Thunder Bay Annual Report

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C i t y o t h u n d e r B a y

Annual Report 2007


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!K e y F a c t s

Population

109,140

Number of Households

49,023

Land area

328.5 sq km

Population Density

332.3 per sq km

Waterfront52 km

Citys Annual Budget

Operating $251,885,700

Capital $ 29,868,200

Total $281,753,900

Citys Credit Rating

A+ Stable

Top employersCity o Thunder Bay

Thunder Bay Regional Health Sciences Centre

Lakehead District School Board

Government o Ontario

St. Josephs Care Group

Lakehead University

Thunder Bay Catholic District School Board

Bowater

Conederation CollegeGovernment o Canada

Buchanan Group

www.b.c


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City of thunder Bay AnnuAl RepoRt 2007

Message rom the Mayor 2

Thunder Bay City Council 2006-2010 3

Message rom the Acting CAO 4

Corporate Structure 5

Departments 6

2007-2010 Strategic Plan 8

Stronger & More Diversiied Economy 10

Clean Green Beautiul Proud 14

High Quality o Lie 18

One o the Best-Run Cities in Canada 22

Looking Ahead to 2008 25

Repor t rom the City Treasurer 27

Financial Statements 31

Statement o Administrative Responsibility 32

Auditors Repor t 33

Statement o Financial Position 34

Statement o Financial Activities 35

Statement o Changes in Financial Position 36

Schedule 1 - Operating Fund 37

Schedule 2 Capital Fund 38

Schedule 3 Reserves and Reser ve Funds 39

Notes to Financial Statements 40

I n d e x


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!M e s s a G e F R O M t H e M a y O R

Welcome to Thunder Bays rst Annual Report. This repor t provides

the opportunity to look back at the past year and refect on our manysuccesses, challenges and opportunities.

As you read this report youll realize that as a community, we are making

progress through the determined eor ts o many. We have a shared

vision that motivates us to work toward a better tomorrow that is rmly

planted in the reality o today.

To meet the uture needs o our community, Thunder Bay is taking a

strategic approach that makes the most o our Citys strengths. As

outlined in the 2007-2010 Strategic Plan, we are working with ourcommunity partners to pursue many initiatives and actions that will

allow us to build:

a stronger and more diversied economy

a cleaner, greener, more beautiul and proud Thunder Bay

a high quality o lie

one o the best-run cities in Canada.

These our Council priorities provide the basis or reporting back on our

progress. Looking back at 2007, we have many reasons to celebrate and

it is clear that we are Building on the New Foundation through long-

range plans, steady implementation and careul nancial management.

Key accomplishments in 2007 include the opening o the new Bare

Point Water Treatment Plant, strategic investments in new economic

development opportunities and the start o a 10-year Master Plan or

Recreation and Parks.

On behal o City Council, I invite you to get to know this Annual

Report and see or yoursel how Thunder Bay is Building on the New

Foundation. We have so many reasons to be proud. Remember, lie

and business is better here in our City thats Superior by Nature.

Sincerely,

Mayor Lynn Peterson

www.b.c


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c I t y c O u n c I l

City o Thunder Bay

Mayor Lynn Peterson

625-3600

Current River Ward

Councillor Andrew Foulds

766-9914

McIntyre Ward

Councillor Trevor Giertuga

683-8041

McKellar Ward

Councillor Robert

Tuchenhagen622-0002

Neebing Ward

Councillor Linda Rydholm

577-9260

Northwood Ward

Councillor Mark Bentz

577-8226

Red River Ward

Councillor Brian McKinnon

767-3945

Westort Ward

Councillor Joe Virdiramo

625-5547

Councillors at Large

Councillor Iain Angus

474-0926

Councillor Larry Hebert

622-7938

Councillor Rebecca Johnson

577-2807

Councillor Frank Pullia

767-6579

Councillor Aldo Ruberto

768-8038

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Front Row: Councillor Larry Hebert, Councillor Linda Rydholm, CouncillorJoe Virdiramo, Mayor Lynn Peterson, City Clerk John Hannam, CouncillorRebecca Johnson, Councillor Trevor GiertugaBack Row: Councillor Mark Bentz, Councillor Frank Pullia, Councillor BrianMcKinnon, Councillor Robert Tuchenhagen, Councillor Andrew Foulds,Councillor Iain Angus, Councillor Aldo Ruber to


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!M e s s a G e F R O M t H e a c t I n G c a O

Each day, your Citys employees strive to provide excellent service to the

citizens o Thunder Bay which, ultimately, contributes to the quality o liein our dynamic and diverse city.

We ocus on providing high value municipal services, knowing that our

uture is:

Satised customers

Valued employees and

Strategic partners

The City o Thunder Bay is committed to Accountability, Continuous

Improvement and Teamwork the values that guide our actions.

As a Corporation, we work together to take the right steps in order

to achieve our goals. We are committed to excellence and serving

the specic needs o the people o Thunder Bay through high quality

community services and operations, nancial leadership and support or

uture sustainability and long-range plans or our land, inrastructure and

resources.

The 2007 Annual Report is our opportunity to inorm you o the

actions we took over the last year toward achieving the priorities o theStrategic Plan. Here you will nd the detailed inormation about your City

governments nancial perormance as well as highlights o some o our

extraordinary achievements.

I am proud o the accomplishments outlined in this report and wish

to recognize the City o Thunder Bay sta or their contributions. It

is through their collective hard work and commitment to our Vision

and Values that Thunder Bay will become one o the best-run cities in

Canada. On behal o all residents, we will continue to work hard to build

a cleaner, greener, more beautiul and proud City.

Sincerely,

Darrell Matson

Acting Chie Administrative Ocer

www.b.c


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cIty OF tHundeR Bay cORpORate stRuctuRe

Community Economic Development Commission

Parking Authority Board*

Thunder Bay Community Auditorium Board

Thunder Bay District Social Services Administration

Board

Thunder Bay Police Services Board

Thunder Bay Public Library Board

TBayTel Municipal Service Board

Victoriaville Board o Management

Boards & Commissions

* For administrative purposes, the Manager - Parking Authority reports to the General Manager - Transportation & Works

City Council

Chief Administrative

Officer

CommunityServices

DevelopmentServices

FinanceTransportation

& WorksCorporateServices

Facilities& Fleet

Fire & RescueServices


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OFFICE OF THE CAO

Darrell MatsonActing CAO

Provides strategic leadership and overall

administration to the Citys eight departments.

The CAO develops Corporate Policy and

provides advice to Council about City

organization and operating procedure.

The Chie Administrative Ocer also

acts as Department head or Corporate

Communications & Strategic Initiatives,

Emergency Medical Services, Human Resources

and Internal Audit & Management Studies.

COMMUNITY SERVICES

Greg Alexander

General Manager

Supports and enhances the quality o lie o the

community by providing a range o social, health,

and leisure services, acilities and opportunities

that meet peoples broad, diverse and changing

needs; are oered in a air and accessible way;

and meet legislated requirements. Divisions

include Recreation & Culture, Gol, Homes or

the Aged, Parks and Tourism.

CORPORATE SERVICES

Rosalie EvansCity Solicitor & General Manager

Monitors the legal, legislative, administrative

and management requirements or City

Departments, Boards and Council. This

Department includes the City Solicitor, Health

& Saety/Risk Management, Oce o the City

Clerk and Provincial Oences Oce.

DEVELOPMENT SERVICESMark Smith

General Manager

Facilitates development initiatives designed to

attract visitors and investors to the community,

and administers regulatory unctions that

maintain the quality o lie and make the

community attractive to residents, visitors and

investors. Divisions include Building, Licensing &

Enorcement, including Animal Services, Planning,including Committee o Adjustment, and Realty

Services.

