Mayor leads push for capital policy review in budget meeting

As far as discussions about the combined water and wastewater operating budget and the associated calculated rates go, Wednesday evening’s session at North Bay City Hall was livelier than most.

Even with many councillors just getting their feet wet when it comes to budget deliberations, there was earnest discussion as ideas flowed on how best to tackle and lower a 5.53 per cent water and wastewater levy increase.

See: Full report on the 2023 water wastewater operating budget

Several of the council members around the budget table expressed their concern for taxpayers over what city staff project as an average increase of about $60 per year for the average residential water customer, not to mention the anticipated increase in the levy from the combined capital and operating budgets.

Coun. Gary Gardiner highlighted the challenges faced by the average taxpayer, especially citizens on fixed incomes. “They pay roughly 5.6 per cent of their income,” in property taxes and water bills, “or about $5,000 per year. The problem we face in terms of inflationary costs...is homeowners can’t simply go out and raise more money to pay for the increased food cost, the increased heating cost, and the increased tax cost.

“I’m fearful that as we continue down this road we haven’t even got to our general operating budget — which will be more impactful — and we are making it difficult for people to keep their households up. I cannot live with six per cent,” he added.

Chief Financial Officer Margaret Karpenko clarified that suspending the funding of the capital portion of the water and wastewater budget would have financial ramifications down the line. For instance, Karpenko explained by using $750,000 meant for capital projects this year to pay down the levy, that amount would compound over 10 years to a deficit of approximately $7 million. 

As Gardiner offered solutions using reserves and capital project surpluses, Coun. Jamie Lowery went a step further and expressed a preference for seeing the “bigger picture,” meaning he wished to examine the larger, overall capital project picture to reset the municipality’s priorities if warranted.

“We need to look at whether these projects will move forward, what are their statuses,” Lowery observed. “Maybe there is some room to readjust or reset our capital budget. We need to prioritize which ones have to be done, which ones are legislated, and our asset management plan. I’m really nervous about dealing with this particular [water and wastewater] budget in isolation.”

Mayor Peter Chirico then leaned forward in his seat and, with a few points of clarification from Karpenko, it was decided. Thursday’s scheduled meeting would be pushed back. City financial staff would have until Monday to present a review of its 10-year capital policy and options to lower the burden on taxpayers in the face of inflationary pressures.

Asked about the night’s events, Chirico said, “I’m looking forward to Monday and seeing a reduction in what that overall water tax bill is going to look like. I think tonight sparked a whole bunch of other conversations that we have to have as a council — especially a new council — about looking at our capital plan, the infrastructure gap, and all of those broader issues that we’re faced with because our population isn't growing and you either tax or you grow. One or the other.”

The move to send staff back to the drawing board should come as no shock to anyone following local politics closely. Lowery tabled a recent motion to trigger an overall operational review of the municipality. Lowery and Chirico ran on platforms of transparency and finding efficiencies within the organization.

See related: Mayor: City review seeks 'the good, the bad, and the ugly'

Lowery, the former CEO of Cassellholme has been open about his skepticism about how the city is run. Considering his feud with City of North Bay senior management — including CAO David Euler — thanks to the protracted and testy Cassellholme negotiations, many anticipated a shuffling of the deck on the fifth floor of City Hall by now, to those more in line with the vision of Mayor Chirico and clear ally, Lowery.

See also: Dispute between City and Cassellholme Board over reconstruction costs reaching boiling point

“What are our priorities? What should we be spending money on?” Lowery asked during the meeting, adding that he had “no idea where all these pockets of money in reserves are. I hear a lot about projects that are funded but certainly, the public doesn’t know about them. We should be looking at what’s going on in the whole city, rather than at just the water and wastewater budget.”

“Council is interested in looking at our capital policy on a long-term basis,” Chirico summed up. “The capital plan has been in place since 2005. There have been some minor tweaks to it. Is it going to address our future needs? Those were times of very low inflation and interest rates. We’re not in that same spectrum and it warrants a full review.”