City councillor Doug Graham said last night he is disturbed by the prediction of yet another city deficit.

At last week's standing committee meeting, city financial manager Valerie Anderson read a second-quarter variance report to council that projected a $304,000 deficit at year's end.

'This is a disturbing trend,' said Graham at Monday night's council meeting. He reminded council that in the last six years, Whitehorse residents have paid a 14 per cent increase in taxes.

'We need to really budget,' he said.

The variance report says that if at year's end there still remains a $304,000 deficit, the city will draw down from the contingency fund to make up the difference.

Coun. Florence Roberts echoed Graham's disappointment.

'We shouldn't be going to the contingency fund,' Roberts insisted. 'It's for rainy days.'

Graham, in his third term as a member of city council, said he is concerned that relying on the contingency fund or on extra revenue sources, like gas tax, is an irresponsible way to budget. He also said he will adamantly lobby his fellow council members to be conservative and realistic when making budgets assessments for next year, in the hopes of avoiding another deficit in 2008.

Graham said the current system is an irresponsible way to budget, and that while a $304,000 deficit may seem manageable now, if deficits continue to become part of the budget every year, the city will have an out-of-control problem on its hands.

Coun. Dave Stockdale said he agreed with Graham as well, that he was disturbed by the projected deficit, but that it is part and parcel of Whitehorse expansion.

'This is a growing city,' he said. 'And a bigger city costs more to run.

'The taxpayers have to take on some of those costs.'

While city managers have been asked to decrease unnecessary spending for the rest of the year, Mayor Buckway said last week she would not rule out a tax increase for the 2008 budget, which will be announced in November.

Graham asked his fellow council members if the current situation meant regular services would be affected for the rest of the year as a result of cutbacks.

'Does this mean if my street gets [snow] plowed once this winter, now it won't be plowed at all?'

An answer wasn't made available for Graham about what specific services would be reduced.

At last week's reading of the variance report, Graham had asked whether the deficit could be directly attributed to the Canada Winter Games. Coun. Jeanine Myhre answered his question last night.

'Administration confirmed that some wage costs, split over various departments, can be attributed to the Canada Winter Games,' she said, reading from a prepared statement. 'Details on that will be available following the receipt of final reports from the Host Society.' That report is expected at the end of August, said Graham.

'That will be interesting.'

Graham also expressed concern that if not for additional tax revenues from increasing property values and new housing starts, the city would be in even bigger trouble.