FACILITIES & FLEET

Alan Fydirchuk

General Manager

Manages Capital Building projects, asset

management, energy management, operations

and preventative maintenance o theCorporations Buildings, Fleet o Vehicles and

Equipment. Divisions include Administrative

Services, Facility Services, Construction/

Renovation Services and Fleet Services.

c I t y O F t H u n d e R B a y d e p a R t M e n t s

www.b.c


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FINANCE

Carol BuschCity Treasurer & General Manager

Manages the nancial aairs o the City including

the development o eective control measures

or the protection o the Citys assets and

resources, the maintenance o the Citys books

o accounts, nancial planning including scal

policy recommendations, budgeting, and debt

administration, the acquisition o materials,

supplies and services or all City departments.

The Divisions include Accounting & Budgets,

Corporate Inormation & Technology, Materials

Management and Revenue.

FIRE & RESCUE SERVICES

John Hay

Fire Chie

Provides the citizens o Thunder Bay with a

highly trained re suppression and emergency

service, capable o handling various hazardous

situations. The Fire Prevention and Investigation

Division is responsible or ongoing inspections

o all business, industrial, commercial and

residential properties, as well as re origin and

cause investigation. Public education programs

include re and lie saety education, juvenile re

setter intervention, special interest programming

and specialized training to business and industry.

Fire & Rescue delivers Emergency Planning or

the community.

TRANSPORTATION & WORKS

John HusiakActing General Manager

Provides or the planning, operation and

maintenance o all City roads and bridges,

street lighting, trac control, water supply,

water distribution, waste reduction and

recycling, garbage collection and disposal,

sewage collection, sewage treatment, drainage,

transit operations, training and saety, and all

administrative unctions. Divisions include

Central Suppor t, Engineering, Environment,

Health & Saety, Roads and Transit.

c I t y O F t H u n d e R B a y d e p a R t M e n t s


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Creating and Sustaining Jobs through Partnerships

2007 was the rst ull year o operation or the newly created, results-based Community

Economic Development Commission. In addition to operating dollars, the CEDC was

provided with a $300,000 und or star tups, easibility studies and small projects. Council

also set aside a $1 million reserve und or major projects recommended by the CEDC

that build on our traditional strengths and emerging new economy. Major initiativesincluded the creation o an Oil Sands Consortium to pursue manuacturing opportunities,

the opening o Thunder Bay Fine Papers Incorporated and the attraction o the Superior

Propane Sales & Marketing Oce.

City Council was the rst to invest in the Molecular Medicine Research Centre (MMRC),

committing $5 million to successully leverage commitments throughout 2007 rom other

partners. The MMRC on Munro Street is expected to create 205 research jobs and 400

to 600 spin-o jobs. Twenty nine researchers began operating at the acility. Thunder Bay

will benet in ways we are only beginning to understand rom the expanding economic

engines o health, biotechnology, research and innovation.

Work also got underway to create a state-o-the-art multi-purpose emergency training,

development and research centre in Thunder Bay. Thanks to a commitment o $1.7 million

rom the Northern Ontario Heritage Fund, construction began on the Fire Site, the

rst phase o the Thunder Bay and Region Protective and Emergency Services Training

Complex. The City contributed $660,000 (the proceeds o the land sale rom the old

site); the use o property on Hammond Avenue valued at $484,000 and will also provide

a dedicated re pumper and training sta to manage the Fire Site. A key goal o the

Centre is to keep training dollars in the region.

Ater the City decided to return 300 long-term care beds to the Province in January

2009 due to inadequate unding to upgrade the acilities, the Province announced it would

create the Centre o Excellence or Integrated Seniors Services (CEISS). This Centre and

support services will better meet the needs o seniors in our community, allow them to

stay in their homes longer and has the potential to create an additional 107 ull-time jobs

in the community.

s t R O n G e R & M O R e d I v e R s I F I e d e c O n O M y

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www.b.c

srogr & MorImproving Business

Competitiveness

Lobbying eorts with the Province were

successul in achieving a substantial and

accelerated reduction in education tax rates

or industrial and commercial properties in

Northern Ontario, our years ahead o the

rest o the Province, to support development.

This will result in a 2.1% tax rate decrease orcommercial properties and 8.6% decrease

or industrial properties in 2008. Water and

waste water rates as well as Hydro distribution

charges remain among the lowest in the

Province. TBayTel, the largest independent

communications company in Canada oers

Thunder Bay residential and business rates

or landline services that are well below the

national average. Other state-o-the-arttelecom solutions - data, wireless and Internet -

are competitively priced. Compared with other

cities, Thunder Bays residential tax burden

is about average while business taxation is

generally above average.* The City committed

to developing a long-term tax strategy to make

Thunder Bay more competitive in attracting

and retaining business.

Upgrading our Infrastructure

Developing and maintaining inrastructure

is one o the key ways that a municipal

government supports economic development.

The City o Thunder Bay and other

municipalities continue to press the ederal and

provincial governments or increased unding

to address a growing inrastructure gap. 2007

saw the completion o a number o notable

inrastructure projects. The new Bare Point

Water Treatment Plan was opened in June to

provide or residents long-term needs or clean,

sae drinking water. A new public street was

added that allows trac to bypass the Bowater

Mill, taking logging trucks o Broadway Avenue,which has been upgraded between Broadway

and Neebing Avenues with paved shoulders

or pedestrians and cyclists to improve saety.

Red River Road was widened and a new

centre let turn lane added to support this

busy commercial area. As well, improvements

were made to the intersections to improve

trac saety. May Street was reconstructed

rom Miles Street to Ridgeway Street includingreplacement o underground inrastructure,

streetscaping work, improved street lighting

and trac signal rebuilds. Work was completed

on the $1.2 million rehabilitation project or the

Vickers Street Bridge.

Developing our Waterfront

A Master Plan was approved or Prince Arthurs

Landing at Marina Park, a legacy project thatwill create a centre or the community that

integrates recreational, cultural, environmental

and commercial uses. The Citys portion o the

$126 million project is estimated at $22 million

with the balance o unding expected to come

rom the private sector and other levels o

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* Survey of 80 Ontario municipalities by BMA Management Consulting Inc.


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Reporting on Environmental Policy Progress

The City released its second progress report on the Environmental Policy that was

approved by City Council in December 2005. It provides an overview o the Citys

environmental management and perormance and demonstrates that the intent othe Policy and its 10 environmental principles are being ollowed. The City has hired a

new Coordinator who plays a lead role or the EarthWise Thunder Bay Community

Environmental Action Plan. The ull progress repor t is available at www.thunderbay.ca/

environmentalprogress.

Protecting Lake Superior

Thunder Bay became a leader in the protection o Lake Superior and provided or our

long-term needs or clean, sae drinking water when the New Bare Point Water Treatment

Plant opened in June. Highlights o the $87 million project include a Zeeweed 1000

Version 3 Ultra-Filtration membrane plant; water production capacity o 25 million

gallons per day; a new south side reservoir to store additional treated water and a new

north side above-ground water reservoir. At Bare Point, waste water rom the ltering/

membrane process has been routed into the sewer system and is no longer discharged

directly into Lake Superior.The City o Thunder Bay was awarded Wonderwares Best

SCADA Solution or the system developed by Automation Now or the Bare Point Water

Treatment Plant. A study was released, the Great Lakes Sewage Report Card, that ranked

Thunder Bay ourth out o 20 American and Canadian cities or its role in the protection

o Lake Superior. Thunder Bay was the second highest ranked Canadian City. The study that

graded areas such as collection, treatment and disposal o sewage was actually based on

data submitted beore the new Secondary Sewage Treatment plant was ully operational in

October 2005. Current data is expected to show even greater improvements.

c l e a n G R e e n B e a u t I F u l p R O u dB i f


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www.b.c

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B i f Investing in a Cleaner CityThunder Bay Transit invested in waste containers

at bus stops throughout the city. This initiative saw

waste containers added at 50 locations.

