City of Thunder Bay prepares for another challenging budget

The City of Thunder Bay is preparing for its 2024 budget process, which the city manager said will be another challenging one.

A draft budget is scheduled to be released publicly on Jan. 19. That will be followed by public input and council deliberations, with a ratification meeting slated for Feb. 12.

City Manager Norm Gale said council has directed administration to keep any tax levy increase to 5.5 per cent or less the final 2023 budget included a tax levy increase of 4.4 per cent but noted there are several challenges facing the city.

One of those, he said, is infrastructure.

"Despite the fact that we're increasing our infrastructure spend by five per cent each year, we continue to fall behind," he said. "There is a gap on what we're spending versus what needs to be spent to maintain the infrastructure that we have and [have] to build new.

"That squeezes operating costs, and those operating costs usually come in the form of community services."

Other challenges include emergency services funding, which continues to rise.

"That's largely as a result of increases in demand for those services, and also social costs and healthcare costs that are borne by the property taxpayer," Gale said.

Inflation, recruiting and retaining workers, and supply chain issues also have an impact on the city budget, he said.

"These are very difficult times when it comes to municipal finances," Gale said. "Thunder Bay is not immune, and Thunder Bay is not alone."

"My colleagues, city managers across Ontario and indeed Canada, facelargely the same challenges that we do, and we are seeing some municipalities have significant levy increases to their budgets."

"This is a difficult budget, and difficult choices will have to be made. I know this sounds trite, but it is true."

The 2024 budget dates have been posted on the city's website.

Red River Coun. Michael Zussinosaid there are a few things he'd like to see included in the new budget, including limiting how long city vehicles can idle.

"I really would like to see that reigned in a bit, because I just see that as an easy way to save some money, and have a little bit of a vested interest in the environment and in terms of utilization of this limited resource."

Selling some city-owned land to promote infill and bring in some revenue is also something Zussino said he'd like to look at during the deliberation process.

"It can't always just be 'tax people' because otherwise ... in two years, they're going to have a 10 per cent increase while we've been in term," he said.

Zussino said the city is "hamstrung in some regards" when it comes to things like inflation and rising emergency services funding.

"You still have to repair things that break along the way, too, and you have to invest as well if you want to have all these new homes that we're striving for," he said. "It's a precarious situation, and for some people has serious impacts."

"I look at our community, and certain segments can buffer this, and certain segments of the society are like, 'I can't do this anymore,' and I feel for them."

Zussino said he'll be holding a ward meeting on Jan. 24to give constituents a chance to provide some feedback on the upcoming city budget.

Coun. Mark Bentz, chair ofadministrative services, which oversees the budget session, said he's also expecting a difficult budget process this year.

"There's a lot bigger numbers that make people anxious, rightfully so," he said."And on top of that we've got some cuts to some services, I'm sure, that that are part of that budget."

And while Bentz noted last year's 4.4 per cent increase was below inflation, "I think the community needs to understand that the community services are being eroded in [a] high-inflationary environment in order to maintain these types of rates."

Bentz said there will be a few opportunities for the public to provide input on the proposed budget.

He said the most-important dates during this year's budget process in terms of public participation are:

• Jan. 19, when the proposed budget gets released;
• Jan. 23, which the city's long-term financial overview will be presented to city council, and
• Jan. 25., when a public Q&A session on the budget will be held at the Victoria Inn.

As for challenges in this year's budget process, Bentz echoed concernsabout infrastructure spending.

"We're on a track to do five per centincreases per year in [the infrastructure] category in order to kind of wrestle down the infrastructure deficit that we have, which is anywhere from 25 to $30 million per year depending on who you ask."

"That is a huge problem that means we're not maintaining our assets to the level in which our service standards require," he said. "So rather than a road being just repaired, some of them have to be replaced in terms of right down to the foundations if you let them go too long. Buildings as well."

An example he gave was Dease Pool, which was recently closed by the city.

"We did not have any reserves set aside to replace that asset," Bentz said.

Another challenge is the rising cost of emergency services, which Bentz said is rising "well beyond inflation."

"We have to sacrifice community services to fund emergency services," he said. "All of these things are starting to really erode the levels of service that we can provide in terms of community service."

"Building new things that we have to maintain is always a challenge as well, because we can't really maintain what we own," Bentz said. "So when we build new stuff, new bridges, new facilities, that also sets in motion an increase in the infrastructure gap."