Ratepayers reluctant to finance city’s debt proposition

DENISE RIDEOUT

Ratepayers who attended a public consultation on the municipal budget this week weren’t entirely persuaded the city should go $4 million in debt.

Many expressed concern the money won’t be spent properly and that the city will just need to borrow more in a few years’ time.

To borrow the money, city council needs the support of Iqaluit’s 1,300 ratepayers. According to municipal law, the city can’t go into debt unless the ratepayers agree to it in a vote.

So council has begun a campaign to get Iqaluit ratepayers to vote “yes” to its plan to borrow $4 million for infrastructure projects.

The sales pitch council is using is a simple one: For $4 million, Iqaluit residents will see $50 million worth of work on roads, water and sewage systems and recreation facilities completed over the next five years.

If council doesn’t get the go-ahead from ratepayers, a multimillion-dollar deal it has signed with the Nunavut government may be in jeopardy.

In December, the GN agreed to give Iqaluit $31 million between 2003 and 2008 for infrastructure projects. But the city has to put in $19 million of its own money, and it has only $15 million from reserve funds, taxes and fees.

The city must borrow the remaining $4 million from the banks.

“In order to raise that $4 million and complete the package [signed with the GN], we still need the approval of the community — specifically the ratepayers of the community,” the mayor told the handful of residents at the meeting.

“If the $4 million isn’t financed through debt, then the package could fall apart,” he warned.

The city is proposing to borrow the $4 million in 2004 and pay back $476,000 each year for the next 15 years.

The vote is scheduled for the spring, and, until then, city council will try to persuade ratepayers that debt is the only way to go.

Without it, the city can’t afford to complete key projects, including paving main roads, replacing old water and sewer lines, upgrading the water treatment plant, creating another cemetery site and building new recreation facilities.

However, the cost to residents won’t end at $4 million. In addition to borrowing funds, the city wants to raise property taxes and fees for water and sewer services to pay for the projects residents want.

In 2003, property taxes will increase by 2.25 per cent, meaning taxpayers will pay an extra $45 this year. Taxes would increase each year until 2007.

Residents would also pay more in water and sewer fees. The fees would increase by five per cent per year from 2003 to 2007. That would mean an additional $47 a year.

But the half a dozen homeowners who attended the meeting said it isn’t fair that the 1,300 ratepayers in Iqaluit have to foot the bill for services that all Iqaluit residents will benefit from.

“We’re the guys who get zinged just because we bought a house and we’re trying to raise a family here,” homeowner Ed Picco said.

Resident Sandy Tieman said she didn’t agree with the proposed tax hikes. “Before I vote yes to increasing my taxes, I want to see the people who are in bad debt to get current on their bills,” she said.

There’s a long list of taxpayers who are in arrears. Together they owe the city about $1 million.

But Rick Butler, the Iqaluit’s chief administrative officer, said the city has taken strong measures against the delinquent ratepayers, including taking legal action against them.

City council also tried to appease the ratepayers’ concerns by assuring them the money borrowing is a one-time thing.

“We’re confident we won’t be coming back to you to bail us out,” Matthews said.