Jess McDiarmid
Northern News Services
Published Friday, November 16, 2007

YELLOWKNIFE - The city expects more than $59.5 million in revenues next year despite pressure from inflation, forced growth and mine closures.

The 2008 draft budget, released Wednesday, puts revenues up by about $2 million from the 2007 forecast, which exceeds the budget by more than $5 million. Councillors received a presentation on its highlights at the priorities, policies and budget committee the previous day.

The budget puts inflationary pressure at $1.4 million, most of which is required to cover salary costs.

Growth in commercial and industrial sectors is somewhat offset by mine closures, particularly with the accelerated demolition of Con Mine.

City administration recommended a property tax hike of 2.53 per cent, lower than the 2.75 planned in the previous budget. Property tax revenue is expected to rise nearly $600,000 over last year's budget estimate.

The tax hike, if passed, would represent the fourth consecutive year the city has seen an increase. The draft budget also calls for hikes of roughly 2.2 per cent in 2009 and 2010.

City coun. Bob Brooks said his first response when he saw the budget presentation Tuesday was he was happy the tax increase was a little lower than what had been projected.

"My goal is always to try and see if we can't have a zero per cent increase each year," said Brooks. "However, I did note that they did miss a couple items like the special and core grants increases that we're looking for."

Coun. Lydia Bardak also said she was pleased with the lower tax increase than budgeted for in 2007.

"The challenge is always to make sure our services are meeting a growing demand," said Bardak.

Taxes account for nearly 31 per cent of revenue, while user charges, such as rentals and dump fees, make up more than 46 per cent.

No new borrowing is slotted in the draft budget, which puts total expenditures at about $56.3 million, an increase of nearly $8 million over last year's forecast. The draft plans to have debt down to less than $1 million by 2014.

Highlights of 2007 along with the draft for 2008, which included: an estimated $47.6 million increase in taxable assessments partly offset by mine closures, a 596-hectare land transfer from Municipal and Community Affairs and a 17 per cent increase in fuel and power costs.

Costs for maintaining and operating vehicles also dropped 44 per cent this year to $239,000.

City administrator Max Hall sounded alarm bells at the priorities, policies and budget committee during a Nov. 13 presentation about the water and sewer fund, which has been operating with an annual deficit since 2001.

The fund needs to be put back on course or it will be headed for trouble, said Hall.

The accumulated deficit is forecast at $178,000 by the end of next year and there hasn't been an increase in fees for water and sewer services since 1995, though council has approved a 3.5 per cent hike starting in the new year.

The budget recommended a $2 increase to the $5 infrastructure replacement levy to come into effect June 2008, followed by an increase to $10 the following year to pay for upgrades to water and sewage systems.

The levy is planned to inject $800,000 into the capital fund.

The proposed budget creates five new positions within the city, including an assistant supervisor for the arena and an additional equipment operator in public works.

The draft plans for $12.4 in new capital projects, which include development of the Somba K'e Civic Plaza, the Community Energy Plan and replacement of water and sewage pipes. The city's infrastructure gap is currently estimated to be $67.8 million.