Photo by Whitehorse Star
Rob Fendrick
City is zeroing in on a $457,387 fiscal deficit
Whitehorse is headed toward a deficit of $457,387 for this year, city council heard at Monday night's meeting.
Whitehorse is headed toward a deficit of $457,387 for this year, city council heard at Monday night's meeting.
Rob Fendrick, director of administrative services, said the global economic crisis has torpedoed the city's investment portfolio, creating a shortfall of more than $600,000 in anticipated returns.
Council also heard, however, that with some belt-tightening – laying off seasonal staff earlier than normal, guarding overtime expenditures, cutting spending where possible – there still may be enough time to even up the books.
"Last year was the same, but we managed to balance by year end,” Fendrick said of last fall's forecast for a $300,000 deficit by last Dec. 31. "It is not an easy situation, but it can be managed in the time we have available.
"Basically, we just have to batten down the hatches for year end.”
Fendrick said the global economic crisis is squarely to blame for the budget deficit.
Also contributing to the strain on the city's cash flow, however, is a lack of land sales which were expected to generate another $2 million in revenue, Fendrick indicated to council.
He pointed out there will be a meeting this week of senior management officials and council members to look more closely at the revenue forecasts for 2010.
"I would suggest we all pray for no snow at this point; that would really help out the budget,” Fendrick quipped, noting that city has already spent two-thirds, or $1.3 million, of the $2 million it budgeted for snow removal this year.
The city budgeted $769,000 in investment income in 2009. The revised prediction, based on a budget analysis to June 30, calls for investment revenue of just $125,000, with another $210,000 in gas tax money, for a total of $335,00 in investment revenue, council heard.
Fendrick pointed out the city earned an average interest rate of 3.74 per cent on its investments last year.
It budgeted for a average return of 3.74 per cent, but the return so far has been 0.7 per cent, a difference of 3.04 per cent.
As of last July, the city had $16.8 million in investments, which includes all its capital reserve accounts it has save for everything from new buses to new buildings.
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Comments (3)
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francias pillman on Sep 22, 2009 at 9:53 am
My comment above should read " hello to even higher property taxes". Hey rob, I think you should be a man and stop blaming others for your screw-ups and say yes, it is our fault. And the point of making a joke about hoping it dosent snow makes you really look ridiculous. 2/3rds of the budget for snow removal is already gone? What the heck is going on, I have never seen this town in such bad shape. Snow removal is a safety concern for all, not a if it fits into our budget type speak. There needs to be a public investigation on the books of this town. Funny how this info about another deficit comes out after council voted themselfs raises. Again, council, what exactly do you do again? Last time I checked when people don't fulfill their job responsiblies they are fired. It seems in this town you are rewarded for stupidity.
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Kody on Sep 22, 2009 at 7:10 am
Hmm.
I bet if you add up the mayor's car allowance (shouldn't she be taking the bus?) all her travel and the raises she and council voted for themselves I bet you could wipe that half million off the map.
I smell a tax increase. Thanks for nothing Bev. Don't let the door hit you on the way out.
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francias pillman on Sep 22, 2009 at 7:05 am
What a joke. Stop blaming the economic downturn on every problem this town faces, especially financial. Where's the pay decrease for the mayor and council? Oh wait that was already approved. Bye bye bev buckway and your money bandits called your staff. Stop buying useless half million dollar handybuses when we already have them. Stop re paving a parking lot that also cost half a million dollars. This town is a friggen joke. And I guess the town can afford that useless 30million dollar safety building that probally will never be used for what its being built for. Oh; btw, say hello to even property taxes next year. Hey bev, go cut some hair, it dosent sink this town into further debt and continually take food out of peoples mouths.