Iqaluit council agrees in principle to budget for 2014

John Hussey, chief administrative officer for the City of Iqaluit, right, explains the city’s proposed budget for 2014 to the city council’s finance committee of the whole, Feb. 4. (PHOTO BY PETER VARGA)

Iqaluit City Council’s finance committee of the whole agreed Feb. 4 on a final draft of the city’s 2014 budget.

On the sixth day of budget discussions, which began Jan. 9, council settled on a mill rate increase of 1.5 on all property tax categories, exactly half of what the city’s administration originally proposed.

The administration brought the proposed decrease down after meeting with directors of each city department to cut expenses and projects, or delay them to 2015, as instructed by council.

Increases to water fees, amounting to six per cent, and garbage collection fees, up by 10 per cent, did not change from the original proposal.

Administration presented city council, down to five members from the usual nine at the Feb. 4 finance committee meeting, with four alternative changes to the mill rate.

Council’s two favoured options, requested at the last finance committee meeting Jan. 22, were: a mill rate increase of $1 per $1,000 valuation on residential and commercial properties, with a $3 increase on industrial and all other properties, versus a $1.5 increase on all properties across the board.

Mayor John Graham’s was the first to say that all property-owners, residential, business and institutional, share the burden of an equal increase.

Council fell in line by a narrow margin, with councillors Terry Dobbin and Romeyn Stevenson voting in favour, and Noah Papatsie and Kenny Bell voting against.

Differences of opinion on expenses, and how to limit tax increases persisted.

Bell said he did not disagree with the $1.5 increase to cover the rising expenses the city faces, but opposed the idea of putting $3 million into reserve funds.

“If we didn’t put $3 million cash into reserve funds, we wouldn’t have to increase the mill rate,” he said.

“There’s $12.5 million in the reserve funds already,” he said, adding that the city would not have to cut a list of projects slated for 2014, if it only they agreed to cut certain amounts from each reserve fund.

Included among the cuts in the final proposed 2014 budget are construction of a public works fence, GPS systems, security cameras for the recreation department, and an outdoor sports pad.

The city’s director of corporate services, John Mabberi-Mudonyi, answered that the city would not cancel those projects.

“It’s just that for this year, we’re not going to be able to do them,” he said.

The director added that reserves keep the city from having to borrow money, at interest, to finance the city’s growing list of future projects – all of which council agreed to.

In some cases the territorial government obliges municipalities to keep funds in reserve, he said.

John Hussey, chief administrative officer for the city, added that the reserves will ensure the city is ready to apply for federal funding offered through the Building Canada infrastructure fund by April 1 to help finance its projects.

To qualify, the city will have to prove its ability to pay for a share of the costs.

“It’s unknown at this time what our contribution has to be,” he said. “If there’s a requirement that says we’re going to have to pony-up ‘x amount’ of dollars, then we’ll have it available.”

“I’m not arguing about the importance of reserves,” Bell said. “But Iqaluit as a whole is in trouble. We’re sitting here putting away for a rainy day, when the rainy day’s passed.

“People can’t feed themselves, people are on the edge of paying their bills. I’m not worried about people who can’t pay the $1.5 increase, I’m worried about the people who can’t pay the current mill rate.”

Bell said property tax increases would be reflected in price increases of food and retail items.

Coun. Dobbin brought attention to the city’s property tax arrears, which amounted to more than $2.3 million due to the city in 2013.

The unpaid sum “tells me the administration is really not doing their job,” Dobbin said.

“It’s part of their job to either go ahead, hire a collection agency, or get that money. It’s not fair to people that pay their property taxes, and still providing service to people that aren’t paying.”

Almost 60 property owners in Iqaluit owe $500 or more in property taxes to the City of Iqaluit, according to the city’s July 2013 listing.

Coun. Stevenson agreed the city must take action to collect back taxes, and called for council to address this in a separate meeting.

“Some could be errors and some are more complicated than that, but we need to fix it,” he said.

The finance committee of the whole’s recommended budget will go to council for final approval at the next regular council meeting, Feb. 11.