Photo by Whitehorse Star
Valerie Anderson
Council faces decision on $800,000 deficit
A deficit of nearly $800,000 on the city’s water and sewer system could be funded from the water and sewer reserve and may mean further increases to utility bills next year.
A deficit of nearly $800,000 on the city’s water and sewer system could be funded from the water and sewer reserve and may mean further increases to utility bills next year.
Valerie Anderson, the city’s acting director of corporate services, brought forward the recommendation at Monday’s council meeting in a report detailing the 2014 financial statement.
The document shows an overall budget surplus of $4.37 million (water and sewer are charged as separate utilities).
Anderson, however, was quick to remind council that “the bulk of the City of Whitehorse’s accumulated surplus is already spent and has been invested in infrastructure known as ‘tangible capital assets.’”
Under public accounting rules for financial statements, those tangible assets include city buildings and land that are factored into the city’s accounts.
It was noted much of the surplus comes from land in the Whistle Bend area the territory transferred to the city.
Also factored in are investments the city has made and additional revenue that has come in.
Meanwhile, the deficit on the water and sewer system marks the third consecutive year for a deficit, though it had been expected from the quarterly financial reports done throughout 2014.
“It should be noted that for the two years prior, deficits totalling $1.03 million have been funded from the water and sewer reserve,” Anderson stated in her report to council.
She went on to cite electrical costs as a big reason for the deficit, coming in at $226,000 over-budget.
There were also:
• “unexpected infrastructure issues” that resulted in additional staff costs of $205,000;
• supplies costing an extra $106,000; and
• other service costs of nearly $72,000.
As Anderson pointed out, when there are issues with the water and sewer system, they have to be fixed as quickly as possible. The city simply can’t opt not to make necessary repairs because of budgetary issues.
While Coun. John Streicker said he appreciates there have been higher-than-anticipated costs, he also noted concern for the impact it will have on the reserve.
“I do think we have to be concerned about that,” he said.
The water and sewer reserve has the cash to cover the deficit, Anderson assured council.
While the reserve will remain at a “healthy level,” she acknowledged, that is due in large part to federal gasoline tax funds the city has received.
She pointed out the city has to either cover the additional costs through the reserve or charge them to ratepayers.
The water and sewer rates for 2015 have already risen by 6.3 per cent in light of rising costs for the system.
Coun. Mike Gladish wondered whether increasing rates will see the city recover the full cost of operating the system in the coming year.
Anderson then confirmed city officials are beginning to look at the 2016 budget and may consider another rate increase (subject to the council to be elected Oct. 19 approving the budget next year).
She added, however, staff don’t want to “over-inflate” the water and sewer charges either for a system that’s in place to be paid for entirely by ratepayers.
The city’s operating budget detailing tax and rate increases for the year usually comes forward early in the new year.
Council will vote next week on whether to fund the deficit from the reserve as well as whether to approve the 2014 financial statements.
Add your comments or reply via Twitter @whitehorsestar
In order to encourage thoughtful and responsible discussion, website comments will not be visible until a moderator approves them. Please add comments judiciously and refrain from maligning any individual or institution. Read about our user comment and privacy policies.
Your name and email address are required before your comment is posted. Otherwise, your comment will not be posted.
Comments (24)
Up 0 Down 0
Ideas for raising revenues for the City on Jun 29, 2015 at 5:42 pm
We could cut our 50% of our street lights and save money.
We could cut Council and mayor incomes by 20% and save a lot.
We could infill the City by 50% and we still have more park land than any other cities.
Infill would bring the cost ratio of services in line.
Our transit is not cost effective because you do not have the mayor using it.
We have to increase parking meters and parking.
We have to tax YTG for parking stall they have in the downtown by 300% and not using transit.
We need to put a parking tax on all businesses in the downtown core by $50 a day.
We have to put toll on the three entrances into downtown 50 cents each way.
Believe it or not some of these ideas have been used.
Bridges in Cities have tolls.
Maybe we need to bring back a head tax on all residents of the City of Whitehorse.
Maybe we need a wealth surtax on people who own homes over $500,000 dollars.
Even maybe put a toll on the Alaska highway through the City.
A buck a vehicle. Think 100,000 autos and $100,000 of dollars to pay our water sewer costs.
