ridge structural reserve fund.
That marked the fourth straight year the city ended with a favourable variance, prompting Coun. Trevor Giertuga (At-Large) to suggest giving it back to the tax base.
“The money or some of the money should be going back to the residents in the form of a tax reduction,” Giertuga said. “At some point we should be anticipating the surplus and having a lower tax rate. We could have taken $2 million of this and had a one per cent tax increase, rather than two.”
The four consecutive surpluses, which totalled a combined $12.7 million, came immediately after three straight years from 2012 to 2014 when the city was hit with three consecutive deficits to the tune of $11 million. Rate-supported operations ended up with a $3.5 million surplus, which will go into rate supported reserve funds.
City officials had been concerned that provincial decisions made at Queen’s Park would likely send the city’s books into the red, the government earlier Monday reversed course on in-year cost sharing adjustments for land ambulance, public health and child care services that would have affected 2019 municipal budgets.
Although he alluded to challenges that might be looming on the road ahead, Coun. Cody Fraser (Neebing) said residential taxpayers have felt the brunt of the city’s economic climate.
“We may have hard times ahead for the city and we’re bracing for that, but I think people in Thunder Bay have had hard times for a long time,” Fraser said.
“Our residential tax rate continuously increases. We have industry leaving town. It’s more difficult all the time to start new business.”
The residential property class, which in 2018 accounted for 63 per cent of the municipal levy, will face a 2.45 per cent increase. The median residential single family detached home, with an assessed value of about $210,000, would pay about $85 more than last year.
Since 1999, the city’s tax levy has nearly doubled from $95.9 million to $194.1 million this year. Over the course of those two decades, the large industrial’s share of the levy has dramatically dipped from nearly 12 per cent in 1999 to 1.75 per cent in 2018.
There will be a further shift onto residential, as the approved strategy is expected to lower the multi-residential ratio to the provincial threshold within the next two years. The 2019 strategy, which drops the ratio, is anticipated to result in a rent reduction for 43 multi-residential properties, which contain 17 per cent of the city’s nearly 7,000 units.
Giertuga, Fraser and Coun. Andrew Foulds (Current River) were the three dissenting votes against the approved tax strategy.
