SOMBA K'E/YELLOWKNIFE - The 5.7 per cent property tax increase facing Yellowknifers next year became official as the city passed its 2010 budget by one vote.

The city is proposing $64.7 million in expenditures, $5 million more than last year. Of that amount, $21 million will be generated through property taxes - an increase of $1.3 million over last year.

In the 4-3 decision Tuesday night, city councillors Bob Brooks, David Wind and Cory Vanthuyne voted against the budget, while Couns. Paul Falvo, Shelagh Montgomery, Lydia Bardak, and Mark Heyck voted for its approval. Coun. Amanda Mallon was absent.

Montgomery said it's important to maintain a certain quality of life for residents but that comes at a cost.

"It was certainly a huge public push that created the fieldhouse and that, I am sure, is about quality of life," she said.

"But people have to realize that a huge facility like that, it does require new staff people and those are costs that need to be borne by the city and that ultimately because we're not charging 100 per cent recovery user fees to youth, then there are taxes that have to pay for those extra costs."

Brooks, who was a major proponent of the $17 million sports fieldhouse and voted for its construction last spring even though it was a $1 million over its original budget, said it's important to have a property tax increase as close to zero as possible as the city cannot afford to raise taxes in a recession.

He proposed an amendment, which was ultimately defeated, to defer for at least one year the Smart Growth allocation of $500,000 to redevelop Old Airport Road, which he said would have decreased taxes by 2.5 per cent.

"We're doing a project that I thought was way premature, that (the city doesn't) have the answers for, that we don't have to money for. We're doing another capital project simply because we're chasing federal dollars," he said of the road improvements.

"That (project) gave us, as a result, a 5.7 per cent increase rather than a 3.2 per cent increase. I could have lived with a 3.2 per cent increase because that's about an inflation rate increase, and that would have included our responsibilities for the fieldhouse."

Heyck said this council is facing challenges on both the revenue and expenditure side of the budget, noting the city's decreasing revenues from mining properties around the city.

"Where we used to have $90 million in assessments related to mining, we now have less than $20 million. That's been a major loss in our property tax base, and in order to maintain service levels or enhance them in some cases, residents and businesses had to pick up the slack in that respect," he said. "We've also added facilities and services such as the fieldhouse that has ongoing operational and maintenance costs associated with it."

Heyck said deferring the Old Airport Road project would increase construction costs, and the city might not get the $700,000 expected from the federal government.

Brooks countered that the federal money isn't for certain.

"If getting those dollars means that you have to come up with an extra $1 million that you don't have, how is that a savings? It's like getting a special deal on cat food without owning a cat," said Brooks.

Wind argued the budget was not balanced since the city's general fund is $454,000 short of the minimum balance of 10 per cent of the projected expenditures out of the general fund. That motion was ultimately defeated with Vanthuyne, the only one voting with Wind.

Vanthuyne said he wants to look at the way the city does its business and planning.

"I supported (Wind's) amendment so that we can move forward with prudent fiscal management," he said.

"I expect that if Yellowknifers are being asked to tighten their wallets during these times, make cuts and watch their spending, they expect the same from us and that would only be the right thing to do."