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Deficit snags city budget

Councillors get staff to re-work numbers to avoid going in the red

Nathan VanderKlippe
Northern News Services


Yellowknife (Nov 29/02) - City councillors came away from two days of intensive budget talks Wednesday with a $238,000 deficit and no certain way to pay it off.

All of that will change next week, however, as city staff readjust numbers to reflect this summer's construction boom.

"They (staff) now have the opportunity to go away, update their projections for the next couple of years and then come back with a real up-to-date recommendation on if the funding will become available, or if another alternative such as an increase in fees, levies or taxes is the only alternative," said Mayor Gord Van Tighem.

Councillors will meet on the updated figures sometime next week.

In a calm six-and-a-half hour debate on Tuesday and Wednesday nights, councillors made only minor amendments to the budget document.

Among the changes:

- $161,000 for four additional firefighters, beginning April 1, 2003

- $32,000 to hire a full-time person to pick up city litter year-round

- $50,000 to redraft the city's five-year general plan

The head of international association of firefighters union local 2890 greeted the news of extra staff with guarded optimism.

"It's excellent news," said Mike Dunsmore. "I don't want to try and have my cake and eat it, too - the best possible scenario would have been (to hire the staff) Jan. 1. But we're more than happy with April 1."

The extra personnel will guarantee the fire hall has a minimum of four staff on duty at all times. That means firefighters can respond to two simultaneous ambulance calls without calling in extra help - which reduces city overtime payouts and cuts down on staff fatigue.

The $238,000 deficit, as it currently stands, is about 1.6 per cent of the city's annual revenue.

A debate over tax hike

But councillors are unlikely to pass a tax hike to cover the extra costs, some for philosophical reasons and others out of political concerns. A number of councillors are dead-set against bumping up taxes, even though the Yellowknife mill rate hasn't changed in the past nine years.

Others are more concerned about grabbing more from citizens' pockets in an election year: council is up for election next October.

Even so, Coun. Kevin O'Reilly is warning that residents can't expect an eternal tax freeze.

"We have fewer staff now at city hall than we did five years ago, and our population has increased and all the rest," he said. "At some point, you've got to look at raising additional revenues."

"I realize members don't like tax increases, but I don't like trying to sugarcoat a pill," said Coun. Blake Lyons, who urged the city not to eat into $400,000 in higher-than-expected revenues this year.

If councillors don't touch that cash, it will be put aside in a large city contingency fund. Council goals call for the fund to reach 10 per cent of the city budget by 2005.

Finance department projections indicate the city will be $650,000 away from that goal three years from now.

Even so, councillors may discover next week that a tax hike is unnecessary.

Before resuming budget talks next week, they will make decisions on a round of competitive bids on city land, which will likely boost the money in municipal coffers.

Add to that updated fiscal projections for next year - which are also likely to boost anticipated revenues - and councillors could come away in the black.

At least for now, city hall looks to be reaping the benefits of boom-times.

"We're at a stage of significant growth," said Van Tighem.

"Right now we're the beneficiary of what that growth means for the future."