THUNDER BAY – City administration has identified $3.02 million in savings, nearly enough to rein in the municipal budget by year’s end.
City manager Norm Gale will present a plan before city council on Sept. 26 that would cut nearly $1 million in operations spending while over $2 million in capital expenditures will either be saved or deferred.
His presentation will come exactly two months after he delivered the city’s second quarter budget variance, which had quadrupled since the first quarter.
Gale attributed the deficit to unforeseen costs in the city’s legal and insurance departments, as well as a Thunder Bay Police Services budget running $1 million in the red.
“Should council approve all the measures in this report, we’re heading toward a negative variance of slightly less than $200,000, which is substantially less than the $3.2 million projected just a few months ago,” Gale said.
Infrastructure savings of $1,142,000 account for more than half of capital spending re-allocation. Approved infrastructure projects that will need to be budgeted again in future years accounted for $1,128,000.
Gale said that figure is comprised of many small projects and that all major construction currently underway will be completed.
Nearly a third of the total money earmarked in the plan is attributed to complete capital projects that came in under budget.
Across the city’s six departments, they add up to $977,000.
On the operations side, a hiring freeze will be extended to all but frontline positions while discretionary spending and travel will be reduced.
Corporate Services will see its operations cut $540,000 and Community Services will tighten its operations by $192,000 while Gale’s own office will forego $86,000 in spending.
“We’re extraordinarily lean,” Gale said.
“These measures are difficult. They involve not staffing positions that produce things. They involve not doing work that was already approved by council. These are one-time cuts and holds we’re in and it should not be inferred that these are easy moves to make for the 2017 budget and beyond.”
While the plan doesn’t suggest drawing on reserve funds to balance the budget at this time, it also suggests re-purposing the $438,000 the city previously committed to the fund.
Gale said he’s confident the $180,000 difference between the plan’s savings and a balanced budget will present itself before year’s end in April.
City council is expected to vote on the report on Monday.
