Thunder Bay – Whats Behind Me Is Not Important

No tax increase - Thunder Bay News
click to enlarge (website here)

Included in the resolution is close to $2.5 million in a deficit management strategy, where different departments found savings from non-essential spending. These included measures such as a hiring freeze on all non-essential positions, reduction of travel budgets and postponing or cancelling some projects and programs.

Council also approved more than $1.6 million in cost containment strategies, including more than $400,000 from the facilities, fleet and transit services department and close to $200,000 in the infrastructure and operations department.

Non-essential spending?  Why is there such a  thing in the first place?  Why does the City of Thunder Bay spend money on things that are not essential?

Transit services are not essential?  Of course not. Everyone in Thunder Bay has a car, isn’t that right?  Right now, evenings, Sundays and holidays have transit users facing long wait times for some buses.  Will those wait times now increase? Does anyone care?  Do people who depend on public transit count?

City departmental budgets are largely wages.  That is what needs to be addressed. Staff and wages. When someone in City Administration talks about essential city spending, they are talking about wages for employees and managers.  (See previous post here.)

One of the comments to the above article:

chezhank says:
One thing the mayor,council and administration did not want to talk about last night was that for the year ended December 31, 2013, there was an overall unfavourable variance from operations of $8.2 million on the 2013 operating budget.
That report just quietly slipped by council.
What’s $8.2 million for this council.

This from Report 2014-078 presented to council last night….nobody mentioned this? Interesting.

For the year ended December 31, 2013, there was an overall unfavourable variance from operations (tax-supported and rate-supported) of $8.2 million (representing a 4.5% variance on the total net operating budget and 2.6% on the 2013 gross operating budget). For the fiscal years 2009 through 2013, the yearend variance on the gross operating budget has been between 2.6% unfavourable (2013) and 1.9% favourable (2010). For a gross operating budget the size of the City of Thunder Bay, having a variance less than 5% is considered responsible. – Report 2014-078

Whats behind me is not important….first rule of Thunder Bay Municipal finances. That $8.3 million budget deficit is sooooo  2013. Its history man!  Fogeaboutit.  Time to move on to the $6 million budget deficit projected for 2014.

$14 million in budget deficits over two years?  Don’t forget about the $85 million that the City of Thunder Bay gets from the provincial and federal governments annually. None of that prov and fed money is guaranteed.

One other point that might have something to do with everything is that reserve funds have an inverse effect on borrowing rates.  Less equates to more.

For you who understand this type of stuff, here is the Non-Consolidated Statement Of Capital Operations  put up very recently online.  The resolution is as presented by City Hall. Its a real shitty scan which makes me wonder if City Hall wanted people to read it. Click on any image to enlarge  (website here)


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