THUNDER BAY — Council has approved a 2025 capital budget of $161.8 million, exactly as proposed.
Despite a lengthy debate, no changes were made to the capital budget proposed by administration, which passed at Monday night's council meeting. The 2025 capital budget will be back before council on Dec. 9 for ratification.
That's $58.5 million more than the $103.2 million the city budgeted for capital last year, a 57 per cent increase. However, very little of that increase will be supported through taxes.
That tax-supported portion of the capital budget is only up by 3.8 per cent, line with City Council’s 2025 mandate of a 3.8 tax levy increase.
At $32 million the indoor turf facility is the single biggest item in the budget, but the temporary shelter village was the biggest point of contention.
Council had already approved up to $5 million dollars to build a temporary shelter village as a way to address thr growing issue of homeless encampments in the city.
Coun. Trevor Giertuga and Coun. Rajni Agarwal raised concerns about using the Renew Thunder Bay Reserve Fund to pay for the project.
Agarwal shared her concern that the capital budget did not reflect any potential funding sources from the federal or provincial government for the shelter village.
“I know there's hope to get some sort of federal or provincial funding, but that's not reflected here. So if we were to accept this budget, the way it's presented, then we would be accepting that all that money would be coming out of our reserve fund,” Agarwal said.
“And that would be it if we don't get any funding. It's my understanding?”
City Manager John Collin responded to Agarwal with a resounding, “yes”
Collin pointed out that council had already voted and ratified an expenditure cap of up to $5 million from reserves.
“Whether or not any of that money can be obtained from other sources, we do not have answers to that at this point in time," said Collin. "This budget has to reflect current known situation and that's why you do not see any external funding dollars in this budget at this time.”
However, Collin pointed out that use of the reserve funding was conditional upon approval of a site.
That site approval is not a given. During Monday night's committee of the whole meeting, council voted down administration's preferred site at 114 Miles St. E. and asked for a new report with more options.
Both Agarwal and Giertuga noted that the reserve fund is a leveraged fund, to be leveraged when a third party can contribute to match what the city would be taking out, according to the city’s policy and by-law.
“What will be displaced if we do not get any other funding at all?” she asked.
Collin said, “nothing.”
"Our operating budget will come in at 3.8 per cent. There is nothing that has been displaced. What we will have to work towards without doubt in the coming years is a replenishment of the Renew Fund." he added.
"And, certainly, you will see that both within the operating budget and our approach to additional funding that we may receive from other orders of government."
“The specific wording is to be aligned with federal and provincial funding/economic stimulus programs resulting in the corporation's contribution being highly leveraged,” clarified Keri Greaves, commissioner of corporate services.
“But it's not. It's not aligned with provincial or federal funding. It's not leveraged at all at this point,” said Giertuga.
“Federal government has announced a dedicated stream of funding of $250 million to be cost matched by the provinces. They have also indicated the willingness to actually enter into direct conversation with municipalities specific to human rights-based approaches to encampments and this aligns with that,” said Cynthia Olsen, director of strategy & engagement.
Nevertheless, Giertuga asked administration since the reserve is being used to fund the temporary shelter village in the capital budget, does that violate the city’s policy and by-law?
Collin said the recommendation was ratified.
“We made it clear that at that point in time. We had not achieved any leveraging, but we were going to continue to work towards that and that resolution passed and all of these arguments were articulated at that point in time as we move forward,” said Collin.
Giertuga persisted in calling out that the allocation was not leverage stating, “it's against our policy,”
According to Greaves, the policy states that projects must aligned with council strategic priorities to provide economic growth, job creation, be aligned with federal and provincial funding; provide community synergies and promote community partnerships; improve the quality of life in the city; be supported by the community; and be affordable to capital investment and impact on future operating budgets.
“There are seven criteria. We need to hit all seven and we are not highly leveraged. So, I don't care what the other six say,” said Giertuga.
“It's not all seven. It is that it must be aligned with the council's strategic priorities,” Greaves replied.
Coun. Brain Hamilton pointed out that council has gone against policy in the past, with the allocation of the Multi Turf Reserve fund in 2019.
Coun. Shelby Ch'ng also said, “council in the past has voted in contrary of policies.”
“For example, EIRP a few years ago, they wanted administration to recommend reserves to be used for radios and it clearly didn't fit but council voted in favour.”
“So while it's not every day we vote against policy, honestly, it doesn't matter if they line up perfectly. It's the will of council. We created the policy. We can vote not in favour of the policy. I don't always recommend it, but sometimes the situation calls for it”
During the committee of the whole meeting, council thanked Greaves for reformatting the budget to improve the readability of the documents so that the community and council can easily access where funding is being allocated to each service.
Administration said they have maintained an 80/20 split between renewal and new capital projects.
Capital renewal projects are rehabilitation or replacement projects for existing infrastructure that are obsolescent, prose a health and safety concern, a legislative requirement, or have deteriorated.
Approximately 82% of the capital budget will be invested in renewal projects.
New capital projects like the indoor turf facility and the temporary village are new developments to expand service levels or operational service areas.
Administration said these new capital projects have dedicated external funding, which council has specifically approved or funds have been set aside in a reserve fund.
