Nunatsiaq News
NEWS: Iqaluit April 02, 2018 - 10:30 am

City of Iqaluit shrinks deficit, net debt

But lack of bookkeeping at aquatic centre prevents audit of Aquatic Centre

STEVE DUCHARME
The City of Iqaluit's administrators believe they're on track to eliminate the deficit by the end of the year, city councillors heard at a March 26 meeting. (PHOTO BY STEVE DUCHARME)
The City of Iqaluit's administrators believe they're on track to eliminate the deficit by the end of the year, city councillors heard at a March 26 meeting. (PHOTO BY STEVE DUCHARME)

The City of Iqaluit continued to chip away at its deficit last year, with administrators now predicting that it can be eliminated entirely by the end of 2018, after presenting the city’s latest end-of-year financial statements to city councillors on March 26.

The city’s acting chief administrative officer, Amy Elgersma, said the City of Iqaluit’s deficit now stands at about $4.26 million as of Dec. 31, 2017, down from the $6.2 million deficit reported at the end of 2016.

The city’s net debt shrank dramatically, from over $21 million in 2016 to about $12.6 million last year.

“We believe that eliminating the deficit is achievable by the end of 2018,” Elgersma told council members during a special finance committee of the whole meeting.

Three of the city’s six operating funds now report surpluses, while the city’s troubled water and sewer fund reduced its crippling deficit last year from $4.4 million to $2.3 million.

“All and all, it definitely was a good year on the financial management side, and our deficit situation is definitely improving,” said finance committee chair Coun. Kyle Sheppard.

But while council has good reason to be optimistic, the city’s new senior consultant for corporate services and accounting, Sherry Rowe, said “more hard work and hard decisions will still need to be made for this current fiscal year.”

That because most of the city’s deficit reductions have been made through cuts in staff and services, and while that’s improving the bottom line, Rowe said it’s also taking on toll on overworked city employees.

Rowe singled out the city’s finance department as “a bare bones operation,” with “some basic tasks that should be done [that] are not getting done because there is not a person there to do it.”

She also recommended that the city hire a finance officer dedicated to collections, as currently no organized collection effort is being made by the city for overdue payments, which is turn is having an effect on revenue.

And as part of a deficit recovery plan, which is currently being drafted by city administrators, Rowe said all city service rates would need to be reviewed, since many of the rates currently charged are “not sustainable” in relation to costs and the city’s existing cash flow.

“To me it looks like the city has more of a revenue problem than an expense problem at this point in time. We need to generate more revenue,” Shepard said.

Mayor Madeleine Redfern added that the Government of Nunavut has committed to review its funding formula for municipalities, which she said hasn’t changed in over 10 years.

Auditors attending the financial statement presentation told the finance committee that they were unable to give an opinion concerning the city’s new Aquatic Centre.

That’s in part because auditors were unable to audit revenue collected by the facility, which, according to Elgersma, was not operating with a “point of sale,” or POS, computer ledger system until recently.

The unverified revenue for the city’s aquatic centre, for its first year of operation, was still included, reporting sales of about $1 million.

But more than $3 million in expenses at the aquatic centre ultimately brought the building into an operational deficit of more than $2 million.

“Because we’ve operated for three months this year without that POS system, there is a chance that [the auditor’s] qualified opinion will show up next year,” Sheppard said.

Following the presentation of the financial statements to the finance committee on March 26, city council approved the statements during a regular city council meeting the following day.

During that meeting, councillors also passed a 2.15 per cent increase to the city’s mill rate, the rate at which property owners are taxed on the assessed value of their properties.

Email this story to a friend... Print this page... Bookmark and Share Comment on this story...

(7) Comments:

#1. Posted by concerned kabloona on April 02, 2018

To call these figures wonky would be charitable. The net debt has supposedly gone from $21M to $12.6M. That could only occur if there were surpluses applied to the debt. But the story says that Iqaluit continues to run multi-million dollar deficits. Those numbers literally don’t add up.

#2. Posted by Qanurli on April 02, 2018

whatever happened to the idea of the airport AND hotel bed taxes to support our infrastructure? Vehicle tax so that it can be used to ship the metal south one day.  REad what any other world wide locations do to sustain themselves.  the dump can be a business that the City runs to recycle and sell scrap metal, wood for bonfires, nails and leftover construction supplies.,

#3. Posted by sled dog on April 02, 2018

She also recommended that the city hire a finance officer dedicated to collections, as currently no organized collection effort is being made by the city for overdue payments, which is turn is having an effect on revenue.


sorry, but I would argue a collections officer has little impact on revenue unless there have been significant write offs. it does however, have a bigger impact on cash flow.

#4. Posted by Good intentions on April 02, 2018

Those are good ideas #2 but I think that the territorial legislation would need to be amended to allow the city to levy those taxes. Our Iqaluit MLAs have always and continue to be silent on the issue in the Leg..  It wouldn’t surprise me if the GN opposed a hotel tax in Iqaluit because so many people staying in the hotels are there on GN business so they would see it as a significant cost to them that they wouldn’t want to bear.

I’ve always lamented that we have never had Iqaluit candidates for MLA who have run on a thoughtful platform of policies to assist our city. There are so many things the territorial government could do but we have no voice in that building

#5. Posted by old GN vs New GN on April 03, 2018

#4 Now is the time to talk to the New GN of what issues are concerning you or you could stay lamenting over the old GN.

#6. Posted by Good intentions on April 03, 2018

Hey #5, I was being overly dramatic when I wrote that I “lamented” the fact that these issues have not been raised. It would be nice if our MLAs did their job and raised them. But, Iqaluit and Nunavut will limp along as always which doesn’t cause me to lose any sleep

#7. Posted by Pie in th sky on April 03, 2018

#5 Keep dreaming that dream…

Remember my personal information

Notify me of follow-up comments?