Reducing Greenhouse Gas

Emissions

Thunder Bay Transit worked to increase publicridership and consequently reduce GHG

emissions through a variety o activities including

a Universal Transit Pass or students developed

with Lakehead University. Roads converted all

trac lights at controlled intersections in the City

rom incandescent lamps to light emitting diode

(LED) lamps. The LED lamps use 80% to 90%

less electricity. Facilities & Fleet star ted a Greening

o the Fleet pilot project to test alternative uelssuch as Bio Diesel and Ethanol in City trucks and

buses or vehicle perormance and greenhouse

gas reductions. Two smar t-cars were introduced

or Building and Plumbing Inspectors with the

goal o reducing operating costs and greenhouse

gas emissions. Facilities & Fleet committed to

building high-perormance green buildings by

using the nationally accepted Leadership in

Energy and Environmental Design (LEED) ratingsystem and committed to building the new

Landll acilities to a Silver Standard as described

in the new Clean, Green and Beautiul Policy.

Conserving Water and Energy

The City was recognized by the Ontario

Municipal Benchmarking Initiative or Best

Practices or our re hydrant modeling that

conserves water and energy and electronic

system to detect leaks in watermains. Three

aging tap house acilities were replaced with

upgraded Water Fill Stations that use Smart

Card technology. The Environment Division

continued to partner with EcoSuperior to

oer rebate programs or washing machine

replacements, low fush toilets, no-fush urinals,

rain barrels and general education programs on

water conservation.

Promoting Waste Reduction

Waste Reduction Week kicked o with the

launch o Mr. Greens Guide, a comprehensive

list o ways residents can reduce, reuse andrecycle household items. The guide provides

solutions to help build a greener community

by better managing the disposal o all orms o

waste. The guide is available at www.thunderbay.

ca/rrrguide.

Greening One Tree at a Time

One hundred trees were planted through the

Tree Stewardship Program, a City-subsidizedtree planting initiative available to citizens

wanting to contribute to the planting o trees

on public land or boulevards ronting private

property. Thanks to a contribution rom Pauline

Nickerson Young, 10 Northwood Maple trees

were planted around the Hogarth Fountain

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in Waverley Park to honour Canadian soldiers who have died

in Aghanistan. For more inormation or to view trees planted

across the City, visit www.treestewardship.com. The City Forester

works with departments to protect the urban orest and

promote Arbor Week celebrations. In total, the City planted

about 454 large caliper trees and 4,500 seedlings. A mature tree

absorbs between 7.5 and 13 Kg o carbon dioxide a year.

Planning for Active Transportation

The Engineering and Parks Divisions initiated a public advisory

committee to help develop an Active Transportation Plan with a

vision o increasing and linking commuter routes and recreational

trails.

Becoming Clean Green Beautiful & Proud

The Mayors Task Force on Civic Pride evolved into the Clean,

Green and Beautiul Committee. The Committee, comprisedo the Mayor, a City Councillor and nine citizen representatives

reviews capital initiatives and determines ways to contribute to

a cleaner, greener, more beautiul and proud Thunder Bay. Work

began on the rst priority the creation o beautiul gateways to

the City.

Taking Pride in our Natural Wonder

Thunder Bay pride soared when we raised national awareness

o Thunder Bays iconic Sleeping Giant as one o Canadas top

natural wonders. Building on the momentum, Tourism Thunder

Bay launched a local tourism awareness campaign ocusing on

Visiting Friends and Family markets, including on-line promotions,

co-sponsorship o the Seven Wonders o Thunder Bay campaign

and the Be a Tourist in your own Backyard program.

Increasing TransitRidership

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Removing Barriers to Accessibility

The City o Thunder Bay works with an Advisory Committee to develop an annual plan

to identiy and remove barriers to accessibility. We worked with our community partners

to create an Access Thunder Bay guide available at www.thunderbay.ca/accessibility

that will assist persons with a disability to learn about accessibility eatures at the City,Conederation College, Lakehead University, Thunder Bay Regional Health Sciences Centre

and St. Josephs Care Group. On March 7, Thunder Bay Transit became the rst 100% ully

wheelchair accessible conventional Transit feet in Ontario and its 49 buses had the largest

per capita wheelchair ridership with 19,175 rides. The City also celebrated the success o its

Inclusion Services partnership with Community Living Thunder Bay, which was launched

in 2005 to help citizens o Thunder Bay with disabilities participate in recreation programs

at various acilities. For its commitment to accessibility, the City received an Ontario

Mainstreet Accessibility Award and recognition rom Canadian Association o Independent

Living Centres and Independent Living Resource Centre Thunder Bay.

Enhancing Emergency Medical Services

Superior North EMS, a division o the City o Thunder Bay, provides emergency medical

care throughout the District o Thunder Bay including 15 communities rom Upsala to

Manitouwadge and Longlac. Notable improvements were made to improve pre-hospital

care to citizens. Six Advanced Care Paramedics (ACPs) were added in Thunder Bay and

one in Armstrong the rst at a rural station to bring the team o ACPs to 22. Advanced

Care Paramedics perorm the skills o Primary Care Paramedics and can perorm IV

therapy, intubation, advanced assessments and administer a wider array o drugs. Aswell, Superior North EMS and Thunder Bay Regional Health Sciences Centre developed

a computer network to share inormation back and orth with support rom the Citys

Corporate Inormation & Technology Division. In partnership with the Heart and Stroke

Foundation o Ontario, the rst Public Access Debrillators were installed at City arenas

and gol courses. Within weeks o installation, a mans lie was saved on December 14 at

Port Arthur Arena.

H I G H Q u a l I t y O F l I F eBr


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0 www.b.c

li f R iImproving Recreational

Opportunities

The Recreation & Culture and Parks Divisions

invited public consultation on their 10-year

Master Plan, which will be presented to City

Council in 2008. The Master Plan will provide

a ramework and guide decisions regarding

municipal parkland, recreational and cultural

acilities and services over the next 10 years.

The City continues to build on its commitment

to recreational opportunities or youth and

children. Thunder Bay was named a Youth

Friendly community as a winner o the Play

Works Youth Friendly Community Recognition

Program or the Citys commitment in

providing outstanding opportunities or the

growth and development o adolescent youth

through play. With the support o community

partners, P.R.O. Kids raised $150,000 in sports,

recreation and arts spaces or children and

youth. P.R.O. Kids is a unique service provided

by the Recreation & Culture Division that

enables children and youth to participate in

community-based recreational activities when

ees are beyond their means. The Canada

Games Complex completed $150,000 in

outside repairs to its sidewalks, parking lot and

landscaping. The Complex was also designatedhome to the Thunderbolts Swim Club the

Citys premier competitive swim club in a way

that successully integrated its 73 swimmers,

using 19 hours o practice pool space a week,

with all other user groups.

Working with Citizens to Reduce

Fires

In 2006, it became law that every home in

Ontario must have a working smoke alarm

on every storey and outside all sleeping areas.

Throughout 2007, Thunder Bay Fire & Rescue

Service inspected 3,687 residences and installed

1,266 smoke alarms to help citizens benet

rom and adjust to the new smoke alarm

legislation beore enorcing zero tolerance on

violations a $235 ticket or each missing or

non-working smoke alarm in the residence.

Strengthening Protective

Services

Fire & Rescue Service added Urban Search

and Rescue equipment and training to give

Fireghters specialized tools to assist in

conned space, accidental material release,

technological or transportation accidents. In

December, the Citys Emergency Plan was

tested with an emergency exercise on the

citys north side involving emergency crews and

community partners.

Responding to Changing Policing

Needs

Thunder Bay Police, which is governed by

the Thunder Bay Police Services Board,

created an Integrated Police Gang Unit to use

intelligence, enorcement and education to

counter the growing threat o criminal gangs to

our community and our youth. As well, Police

seized the Hells Angels clubhouse under the

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Provinces Civil Remedies Act. Police introduced mobile data

terminals in its cruisers to provide secure and direct access to

police reports including photographs o missing persons and

suspects. For reports and plans by Thunder Bay Police, visit

thunderbay.ca/police.

