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Council passes budget with 3.55 per cent levy

City council passed the 2017 municipal budget with a 3.55 per cent levy on Wednesday despite a failed last-minute motion to dip $1 million into reserves that would have reduced it to 2.96 per cent.
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Frank Pullia Budget
Budget chairman and Coun. Frank Pullia was among four councilors who voted against the 2017 municipal budget on Wednesday evening.

THUNDER BAY -- The 3.55 per cent levy increase in the 2017 budget city council passed by a 7-4 vote on Wednesday was practically unaltered through the three-week budget deliberation process. 

If the $406-million budget is ratified on Feb. 21, the city will spend 3.55 per cent more in 2017 than it did in 2016. When accounting for 0.46 per cent growth over last year, city operations will cost taxpayers 3.09 per cent more, collectively.

Council has not yet set the tax rates and ratio to determine tax increases for homeowners.

The budget that city administration proposed on Jan. 24 began with a 3.53 per cent levy of $5.5 million. The only additions to the levy were a $4,000 increase to the Official Recognition Committee's budget, a motion by Current River Coun. Andrew Foulds to add $16,000 to continue the Muskeg Express train rides at Centennial Park and a move by Neebing Coun. Linda Rydholm to commit $20,000 more for culverts.

Budget chairman Frank Pullia voted against the budget. He called for a complete review of consulting work, a municipal overtime work review, and to evaluate savings that could come from insourcing union jobs that have been outsourced.  

"We keep hearing, 'either we cut services or we have to increase your taxes.' I just identified three key areas where we don't need to do that. Find savings internally. You have now the collaboration of the unions to do that, the Chamber of Commerce has been asking for that, the LEAN program has been successful in other jurisdictions where they've saved millions of dollars."

Pullia was among four dissenting councilors, the same four who voted to support a last-minute, failed motion by Coun. Rebecca Johnson that would have reduced the levy to 2.96 per cent (2.5 per cent including growth).

Claiming the proposed increase would be prohibitive to seniors living on fixed incomes, Johnson proposed transferring $1,470,900 from the $7,520,000 rainy day Rate Stabilization Reserve fund into the operating budget. 

"No matter how I look at it, whether it's three per cent (increase) in the water or three per cent on the wastewater or hydro," Johnson said.

"I had two calls this week -- because we just had an age friendly meeting -- of people who can't pay for their prescriptions. They're seniors and they're saying, 'I can't afford to buy my drugs I need to exist on.'"

The motion lost despite support from Pullia, Johnson, Rydholm and Coun. Larry Hebert, the latter of which has yet to support a budget in his 11 years on council.

Coun. Iain Angus pointed out the city has tax relief programs aimed at those who truly can't afford tax increases, including homeowners who own low-value properties. He said the city is now reaping the cost of insufficient tax increases in prior budgets. 

"We'd all love to be heroes and bring in the lowest tax rate possible but I remember when I got on this council, we were suffering through those zeroes for many years and we're seeing the benefit of that now, in terms of the infrastructure deficit we have because we kept short-changing what we were spending on our infrastructure," Angus said. 

"We were reducing our programs and services -- we're continuing to do that -- and we were wanting to be nice by taking it out of reserves in order to keep the number down. I can't do that."  

The motion stipulated administration would look for the savings in the 2018 budget. City manager Norm Gale reminded council that administration found $2.8 million in cuts this year.

He also reitterated the purpose of what he calls the "reset budget" is realistically funding areas that often exceed their budgets such as the city's legal department and the Thunder Bay Police Service budget.  

"This over-reliance on reserve funds was due to chronically underfunded areas within the budget," Gale said. 

"In this budget we did two things: we addressed the under-funding by recommending budgets that actually meet the demand of what those respective areas are but concurrently, we increased our contributions to reserves... My advice to council in this respect is that continuing to use reserve funds is contrary to the approach we took in this budget from the begining in changing how we use reserve funds." 

Most financial additions council has made to the 2017 budget have not landed on the levy. With the exception of a $20,000 commitment to the National Team Development Centre for cross-country ski training, the money came from the Renew Thunder Bay fund, which is designed for major projects.

Council voted to dip into Renew Thunder Bay to spend $1.45-million on the Centennial Botanical Conservatory, to restore administration's proposed $160,000 cut to the Clean Green and Beautiful Committee, and fund "up to" $106,000 toward planning a new soccer complex at Chapples Park. Including those withdrawals, that fund will hold $20,170,193. 

Pullia pointed out Mayor Keith Hobbs and McIntyre Coun. Trevor Giertuga were absent for Wednesday's vote as he promised to revive the debate when every seat is full at Tuesday's ratification meeting. 

"Next week, I'm prepared to fully engage again in that debate because I think it's an important debate," Pullia said. 

"We cannot look at this year in isolation. We need to look strategically at where Thunder Bay's heading with a stable population or a growing population. The tax base is now growing."