Get it right, city tells chamber

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The City of Thunder Bay wants the local chamber of commerce to set the record straight on city spending and taxation.
In a letter to the Thunder Bay Chamber of Commerce, the city asks that the chamber revise its report, An Analysis and Forecast of the City of Thunder Bay’s Municipal Finances, and issue a public statement to set the record straight.
“While the city fully respects and appreciates the chamber’s important role in bringing the perspective of business related to city spending and taxation, the chamber also has a responsibility to get the facts right,” Mayor Keith Hobbs said Tuesday.
Hobbs’ comments refer to a letter sent to chamber chairman Uli Walther from city manager Tim Commisso and city treasurer Carol Pollard following a meeting between city and chamber representatives on Friday.
“The (chamber of commerce) report applies incorrect assumptions with respect to tax rates, tax forecasts and assessment changes,” the letter states.
“It is regrettable that the chamber did not provide the draft of the report for review and comment by the City of Thunder Bay through the city manager and/or others who are experts in municipal finance and municipal tax.
“By including a highly inflated forecast for tax increases, it has served to alarm taxpayers,” the letter says.
“Over the last five years, the total property taxes levied by the city have gone up on average three per cent a year, with one per cent of that amount dedicated to infrastructure renewal. Given recent and projected growth in the overall tax assessment base, we have every reason to expect that trend will continue over the next few years. The chamber owes it to the city and to the broader public to set the record straight,” the letter adds.
Responding to the city’s criticism, chamber president Charla Robinson said in a statement Tuesday that “the chamber represents over 1,000 business including 15,000 employees and their families who are concerned about rising costs.
“The purpose of our report is to provide information on areas where the city lags in efficiency compared to similar communities,” she said.
“We believe city council needs to reduce operating costs.
“We would be quite pleased to see tax increases come in lower than the projections and certainly hope that council will take the necessary steps to reduce spending.
“We are glad that these important conversations are taking place . . . (and) look forward to continuing discussions with the city to find solutions to the concerns we have raised about cost control,” Robinson added.
In its report, the chamber predicts that property taxes will reach alarming levels of between five and nine per cent a year if municipal spending continues to increase at the current rate.
Among the report’s highlights:
• Property tax rates in the city are among the highest in Ontario.
• Thunder Bay ranks last among eight comparative cities in overall performance.
• Operating costs are above both the provincial and Northern Ontario average and are higher in 20 of 27 categories.
• Total operating expenses have increased from $346 million in 2002 to $505 million in 2012.
• General government category expenses have almost doubled from $14.3 million in 2002 to $27.3 million in 2012.
“Unless council takes immediate serious action to cut costs, residential taxes will continue to rise by nearly eight per cent each year (over the next four years), commercial taxes by over five per cent and industrial taxes by over 8.5 per cent,” Robinson said in a news release accompanying the chamber report’s release.
“Inaction will continue to make Thunder Bay one of the most expensive places in Ontario to live, work, play and raise our families.
“All we want is to move the city in a positive direction . . . in order to get to where we want to get, we need to be competitive,” Robinson said.
She said the report “isn’t meant to be a negative message.
“Now is the time to have a conversation before council starts budget deliberations,” she said earlier.
“We feel that there needs to be more attention to cost control.”
The city’s criticism of the chamber comes a day after administration released a draft of the 2014 budget.
Under the proposed budget, the city would spend just over $313 million this year, taking in $198 million from local ratepayers. The rest of the money comes through grants and user fees.
If the proposed budget is approved in March, the city would take in an additional $5.5 million from taxpayers, or 3.45 per cent more. But, the city says, $2.1 million of that amount would be offset by an increase in the municipality’s tax base.