Promoting Diversity

On March 21, the City held an inaugural breakast with

Diversity Thunder Bay to commemorate International Day

or the Elimination o Racism. The breakast attracted 160

attendees who learned about eorts to make Thunder Bay a

more welcoming community including the implementation o

the Thunder Bay Police Diversity in Policing Project.

Renewing Fort William Neighbourhood

The Oce o the Neighbourhood continued its eorts

to revitalize the south core downtown through a variety

o projects and activities designed to oster a cooperative

neighbourhood where people interact and various groups work

together or the betterment o the community. An innovative

saety orum was held through a partnership between the

Oce and a variety o organizations interested in downtown

renewal and saety.

Caring for Animals

The Citys Animal Services Centre provides shelter, eeding,

care, adoption and animal control or stray and homeless

animals within city limits. New homes were ound or 36 dogs

through a Pet Saving Partnership between Animals Services

and New Hope Rescue, a non-prot dog rescue organization.

To provide room or owners to exercise their dogs, the rst

pilot O-Leash Dog Park was opened on November 1 on the

Hillyard lands between Memorial and 8th Avenues.

Recruiting HealthCare Professionals

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Enhancing our Efficiency and Effectiveness

The City maintained an A+ stable credit rating rom Standard and Poors. A tax increase o 2.16%

maintained service levels. Twenty-year Asset Management Plans were developed to plan or the

regular maintenance and replacement o City inrastructure and buildings.

The Mayor and City Council, through the Intergovernmental Liaison Committee, pursuedthe ongoing need or additional unding rom ederal and provincial governments to address

inrastructure replacement and Provincially mandated social service programs.

The City has embraced various corporate measurement and benchmarking programs as tools or

improvement and quality control. The City o Thunder Bay is committed to continually monitoring

its perormance in key areas and to identiy best practices or program and service delivery. The

City is a member o the Ontario Municipal Benchmarking Initiative, which brings municipalities

together to share detailed perormance inormation. Further inormation is available at www.ombi.

ca. The City also participates in various Provincial initiatives, including development o nancial

policy, consultation on property taxation, and inrastructure decit determination. In 2007,

Thunder Bay was recognized or best practices in superior energy management related to re

hydrant testing model and innovation in leak detection.

Every year, TBayTel contributes a dividend to the City o Thunder Bay to support municipal

services. The 2007 dividend o $16.9 million resulted in a savings o 12.4 % on the municipal

portion o the average homeowners tax bill.

Engaging and Informing the Public

The 2007 Citizen Survey was conducted to gather views rom residents on City services. Jobsand economic development were identied as being important issues acing the City, ollowed by

Roads and Waterront Development. Six editions o the Your Citynewsletter were published to

share City news and inormation with residents. The Citys website recorded 1.5 million visits, a

10% increase.

The City o Thunder Bay was highlighted or the ourth straight year by the Inormation/Privacy

Commissioner as a compliance leader in responding to ormal reedom o inormation requests

O n e O F t H e B e s t - R u n c I t I e s I n c a n a d a

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www.b.c

and achieved 100 per cent 30 day compliance with 121 requests.

City Archives gave the public access to Land Title records or the

District o Thunder Bay rom 1871 to 1971 through a long-term

loan rom the Archives o Ontario. Archives also created publicly

accessible databases or their holdings o City publications and the

historical records o Port Ar thur and Fort William. Through the

Ocial Recognition Committee, City Council gave 63 Awards to

Citizens o Exceptional Achievement. The Oce o the City Clerk

perormed 47 marriages in City Hall and the community.

Engaging Employees and Developing Talent

In keeping with the New Foundation 2004-2006 Strategic Plan, the

City created a succession planning program called Pathways to

Leadership to prepare or the Corporations uture stang needs.

This program provides participants with opportunities to develop

their leadership talent.

City employees raised $132,794 or United Way o Thunder Bay

through personal pledges and special events. As well, employees

held 51 Dress Down Days or 10 local charities. The annual

Long Service Awards Dinner recognized more than 53 25-year

employees and 40 retirees.

Through a joint Union/Management initiative, the City provided

training on recognizing and responding to adult bullies. The City

also continued to oer Accessibility Training and Aboriginal

Sensitivity Training as part o an unprecedented oering o

training programs.

A quarterly newsletter called City Voice was issued to employees

as a link across the Corporation or the 14th straight year.

City employees hosted 50 grade 9 students or job shadowing,

health and saety presentations and tours as part o the Canada-

wide Take Our Kids to Work. A new Co-op education program

provided 20 students with on the job learning.

As part o a broader Wellness Program, the City oered the

annual fu shot program to help prevent employees rom being

inected with the virus and spreading it.

What Residents Said

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Dissatisfied or

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Overall Satisfaction with City Services

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Lkga

2008


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Lkg a 2008Key Issues:

These key issues will be pursued by City Council, through the Intergovernmental Liaison

Committee:

South Core location or a new Consolidated Courthouse

Investment in research and innovation in Northern Ontario

New scal relationship with the Province

Canadian content legislation

Comprehensive energy plan or Northwestern Ontario

The Thunder Bay Community Economic Development Commissions rst Strategic Action Plan will

be completed and its strategies and initiatives will be pursued.

The City will:

Pave 24 kilometres o road

Begin the 5-year construction o Prince Arthurs Landing at Marina Park

Develop a Long-Term Tax Strategy

Complete the 10-year Recreation and Parks Master Plan

Establish an Aboriginal Liaison Oce to work inclusively with Aboriginal people.

Hold the rst Clean Green and Beautiul awards or business and other organizations.

Launch a dynamic, easy to use new website or residents, visitors and business.

Start to make Thunder Bay cleaner, greener and more beautiul through a variety o initiatives

including a redesigned John Street Landll that will better encourage recycling.

Make repairs to City Hall and start to create a civic space or all to enjoy.

Develop an Active Transportation Plan

Plan or the Thunder Bay north side EMS station/District Headquarters including site location and

design. Construction to proceed in 2009.

Continue to develop a comprehensive strategic Master Fire Plan.


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R e p O R t F R O M t H e t R e a s u R e R

I am pleased to present the Consolidated Financial Statements or the

City o Thunder Bay as at and or the year ended December 31, 2007.

The purpose o the Treasurers Report is to highlight the key nancial

inormation contained in the 2007 audited consolidated nancial

statements. This report, together with the accompanying nancial

statements, allows the reader to assess the City o Thunder Bays nancial

activities and available resources.

Financial Management and Control

The nancial management and control o the City o Thunder Bay is

largely governed through by-laws that prescribe purchasing, accounting,investment, risk management and debt policies. City Council has sole

authority to allocate unds through the approval o operating and capital

budgets.

The Financial Guiding Principles support the Citys strategic objective o

being one o the best-run cities and the principles o scal responsibility,

cost eectiveness, sustainability and accountability. The presentation o

the Citys Annual Long Term Financial Plan provides a long term view

when making annual budget decisions. The Citys positive credit rating

(A+) was reconrmed in 2007 by Standard & Poors and is largely due to

the existence o this Long Term Financial Plan, which includes projected

capital expenditures and debt issuance.

Adherence to the Citys Financial Guiding Principles and the continual

evolution o a long term plan are important actors in maintaining a

healthy and sustainable community.

The City has embraced various corporate measurement and

benchmarking programs as tools or improvement and quality control.

The City o Thunder Bay is committed to continually monitoring its

perormance in key areas and to comparing Thunder Bays activities to

other municipalities to identiy improved and innovative methods o

program and service delivery.

The City also par ticipates in various Provincial initiatives, including

development o nancial policy, consultation on property taxation, and

inrastructure decit determination.


