Lab West woes: It's belt-tightening times in Wabush

Not long ago, the Town of Wabush was riding a wave of optimism and financial flexibility, with town leaders wondering how they would spend all the money.

Mayor Colin Vardy remembers cracking jokes during his successful mayoral campaign in September 2013.

"I thought we'd have enough money, we'd give free TVs along with our tax bills," Vardy said during a recent interview.

The town of just 1,800 residents seemed to have everything going its way.

If there was a need for a new vacuum truck for the public works department, someone wrote a cheque.Such a purchase would be an impossibility for just about any other town this size.

But here, Wabush Mines, the cornerstone of the town's economy for 50 years, was paying a $2.1 million grant each year in lieu of taxes.

And the council had reached a lucrative tax agreement with another company, Alderon, which would kick in when the company made good on plans to open another iron ore mine in the region.

Town officials were predicting the annual operating budget would probably swell to $12 million in the coming years, and there were talks of a new recreation complex.

Looking back, it almost seemed too good to be true, and it may have been.

The current environment is vastly different.

Gone is Wabush Mines and its nearly 500 jobs gone, and few are even talking about Alderon these days.

And that vacuum truck?

"We purchased that when the future was very bright," said Vardy.

"Now looking back, after everything has unfolded, (we have to) ask ourselves: do we really need that truck? At the time we made those decisions, there was no consideration for industry closing."

Making dowith less

Instead of planning for how to spend $12 million, town leaders are now facing some serious decisions about how to cut spending in order to fall in line with a budget that could shrink to about half that in the next year or two.

The provincial government is providing the town with $3.8 million over three years to help offset the loss of the annual grant from Wabush Mines, but there are tough times ahead, said Vardy.

"I was up to the town hall signing cheques just yesterday. Not to rap anybody on the knuckles, but every dollar we have to be accountable for and justify it.- WabushMayor Colin Vardy

"I was up to the town hall signing cheques just yesterday. Not to rap anybody on the knuckles, but every dollar we have to be accountable for and justify it. We know that even though we got to this point without any loss of jobs, that next year we have to cut another 30 per cent and we have to start with that today," he said.

The town has a full-time workforce of 28 employees, and a recreation budget of just under $1.3 million to operate an impressive array of sporting facilities, including a sprawling complex that houses a swimming pool, gymnasium, fitness centre and youth centre.

Vardy said there's no guarantee this complex will stay open without some creative thinking.

"As a small municipality this is a structure that's very hard for us for us to keep up and and very costly. Now we are extremely proud of this facility, and we continue to run this facility as long as we can. But we need to look at new synergies and new possibilities with industry, the province and our neighbouring municipality to see if we can partner on running this facility," he said.

There's also an indoor arena, so residents are accustomed to top-notch amenities and services.

Vardy is warning residents to prepare for leaner times, and there's already some evidence of this.

There weren't any tax increases this year, but council has mandated the recreation department to generate significantly more revenues.

Rates for some activities have increased by up to 50 per cent.

Longtime resident Margaret Moyles said she understands that council members havetomake some tough decisions, but she worries the higher prices may prevent some seniors from staying active.

If the downturn affects those things, it takes away your purpose for getting out through the door in the morning, she said recently, prior to a water fit session at the pool.

And there's no guarantee the town's workforce won't be cut.

"We don't want to. That's an obvious. We don't want the unemployed to make other people unemployed. But there's a rash reality there. We can only carry forward so much. We have so much money to work with. So we need the co-operation of everybody to move forward to make sure we can minimize the impact," saidVardy.

Eyeing greater co-operation with Labrador City

Wabush is located just a few kilometres away from its larger neighbour, Labrador City, which is home to about 7,400 people.

The iron ore mine in Lab City is still in operation, employing about 2,500 workers throughout the region.

An obvious question is whether it's time for the two towns to amalgamate.

Vardy wouldn't go that far, but acknowledged the two towns could do a better job of sharing services.

Talks have already taken place on the possibility of cost-sharing recreation and fire services.

"Amalgamation of the two communities has been a topic for some time. I still don't think it's overly popular or the right move," said Vardy.

"You start talking about regionalization of how we can do things as a region and start saving money, and we're exploring that right now."

The two towns have similar recreation budgets, but Labrador City has a much larger tax base on which to draw.

"The cost per capita is out of whack in Wabush and we're trying to find ways to balance that," he said

"Hopefully, one of the biggest savings is when we start combining services and facilities, stuff like insurance, there should be some obvious savings there. Also the efficiencies from our employees. You know, do we need two electricians? Do we need two, ya know. So we'll be able to find some efficiencies there as well."

Vardy said the way forward is going to be uncomfortable for many.

"The town of Wabush is a very proud community and many long-term residents are very proud. They lived in a community when Wabush had its own grocery store and its own department store and we were self-sustainable. Well a lot of that has changed now," he said.

"So we have to look at co-operation between the two municipalities to make this work. I think there's going to be benefits for both communities out of this."