City of Iqaluit ponders how to pay for the future

IQALUIT — Although municipal services have nearly ground to a halt in Nunavut’s capital, the Iqaluit council is still moving ahead with long-term plans for the city.

If the council can find the money, Iqalungmiut will one day breath cleaner air, drink better water, and walk or drive on paved streets.

But first the council needs some serious advice on where to find the cash to meet what it calls its “many unique and difficult challenges.”

At last week’s council meeting, councillors approved a request for proposals to find a consultant to help figure out how to pay for the city’s wish-list.

The consultant would be asked to create a “financing strategy” to fund the city’s five-to-10-year capital infrastructure plan.

According to the plan, Iqaluit needs $47 million in new infrastructure that it can’t pay for right now, either through its budget or with existing reserve funds.

And nearly $19 million of these infrastructure projects can’t wait.

Those include “basic health and safety” improvements such as a new dump, closure and clean-up of old dumps, finding a new source of water, and replacing aging utilidor sections – all of which are required by the Nunavut Water Board.

Another $28.5 million is needed for projects such as paved roads, sidewalks, public transportation, a community centre and a new municipal pool.

The challenge is how the city can find the money to pay for any or all of these projects– either through its own revenues, outside money or debt financing.

Given what the financial-plan document calls the “magnitude” and “urgency” of the needs, government money and corporate sponsorships can’t be counted on to cover the entire cost of these improvements.

This is why cities often enter into long-term debt, or debentures, to pay for them.

But the downside of debentures is that municipal taxpayers usually see a big hike in taxes.

So, the city council wants consultants to suggest what combination of financing methods is most likely to work for each project.

Consultants are also being asked to look at the option of “development charges.”

These are a kind of surcharge on any private developers who pay for the privilege of building in Iqaluit.

“Development charges aim to give the municipality a balance between what the development industry needs, what municipalities need, and what new residents and new businesses expect,” reads the request for proposals.

The contract to study the financial strategy will be awarded in May.

The city wants the final report by the end of July, so the council can draw on its suggestions in its 2002 budget.