THUNDER BAY - Tbaytel will be contributing more money to the City of Thunder Bay starting next year. City council voted to raise the municipally-owned utility’s annual fixed payment by half a million dollars, to $18 million, at its meeting on Monday.
The city has received nearly $300 million from Tbaytel over the past 15 years. A city report estimates that amount translates to a 9 per cent municipal tax reduction for ratepayers.
The policy change follows a review of the dividend policy by administration, and will apply through 2023. However, the motion passed by council calls for another review in 2021.
Council also voted to tweak the way the money is allocated. Most will still go into general operating revenue, but around $250,000 per year will now be diverted toward the city’s General Capital Reserve Fund, to support maintenance of city infrastructure.
The previous policy saw about $500,00 per year sent to the Stabilization Reserve Fund, which provides a buffer in case of unanticipated expenses or lower-than-expected revenues. The city now has around $9 million in the fund, an amount administration says provides “a good degree of protection.”
The annual fixed dividend makes up the bulk of Tbaytel’s contribution to city coffers, but the company also contributes secondary dividends that can vary year by year. Those include a performance dividend if yearly net income exceeds expectations, and a “special dividend” decided on by the company’s board, based on its overall financial position. The city left its policies around those dividends unchanged, with proceeds still going toward the Renew Thunder Bay Fund.
