Fort Simpson (Dec 03/04) - As of next week, the village of Fort Simpson could be a step closer to being three-quarters of a million dollars in the hole.

Village council has drafted a budget that will result in a deficit of approximately $750,000 for 2005-06. It's meant as a message to the Department of Municipal and Community Affairs (MACA) that the municipality's funding has been cut too much, Mayor Raymond Michaud said.

"I refuse to raise property taxes and I refuse to raise the water bills. I feel we're paying our fair share and have been for many, many years in comparison to hamlets," he said. "The buck has just got to stop."

Most of the budget expenditures are essential other than one big-ticket item: laying concrete on the arena floor, the mayor said.

That project will cost in excess of $200,000, Michaud said. The idea has been floating around since at least the mid-1990s, he noted. It would make the rink available year-round for various sporting events and would facilitate the ice-making process every winter.

Budget necessities include removing mould from the swimming pool, fixing the sprinkler system at the arena and upgrading equipment at the water plant. Failing to address those problems could force the afore-mentioned buildings to close, Michaud warned.

"We're not made of gold," he said. "You have rules, regulations and codes that all have to be met, and we're operating on a shoestring budget."

There may be something extra in the 2005-06 funding allotment from MACA. The village is expecting only $884,000, according to senior administrative officer Bernice Swanson. However, on Monday, Grace Lau-a, senior financial advisor for MACA, said her department is anticipating the Legislative Assembly will approve additional community funding to cover rising insurance and inflation costs.

That would increase the village's financial support to more than $1 million, but it's still short of the $1.36 million MACA provided in 2003-04.

Lau-a said there's nothing in existing legislation preventing a community from passing a deficit budget. But any deficit must be recovered within the next year, she advised.

She noted the village's last audit indicated it had a surplus last year of more than $1 million.

Swanson argued that Fort Simpson only had an operating surplus of $663,467 last year. The municipality also had $455,548 in reserves for equipment replacement, but that should not be considered part of the surplus, she maintained.

Michaud said the village is paying a price for putting money in reserves. Most of that savings has already been spent by replacing the roofs of several buildings, according to the mayor. Yet the village office still requires renovations, a new grader will soon be needed and the fire truck will be obsolete in three years, he added.

Council will vote on its interim budget Monday. It has to be submitted to MACA in December. A final budget will be passed early in the new year.