City finance manager Valerie Anderson is predicting the city could have a small surplus at year's end.

She's reminding council, however, that at less than one per cent of the city's more than $22-million operating budget, it could easily be spent if there are unanticipated operating costs before the year's end.

Anderson delivered a report to council at its Monday night meeting outlining the financial picture and where spending is above and below what was anticipated in the budget.

Legal fees, for example, are expected to come in more than $230,000 over what was budgeted.

"The city has been involved in a number of high-profile legal cases over the past year and has also worked with legal counsel on conciliation and pay equity issues,” notes the report.

While specific cases weren't cited in the report, one of the most public court matters for the city has been over Trevor. The dog's care has been at the centre of a court dispute since his former owner tried to turn him into the city's bylaw department more than a year ago for biting.

The city has spent more than $45,000 throughout the court case.

In the most recent decision, Justice Ron Veale denied the city's application that the dog be turned over to the pound to be destroyed, ruling that he shall remain in the care of the Humane Society Yukon's care.

Though court cases may take a toll on the city's operations, the nearly $4 million the city isn't likely to get in expected land sales isn't forecast to impact the operating budget.

As Anderson explained, it simply means the transfer to the land bank reserve won't be as substantial as originally thought, which could take a toll on the capital budget.

"This may cause the deferral of future capital projects planned to be funded from the land bank reserve,” she noted in her report.

And while a tight labour market is proving positive for a number of departments, as they save when positions are vacant, that's offset by the higher-than-usual recruiting costs such a labour market brings and the higher costs for internal training.

"Finance has built an allowance into the salary and benefit projections in regards to additional 2010 job evaluation system payments to staff and in anticipation of successful labour negotiations,” reads the report.

Bylaw could also benefit from what's expected to be $185,000 extra in parking meter and other fines.

Anderson told council, however, that much of that comes from a new accounting system that counts the fines as revenue when they are issued, rather than when they are paid.

A lot of the city's additional revenue is coming thanks to recreation, transit and building inspections, Anderson reported.

"The Canada Games Centre is projecting revenues higher than budgeted of $72,000 as the use of the building continues to increase, transit pass sales are exceeding projections by $72,000 and the building inspections area is projecting an additional $79,000 in sales of government/institutional building permits,” her report notes, going on to state where the city's higher expenses were.

"Unplanned maintenance costs within the aging municipal systems building and pump houses as well as at the Canada Games Centre resulted in approximately $52,300 in additional expenditures.”