Thunder Bay

5 things to know about Thunder Bay's proposed city budget

City administrators in Thunder Bay, Ont. have released their proposed municipal budget for 2017, and officials say it strikes a balance between reducing the cost of government and investing in needed projects.

Cost-cutting, capital spending and changes to trash pickup and parks, all proposed in 2017

(Mary-Jean Cormier/CBC)

City administrators in Thunder Bay, Ont. have released their proposed municipal budget for 2017, and officials say it strikes a balance between reducing the cost of government and investing in needed projects.

Currently, the budget calls for existing taxpayers to fund a 3.07 per cent increase in spending over last year.

Additionally, water and sewer rates are each scheduled to rise three per cent over last year.

At four special budget session starting Feb. 2, city councillors can propose changes to the existing budget. In addition, residents can share their thoughts with council on Jan. 31.

Here are five things to know about the budget package administration is proposing:

1. Budget to cut costs, says administration

One problem that has plagued Thunder Bay in recent years is that actual spending outpaces the approved budget.

In 2016, the city was $3 million in the red, necessitating emergency cuts or deferrals later in the year and dipping into reserve funds to make up the shortfall.

This year, city manager Norm Gale said $2.8 million in permanent reductions are in the budget, including job cuts.

Gale said, between eliminating city-funded positions and creating new ones, the budget proposes an overall decrease of 13 full time jobs. He added that the city also found savings in insurance costs.

He added that those measures are designed to "ensure, or best ensure, that we do not see negative variances moving forward, and to maintain and then increase spending on capital and infrastructure."

2. Budget proposes changes to some city services

With cuts to city operations, some services may be reduced or eliminated.

One change proposed in 2017 is that the city's recycling program would be funded by city taxes, not dump fees.

To help offset that, the budget proposes reducing the curbside garbage pickup limit from three containers to two, in addition to changing some collection routes. The city estimated it can save $150,000 with these measures.

In addition, changes to some city parks services are being proposed, including the closure of the Chippewa Wildlife Exhibit, operating Chippewa and Centennial Parks for five days per week instead of seven and discontinuing sleigh rides at Centennial.

Under the proposed budget, the city also would no longer cut grass on boulevards, and mandate that homeowners do it.

3. More money expected from higher levels of government

Capital spending out of city taxes on projects such as road and sewer work and other infrastructure is expected to remain relatively unchanged from last year at around $15.9 million.

However, city officials are expecting more from higher levels of government.

The projected gross capital budget for 2017 — which includes money from all sources, including federal and provincial grants — is about $11 million more than 2016.

City revenue director Rob Colquhoun said that the city has either received, or is likely to receive, project funding in areas such as stormwater management, sewer work and transit.

4. Recent transit funding to be spread out over 2 years

Earlier in January, the federal government announced $6 million in funding for transit upgrades in Thunder Bay.

That money represents 50 per cent of the total cost of the projects.

Colquhoun said the city will spend $3.3 million of the federal money and $2.1 million out of city coffers in 2017 on things like new buses, upgrades to bus stops and terminals and site assessment and planning for a future intercity area transit hub.

He said the rest of the federal grant money will be spent in 2018. The city, using tax dollars as well as other government programs and pots of money, will match the funding over the two years.

5. City setting aside money for legal fees, insurance, emergency services

According to city staff, more money is being put aside to cover contingencies for things like insurance claims, legal fees and city-run golf courses — those are areas where costs have turned out to be higher in the past than projected.

In addition, $900,000 more is expected to be spent this year over 2016 on debenture payments related to previous capital projects and an increase of $800,000 is also projected to cover energy costs, snow removal and the loss of revenue from city-run child care.

The budget for the Thunder Bay Police Service is also being projected at $1.1 million higher than in 2016.