Water rates surge

The city’s proposed budget is moving in the right direction but plans to follow through with a proposed water rate increase is a concern, the mayor said Friday.

A 14.3 per cent increase is proposed for the 2011 budget. City treasurer Carol Busch said the increase is still considered affordable according to standards and will cost the average homeowner $55 a year more than in 2010. The increase is part of the city’s long-term drinking water financial plan, approved by council last February to comply with new provincial legislation Busch said.

"If we look at the big picture our rates remain affordable," Busch said.

But Mayor Keith Hobbs said while Thunder Bay has some of the best and safest water in the country, it comes with a hefty price tag.

"Water rates are almost getting as much as our taxes," he said. "It’s really hurting a lot of people."

Hobbs, looking over the proposed 2011 budget Friday morning, said the city was surprised with two budget items that equal $2.7 million this year. The Lakehead Regional Conservation Authority is recommending the city dredge part of the McIntyre Floodway for safety, which will be $1.5 million. Also, an unexpected $1.2 million shortfall in the Ontario Municipal Employees Retirement System will be picked up by the city.

"Without those two issues we would have a decrease in our taxes this year,” Hobb said. “So those are two challenges that were a surprise to me."

But Hobbs said he wants to work with city manager Tim Commisso to see if there are still ways to keep costs down for the city. All departments were told to tighten their belts this year and Hobbs said he hopes the city can find ways to save money through attrition.
"I don’t want to see anyone lose their jobs and I want to see our services maintained at the same level or better, however I think we can really look hard at a lot of departments," Hobbs said.

Busch said some good news in the numbers is the fact that the city’s net assessment grew by 0.64 per cent last year. That means property value in the city increased and the city grew.

But there is also a proposed tax increase of 1.64 per cent, or an average of $40 more a year per average household, Busch said. Part of that is because of a proposed enhanced infrastructure renewal program that would add an additional $1.5 million for roads and related projects.

"Our annual contribution to asset replacement has not met what we should be doing under those plans so we’re recommending that we start enhancing our asset management plans and increase the capital through a dedicated enhanced infrastructure program," said Busch.

And Hobbs agrees the city’s roads need help.

"Our roads are pretty deplorable," said Hobbs.

Echoing comments made by Coun. Linda Rydholm Thursday, Hobbs said more money is needed for roads in the city. Spending money on infrastructure improvements now goes a long way to stimulate economic development down the road, he said.

"It goes a long way to lowering our tax rate," he added.