Committee recommends 'exceptional' use of reserves to relieve pressures on budget

In meetings this week, North Bay City Council's infrastructure and operation committee discussed and agreed upon a proposed 2021 water and wastewater operating budget of nearly $24 million — carrying an increase of 3.89 per cent.

"It is exceptional when Council assigns some of the reserves toward the budget," admits Coun. Chris Mayne, who chairs the committee. "There was a sense from senior staff we could put a little more toward the capital side this year and that takes a little bit of pressure off the budget increase."

The draft recommendation for the 2021 water and wastewater operating budget calls for the use of $300,000 from the wastewater capital reserves in 2021, plus a further $150,000 from the same reserves in 2022. Those reserves are currently approximately $1 million above the City's target threshold. 

Looking beyond the 2021 increase of 3.89 per cent, the use of the reserves means the water and wastewater operating budget for 2022 will begin at a 3.46 per cent increase but according to staff calculations, could rise as high as six per cent with pressure from possible operating costs.

"Initially, staff were looking at a budget increase in excess of six per cent," for 2021, Mayne points out, "but it was felt that this year, that might be a difficult increase to absorb into the community, given a lot of residential and business budget pressures following COVID-19."

Mayne adds, "We didn't add in the Consumer Price Index — which we normally do — it would have been about a $300,000 amount. That's been waived for the 2021 budget."

This brought the water and wastewater budget increase to 5.1 per cent, a figure still deemed to be too high by the majority of the committee. Mayne credits CFO Margaret Karpenko and her staff for coming back with an acceptable proposal that addressed those concerns and got the increase down to 3.89 per cent.

"We don't want to use excessive amounts of reserves," observes Mayne, "because it tends to upset the long term."

Not all committee members were in favour as, for various reasons, Councillors Robertson, Maroosis, and King did not support moving the proposed operating budget forward but were outnumbered 8-3.

In discussions, Robertson had favoured examining moving to a 60-40 split between variable and fixed on water bills, as opposed to the current even split but the majority decided this was too drastic a move, especially for large businesses to navigate. He also objected to the pressures users could face in future years with an increase of the levy and re-introduction of the water filtration surcharge.

King and Maroosis both asked about staffing levels at the City of North Bay and King again questioned the amount being kept in reserves. As King and Maroosis seemed to be warming up with separate item-by-item enquiries, they were reminded by Mayne the committee would take a broad-strokes approach in meetings with more specific questions to be directed to City staff.

On the budget deliberations, Deputy Mayor Tanya Vrebosch says, "We found some ways to relieve pressures on the water and sewer side.

The budget chief adds, "The charge added every year to recoup the cost of the water filtration plant," will be deferred. "It will extend the period of time it takes to pay it off," while providing relief to taxpayers.

The average user at 14 cubic metres will see an increase of $1.45 per month rather than the $4.01 per month the committee and staff started with at the outset. Users at 16 cubic metres are expected to see an increase of $1.64 monthly with 20 cubic metres facing a monthly increase of $2.03.

The 2021 water and wastewater operating budget will go to a vote at the council level, November 10. Then, the implications of the water and wastewater operating budget increase on the water rate increase will be open for discussion at a public meeting, November 23.

"We found ways to offset the impact on people this year," with an eye on next year and beyond, says Vrebosch. "There is a ripple effect down the road. It will have a small impact next year."

There will be no in-person budget open houses this year due to the pandemic. The City of North Bay encourages members of the public who would like to provide input to utilize the Town Hall meetings or to make submissions to [email protected] until November 6.

All committee and budget meetings are available to the public for viewing on the City of North Bay’s YouTube channel.