Maybe put tourism tax on tourist like some places have done.
Put a tax on bicycle, ATV, boat, snowmobile and watercraft of $500 a year.
Put a trail tax on people who use trails - $100 a year.
User pay tax for all.
Develop an improve tax which is used a lot especially by airports.
Charge a surplus tax on gasoline sold in the City of 4 cents.
Big money maker.
Time to get real Mayor and Council.
Up 11 Down 2
TAX PAYER on Jun 29, 2015 at 4:08 pm
1. Stop funding all thesed societies and let them do their own fund raising
2. No more travel for City Council. none. zip. Nada, zero.
3. Enough with the Christmas Lights, or at least keep it minimal.
4. Turn some friggin lights out.
5. Cut some wages!
Up 19 Down 6
As a CAO reserve funds are for on Jun 27, 2015 at 6:23 pm
Replace future assets that are at the end of their life cycle or develop new infrastructure to support the primary services of the municipality, not deficits.
Wilf Carter
Up 5 Down 20
Adele Sandrock on Jun 27, 2015 at 1:46 pm
Yeah- Wilf Carter for Mayor or even better Premier !!!
Up 20 Down 6
50% of the City of Whitehorse operating costs are in wages on Jun 27, 2015 at 9:43 am
The normal wage costs for municipality should be between 30 and 35% which is one cost problem that no one will touch.
Second the amount of water and sewer pipes in the City as ratio to users is very low driving up costs.
Pumps don't seem to be efficient and use a lot energy. Or the pump stations are not in the right places not by design but because the continuous growth of the City making it more costly.
We'd like to know the issues but the Mayor will not answer the questions in public.
Up 26 Down 7
This Mayor is financing grants with deficits on Jun 27, 2015 at 8:59 am
In 2013 the CoW gave away a million dollars in grants according to their reports. No one minds helping groups.
But when you have this Mayor financing grants with deficits in water and sewer someone needs to get it right before the paddlewheeler sinks.
Up 20 Down 8
This Mayor mismanagement has cost residents a lot of money on Jun 27, 2015 at 8:36 am
This major mismanagement has cost residents of the CoW a lot of money and it will take 10 or more years to clean up the mess.
It will also certainly cost taxpayers a lot more for our municipal services. It will make the CoW a less competitive City to live in because of municipal costs.
Business will get a big bill for services by this mismanagement of public business. There will be a need to cut salaries of employees and maybe lay offs. We need to face the facts now before the election in October 2015.
When your water and sewer costs are out of control, when is it going to end?
CoW employees have the best knowledge on solutions to the problem because they manage the system but they need an Executive Officer that will listen to them not fire them because they can't get along.
For the residents of the City of Whitehorse and Yukon these are the types of messes if you vote in the wrong people to manage our public business and this Mayor supports the liberals so what does that tell voters.
Up 39 Down 33
A soccer complex would have given the CoW $220,000 dollars grant in lieu on Jun 26, 2015 at 9:10 pm
A new soccer complex would have given the City of Whitehorse $220,000 thousand or more in grant in lieu of taxes that the Yukon Government agreed to pay plus millions of dollars in sport events for the City. That would have created 10's of thousands of dollars for business in the City of Whitehorse and created 1000 man hours of work that would create more tax revenues for the City of Whitehorse.
People who do not know what they are doing are dangerous for the Yukon and City of Whitehorse because they only think of themselves not the greater good of all.
Wilf Carter
Up 32 Down 2
Miles Miller on Jun 26, 2015 at 2:15 pm
I agree with "Tough choices for the next mayor and council".
Council accepted the firing without cause of 2 longstanding Managers. The Severance Package they received needs to be disclosed. Was it over $500,000? Council has to accept responsibility for this as does the new City Manager.
The City is down $800,000 but hides how much the firings contributed to the deficit.
Up 41 Down 1
Tough choices for the next mayor and council on Jun 26, 2015 at 11:30 am
Tough choices for the next mayor and council to get the City sailing properly on fiscal route of good public business for the residents.
People of the City of Whitehorse need to know the true facts that have been kept from us on where the City is at financially!
