Iqaluit (Dec 13/04) - City council found the money needed to balance its budget and fund future capital projects through raising property taxes, eliminating an under-used transit system and scaling back its recycling program.

The City of Iqaluit's chief administrative officer Ian Fremantle, right, and director of finance John Hussey before Fremantle made a presentation to the Utilities Rate Review Council regarding the proposed power rate increase in November. - Brent Reaney/NNSL photo

"We don't like to do it, but when you can't get it from anywhere else, this is where it comes back to: the taxpayers," said John Hussey, the city's director of finance during the Dec. 8 council meeting when the news was announced.

Owners of a home valued at $200,000 will pay $450 more in 2005. Those with a home valued at $250,000 will face an increase of $562.50.

Two-thirds of the extra tax is part of a capital projects funding arrangement signed with the Government of Nunavut in 2001.

Iqaluit's transit system was costing about $150,000 to operate, but only about 200 people were using it on a weekly basis. The operator kept any money brought in by the $2 fare.

During a budget discussion the week of Nov. 29, it was reported that federal funding for the transit program did not come through as expected.

Curbside pick-up for the city's much-discussed recycling program has been cancelled. Recyclables will now have to be dropped off at four designated stations.

In response to a potential April 1 power rate increase, the city set aside $170,000.

Hussey says that money may not be enough to cover the city's costs, depending on the final decision on the Qulliq Energy Corp.'s proposal.

Any extra funds would have to be drawn from the city's already stretched reserve fund.

"It puts us in a very tight position," said Hussey.

Faced with a potential operating deficit of $485,050, a balanced budget was needed in order for it to be approved by the Government of Nunavut.

"We didn't have sufficient funds to cover our operating needs," said chief administrative officer Ian Fremantle .

Part of the city's cash problem began with plans laid in 2001.

The plans called for the city to build a subdivision per year; a process that Fremantle says would normally take about three years.

Eighty new houses per year were expected to provide the property tax base needed to finance the numerous capital projects planned by the city in partnership with the territorial government.