A preliminary 2017 budget to be presented to City Council next week contains no writedown for Essar Steel Algoma's unpaid property taxes.
Both City Treasurer Shelley Schell and Chief Administrative Officer Al Horsman tell SooToday they are optimistic Essar Algoma's taxes will be paid in full as part of the ongoing restructuring efforts.
"We are assuming that," says Schell.
There's a misconception in the community, she says, that the 2017 tax levy will be greater because of Essar's fiscal woes.
Yes, a tax increase is contemplated this year, but for reasons entirely unrelated to the steel mill.
"It has nothing to do with Essar. That's a cash-flow issue right now. All things are still equal within our budget. There's no effect of Essar not paying their taxes," Schell says.
"We're negotiating hard on that front," adds Horsman. "There's a lot of work that's taking place right now."
Indeed, closed-door meetings with councillors are held after pretty much every City Council meeting to discuss the city's legal strategy for collecting the millions of dollars Essar owers for unpaid property taxes.
"There's a lot of moving parts. It's a delicate point in time but I have optimism," Horsman says.
The restructuring talks are expected to lead to a comprehensive five-part deal in late January that will cover:
- payment of property taxes owed to the city
- environmental obligations
- resolution of the Port of Algoma dispute
- capital expenditures
One reason Horsman gives for his optimism is that the province has brought some blue-chip 'fixers' to the Essar restructuring talks, including Ed Clark, former group president and chief executive officer of TD Bank Group.
SooToday will post additional coverage of the preliminary 2017 city budget tomorrow morning.
Monday's City Council meeting will be livestreamed on SooToday.