Council eyes reserve fund for rec centre, new city hall

Property taxes, water rates and garbage fees are all increasing in Iqaluit this year, but for now, only the water rate increase is written in stone.

Councillors and city staff performed their annual two-day budget exercise last week. While the mill rate, the amount per thousand dollars of assessed value that homeowners fork over in taxes, isn't set yet, it will be lower than last year's 2.5 mill increase.

That's because the city's last five-year capital plan agreement with the Government of Nunavut forced the city to raises taxes by that amount.

That deal has expired and it will be replaced by a new agreement that will give the city $2.4 million per year in block grants, said chief administrative officer John Hussey.

"You have to spend [that money] on water, sewer, garbage, roads projects and report [to the GN] quarterly on it," he said. Under the old capital plan, the city had to seek approval from the GN and share the costs, forcing the city to raise taxes to cover that share.

Coun. Jim Little wanted to limit the tax hike on homeowners to 0.65 mills, but Coun. Glenn Williams and Mayor Elisapee Sheutiapik argued the city needs to stash some money away for two big-ticket projects: a new recreation centre and a new city hall.

Those projects, which would have required $18 million in borrowing, were shot town by ratepayers in an Oct. 2006 plebiscite, in part because there was no plan for how to spend the money.

"We could get a very nice reserve fund started for a recreation facility," Williams said.

"Now we have a chance to take the payments we've been making to the bank and put it to something for ourselves."

To do that, Williams and Sheutiapik lobbied for a mill rate increase of 1.5 to 1.65 on a residential mill rate of 21.55, with increases to other types of taxpayers calculated at an equal percentage. Such a hike would create a $300,000 surplus to go toward new buildings.

So councillors directed Hussey to come up with different tax hike scenarios to present to the next meeting of council Feb. 12, when the budget will come up for a vote.

"It's not an easy math problem," Hussey said.

Water rates will also rise two per cent to cover a $325,000 shortfall. Per-litre costs will rise two per cent for industrial and commercial customers, while residents will lose a two per cent subsidy on their rates.

Garbage rates will also rise, although it hasn't been determined by how much. The city's garbage system ran a modest $56,000 surplus this year, but still carries a debt of $693,000.

That shortfall was caused when the city held off on raising garbage fees during the last capital plan to offset the pain of mandated tax hikes.