THUNDER BAY – Thunder Bay city council began the process of shaping the 2024 operating and capital budget by examining the long-term outlook at Tuesday night's meeting.
Staff brought forward a 50-page presentation, which highlighted current proposed municipal tax levy increases among 15 Ontario municipalities.
Proposed increases ranged from 2.5 per cent to 14.2 per cent - with an average of 6.7 per cent. Thunder Bay’s proposed increase is 5.5 per cent.
City manager Norm Gale said although comparisons were brought forward to councillors, it is challenging to find a direct comparator to Thunder Bay because of all the services that are delivered as a single-tier municipality.
“We're not the same as compared to Guelph, or Kingston or Kitchener. We don't deliver the same services and this is one of the reasons why Thunder Bay has a higher level of staffing per capita than other cities,” Gale said.
“We deliver all of the services. Other cities do not, they pay for it but they don't have the staff. This is a very important distinction that needs to be considered when anyone is looking at comparisons between municipalities. There is no single comparison between any two municipalities that is perfect. No single municipality is the same as another municipality.”
Gale noted in Ontario there are upper tier, lower tier and single tier municipalities.
The upper and lower tiers can deliver a suite of services, while the single tier municipalities deliver all of the services to their taxpayers.
City treasurer Keri Greaves agreed that making a direct comparison between Thunder Bay and even other Northern municipalities is a challenge.
“Each municipality has its own council that makes decisions based on services that they provide. It’s good information to have, but you can't rely on that completely," Greaves said.
In order to support the budget, staff have proposed that the municipal tax levy would need to be $231.7 million ($211.5 million operating, $20.2 million capital), which is an increase of $13.3 million or 6.1 per cent compared to the previous year.
In a slideshow presentation, the city indicated that because of its AA+ credit rating they have access to $8.5 million in debt servicing in 2024 and can accumulate between $61 million and $107 million in new debt room before hitting their max.
The projected debenture balance, according to city staff, has dropped from 2022 levels.
As of December 31, 2023 the total was $200,884,134, as compared to $216,860,094 in 2022.
Staff also indicated that the city is facing a potential infrastructure deficit that could be more than $30 million but noted that core assets such as roads, bridges and culverts are tying up $13 million of that projected number.
Staff pointed to forecasted growth in the city, which includes a pair of new hotel builds on Arthur Street, a strip mall and apartment building going up on Golf Links Road and various other apartment buildings totalling 175 units.
“Growth is a good thing, but I think we need to be measured and responsible in looking at what the actual impact of growth will look like,” Gale said.
“As the city grows, we will have to deliver services to support the growth. More roads requires more manpower and time to plow those roads and conduct repairs on those same roads.
“People currently want more community services, recreation, and cultural programs, athletic facilities and other things. It's not just the city but the province also needs to provide more schools, volunteer groups, churches, places of worship, all of these things will have to catch up to growth.”
In terms of reserves, the city has $121.8 million in total as of December 31, 2023, which dropped by $5.6 million from the previous year.
2024 Key Budget Drivers
- $2.3 million increase request from Thunder Bay Police Service
- $200,000 increase request from the Thunder Bay Police Services Board
- $1.7 million to implement approved program and services review recommendations including expansions for the human resources strategy, digital strategy, and other expansions such as the affordable transit pass pilot project, recreation and culture affordable access pilot project, airport rebate program, and provincially mandated organics program
- $1.1 million for inflationary increases for materials and purchased services for parts, salt, paint, contracted repairs and maintenance, and snow removal
- A $900,000 one-time use in reserve funds in 2023 that were not offset by approved service-level reductions
- $1.6 million increase for outside and local boards, excluding Thunder Bay Police Service and the Police Services Board
On the positive side of the ledger, staff have highlighted the following:
- $1.2 million increase in user fees
- $800,000 decrease in insurance premiums
- $1 million increase in the Tbaytel dividend
- $800,000 in the beginning of interest payments from the Synergy North Corporation
- $500,000 increase in other revenue including administrative recoveries and casino revenue
- $200,000 increase in the Ontario Municipal Partnership Fund allocation
The proposed operating and capital budget includes total gross spending of $538.3 million, an increase of $23.5 million or 4.6 per cent compared to 2023.
You have your chance to weigh in during an informal question and answer session in the Embassy Suite at the Victoria Inn on Jan. 25.
Council will review the budget on Jan. 30, Feb. 1, Feb. 5 and Feb. 7.
The budget is scheduled to be ratified on Monday, Feb. 12.
