THUNDER BAY – City councillors say a controversial process to identify service cuts has helped nudge the municipal budget in the right direction, even as it has fallen well short of council’s targeted savings.
After blindly ordering $1.5 million in cuts during the budget process earlier this year, council has agreed to just over a third of that amount after several proposed cuts proved too controversial to pass.
The gap of nearly a million dollars, if not filled, will contribute to what could be the largest municipal tax hike in recent history in 2024.
Councillors have argued significant tax and user fee hikes will be necessary to confront challenges like soaring emergency services costs, inflation, downloading by the province, and a massive infrastructure deficit.
In an interview, Mayor Ken Boshcoff acknowledged that approach diverged from many candidates’ rhetoric around limiting tax increases during last year’s municipal election.
“I don’t think anybody ran assuming, I’m going to be a five percenter,” he said. “Everybody came in under the assumption that things could be done.”
Instead, council has struggled to realize the savings it targeted this year, which included the $1.5 million in service cuts and another $700,000 in staffing reductions.
Councillors did not identify where those cuts should fall, instead requesting recommendations from administration.
Council has approved just over half a million dollars in cuts so far through that process, axing things like the sister cities program, movie nights in the park, fireworks, and a Current River EMS station, and scaling back the playgrounds program, outdoor pool hours, and downtown litter pick-up.
Most of those brought only marginal savings, however, while council deferred decisions on bigger ticket recommendations like closing the Neebing Memorial Arena and most outdoor rinks, or cancelling the 4-Neebing and 6-Mission bus routes, after public pushback.
“I think everybody’s disappointed in the process,” said Boshcoff.
The mayor said “there’s a bit more courage required” by a newly-elected council to make tough decisions including cuts.
However, he also suggested some options presented by administration – like ending bus service between the city and Fort William First Nation – had not been feasible to implement.
He also suggested a council with five first-time members could improve its approach with more experience under its belt.
“I think you’ll see a more seasoned group coming into the fall round of budget discussions, with a much more stable perspective on how this can happen.”
City manager Norm Gale was not available for interview for this article. At a recent council meeting, however, he also appeared to question council’s cost-cutting approach.
“In previous years, council has said, ‘Go and find the [cuts],’ and we have,” he said. “Mostly, our recommendations are not accepted by council.”
Coun. Mark Bentz was one of several councillors to argue while council has fallen short of its target, it still achieved meaningful spending reductions.
“I firmly believe there’s been progress made, and this is an iterative process,” he said. “It’s going to take a number of steps to get to where we need to get to."
Bentz has suggested council target tax increases in line with inflation, noting the five per cent hike last year came in under the national inflation rate.
Coun. Kasey Etreni believes the cost-cutting process foundered in part because it was left to administration, with no direction to consult with stakeholders and rank-and-file employees.
"In some ways, we’re putting a lot on the shoulders of senior administration, and I think there’s a potential we could do things a little differently so they don’t have to bear all of that," she said. "Sitting down with the stakeholders and discussing how can we do this better… we might have had a different response from the community."
"We might be surprised that some of the stakeholders could collaborate with us and come up with different solutions."
She cited the potential willingness of hockey groups and other ice users to pay higher booking fees to keep the Neebing Arena open as one example.
Coun. Andrew Foulds said he’d found the 2023 budget process the most frustrating in his nearly two decades on council, in part because cuts were approved blindly.
“What I find frustrating is picking these arbitrary numbers, and not fully understanding what they actually mean,” he said of the $1.5-million target. “We think we’ve done good work, but when that comes back with the impact of that number, we don’t agree to it – it [is] problematic, for sure.”
However, he argued the process had served as “a bit of an education for all of council about, if you want to make this level of cuts, what the impact is on the citizens.”
That helped inform council’s decision to target a higher tax increase for 2024 rather than further cuts, Foulds said.
Coun. Brian Hamilton echoed that point.
“I didn’t support city council’s aggressive budget reduction strategy in the last budget – I thought we went a little too far,” he said. “I knew what administration was tabling was going to be unpalatable, at least most of it – and that turned out to be the case.”
“It did apply enough pressure, though, that we’re looking at more innovative solutions – and I think council, especially the new councillors, are getting a sense of how difficult it is to plan balanced budgets.”
He added that councillors can be caught between a rock and a hard place, facing public demands to contain taxes while increasing emergency service spending and avoiding service cuts.
“The public is not going to be ready to accept a model of sustainability if it means losing services they cherish, but that might be the only way we can become financially sustainable,” he said.
Bentz agreed public expectations may need to be tempered.
“You can’t have it all – you can’t have low taxes and all your services and way above-inflationary increases in emergency services,” he said. “It’s just not doable.”
Others on council have questioned the need for service cuts.
In a June meeting, Coun. Shelby Ch’ng called the proposed cuts a “distraction” that would do little to address the city’s main financial challenges, like soaring emergency services costs that have been largely driven by increased police spending, which rose by $4 million this year alone.
“We can empty every pool, we can sell every park… and it’s still not enough money for us to be sustainable,” she said at the time.
City administration has asserted the municipal government proper is already containing costs, and that spending by other city-funded organizations is largely behind rising tax rates.
Excluding police and other outside boards like the health unit and CEDC, city spending rose by less than one per cent in the 2023 budget, staff reported.
Bentz said feedback from constituents indicates the community supports increased spending on emergency services, limiting council’s options.
“What I see happening is community services are likely to be sacrificed for emergency services over the next while,” he said. “Emergency services costs are ever-increasing, and at some point the community’s got to give us some feedback as to what is reasonable in terms of how much do you want to spend.”
“If all we hear is that, no, emergency services are untouchable, then I suspect they’ll remain untouchable.”
