A new bookkeeping measure being floated by the nation's public accounting authority could lead to a cutback in services, higher taxes and remove Whitehorse's ability to control its own destiny, say city officials.

In an interview at city hall this morning, Mayor Ernie Bourassa said new accounting measures being proposed by the Public Sector Accounting Board (PSAB) would require all Canadian municipalities to change the way they do their accounting.

Those changes would lead to tax increases so the city could meet new legal accounting requirements, the mayor said.

He said if the the new accounting measures come to pass, the city would have to reflect the amortization assets, including roads and sidewalks, water and sewer lines, and water mains a practice currently not undertaken by the city.

'It would be a huge amount of money,' Bourassa said.

The PSAB, whose recommendations are still in the draft stages, is the body which has the authority to set accounting standards for the public sector in Canada.

'(If these new accounting measures come to pass) we're going to be facing some very serious funding issues ... (which could include) cutting services and/or raising taxes,' he said.

Amortizing asset is a practice which would require the city to put money away over time so that it would be able to replace infrastructure when it's passed its used by date.

It would include all infrastructure transferred to the city from the Yukon government (YTG) after the YTG builds development lots and transfers the infrastructure to the city.

The YTG pays for new infrastructure in city subdivisions and recovers that money after selling the newly-developed lots.

'Let's think for a minute of what Granger and Copper Ridge cost to develop ... we're talking millions of dollars in infrastructure.'

The yet-to-be approved accounting measure, he added, would essentially mean the city would have to plan to replace infrastructure, built by the YTG, that the city didn't have the money to pay for in the first place.

'It isn't just Whitehorse, it would be (every Canadian municipality) ... (but) let's not panic; it's not a done deal yet.'

City council, he added, has commissioned Coun. Doug Graham to take the city's concerns to the Federation of Canadian Municipalities.

In an interview this morning, Ray Goruick, the city's financial services manager, said he felt applying the proposed accounting measures 'made absolutely no sense' for municipalities but confirmed the measures, if passed, would have a major impact on the city.

'What they want us to do is to account for property and equipment, including historical costs, and amortize them over the economic life of the asset.

'I don't think this makes any sense from a purely logical perspective.

'What causes a problem is that by them dictating to us that we have to (use the new accounting methods), they are taking away the city's ability to control our own destiny,' he said.

Goruick said the city currently shifts funds into reserve accounts but that the new accounting measures would likely cost the city 'millions' because it would have to set aside money for every piece of city infrastructure based on the infrastructure's value.

The city, he added, currently does not know the value or the lifespan of much of its infrastructure, including its roads, sidewalks, water and sewer lines, and water mains.

'I have no idea how we would go about coming up with a value ... we would certainly need access to Yukon territorial government (accounting) books to figure out what these things cost.

'It would be a huge and very expensive undertaking to determine the value of those assets,' he said.

The city, he added, could actually end up paying less for some things because the value of the infrastructure could be less than what the city is currently setting aside in its reserves.

Using the Canada Games Centre as an example to explain the impact of the proposed accounting measures, Goruick said if the $40-million building had a life span of 40 years, the city would be required to set aside $1 million a year. That would accrue interest, so city coffers would have the $40 million in the bank at the time the city's multiplex needed to be replaced.

According to city financial figures, the city has a 2005 inventory value of $250,000. It values the city's current property and equipment minus sewers and water lines, water mains, roads and sidewalks of $240,000,564.

City financial figures also show the city currently has $19,429,557 in its 'reserves for future expenditures.'