When Thompson’s mayor, councillor and administration saw the writing on the wall late last year during the closing stages of grant-in-lieu (GIL) negotiations with Vale’s Manitoba Operations and realized that they were going to be getting a lot less money than they had been – a 20 per cent drop from 2017 levels this year and 50 per cent less in the three years after that, with the possibility of an extra $1.2 million in year two of the four-year agreement – they started having discussions about making tough choices to cut municipal spending. There was talk of having city employees take unpaid days off, but that was quickly shelved when it became clear that it was unpopular and the workers were not interested in making less money. There was an aborted attempt to make a symbolic cost-cutting move by reducing the number of councillors but this has been abandoned for the time being because the city and province did not have the time to pass the necessary legislation in order for it to take effect by this fall’s municipal election. They did reduce the percentage of fees for rental of city facilities that non-profit groups can request to be waived from 100 per cent to 50 per cent. Cuts to summer camps for kids and other city programs are coming.
But when school board chair Don Macdonald revealed at the April 24 school board meeting that the city was not going to provide the School District of Mystery Lake (SDML) with any of the GIL funding for the term of this agreement, which expires at the end of 2021, it became clear that some much harder choices will be left to the next mayor and council who are elected in late October.
Not getting the money from the city was something that the school district prepared for and the amount they’re losing out on only works out to a few per cent of their budget, so it isn’t an existential crisis. And it was pretty clear from the moment that Mayor Dennis Fenske first pointed out back in January that whether or not to follow the previous formula, under which the city got about 71 per cent of the GIL funding and the school district about 28 per cent, was up to council’s discretion, that the decision had been made to reduce or eliminate the amount the school district receives.
In essence, what the decision has done is put off the need to make really hard choices until the 2019 budget. By keeping all of the GIL for itself, the city actually doesn’t have to deal with a funding cut at all in that area of revenues compared to when it was receiving only part of that funding during the previous five-year agreement. But the next mayor and council will and it will be an even steeper drop with an additional $1.8 million decrease from this year, unless Vale’s Manitoba Operations are sufficiently profitable for it to chip in an extra $1.2 million in 2019.
In some ways this makes sense. The next mayor and council will be the ones to deal with the consequences of reduced spending so maybe they should be the ones in control of deciding what gets cut. On the other hand, Fenske was perfectly positioned to work with council to make unpopular choices since he doesn’t have to worry about getting re-elected when this term ends. Many of the councillors who often vote in concert with him might however, and may not have wanted to hurt their chances of continuing in their positions come Oct. 24.
For now, the problem of figuring out how to reduce spending has been put off for the most part until the 2019 budget. However, as we all know, avoiding problems doesn’t make them go away and sometimes makes them worse. How many of the current councillors will still be around to deal with the problem of reduced GIL funding in 2019 and beyond won’t be known for several months.
