THUNDER BAY -- City council will begin deliberating the city's 2017 budget from the point of a 3.53 per cent gross increased levy.
The city's Budget Committee released its proposed budget to launch the annual process Tuesday, announcing the city would spend $6.3 million more in 2017 than it spent in 2016. The 3.53 levy increase is nearly one per cent less than the 4.4 per cent levy starting point council accepted in September.
When growth is considered, that figure falls to 3.07 per cent.
Budget Committee chairman and Coun. Frank Pullia believes the process can drive the levy down at least another per cent with a goal of reaching the 1.5 per cent increase, when expected growth is factored in, expressed in the Consumer Price Index.
"Three per cent as a starting point is a reasonable number given what we were dealing with," Pullia said.
"We have to take into account the challenges were fairly substantial. They will continue. That's why we need to continue to look at those efficiencies, savings -- permanent savings -- on an ongoing basis. I'd like to see the cost of doing business in the city going down even further by another one per cent to make sure the lack of revenue we're seeing can be offset."
The unexpected $821,000 (0.46 per cent) in economic growth throughout 2016 can be accounted for in new residential development but that figure doesn't account for anticipated reductions to large industrial property values, which are still in the appeal process. Most commercial property owners are also appealing their values.
"We were projecting based on communication with MPAC (Municipal Property Assessment Corporation) that certain appeals would have been completed in 2016," said revenue director Rob Calquhoun. "Because they weren't and were pushed into 2017, that negative offset to the growth calculation didn't happen."
City manager Norm Gale said although the city projects $800,000 in increased costs to energy, snow removal and a reduction in child care revenues, those expenses will be offset through $2.8 million in permanent cost reductions, including $2.2 million to operations. Twenty-five positions have been eliminated through that process but jobs have been added elsewhere resulting in a net 13 fewer full-time municipal positions.
Administration has also permanently reduced insurance costs $600,000.
"These moves are consistent with council direction provided to administration in 2016 to find $1.4 million in operating cuts and have an offset limit of 4.4 per cent in growth of the budget. So we met those targets," Gale said.
On the capital side, the proposed budget includes a $15.9 million in net capital investment consistent with 2016 expenditures, part of a $47.4-million plan for infrastructure over the coming year.
Gale attributed a $900,000 reduction in debenture repayments to phase two of Golf Links Road reconstruction.
A $2.3-million injection is being presented as a "stabilization" solution for departments that routinely exceed expected budgets such as legal fees, insurance claims and golf.
That figure does not include a $1.1 million increase to the $39-million Thunder Bay Police Service Budget to account for increased overtime costs, $100,000 less than police chief J.P. Levesque had requested.
