SOMBA K'E/YELLOWKNIFE
The territorial government has been underfunding the City of Yellowknife along with the NWT's other communities to the tune of $40 million a year, a review by the Department of Municipal and Community Affairs has revealed.

Sara Brown: NWT Association of Communities CEO says it was startling to see how much the government has been underfunding communities. - The GNWT has four funding "pots" that dole out money to communities Operations and Maintenance Funding (2014-15 - $47,684,000) Community Public Infrastructure Funding (2014-15 - $28,002,000) Water and Sewer Services Funding (2014-15 - $15,937,000) Gas Tax Funding (2014-2015 - $15,000,000) - transferred from the federal government Source: GNWT

Last year, the department with the NWT Association of Communities started a review of the formula that provided more than $103.6 million to communities in the territory in 2014/2015 for things like building new infrastructure or maintaining water and sewer systems.

That year, Yellowknife received $13.3 million according to a separate MACA report.

The money is used in the city along with municipal funds to pay for maintenance, water and sewer work and infrastructure projects.

In a pre-budget letter to the GNWT, association CEO Sara Brown said the review has found the government is under-funding communities by 37 per cent per year, or $40 million.

"This startling figure includes operations and maintenance, water and sewer and public infrastructure; essential services for our communities," Brown stated in the December 2014 letter.

"It echoes the ongoing comments that communities have presented about underfunding, and brings forward concerns for the future."

The organization, which represents and advocates for all communities in the territory, will begin lobbying MLAs and cabinet to change the formula after its annual general meeting in May, said Brown.

Without adequate funding, community governments are left paying for immediate needs instead of planning for the long-term, Brown said in an interview Wednesday.

Eleanor Young, the assistant deputy minister of MACA, said late last month that the department knew there was a funding gap before the review but it wasn't clear how large it would be.

"We have identified that there are some significant gaps in our funding right now," she said.

It's unclear how significant the impact could be for Yellowknife.

Young declined to provide specifics about individual communities until a final report is completed, which is expected to be later this year.

Coun. Bob Brooks said the figures did not come as a surprise to him.

"It confirmed the gap that we already knew," he said Wednesday.

He said under-funding means communities aren't getting the money they need to keep infrastructure in good condition over the long run.

"If you leave it too late, the infrastructure fails," he said, referring to crumbling infrastructure like bridges in Montreal.

Brooks, a member of the association's board but not directly involved in the review, said he's looking forward to the department making a case to cabinet to change the funding formula.

The existing funding system, the so-called New Deal, for community governments in the territory began in 2007, replacing a per capita model.

There have only been minor tweaks to the New Deal system since it started, Young said.

It gave communities direct control over decisions about public infrastructure with the GNWT providing money from four "pots."

Those include funding to cover operations and maintenance, public infrastructure, water and sewer infrastructure and the gas tax fund, which is a transfer from the federal government.

The formula is so intricate it's difficult to explain even to the councils getting the money, Young said.

The New Deal came with a commitment to review the formula in the future.

Late in 2013 the minister signalled MACA officials that it would be a good time to carry out the review, Young said.

The department approached the association to create a working group to study the system, collect information about the existing infrastructure in the communities and suggest changes.

The group had representatives from 15 communities, including Mayor Mark Heyck.

Heyck was unavailable to comment by press time.

The review led to the recommendation to create a needs-based funding approach.

Under the existing system, a community may build a large new piece of infrastructure with money from the GNWT, but the operations and maintenance budget isn't increased to account for the added cost.

That can leave communities without adequate money to cover upkeep.

The proposed new formula would link funding to what communities actually need.

Now the department will be presenting its initial findings to councils in the communities and will seek input on the new formula.

The funding review is expected to be one of the highest priority action items the department will take to the new government elected this fall, Young said.

While the department is expected to propose a change, it may not result in an immediate difference in funding.

Should the department determine a community has been under-funded, the government may phase in an increase over several years, said Young. Some communities may lose money while others may see an increase in funding, she said.

We welcome your opinions. Click here to e-mail a letter to the editor.