Council lowers projected 2024 tax levy, but tough decisions remain

Thunder Bay City Council lowered the projected 2024 tax levy increase slightly on Monday, amid warningsthat some tough decisions may need to be made.

City administration presented council with its annual budget directions report on Monday. The report is essentially a snapshot of the city's finances based on all available information.

In the report, city administration was recommending council target a tax levy increase of six per cent in 2024; that came down to 5.5 per cent thanks to an amendment tabled by McKellar Ward Coun. Brian Hamilton (that amount could still change, as 2024 budget deliberations haven't begun and council has not made any final decisions yet).

"The amendment that I tabled [Monday] night was specific to just making sure that we can find that balance between taxation and service levels," Hamilton said. "We knowthrough my time at council anyway through the last several years that we can't do this on budget cuts alone."

Current River Coun. Andrew Foulds said there are a number of financial pressures on the city, and not all of them are things the city itself can control.

"We know that there's going to be an ask from the Thunder Bay District Health Unit that's going to be an increase," he said. "We don't have much control over that. We know that police costs are going up. There isn't a lot of control over that."

"We know we have to implement a green bin program that the province is mandating. We have to do that. So there are some challenges on the horizon, and I think council's decision last night reflects those challenges and also recognizes that we need to do a little bit of heavy lifting now and not kick the can down the road."

According to the report presented Monday, a halfper cent decrease in the tax levy means the city will need to find$1.1 million in net operationalsavings elsewhere.

Northwood Coun. Dominic Pasqualino said the city will need to look at increasing its revenue.

"It's not just going to come from the two other levels of government," he said. "It's going tohave to happen by growing the city, which we really haven't done for 40 years."

"Our population has diminished, our industries have diminished," Pasqualino said. "I've been the union president of the Bombardier plant, Alstom now, and we've gone from 1,300 people to, probably in our union we're looking at about 250 people right now."

"Sofor over 1,000 people, that place is closed and that's hurting them, because they can't afford to pay their taxes if they're not working," he said. "But also the plant pays less taxes because it's not utilizing as much as it can, plus all the other spinoff businesses."

Meanwhile, Hamilton said, capital projects and infrastructure need funding.

"The spends on infrastructure aren't solely aboutbuilding nice roads," he said. "It's about actually ensuring long-term financial sustainability, because when we don't properly fund our infrastructure, it ends up costing us more long-term."

"So as a long-term financial strategy, infrastructure spending is incredibly important. The motion [Monday] night torequest the 5.5 levy target, it actually specifically keptthe five per cent infrastructure expansion in the budget."

"We're asking that of administration. I think that they have their work cut out for them already."

Theprojected5.5 per cent tax levy increase next year isn't the only budget-related challenge that's come across councillors' desks lately.

The 2023 budget was a tough one, too; it included a 4.4 per cent tax levy, down from the 5.6 per cent that was initially proposed.

However, last month, council agreed to a wide swath of cuts to generally-smaller programs as part of an effort to find $2.2million in savings.

For example, the city's large debris pickup program which sees the city contract out the retrieval of large items, such as furniture or pianos, that are dumped on public property was cut. That change will come into effect next year, and will save the city about $40,000 per year.

Other small programs and services cut included movie nights in the park, event fireworks, and hours of operation for outdoor pools.

Foulds said while the savings resulting from each of those cuts were smaller, the affected programs and services aren't mandated.

"Is that the best way to to save money, because cutting the arts and cleaning and those things really matter to citizens," he said. "That single mom who can't afford to go to the movies that often, movies in the park isa sort of wonderful reprieve."

"Those kinds of things make our community, I think," Foulds said. "Those things do matter."

On the other hand, Foulds said longer-term savings require council to look at service standards.

"We haven't really looked at that," he said. "But to be perfectly frank, Idon't know if those service standards and making them less is something palatable that the community wants either."

"Itjust speaks to how difficult this process is."

Hamilton said the city needs to look at what its future needs will be, and plan accordingly.

"I think our role as a council is to actually, rather than snowball and just build more infrastructure, is to pivot," he said. "So if the needs of the future are X, then we've got to potentially divest from Y."

"In an era of limited budget, we are really going to have to make some choices, and those choices have political consequences."

Pasqualino said he'd like to see more effort put into attracting more business to Thunder Bay.

"In some ways, it frustrates me that some people on city council, whenever they start talking about other sources of income, 'well, the city is not in that business.'"

"If we're not in that business, well, then where areyou going to get some of this income coming from? Because it's not going to come from the residents. They have their own struggles to deal with."