Council is considering cost-cutting measures such as requiring city workers to take 10 unpaid days off per year in anticipation of lower Vale grant-in-lieu payments in 2018 and beyond.
Implementing the 10 unpaid days off would result in annual savings of about 3.8 per cent of the overall budget, about half of which is used to pay wages and benefits, says city manager Gary Ceppetelli.
A letter from Ceppetelli to city workers, which was posted in at least two Thompson Facebook groups, said that council has asked the city's administration to identify internal and external measures to reduce costs in 2018 amounting to about $750,000 to $1 million.
"One measure of reduction council identified is employee costs," wrote Ceppetelli. "Three options were discussed by council in budget meetings held to date: reducing all employees by 1 hour per day; reducing all employees by .5 hours per day; and implementing 10 unpaid days. Council decided to consider 10 unpaid days as part of the overall cost reduction for 2018. This information was relayed to USW [United Steelworkers] and IAFF [International Association of Fire Fighters] leadership on December 13 and 14, 2017. At no time was USW or IAFF told that they had to vote on an option or that there would be layoffs. As indicated at the meetings USW and IAFF were told that council still had to finalize what they were willing to reduce. Council is still in deliberations and has not confirmed the value of cost reductions that they will implement in 2018."
Other spending reduction options the city is looking at include eliminating recreation and public works department seasonal staff, getting rid of one outdoor area attendant position, removing one wading pool, reducing the number of community safety officers, reducing the number of councillors by two, reducing the Norplex Pool's operation hours to 11 hours every day, and reducing the hours of the Thompson Regional Community Centre reception area by two hours – one at the beginning and end of each work day. They are also considering eliminating summer day camps and no longer providing museum grants to artists who display their work there.
Reducing the amount of council and administration travel, as well as administration training and the provision of meals at lunchtime meetings are also on the table, as are reductions to operating funding to the library, recycle centre and zoo. The library operating funding could be reduced by three per cent – the amount the city is looking to shave from its budget – and the zoo and recycle centre could have their capital funding eliminated. Getting rid of grants to other organizations and external agencies like the Heritage North Museum and the homeless shelter is also under consideration, as is reducing the number of fee waivers or the amount of fees waived for non-profit organizations.
Ceppetelli told the Thompson Citizen that, although negotiations with Vale regarding the grant-in-lieu – money the company provides the city as a substitute for property taxes – are still underway, that "Vale indicated that the current value the city gets will not continue."
Over the past five years, from Jan. 1, 2013 to the end of this year, Vale paid $6 million per year to the city and the School District of Mystery Lake, with about 71 per cent going to the city and 28 per cent to the school district, with the small difference going to the Local Government District of Mystery Lake. By the letter of the 1956 agreement that governs the company's responsibilities to the town, Vale could have limited the grant-in-lieu to about $2 million per year based on a formula that takes into account the number of its employees with dependents and a residence in Thompson.
"This summer 500 employees will lose their jobs," said Ceppetelli – while about 60 who worked at Birchtree Mine are laid off effective Dec. 31 and another 60 will have retired. "People would be naive ... to think that we're not going to be impacted at all."
The city manager said the city has the ability to undertake the option of having employees take 10 unpaid days off per year and that he believes similar measures were taken by the city and school district in the late 1990s, though it was only five unpaid days off per year. That said, the city wants to involve its unions in the process.
Reducing costs is not only being considered in light of next year's budget, but with consideration to the fact that a new council will be voted in next October, Ceppetelli said.
"Doing nothing right now is likely to put them in a bigger hole," he said. It's just being prudent to start the discussions and planning."
Budget reductions are just one part of the city's strategy for dealing with the challenges it will face over the next few years. Ceppetelli said other measures include Thompson 2020, which is attempting to retain as many skilled workers who lost jobs at Vale as possible, possibly by having them continue to reside in Thompson while flying in and out to work at mines elsewhere. Retaining soon-to-be retirees who have not yet made up their mind whether they are staying in Thompson or leaving is also a priority, as is encouraging businesses that are unsure about what is going to happen to invest in their operations by providing them property tax rebates through the recently passed financial assistance bylaw, which provides new construction with a 50 per cent rebate on the new assessment value of the property for five years and improvements to existing buildings with a 100 per cent rebate on the increased assessment value for the first two years and 50 per cent for three more years after that.
While the situation facing Thompson could improve if the price of nickel were to rise dramatically, Ceppetelli says having a more diversified economy than the city did 15 years ago means the impact of Vale's workforce reductions now will not have as big an impact as they would have had they occurred in the 1990s.