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2007 Audited Consolidated

Financial Statements

Management is responsible or the preparation

o the nancial statements and or the integrityand objectivity o the nancial inormation

contained in those statements. The audited

consolidated nancial statements refecting the

nancial activities o all entities accountable

to and controlled by The Corporation o

the City o Thunder Bay have been prepared

in accordance with generally accepted

accounting principles or local governments as

recommended by the Public Sector AccountingBoard (PSAB) o the Canadian Institute o

Chartered Accountants.

The Treasurer is responsible or the overall

nancial management o the City and must

make certain that all corporate accounting

records and nancial reports conorm to

Council budgetary requirements, by-laws,

policies, procedures, accounting principles and

nancial reporting requirements.

The Municipal Act requires the City to engage

independent auditors to express an opinion as to

whether the nancial statements present airly in

all material respects, the Citys nancial position

and operating results. Included in the nancial

statements is the Auditors Report signed by

Grant Thornton, the Citys External Auditors.

The statements have been reviewed by the

Citys Audit Committee, whose responsibility

is to ensure that the nancial statements

are airly presented in accordance with

generally accepted accounting principles and

to recommend to City Council approval o

the annual audited nancial statements. The

Audit Committee met with Administration and

the External Auditors on May 20, 2008 and

recommended approval o the audited nancial

statements.

2007 Financial Statement

Highlights

2007 Operating Results

Revenues

Total 2007 operating revenues o $428

million increased $27 million (6.7%) over

2006 operating revenues o $401 million. This

increase is made up o : Higher net tax revenues o $3.1 million

Increase in ees and charges o $3.7 million

Increase in Provincial grants o $2.4 million

Increase in TBayTel revenues o $18.6

million.

Expenditures

In 2007, the Citys operating expenditures

totaled $367.8 million, representing a 6.3%

increase over 2006. Components o the totaloperating expenditures are as ollows:

Social and Family Services $98.5 million

(27%) [See Note]

TBayTel $70.3 million (19%)

Protection to Persons and Property

$54.6 million (15%)

Transportation, Environmental, Health, and

Recreation and Cultural Services $30.0

million, each (8%)

[Note] - Expenditures for Social and Family Services

include $32.7 million in expenditures for Homes

for the Aged. The majority of the remaining $65.8

million represents the Citys share of expenditures for

general assistance, social housing and other programs

provided by the Thunder Bay District Social Services

Administration Board.


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2007 Capital Fund

The City o Thunder Bay builds, maintains and

manages a variety o assets, including land,

buildings, physical inrastructure and equipmentrequired or delivering its programs and services.

Capital costs incurred during the year or these

assets are reported on the Schedule o Capital

Fund operations. Currently, neither the ull

cost o these assets nor their remaining useul

lie is reported in the nancial statements. The

Public Sector Accounting Board will require

municipalities to report this inormation in

their nancial statements or the year endedDecember 31, 2009. The City o Thunder Bay

has implemented plans to comply with these

requirements.

The City expended $74.0 million on capital

inrastructure during 2007. The 2007 capital

program included:

Roads and transit $19.0 million

Water and wastewater treatment$19.2 million

TBayTel capital inrastructure $23.5 million

Other $12.3 million

Capital und revenues o $80.1 million included:

Operating and reserve und contributions

$47.8 million

Proceeds rom the issue o long-term debt

$25.1 million

Government grants $4.5 million

Other sources $2.6 million. This resulted in

an increase o $6 million in the capital und

to $17.9 million.

The ollowing chart demonstrates the

commitment to capital spending by the City as

well as the changing priorities rom year to year.

Debt Position

Total outstanding debt at December 31, 2007

amounted to approximately $230 million, an

increase o $10 million over 2006. The increase

was the net result o the issuance o $25 million

in new debentures less the retirement o $15

million o outstanding debt. Since 2002, there

has been a signicant increase in debt levels,

with the debt having peaked in 2007.

The ollowing chart depicts the main

components o the outstanding debt:

Cpl exps

2001 2002 2003 2004 2005 2006 2007

70

60

50

40

30

20

10

0

MillionsofDollars

Transportation

Environmental

TBayTel

Other

80

70

60

50

40

30

20

10

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Millionsofdolla

rs

69.7

57.0

41.3

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9.0

Municipal Water Wastewater SocialHousing

TBayTel Hospital


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rsvs rsv s40%

35%

30%

25%

20%

15%

10%

5%

0%

PercentageofTotal

The City o Thunder Bay has made specic

decisions with respect to borrowing, which have

placed the City at the high end o desirable

levels o borrowing based on industry standards.

Given that municipalities are at dierent stages

in addressing inrastructure decits, care must

be taken in evaluating the Citys level o debt.

For example, the act that Thunder Bay has

aggressively addressed its water and wastewater

capital programs has increased the outstanding

debt but the City is a leader in state o the art

processes and acilities in these areas.

Reserves and Reserve Funds

The establishment, maintenance and prudent

management o reserves and reserve unds are

important components o the Citys nancial

strategy. Reserve unds support a signicant

portion o the cost o capital inrastructure

and play an instrumental role in osetting

unoreseen cost increases during uncertain

economic times.

In 2007, the Citys reserves and reserve unds

decreased by $4.9 million to $118.7 million,

largely refecting the decrease o $8 million in

rate-supported reserve und balances related

to water and wastewater. These reserve unds

were built up in prior years to provide some o

the unds required to nance the large water

and wastewater capital projects which began in

2002 and were substantially complete in 2007.

The ollowing chart provides an overview o the

types o reserves and reserve unds held by the

City:

Conclusion

In closing, I would like to express appreciation

and thanks or the cooperation and support o

City Council and the sta o all departments

in addressing the challenges o the past year.

In addition, I would like to acknowledge the

proessional eorts o the Finance team or

their commitment and dedication during

2007 in providing accurate and timely nancialinormation to City Council, Committees,

departments and community stakeholders. We

are committed to providing high standards o

scal excellence at the City o Thunder Bay.

Respectully submitted,

Carol A. Busch, CGA

City Treasurer & General Manager - Finance

Rate-Supported Capital

Tax Supported Capital

Stabilization

Joint Local Boards

Employment Related

Other


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coo iFii sm y r e d m b r 3 1 , 2 0 0 7


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THE CORPORATION OF THE CITY OF THUNDER BAY

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

For the year ended December 31, 2007 2006$ $

RevenuesTaxation, net (note 2) 134,234,230 131,102,523Fees and service charges 70,775,689 67,107,547Government of Canada grants 5,681,404 5,664,094Province of Ontario grants 99,251,231 101,034,367Investment income 8,302,662 8,170,596Other 8,726,733 7,341,591TBayTel 113,155,703 94,506,823

440,127,652 414,927,541

Expenditures (note 18)General government 21,947,842 23,882,815Protection to persons and property 56,719,125 55,437,529Transportation services 48,037,443 40,873,798Environmental services 48,724,138 54,058,850Health services 30,107,773 28,085,856Social and family services 98,885,080 99,918,998Recreation and cultural services 35,792,242 31,973,640Planning and development 7,885,586 8,394,692TBayTel 93,777,987 104,272,937

441,877,216 446,899,115

Deficiency of revenues over expenditures for the yearbefore the following (1,749,564) (31,971,574)Earnings from subsidiary (note 14) 689,043 868,246

Deficiency of revenues over expenditures for the year (1,060,521) (31,103,328)

Change in amounts to be recoveredPrincipal repayments on long-term debt (note 8) (15,317,599) (16,065,380)Proceeds from long-term debt 25,112,967 33,641,181Change in non-financial assets, employment benefits

landfill closure and post-closure, and interest (2,701,665) 3,818,499Increase in amounts to be recovered 7,093,703 21,394,300

Increase (decrease) in municipal position 6,033,182 (9,709,028)

See accompanying notes to the financial statements


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CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION

For the year ended December 31, 2007 2006

$ $

Operating ActivitiesDeficiency of revenues over expenditures for the year (995,309) (31,103,328)Deduct non-cash items:

Earnings from subsidiary (note 14) (689,043) (868,246)Add (deduct) non-cash working capital items:

