Balancing the books
No new city taxes expected next year
NNSL (Nov 18/98) - The City of Yellowknife is still several years away from wiping its debt off the books. But Mayor David Lovell says the territorial capital is moving in the right direction.
According to the just-released City of Yellowknife 1999 annual draft budget, by 2004, the city could lower its debt to $17.4 million from $23.6 million. Subtract $8 million in possible new borrowing for a sports facility, and city hall could cut its debt position in half.
In five years, The city projects it will be using only five per cent of revenue to pay off debt principal, down significantly from 19 per cent this year.
Among the biggest uncertainties on the revenue side in the city's future finances is the possibility that one or both gold mines could shut down. If a mine shuts down, it will take 12 months before the city feels any tax effect. The full impact will take four years.
Another variable is how much will be spent on big-ticket items, specifically the twin-pad arena or upgrading the Gerry Murphy Arena.
"I'm pleased with the way the debt is projected to go down. We've got our long-term debt under control," Lovell said.
Many towns have put off expenses, such as upgrading infrastructure like water, sewer and paving projects, to get their debt under control, but Yellowknife has improved its debt position and stuck with its infrastructure upgrade programs, Lovell also said.
Despite good news that debt refinancing will save the city $2.5 million over he next five years, Lovell said the city is still facing a cash crunch in the short term as it directs much of its revenue at debt.
In '99, the city has budgeted for $4.3 million in repayment of debt principal.
"About four years from now, council will look good because of what has been done over the past few years (but) no matter how good we look, the health of the corporation is tied to the health of the community," Lovell said.
For Yellowknifers, the draft budget points to no new taxes in '99. This year is the fifth year in a row of no new tax increases and the fourth year in a row that water, sewer and garbage rates will not go up.
City financial administrator Robert Charpentier said although the city is projecting no new tax increases in '99, there will be a redistribution linked to services.
Council has asked administration to look at combining four water and sewer charges into one flat monthly fee. This may mean some city residents will see an increase in fees while others see a decline. But overall, the amount collected will not increase.
Charpentier added the city has "held the line" on its administrative costs. The city pays about $10 million for wages and benefits. But Charpentier said the number of full-time equivalent jobs within the city's structure is declining.
For '99, the city is projecting a $209,000 surplus. A deficit of $183,000 for 1998 beat an expected deficit of $258,000.
Budgeted revenues for '99 are $32.9 million. Expenditures are budgeted at just under $30 million.
On Thursday there will be public briefing on the budget. City officials will meet on Dec. 2 to discuss the public submissions. A special meeting is scheduled for Dec. 15 to approve the 1999 budget.