SOMBA K'E/YELLOWKNIFE - Uncontrollable expenses and decreases in revenue due to a lack of new development may result in a property tax hike of 5.95 per cent if the city's draft 2010 budget is approved.

Carl Bird, director of Corporate Services at the City of Yellowknife, reviews the draft 2010 budget. - Charlotte Hilling/NNSL photo

"If you don't have revenues going up but you have costs going up, then you have to find a way to increase your revenues - it's just a fact of life," said Carl Bird, director of corporate services for the City of Yellowknife.

He said the budget is required to maintain the current level of service despite a lack of increased revenues.

"There's not that much new construction of homes, there's not that much new construction of commercial, and in fact there's a retraction in the mining sector that really impacts on us negatively," he said.

Despite the tax increase, the budget forecasts a fund surplus of more than $5.1 million come the end of 2010, but Bird said higher taxes are necessary to avoid a deficit.

"We're not allowed to have a deficit in the general fund," he said. "We have specific revenues that go toward the general fund, and it's mainly tax revenue and user fees."

The draft predicts land development revenues will stay relatively low in 2010, at about $1.7 million but will jump up to $2.5 million by 2012.

"It has to do with less sales than we predicted for Niven Phase VII and the Engle Business District," said Bird.

"We're expecting our land sales to go up a bit and we think that the completion of the bypass road will encourage some industrial development out there," he said, referring to the Engle Business District.

Bird said savings were gained on some points. "I mean, we're fortunate that the cost of fuel has come down," he said.

Bird pointed to the pellet boiler system at the Yellowknife Community Arena and Ruth Inch Memorial Pool, and a heat-recovery system to heat both the Multiplex and the fieldhouse now under construction as examples of savings gained.

Bird said the adoption of LED bulbs in traffic and street lights will reduce power costs by $108,000 a year. The budget also proposed scrapping credit card tax payments, the fees of which cost $40,000 a year.

City councillor Mark Heyck said he was sure the proposed tax hikes could be brought down while still providing the same level of service.

"There's a need for the city to keep up with rising costs," he said. "That being said, once council has had a chance to sit down together and go through the budget line by line, I'm fairly confident that we'll be able to reduce the amount that's being presented right now."

Coun. Cory Vanthuyne said residents may now be paying for a lack of tax increases over the past few years.

"None of us really want to see the projected hikes," he said. "But it's looking as though, unfortunately, we may have to live with that for the next couple of years."

City council will hold a special meeting on Nov. 30, in which members of the public will have the opportunity to raise questions on the draft budget. Residents wishing to make a presentation must contact the city clerk's office by noon on Nov. 30, and written submissions must be submitted to city hall by Nov. 25.