THUNDER BAY— The city is facing financial challenges with the rate of inflation outstripping growth in the tax base, according to city manager John Collin.
In a presentation on Monday, Collin updated council on his growth plan, which aims to create growth opportunities in the city. One way he plans to tackle that challenge is through a new streamlined model to support development.
The one-stop shop model
Collin explained to council that through the growth plan, residents could access support for development projects through a single point of contact.
Collin told council, “we need a one-stop development shop for anybody who wants to build something. Be it something as simple as a deck to a 12-story wood construction building.”
“The idea is you walk into one place or you call one number or you send one email and then we shepherd you through the entire process to get your development up and running,” said Collin.
According to Collin, the development model will be put into place “as soon as possible.”
Moreover, the one-stop shop model will be extended into other areas of city services, including finance, parks, recreation, roads, and snow management to "enhance customer service which will enhance image and perception, which will enhance growth,” said Collin.
“We're getting very close to an acceptable production rate to satisfy our growth requirements,” said Collin.
All hands on deck
Through partnerships with the community and corporate leaders, business owners, and academics, Collin envisions a collaborative approach to his smart growth plan.
Collin is calling it: Task Force Growth.
The task force will have its own mandated, tax-supported budget and use that revenue “to put into a special fund to reinforce growth moving forward,” said Collin.
By utilizing the experts and professionals in the field, the task force can work to reduce or remove barriers that slow down development, with ideas like the one-stop development shop.
Coun. Brian Hamilton asked if the smart growth plan incentivizes existing businesses.
“It's not all about new business. It can't be. We also have to look after the businesses that are currently here and have them thrive so that they may choose to expand and evolve and grow,” Collin said.
Incentivizing growth
Collin is proposing the city implement "smart growth" incentives.
I certainly do not foresee in this action plan growth rates of 10 and 15 per cent. That's just unmanageable, but three (per cent) or slightly higher than three would be a great place to be,” Collin said.
Coun. Mark Bentz asked how could the city see growth in the next five years through the incentives.
The city manager said they would have to maintain a revenue that is above inflation and make some discretionary spending investments on initiatives that would encourage growth.
“It is smart growth to make sure we have the housing, the talent, the services, the recreation and sports that are needed so that everybody enjoys the community in which they're in to create that smart growth plan with all of the various players that will be involved,” said Collin.
Colin is confident that the Housing Accelerator Fund and the Build Faster Fund, for example, will yield a return on investment next year.
At the end of Sept., the city issued 310 building permits for residential properties which he assures council will reach the provincial target of 350 units by the end of the year.
The corporation of Thunder Bay
Collin’s plan comes with a significant restructuring of the city's administrative departments.
“We are conducting a review of central administration and financial support functions, not because they're ineffective far from it,” said Collin.
“They are very effective. It's not an effectiveness review. It's an efficiencies review. We need to find savings,” said Collin.
He plans to create a new growth department within the corporation on a two-year interim period.
General manager infrastructure and development Kerri Marshall would lead the growth department, which would include the development services division.
Several other departments and senior administrative roles would also be affected by the restructuring.
Collin also suggests a move away from using title of general manager, which he finds to be “old school.”
“It does not speak to the importance of the leadership roles required within those organizations. And you'll find that many municipalities throughout Canada have embraced instead the term Commissioner,” Collin said.
The challenge of growth
Collin said the city’s population has grown 1.3 per cent over the last ten years according to the last two censuses.
He compared that to an average population growth of 5.8 per cent provincially and 5.2 per cent nationally in that same period.
Considering the municipality’s revenue is dependent on property tax, population growth is a major factor in the city's bottom line, Collin explained. If growth doesn't keep up with inflation then city revenues are effectively diminishing.
He said that over the last five years, the annual tax base growth averaged 0.44 per cent and in the past 10 years, it was 0.63 per cent.
“If you take a look at our compounded growth over the last 10 years, because growth is much like interest, it compounds on itself. Our total growth over a 10-year period has been 7.8 per cent,” said Collin.
The Consumer Point Index (CPI) increased by much more, said Collin. "CPI, or household inflation, if you will, during the same time frame has grown by 31.7 per cent.”
Collin said municipal inflation is typically much higher than the household CPI.
“We have grown at a rate four times less than inflation by any measure. What that means is, the city's purchasing power has significantly decreased in each of the last 10 years. And that has resulted in tax and user rate increases above inflation and services have gradually diminished,” said Collin.