Taxes receivable (667,704) 1,797,579Accounts receivable 24,829 2,210,009User charges receivable 2,632,078 (4,597,693)Other assets (666,499) 134,416Accounts payable and accrued liabilities (6,513,785) 3,171,059Deferred revenue (1,897,291) 4,397,353Employment benefits (4,338,164) 3,540,494Landfill closure and post closure liability 187,000 (774,000)

Cash used in operating activities (12,923,888) (22,092,357)

Financing ActivitiesProceeds from long-term debt 25,112,967 33,641,181Repayment of long-term debt (15,317,599) (16,065,380)Cash provided by financing activities 9,795,368 17,575,801

Investing ActivitiesReduction (increase) of investment in bonds and own debent (147,098) 1,131,931Cash provided by (used in) investing activities (147,098) 1,131,931

Decrease in cash and investments (3,275,618) (3,384,625)Cash and investments, beginning of year 178,833,167 182,217,792

Cash and investments, end of year 175,557,549 178,833,167



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OPERATING FUND Schedule 1

Budget Actual ActualFor the year ended December 31, 2007 2007 2006

$ $ $

RevenuesTaxation, net 132,520,700 134,234,230 131,102,523Fees and service charges 59,277,905 70,775,689 67,107,547Government of Canada grants 70,119 3,593,840 4,387,573Province of Ontario grants 90,803,534 96,717,001 94,349,915Investment income 531,745 2,063,209 2,827,693Other 15,258,042 7,501,631 7,023,612TBayTel 101,840,000 113,155,703 94,506,823

400,302,045 428,041,303 401,305,686

ExpendituresGeneral government 17,965,048 20,222,983 21,974,757Protection to persons and property 55,817,999 54,599,089 53,522,412Transportation services 35,605,422 28,988,241 25,268,950Environmental services 36,849,621 29,554,648 30,083,163Health services 33,478,281 28,939,481 26,699,359Social and family services 102,239,789 98,481,870 98,853,733Recreation and cultural services 31,083,486 30,387,317 28,203,622Planning and development 5,894,608 6,355,651 4,904,099TBayTel 63,120,000 70,309,436 56,383,007

382,054,254 367,838,716 345,893,102

Excess of revenues over expenditures 18,247,791 60,202,587 55,412,584

Financing and transfersNet interfund transfers

To capital fund (24,768,100) (28,122,662) (28,949,898)To reserve funds (4,311,800) (9,852,103) (17,320,299)

Debt principal repayments (12,890,898) (15,317,599) (16,065,380)Changes in non-financial assets, employment

benefits, landfill closure and post-closure costs and interes - (2,701,665) 3,818,499

(41,970,798) (55,994,029) (58,517,078)

Change in operating fund (23,723,007) 4,208,558 (3,104,494)Operating fund, beginning of year 27,947,984 27,947,984 31,052,478Operating fund, end of year 4,224,977 32,156,542 27,947,984



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CAPITAL FUND Schedule 2

For the year ended December 31, 2007 2006

$ $RevenuesGovernment of Canada grants 2,087,564 1,276,521Province of Ontario grants 2,534,230 6,684,452Investment income 1,379,073 1,523,310Other 1,225,102 317,979

7,225,969 9,802,262

ExpendituresGeneral government 1,724,859 1,908,058Protection to persons and property 2,120,036 1,915,117Transportation services 19,049,202 15,604,848Environmental services 19,169,489 23,975,687Health services 1,168,293 1,386,497Social and family services 403,210 1,065,265Recreation and cultural services 5,404,925 3,770,018Planning and development 1,529,935 3,490,593TBayTel 23,468,551 47,889,930

74,038,500 101,006,013

Deficiency of revenues over expenditures (66,812,531) (91,203,751)

Financing and transfers

From operating fund 28,122,662 28,949,898From (to) reserve funds 19,650,823 (7,497,379)Proceeds from long-term debt 25,112,967 33,641,181

72,886,452 55,093,700

Change in capital fund 6,073,921 (36,110,051)Capital fund, beginning of year 11,861,043 47,971,094Capital fund, end of year 17,934,964 11,861,043



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RESERVES AND RESERVE FUNDS Schedule 3

For the year ended December 31, 2007 2006$ $

RevenuesInvestment income 4,860,380 3,819,593

Net interfund transfersFrom (to) capital operations (19,650,823) 7,497,379From current operations 9,852,103 17,320,299

(9,798,720) 24,817,678

Change in reserves and reserve funds (4,938,340) 28,637,271Reserves and reserve funds, beginning of year 123,618,489 94,981,218Reserves and reserve funds, end of year 118,680,149 123,618,489

Comprised ofReserves 9,365,201 9,856,829Reserve funds 109,314,948 113,761,660

118,680,149 123,618,489



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THE CORPORATION OF THE CITY OF THUNDER BAYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYear ended December 31, 2007

GENERALThe Corporation of the City of Thunder Bay is a municipality in the Province of Ontario, Canada.It conducts its operations guided by the provisions of provincial statutes such as the MunicipalAct and related legislation.

1. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of The Corporation of the City of Thunder Bay are preparedby management in accordance with accounting policies generally accepted for the localgovernment sector as prescribed by the Public Sector Accounting Board [PSAB] of the CICA.Since precise determination of many assets and liabilities is dependent upon future events, thepreparation of periodic financial statements necessarily involves the use of estimates andapproximations. These have been made using careful judgement.

[a] Basis of consolidation

Consolidated Financial Statements

These consolidated financial statements reflect the assets, liabilities, revenues and expenditures ofthe revenue fund, capital fund, reserves and reserve funds of the City and include the activities ofall committees of Council and the following boards, municipal enterprises and utilities which areunder the control of Council:

Thunder Bay Public Library BoardWaterworksTransit

Parking AuthorityMountain View CemeterySaint Patricks CemeteryDawson Court Home for the AgedGrandview Lodge Home for the AgedPioneer Ridge Home for the AgedHeart of the Harbour Business Improvement AreaSimpson Street Business Improvement AreaVictoria Avenue Business Improvement AreaVictoriaville Centre Board of ManagementThunder Bay Community Auditorium Inc.TBayTel (A Municipal Service Board established by the Corporation of the City of Thunder Bay)Thunder Bay Court Services AreaSuperior North Emergency Medical ServicesThunder Bay Community Economic Development Commission Inc.


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Joint Local Boards

Certain joint local boards in which the City participates are accounted for on a proportionateconsolidation basis, consistent with the generally accepted accounting treatment for governmentpartnerships. Under the proportionate consolidation basis of accounting, the Citys pro-rata shareof the assets, liabilities, revenues and expenditures (including capital expenditures) that aresubject to shared control is combined on a line-by-line basis with similar items in the Citysfinancial statements. All inter-fund assets, liabilities, revenues and expenditures have beeneliminated. Joint local boards accounted for in this manner are:

Thunder Bay District Health UnitThunder Bay District Social Services Administration Board

Subsidiary Corporations

Thunder Bay Hydro Corporation is accounted for on a modified equity basis, consistent with thegenerally accepted accounting treatment for government business enterprises [note 14]. Underthe modified equity basis, the business enterprises accounting principles are not adjusted toconform with those of the Citys, and inter-organizational transactions and balances are noteliminated.

Trust Funds

Trust funds administered by the City have not been included in the Consolidated Statement ofFinancial Position nor have their operations been included in the Consolidated Statement ofFinancial Activities. They are reported separately on the Trust Fund Statement of Continuity andStatement of Financial Position.

Accounting for school board transactions

The taxation, other revenues, expenditures, assets and liabilities with respect to the operations ofthe school boards, are not reflected in these consolidated financial statements.

[b] Basis of accounting

Accrual accounting

The City uses the accrual basis of accounting and recognizes revenues as they are levied or earnedand become measurable; expenditures are recognized as they are incurred and measurable as aresult of receipt of goods or services and the creation of a legal obligation to pay.

