Thunder Bay city hall faces $800K budget shortfall for 2015

It was a bit ofdejavu for citycouncillorsin Thunder Bay, as they learned at Monday night's meeting that the city is once again looking at a deficit at the end of 2015.

City staff, who updated thecouncillorson the city's financial outlook, projected that the city would be $832,300, or 0.4 per cent, over budget by the end of the year.

The majority of the shortfall$505,600comes from additional winter control work, like sanding and salting this winter. TheThunder Bay Police Service has a variance of$218,300, whileadditional benefits payments of $157,400, also contributed to the projected deficit.

• Full coverage:Thunder Bay budget 2015

Despite the negative variance, the city is still in a better shape financially in the first quarter of 2015 compared to the same period last year. The city had an overall budget shortfall of $3.6 million, or 1.7 per cent, in 2014.

Changes to reserve funds

The council alsoproposed some changes to the city's reserve funds.

First,the council merged theTBayteldividend reserve fund with the Renew Thunder Bay fund, moving around about $824,000.

Also, the council recommended changing the name of the crime prevention reserve fund to the police capital projects reserve fund, whichwould allow the police department to use the money for major purchases.

The requested to broaden the useof the fund came from the police department, according to Carol Pollard, the city's manager of finance.

"By renaming the fund and purpose of the fund, they will be able to access it for other capital projects," she said.

Councillorsalso learned that the amount in city coffers has dramatically decreased from 2013 to 2014 by about $30 million.

The city's current debt-to-reserve radio is 1.7, which means for every $1 in reserves, there is $1.7 of debt. The recommended radio is 1.

About$9.5 million of the decrease was caused by a reduction in the city's reserve funds, according to Dawn Paris, the city's manager of accounting. Infrastructure payments also contributed to the decrease.

CouncillorRebecca Johnson said she hopes the administration can find savings.

"We're off to not a good start for the year," she said. "But I did, as I looked at last year's first variance, and we are better than that, so that is a good thing."