Terry Kruger
Northern News Services

Yellowknife (Apr 28/00) - After raising taxes 3.9 per cent last year a mill rate cut could be in store for city taxpayers this year, says Mayor Dave Lovell.

His comments came following the tabling of an auditor's report on the city's financial position. Lovell says a tax cut is possible, thanks to council's efforts to stay the course.

"It took guts to stick with those decisions," says Lovell.

That meant raising taxes and sticking to financial decisions to continue to pay down long-term debt and build up a reserve fund that will allow the city to build a new arena without having to go further into debt.

The tax increase was mostly responsible for an increase in total revenue in 1999 -- going from a budgeted amount of $32,487,000 to actual revenue of $33,274,000. The city also benefited financially from higher penalty revenue on outstanding taxes.

The revenue hike helped the city overcome the financial impact caused when Giant mine went bankrupt, resulting in a loss of taxes that were written off in the budget as bad debt.

In total, spending listed in the consolidated statement of financial activities, including water and sewer, solid waste, land and government services was $30,523,000, up from the budgeted $29,948,000.

Increased spending was noted: community services -- $350,000, which included $250,000 in capital for a new youth centre; and, general government -- $303,000.

The city did save about $607,000 by cutting spending in public safety, public works, water/sewer, and solid waste management.

At the same time long-term debt was reduced by $3.3 million and $1.3 million transferred to the Major Community Facility Reserve.

It was noted that for the first time since 1994, the city's year end cash balance increased from the previous year.

Lovell said the report paints a positive picture of the city's financial future, especially with Miramar expected to start paying some taxes from the Giant mine property this year.

"We may be looking at a two per cent tax decrease when we set the mill rates," said the mayor.

Even so, the analysis includes a word of warning for 2001, when a cash crunch is possible as the city uses its facility reserve fund to pay for construction of a new arena. That means short-term borrowing or dipping into its $5 million overdraft to carry the city until tax revenue comes in may become necessary. This situation is "general practise for municipalities across Canada," said corporate services committee chairperson Coun. Bob Brooks.