Employment benefits

The City has adopted the following policies with respect to employment benefit plans:

The costs of vacation entitlements are charged as expenditures when earned;

The costs of post-employment benefits, sick leave entitlements and WSIB entitlements arerecognized when the event that obligates the City occurs; costs include projected future incomepayments, health care continuation costs and fees paid to independent administrators of theseplans, calculated on a present value basis;


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Employment benefits (contd)

The costs of post employment benefits, sick leave entitlements and WSIB entitlements areactuarially determined using the projected benefits method prorated on service and managementsbest estimate of retirement ages of employees, salary escalation, expected health care costs andplan investment performance; accrued obligations and related costs of funded benefits are net ofplan assets;

Past service costs from plan amendments are amortized on a straight-line basis over the expectedaverage remaining service period of employees active at the date of amendment; and

The excess of the net actuarial gain (loss) over 10% of the greater of the benefit obligations andthe fair value of plan assets are amortized on a straight-line basis over the average remainingservice period for active employees.

The contributions to a defined benefit pension plan are expensed when contributions are due.

Government transfers

Government transfers relate to the social services and housing programs and are recognized in theconsolidated financial statements in the period in which events giving rise to the transfer occur,providing the transfers are authorized, any eligibility criteria have been met and reasonableestimates of the amounts can be made.

Investments

The City accounts for its investments at cost plus accrued earnings. The carrying value of aninvestment is written down to its net recoverable amount if a decline in value is judged to be otherthan temporary.

Inventories

Inventories of supplies, including vehicle parts and road maintenance materials, are charged tooperations when purchased.

Deferred revenue

The City often receives contributions that are restricted under specific agreements or the terms ofrelevant legislation. Such contributions, together with any income earned thereon by the City, arereported as a deferred revenue liability until the resources are used for the purpose or purposesspecified, at which time the resources are recognized as revenue.

Capital assets

Capital assets are reported as an expenditure on the Consolidated Statement of Financial Activitiesin the year of acquisition.


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[c] Transitional Provisions

Tangible Capital Assets

Effective January 1, 2007, the City adopted Accounting Guideline 7 (PSG-7) of the Public SectorAccounting Handbook of the Canadian Institute of Chartered Accountants (CICA) with respect tothe disclosure of tangible capital assets of local governments. PSG-7 provides transitionalguidance on presenting information related to tangible capital assets until Section 3150 TangibleCapital Assets of the Public Sector Accounting Handbook comes into effect January 1, 2009.

During 2007, the City continued to work towards compliance with the new recommendations foraccounting for tangible capital assets. As of December 31, 2007, the City has not yet completed alisting of assets and values. The accumulation of data is currently underway and is expected to be

completed by December 31, 2008.

2. OPERATIONS OF SCHOOL BOARDS

Taxation, other revenues and requisitions for the school boards amounting to $46,985,669 [2006 -$46,859,096] are not reflected in these consolidated financial statements.

3. TRUST FUNDS

Trust funds administered by the City amounting to $14,148,689 [2006 - $13,739,939] have notbeen included in the Consolidated Statement of Financial Position nor have their operations beenincluded in the Consolidated Statement of Financial Activities.

Trust fund balances as at December 31 are as follows:2007 2006

$ $

Older Adults Centre 18,467 104,006Mountain View Cemetery 821,371 804,717Mountain View Cemetery Marker Maintenance 211,825 194,474Saint Patricks Cemetery 76,596 76,596Saint Patricks Cemetery Marker Maintenance 17,364 16,648Dawson Court Home for Aged 55,898 69,567Grandview Lodge Home for Aged 66,955 184,618Pioneer Ridge Home for Aged 33,192 30,283Lake Superior Regiment Memorial Hillcrest Park 29,407 28,195Ontario Home Renewal Program 1,381 8,020

Library 2,627 2,765Employee Disability 12,787,668 12,195,100Civic Employees Pension Trust Committee 1,998 1,998Community Auditorium Repairs 21,929 21,025Art in Public Places 2,011 1,928

14,148,689 13,739,939


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4. CASH AND INVESTMENTS

Investments are recorded at cost. The total market value of the Citys investments at December31, 2007 was approximately $177,590,000 [2006 - $181,046,637]. The Citys investments arecomprised of federal, provincial, and corporate bonds, with varying maturity dates and interestrates, and money market funds, treasury bills and cash in the bank.

2007 2006$ $

Cost Market Value Cost Market Value

Federal Government 51,950,224 52,458,193 52,776,759 53,188,586Provincial Government 30,333,524 30,867,632 32,336,619 33,156,926Corporate 43,960,425 44,128,591 - -Other 49,313,376 50,135,584 93,719,789 94,701,125

175,557,549 177,590,000 178,833,167 181,046,637

The weighted average yield on the cost of the investment portfolio during the year was 4.3 %(2006 3.9%). Maturity dates on investments in the portfolio range from June 2008 to June2037.

5. PENSION AGREEMENTS

The City makes contributions to the Ontario Municipal Employees Retirement Fund [OMERS],which is a multi-employer plan. The plan is a defined benefit plan which specifies the amount ofretirement benefit to be received by employees based on length of service and rates of pay. The

amount contributed to OMERS for 2007 was $10,715,638 (2006 - $9,606,999) for current serviceand is included as an expenditure on the Consolidated Statement of Financial Activities.

6. EMPLOYMENT BENEFITS

[a] Under the sick leave benefit plan, unused sick leave can accumulate and certain employeesmay become entitled to a cash payment when they retire or leave the Citys employment.

The liability for these accumulated days, to the extent that they have vested and could betaken by an employee on retirement or his/her estate upon death amounted to approximately$7,245,451 [2006 - $6,968,495]. An amount of $5,752,305 [2005-$6,220,057] has been setaside in sick pay liability reserve funds to offset this liability, which includes $96,801 [2006 -$91,874] relating to joint local boards.

[b] Vacation entitlements earned by the employees are converted to a cash payment when theyretire or leave the Citys employment. The liability for these accumulated days amounted toapproximately $4,761,458 [2006 - $4,485,247].

[c] The City of Thunder Bay pays certain post retirement benefits on behalf of its retiredemployees. The City of Thunder Bay recognizes these post retirement costs in the period inwhich the employees rendered the services. The accrued benefit obligation at December 31,2007 of $33,100,383 [2006 - $31,245,282] was determined by an actuarial valuation preparedfor the year ended December 31, 2007. An amount of $4,239,569 [2006-$3,244,057] hasbeen set aside in a post-retirement benefits reserve fund to offset this liability.


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6. EMPLOYMENT BENEFITS (contd)

Information about the City of Thunder Bays benefit plan is as follows:

2007 2006$ $

Accrued benefit liability recognized in thefinancial statements 31,902,177 30,374,422

Expense for the year 3,220,688 3,863,580Benefits paid for the year (1,692,933) (1,135,819)

The main actuarial assumptions employed for the valuation are as follows:

General InflationFuture general inflation levels, as measured by changes in the Consumer Price Index (CPI),were assumed at 2% in 2007 and thereafter.

Interest (discount) rate

The obligation as at December 31, 2007 of the present value of future liabilities and theexpense for the year then ended were determined using an annual discount rate of 5.25%.This rate reflects the assumed long term yield on high quality bonds as at January 1, 2007.

Salary levels

Future general salary and wage levels were assumed to increase at 3.3% and 4.3% per annumfor various employee groups, reflecting the expected Consumer Price Index adjusted forproductivity, merit and promotion.

Medical costs

Medical costs were assumed to increase at 10% in 2007, 9% in 2008, 8% in 2009, 7% in2010, 6% in 2011 and 5% thereafter.

Dental costs

Dental costs were assumed to increase at 5% in 2007 and thereafter.

[d] The City elected to be under Schedule 2 of the Workplace Safety and Insurance Act and

hence, effectively self-insures its workers compensation claims. According to anextrapolation for 2006 by professional actuaries of an actuarial valuation as at December 31,2007, the City has an estimated future benefit cost including administration costs of$29,326,128 [2006 - $34,874,354].


