Thunder Bay budget shortfall tops $1M

City councillors in Thunder Bay will meet tonight tohear about a budget shortfall projected to be well over $1 million.

According to city staff, its best estimate pegs the deficit at between $1.1 million and $1.7 million. Dealing with the red ink is particularly pressing because reserve funds used to balance the books have been depleted over the last two years.

• Thunder Bay budget help is needed, councillor says

There are number of reasons for the shortfall:

• Revenue is $688,000 lower than projected.
• Insurance is about $1 million over budget because of a large number of claims, a few large settlements and the 2012 flood.
• Legal fees are about $1 million over budget.
• Police are more than $600,000 over budget, the third year the force has run a deficit.
• Parks, engineering and winter control are $325,000 over budget.
• A large vacancy inMcKellarMall has led to a $140,000 shortfall.

The situationcould have been even worse, but some departments came in under budget, and the new courthouse will mean $2.2 million in taxes this year. The city also has a number of tax write-offs that will help.

The city is also looking at a $429,000 deficit in water and sewerage. Though that's not part of the main budget, the city will still have to fund the shortfall.

Thunder Bay has tried to save money by deferring hirings, forgoing discretionary spending, monitoring overtime and delaying capital projects, but it hasn't been enough.

The city says itwill put $1.8 million into next year's budget to rebuild the reserve funds.