Yellowknife (July 18/03) - The city's Yellowknife Life annual report reveals the city spent and earned millions over budget in 2002.

The city made $2.3 million more than budgeted in revenue, but spent $2.1 million over budget.

Robert Charpentier, city finance director, said the money spent over budget occurred because city council decided to develop Niven Lake Phase 3, after the budget was created.

"We would have been bang on budget without the Niven Lake expenses," said Charpentier, "because we spent $2.2 million on land we didn't budget for."

As for the $2.3 million over budget the city earned in revenue, Charpentier said most of the unbudgeted money comes from user charges, which includes landsales.

Charpentier said the addition of the Niven Lake development is also the main reason for the increase in revenue, due to the money made in land sales.

Coun. Dave Ramsay, who is also a member of the city audit committee, confirmed that council did add the Niven Lake project after the 2002 budget was created.

"We sold a lot of lots, but also had some increased expenditures because of it," said Ramsay.

The city's financial statement also shows a large variation between the current balance of the city's operating fund, which is 1.6 per cent of total revenue, and the GNWT's recommendation for the operating fund balance, which is 10 per cent of total revenue.

Charpentier said this variation is acceptable because the GNWT's recommendation isn't the policy of the city.

"We have a policy at the city called the fund stabilization policy, which is a little different then the GNWT," said Charpentier.

He said the fund stabilization policy was adopted by council in 2000. The policy says the city should have a fund balance of 10 per cent of all expenditures by 2005.

But, Charpentier said the city has a long way to go before achieving this policy.

"Basically they (council) want us to have a surplus of $1.8 million by 2005, and at the end of 2002 we only had $685,000 or 1.6 per cent of the total revenue. It just shows we're a ways from reaching that," he said.

However Ramsay said he thinks the fund stabilization policy is achievable.

"I think it's attainable. If you look around town you'll see we have so much happening," Ramsay said.