City council is set to deliberate cuts to municipal services in the wake of information the Canada Games Centre's deficit will be $500,000 more than originally anticipated.

In an interview this morning, Mayor Ernie Bourassa said council is awaiting a report from city administration which will highlight concerns that the city's new Games centre will have a deficit of $300,000 to $500,000 more than budgeted for due to higher operating costs and lower-than-expected revenues.

'What we're projecting for year-end is the worst-case scenario,' Bourassa said. 'Our staff has advised us that this would be prudent.

'It could be $500,000 higher than we had anticipated; it may come in at $300,000 (more than expected).'

He said there are a number of factors that could lead to the ballooning deficit. They include:

• a lack of cheap energy 'promised' to the city;

• a later opening date than anticipated;

• delayed tenancy of businesses using the centre;

• expensive labour costs; and

• lower 10-punch-pass sales than expected.

'There's a whole lot of factors,' he said. 'We're making the necessary changes.'

Bourassa said council is not considering a tax increase.

Coun. Bev Buckway said this morning she too had been made aware from city administration that the costs of running the Canada Games Centre could be nearly half a million dollars higher than first thought.

'It's something that we've been made aware of,' she said 'Management is looking into where they can cut ... (but) the city is already running pretty lean.'

According to budget figures, the city is running at a 0.32 per cent surplus. That's below the one per cent to three per cent surplus that is considered desirable.

According to Ray Goruick, the city's Financial Services manager, the Games centre was originally budgeted to cost $3.8 million in its first year with $2.3 million originally expected in revenue.

Buckway said while she is not happy the city could be facing a bit of a cash crunch, she believes the Games centre is having a positive effect on the health of city residents and that it's not a problem that couldn't be over come.

Coun. Doug Graham said this morning he would vote against any small cuts to services across the board, and favours eliminating an entire program to come up with the money.

'I've heard we'll be considering trimming down some of the services; I don't agree with that. I think we're going to have to cut out an entire program,' he said.

While he doesn't anticipate another tax hike this year, Graham said, there could be increases as early as next year.

'We won't have (a tax boost) right away; I can't see one for at least a year.'

Goruick said this morning the first quarter, Janurary to March, financial figures for the Games centre were $923,000 in expenditures and $534,000 in revenue.

Goruick pointed out that the numbers are not yet official as they have yet to be audited.

Council is awaiting a report on the financial situation of the Games centre which is set to be released soon.

Which programs could be cut and by how much has not yet been made public.