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THUNDER BAY – Next year’s city budget is starting to take shape as administration tackles finding efficiencies while maintaining service levels to offset declining property assessments, though two councillors are not satisfied for opposing reasons.
Council on Monday night approved the direction for the city’s budgets from 2018 to 2020, which includes tasking administration with identifying $1.6 million in net reductions for next year’s deliberations.
City manager Norm Gale said $10.7 million has been eliminated from the operating budget over the past six years without substantial changes to services, though that could be reaching its end.
“Cut every year, cut, cut, cut,” Gale said. “This becomes increasingly difficult and there is a finite end to this. It is not a long-term strategy. Continual cuts searching for the euphemistic efficiencies each year is not how we succeed long-term.”
The 2018 direction maintains the current level of capital out of revenue for the 2018 and 2019 fiscal frameworks, with an increase of $1.1 million in 2020 with the Enhanced Infrastructure Renewal Program component remaining at $8.4 million.
With administration projecting growth of $1.3 million in 2018, the net municipal tax levy increase would be set at 2.9 per cent, followed by three per cent in each of 2019 and 2020.
Recent Municipal Property Assessment Corporation decisions on appeals of values of the Resolute Forest Products pulp and paper mill, grain elevators and big box stores have taken their toll on city books.
“In the past five years, $20 million out of the operating budget has been shifted onto the residential taxpayers due to tax refunds granted back to industrial and large commercial class,” Gale said.
“This is a very important reason why the residential ratepayer is feeling more pressure than the previous few years. While it doesn’t directly impact our budget per say, it affects the ratepayer directly.”
The direction was passed with two opposing votes, though they were made for very different reasons.
Coun. Iain Angus, who unsuccessfully rallied against the closure of the Chippewa Park Wildlife Exhibit during the most recent budget process, said he was concerned about what future reductions will mean to non-essential services.
“We’re seeing some of the reality of our lack of investment in parks, in particular, the soft services,” Angus said.
“There are a lot of angry people around Vickers Park around the maintenance of the park. We’ve seen what’s happened to the Muskeg Express. It’s not operational because of the ongoing lack of maintenance of the track. We know what’s happened with our sports fields and deplorable condition they are in.”
Meanwhile Coun. Rebecca Johnson voted against the direction, taking issue with a nearly 30 per cent increase to the base over the past decade.
While the city will receive increased funding from the Ontario Community Infrastructure Fund, Federal Gas Tax and Provincial Gas Tax over the next three years from $10.3 million in 2017 to a projected $14.6 million in 2020, Johnson urged administration to find sources of revenue.
“I don’t know that we have an expense problem because we can’t have expenses keep going up and revenues going down. It doesn’t work. You have to balance this somehow or another,” Johnson said.
“If we’re not getting the revenues in through taxes, then we have a problem.”
The budget would potentially include the $630,000 cost of adding another 12-hour shift for Superior North EMS and $100,000 each year over three years associated with hosting the 2020 Special Olympics Winter Games if the city’s bid is successful. As well, there is an estimated $325,000 hit from the province’s Bill 148, known as the Fair Workplaces Better Jobs Act, which includes hiking minimum wage, paying part-time employees the same hourly rate as full-time staff and enhancing sick days and vacation.
