There's little flash in Thunder Bay's 2022 budget as savings become tough to find

Municipal budgets used to get many local reporters excited — curious to see what big projects a city had on tap for the upcoming year.

In 2022, like many previous years, once you open those budget documents, there's not as much to be excited about.

The City of Thunder Bay in northwestern Ontario released its proposed 2022 budget on Tuesday, and it starts off with a potential tax levy increase of 2.29 per cent. That figure is more or less on target with previous years, and close to the figure administration targeted for an annual increase of 2.25 per cent.

The figure translates into an increase of $4.7 million.

Increasing cost of emergency services

City manager Norm Gale said the only reason administration didn't get to its target amount is the late addition of fencing for the Thunder Bay Police Service headquarters building that increased the levy.

Savings are becoming tougher to find, and the city is seeing little growth in its assessment base, meaning there is not enough growth in the tax base to offset increases to the city budget.

Other major drivers include the increasing cost of emergency services — police, fire and EMS. Police will see a budget increase of $1.6 million, while Superior North EMS, licensing and enforcement and the parks budget will see a $1-million increase, with most of that attributed to EMS.

Gale said continual increases for emergency services are going up at a much higher rate than other city departments, and that cannot continue to happen without changes to city services or larger tax increases.

"It's not sustainable if you want to keep pressure on the tax rate and you want to maintain other programs and services," he said. "The math simply does not work."

Infrastructure spending

On the capital side, much of the budget is for maintenance of city assets, such as building maintenance, and replacing outdated fleet vehicles.

However, there are some larger projects the city is planning to move forward with this year.

The parks department will see some major capital spending, about $8.7 million, which includes a new playground at Boulevard Lake, repaving the parking lot at Hillcrest Park, improvements to numerous multi-use trails, and starting work on the Waterfront Trail.

Nearly $8 million will also be spent on a variety of roadwork, and millions more on upgrading sewers and storm sewers.

The city is also moving forward on the creation of an organics collection program, which was deemed a priority by the public about eight years ago. The $100,000 budgeted for this year would be the continuation of creating a plan, with the actual collection system still a couple of years away.

Upgrades to Balmoral Street, also known a Balmoral Phase Three, will see the roadway torn up between Alloy and Lithium drives.  The project has been split up into numerous phases, with the road eventually being paved, and underground infrastructure upgraded up to Beverly Street. The work on Balmoral originally started in 2016 and was projected to take three years.

The city will also look at renovating the Junot Avenue Superior North EMS headquarters, which was built about a decade ago. Upgrades to spaces there will cost about $1 million.

As for debt costs, the city is slated to pay $5.1 million in interest for 2022.

COVID-19 impacts

"The impact of COVID-19 will continue to be felt through 2022," said Linda Evans, the city's treasurer and general manager of corporate services and long-term care.

"COVID-19 drivers are consistent with the past two years, including lower transit revenues, lower recreation and culture revenues, lower parking revenues as well as additional costs related to staff for screening activities as well as enhanced cleaning."

The cost of the pandemic is expected to be about $7 million this year, which will be taken from the rate stabilization fund. The current balance of that fund is $12 million, after $1 million was taken out of the account in 2021 for COVID costs.

"We would be maintaining the balance in that reserve fund to ensure we have a reserve fund set aside in case we have extraordinary expenditures in the future," Evans said.

"The $7 million would not be spend elsewhere at this point."

Gale said the city will now have to look at how to replenish those reserve funds being spent to mitigate the impact of COVID-19.

"We've got $12 million plus in our stabilization reserve at this time, and that's after years of council putting money into the stabilization reserve, to get it to the point where the treasurer and I are comfortable that we have an appropriate amount in the stabilization reserve fund today," Gale said.

So far, much of the money needed to support COVID-19 operations has come from the federal and provincial governments.

"It's quite likely, seemingly and presumingly, that $7 million will come out of that stabilization reserve, which is over half, which means it's just not free money, which means we have to go back and find ways to rebuilt that stabilization reserve for the next ...thing we need to do to have funds to cover off."

City budget meetings are slated to start on Jan. 11, with the long-term financial overview.