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Councillors concerned about skyrocketing infrastructure deficit

Thunder Bay should be spending $55.1 million annually to maintain and eventually replace its infrastructure, but has only budgeted $32.8 million to start the 2020 budget process.
Mark Bentz
Thunder Bay budget chair Mark Bentz presides over a budget overview meeting at city hall on Wednesday, Jan. 8, 2020. (Leith Dunick, tbnewswatch.com)

THUNDER BAY – Several city councillors have expressed serious concerns about the city's growing infrastructure gap, which is projected to be $22.3 million in 2020.

Budget chair Mark Bentz on Wednesday night said the city is moving in the wrong direction, noting the municipality should be spending $55.1 million annually to maintain its infrastructure, not the $32.8 million proposed in this year's budget.

“The current estimate is $22.3 million (too little). It is a reality and it is going to cost us a lot of money,” Bentz said, as council was presented with a budget overview at city hall, a day ahead of the public getting a chance to have its say on Thunder Bay's $200-million spending plan.

Bentz said at a 0.7 per cent infrastructure spending increase, as proposed in this year's budget, the city isn't even keeping up with the cost of inflation.

“This budget is not a responsible budget for me in terms of dealing with a known problem,” Bentz said.

Council was told it would take 15 years, plus the addition of a five per cent capital levy hike and reinvestment of a debenture taken out in 2004, to pay the city's share of a new home for the aged, money that was ultimately put into the Renew Thunder Bay fund when the province took on those costs.

Mayor Bill Mauro said taxpayers need to be reassured the city's assets, which total $3.4 billion in replacement value, won't be lost because council isn't spending enough money to upkeep and replace them when needed.

“At what point would we have caught up to the deficit? I'm really concerned about what message this sends to the community. We spent a lot of time on this last year and it seems like we're going to do it again this year,” Mauro said.

Bentz added unless council takes a 180-degree turn, it's going to be an ongoing problem.

“It's not like it's ever going to stop,” he said.

“That's correct,” replied city treasurer Linda Evans.

Northwood Coun. Shelby Ch'ng, however, chastised her fellow councillors, adding it's not administration's job to lower taxes.

“You all voted to lower taxes and cut this,” Ch'ng said, pointing to the 2019 budget process.

Ch'ng also worried that even if the money could be found to close the infrastructure gap, it might be too much work all at once to be feasible.

“I'm not confident we have enough contractors to make this happen.”

There is good news on the fiscal horizon.

The city, whose debt is expected to increase from $205.9 million at the end of 2018 to $212.1 million projected at the end of last year, does have a number of debentures that will be paid off by decade's end.

In addition to the homes for the aged loan, the city is paying off a $42-million debenture for its water treatment plant, with $12.6 million remaining on a debt that expires in 2025. Another $19.2 million loan for the facility, taken out in 2007, will be off the books in 2027. Meanwhile loans of $20 million and $23 million, taken out for waste water infrastructure in 2004 and 2005, disappears by 2025.

The city is making progress paying down most of its debt categories. Tax-supported debt is down to $76.3 million, from $77 million a year ago. Wastewater debt dropped to $32.1 million from $33.7 million and waterworks slid from $65.8 million to $64.3 million.

However, the overall debt grew by $6.2 million thanks to Tbaytel, whose debt grew from $28.9 million to $38.8 million.

Administration is recommending reinvesting debt servicing savings into capital and only considering additional debentures for major capital projects.

Thunder Bay's total debt was $179 million in 2015.



Leith Dunick

About the Author: Leith Dunick

A proud Nova Scotian who has called Thunder Bay home since 2002, Leith is Dougall Media's director of news, but still likes to tell your stories too. Wants his Expos back and to see Neil Young at least one more time. Twitter: @LeithDunick
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