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7. NET LONG-TERM LIABILITIES

[a] The balance of net long-term liabilities reported on the Consolidated Statement of FinancialPosition totaling $229,998,571 [2006 - $220,203,203] is comprised of long-term liabilitiesoutstanding at year-end incurred by the City and joint local boards.

[b] Principal repayments of long-term liabilities are due as follows:

From Fromgeneral From consolidated From

municipal benefiting municipal joint localrevenue landowners enterprises boards Total

$ $ $ $ $

2008 15,834,968 139,977 720 1,254,868 17,230,5332009 15,788,444 139,346 - 1,321,666 17,249,4562010 16,270,649 145,024 - 1,391,882 17,807,5552011 13,319,470 156,044 - 1,466,264 14,941,7782012 13,651,347 85,319 - 1,544,913 15,281,5792013 andthereafter 124,353,838 99,102 - 23,034,730 147,487,670Total 199,218,716 764,812 720 30,014,323 229,998,571

[c] The long-term liabilities in [a] issued in the name of the City have received approval of theOntario Municipal Board for those approved on or before December 31, 1992. Thoseapproved after January 1, 1993 have been approved by by-law. The 2008 annual principal

and interest payments required to service these liabilities are within the 2008 annual debtrepayment limit prescribed by the Ministry of Municipal Affairs of $31,115,502. The Cityhas available $4,656,498, based on this annual debt repayment limit.

8. CHARGES FOR NET LONG-TERM LIABILITIES

Total payments for the year for net long-term liabilities are as follows:2007 2006

$ $

Principal payments 15,317,599 16,065,380Interest payments 9,260,478 9,349,086

24,578,077 25,414,466


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9. LANDFILL CLOSURE AND POST-CLOSURE LIABILITY

The John Street municipal landfill is operated by the City as a central facility to accept allmunicipal solid waste from the City. The landfill includes the closed and capped West Cell, andthe active East Cell that has a remaining life of approximately 50 years. Closure activities includefinal cover and vegetation, drainage control features, monitoring of leachate, water quality and gasand recovery of gas. Post-closure activities include acquisition of additional land for buffer zone,treatment and monitoring of leachate, monitoring groundwater, surface water and gas, andrecovery and ongoing maintenance of various control systems, drainage systems and final cover.

The estimated liability of $6,424,000 [2006 - $6,237,000] is the present value of future cash flowsassociated with the closure and post-closure costs discounted at a rate of 3%, based on a 2006Cost Recovery Plan prepared by consultants.

10. MUNICIPAL POSITION AT YEAR-END

[a] The balance in the Consolidated Statement of Operations of municipal equity of$243,775,863 [2006 - $237,742,681] at year-end is comprised of the following:

2007 2006$ $

OPERATING FUNDCityGeneral and designated ratepayers 355,458 284,612Local improvement ratepayers 539,351 560,778

894,808 845,390Library Board 66,011 (17,827)Thunder Bay Community Auditorium (206,825) -

753,994 827,563

Consolidated entitiesTBayTel 27,840,853 24,478,739

Joint local boardsThunder Bay District Social Services Administration Board 3,561,695 2,641,682

Operating Fund Total 32,156,542 27,947,984

CAPITAL FUNDCapital works in progress to be financed

from the proceeds of long-term liabilities (16,177,559) (24,799,313)

Library Board capital fund 600,266 525,355

Unapplied capital receipts- Available for the acquisition or construction of capital assets 33,512,257 36,135,001

Capital Fund Total 17,934,964 11,861,043

RESERVES AND RESERVE FUNDSReserves for designated purposes 9,365,201 9,856,829Reserve funds for designated purposes 109,314,948 113,761,660

Reserves and Reserve Funds Total 118,680,149 123,618,489

Thunder Bay Hydro Corporation net equity 75,004,208 74,315,165

Total 243,775,863 237,742,681


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10. MUNICIPAL POSITION AT YEAR-END (contd)

[b] City Council approved a reserve fund strategy in 2004 authorizing that any surplus for theyear be placed in a stabilization reserve fund. For the year ended December 31, 2007, theamount transferred to the stabilization reserve fund was $475,000.

The surplus at the end of 2007 from the revenue fund for general purposes and for designatedratepayers was $355,458 [2006 - $284,612]. Had the transfer to the stabilization reserve fundnot been made, the balance of the Citys revenue fund for general purposes and fordesignated ratepayers would have been $830,458.

Unapplied capital receipts represents unexpended capital financing from sources such as thesale of lands owned by the Municipality and the receipt of unconditional capital grants.

11. RESERVES AND RESERVE FUNDS

The total balance of reserves of $9,365,201 [2006 - $9,856,829] and reserve funds of$109,314,948 [2006 - $113,761,660] are comprised of the following:

2007 2006$ $

Reserves set aside for specific purposes by CouncilFor acquisition or construction of capital assets 4,909,902 5,344,399For working capital 4,300,000 4,300,000Joint local boards 155,299 212,340

Total reserves 9,365,201 9,856,829Reserve funds set aside for specific purposes by CouncilAcquisition or construction of capital assets 55,522,675 62,713,71655+ Centre Endowment 897,657 842,988PRO Kids 283,797 205,422Post-retirement benefits 4,239,569 3,244,057Stabilization 6,645,942 7,881,424Election expense 266,796 157,858Insurance 2,360,559 937,787Vested sick leave benefits 5,655,504 6,128,183Tax assessment appeals 6,270,526 6,308,177Vested property 1,714,665 1,070,475Economic development 1,063,339 1,852,424

Winter roads maintenance 1,112,031 826,725Animal control 52,294 47,565Crime prevention 84,132 110,870Digital parcel mapping 265,757 293,867EMS cross border billing 1,710,475 1,433,573Federal gas tax 1,664,967 3,032,823Dedicated gas tax 1,877,924 1,685,657Joint local boards 17,626,339 15,012,748

Total reserve funds 109,314,948 113,761,660

Total reserves and reserve funds 118,680,149 123,618,489


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12. DEFERRED REVENUE

2007 2006$ $

CityPark purposes 161,331 151,866Other 5,380,641 6,261,421

Joint local boards 2,682,164 3,708,140Total 8,224,136 10,121,427

The continuity of deferred revenue is as follows:2007 2006

$ $

Balance, beginning of year 10,121,427 5,724,074Net contributions from developers and property owners 46,264 62,556Investment income 6,588 4,522Net contributions to capital operations (43,386) -Net contributions from (to) current operations (1,906,757) 4,330,275

Balance, end of year 8,224,136 10,121,427

13. JOINT LOCAL BOARDS

The following joint local boards represent government partnerships in which the City participates:

The Thunder Bay District Health Unit promotes public health and provides health education to allinhabitants of the District of Thunder Bay.

The Thunder Bay District Social Services Administration Board delivers provincially mandatedsocial services on behalf of the inhabitants of the District of Thunder Bay.

The following table provides condensed supplementary information for the governmentpartnerships:

Thunder BayDistrict Thunder Bay

Health Unit DSSAB77.91% 75.16%

$ $

Financial positionFinancial assets 2,360,650 23,438,717Liabilities (2,203,576) (33,522,385)

Net assets 157,074 (10,083,668)

Results of operationsRevenues 12,575,965 66,959,714

Expenditures 12,356,066 63,092,581

Excess of revenues over expenditures 219,899 3,867,133


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14. SUBSIDIARY OPERATIONSThunder Bay Hydro Corporation

The Thunder Bay Hydro Corporation is wholly owned by The City of Thunder Bay and providesregulated and unregulated electric utility services and complementary commercial services.

The following table provides condensed supplementary financial information for the Thunder BayHydro Corporation, its subsidiary, Thunder Bay Hydro Electricity Distr

Documents

Thunder Bay Annual Report