Iqaluit plans asset sale as budget balloons
Staff housing, garage on block as council seeks to cover $700,000 shortfall
Thanks to an expected property tax increase, Iqaluit city council has more than enough to pay for this year’s $16.6-million budget to run the city.
But council doesn’t have enough for building and buying what it wants for the coming year.
Council plans to make up for an estimated $700,000 shortfall in next year’s capital budget by putting some of its buildings up for sale in the new year. The city is running a surplus of nearly $700,000 in operating costs, but administration made clear to council that money had to be found somewhere to finance other expenses for the coming year.
Administration also recommended cutting costs such as leases and insurance for other buildings that it viewed as underused. In one case, the head administrator pointed to an annual lease of $50,000 he said was redundant.
City staff explained the sales and savings will ensure that council can follow through with numerous upgrades, such as sewage and water services, and special public safety projects such as long-awaited sidewalks and trails. More than $500,000 has been budgeted for the sidewalks and trails, though half of that comes from the lands department, which is directly funded by the territorial government.
Council discussed the prospective sales during budget deliberations this month. During a meeting on Dec. 12, chief administrative officer Ian Fremantle told councillors they had no choice but to sell a couple of buildings, such as empty staff housing and a downtown garage, to make ends meet.
“We can’t make the budget work with the money we have,” Fremantle said. “We don’t have the funds to do everything council wants to do.
“We need to look at our assets and think ‘What is the purpose of them?’”
During the meeting, Fremantle pointed to the city’s long list of assets — including arenas, playgrounds, and roads — worth at least $60 million. However, he explained in an interview after the budget passed, only a few buildings would be considered for sale. Those include a downtown garage at the Four Corners and unused staff housing in the Butler building beside Capital Suites.
Council reviewed other cost-cutting measures, such as reducing the bylaw department’s budget for on-call services, which is more than 10 times larger than the equivalent for emergency services.
One councillor also questioned whether the city needs two arenas, although the query stopped at the discussion level.
Many details about the 2004 operating budget have yet to be released. At press time, only a sparse outline of actual spending was available because administration is withholding further details until the budget is reviewed by the territorial government.
However, some trends were clear. Council approved increased spending in virtually every city department. Only recreation spending seemed to stay the same for a total of $2.6 million.
Thanks to a major reduction in administration costs, recreation spending doubled in almost every area, when compared with actual spending last year. The swimming pool has $200,000 more at its disposal. The new arena’s budget more than doubled, reaching $519,500, possibly related to the future cost of fixing problems that caused the building to sink several inches this year. Recreation programs also enjoyed a $150,000 hike in spending, and there is $34,000 put aside for a skateboard park announced last year.
During debate about the recreation budget, several councillors lobbied for fences and lighting to be added to playgrounds, as administration indicated without fences, the city could be held liable for any accidents. No decision was made, but council expected to revisit the topic in the new year.
Other big-ticket items in the budget included more than $1 million in new spending for public works. Administration for that department received a more than $300,000 boost, while spending on the city’s building maintenance is expected to increase by $100,000. Council also budgeted for increased spending on garbage and road services, giving public works a total budget of $6.8 million.
Administration emphasized that the budget is a flexible document, meaning spending could change over the course of the year. For example, the city has budgeted $75,000 to sponsor the Canadian Armed Forces to showcase the snowbird jet fighters in Iqaluit in July, but the event may not happen.
“Budget is not a two-day process,” said Fremantle, the city’s head administrator. “Budget is a year-long process.”