Up 105 Down 3
water and sewer rates gone up by almost 300% in last 25 years on Jun 25, 2015 at 6:57 am
What's the problem with water sewer rates going up by almost 300% in the last 25 years in the CoW? That is 12% a year on average. The information is on the front of this paper. Someone better get a handle on that because no one is doing anything about it.
The Mayor wants to help people to get into houses. It does not work when you can't afford your water and sewer bills.
There needs to be an evaluation of the CoW operations by an independent firm and give the residents an understanding of the situation.
Up 77 Down 3
moe on Jun 24, 2015 at 2:51 pm
How about axing the sustainability department and going straight to the consultants that we pay to do the work in that department? (like designing a blue box collection service for instance.) Cut out the middle men and women. Ought to save a few hundred thousand there between salaries, benefits, office space, and plane trips to the east coast to attend awards banquets for sustainable behaviour.
Up 59 Down 4
Adele Sandrock on Jun 24, 2015 at 1:22 pm
Alan M. - oh yes it was a great loss, to let capable people go. Their sacking makes at least half of the $ 800.000 of the deficit I can imagine.
Kick the current invisible Mme. City Manager, Sustainability Manager, Director of Corporate Services and some other Puppets to the curb as well and the City will even be in Surplus.
Added bonus: Cut the inflated salaries 10 % and you will see the City will swim literally in money, so to say.
Imagine what the deficit will really be if King Dan's castle will be built!!!
Up 54 Down 4
north_of_60 on Jun 24, 2015 at 12:42 pm
@Alan M "It makes sense to fund the deficit from the reserve- is that not why the reserve is there? "
Did you miss this part of the article? "the reserve ... is due in large part to federal gasoline tax funds the city has received."
The Mayor & Council use our federal gasoline tax refund as their slush fund to cover their inept administration and their pet 'sustainability' boondoggles.
Up 24 Down 75
Alan M on Jun 24, 2015 at 9:21 am
It makes sense to fund the deficit from the reserve- is that not why the reserve is there?
I know its very easy for many people to beat up on the city for continual increasing taxes. The next mayor and council should keep this in mind when they are trying to get elected. People want a year or two without a tax increase and modest increases which are generally consistent with inflation. People who do not have indexed pensions have difficulties with high annual tax increases.
I think many city staff members do excellent work but in many cases there are unanticipated expenses because you cannot always predict what may take place - that is why there is a reserve fund.
It was a great loss when two seasoned city managers were let go.
Up 57 Down 2
Sigh on Jun 24, 2015 at 5:57 am
It's not even June, and already a huge variance in the budget - what month is this shortfall based on (City is notorious for being slow to reconcile budget numbers)? And the numbers provided don't add up to a little over $600,000 not $800,000. In the 'real' world, budget shortfalls are made up by reducing spending in other areas, not by passing on forecasting errors to customers or stakeholders. And --- there's no such thing as 'unexpected infrastructure issues', especially for the tune of $205k for labour ... It's called 'maintenance' and should be part of the budget forecast. Ok I have to stop before I throw up
Up 78 Down 113
Lefty on Jun 23, 2015 at 10:04 pm
And to think that some of these clowns actually thought we needed an 8 million dollar soccer field. It's astonishing really.
Up 41 Down 4
po'd on Jun 23, 2015 at 7:43 pm
For the fiftieth time, rather than declaring that, shock! The electrical bill came in $226,000 over budget! Why don't you brilliant people strike a committee, hire a consultant, and turn the bleepin' lights out when and where they are not needed?!
I have been way out on the Livingston Trail, headed to Whitehorse at 3 a.m. and I can tell you all that the sky is lit up visibly from 40 miles away or more. You get into town and drive through empty streets and every single street light is on, traffic lights operating for empty roads. Get it together people. Turn off those lights progressively as traffic dies down after rush-half hour.
This goes for highway lights as well. And buildings.
Up 56 Down 6
Yukoner on Jun 23, 2015 at 4:56 pm
That's all you hear day in and day out from the so called nobles - Rate increases. well if I worked for the city I might not care ether.
Up 83 Down 8
Jim Lahey on Jun 23, 2015 at 3:46 pm
Long story short. Taxes are going up yet again because these people running our city have no clue what they are doing. And have no idea what living within our means actual represents. It's always the same senario with this city. Filmsy excuses to nickel and dime us even more. So boring and predictable.
Up 64 Down 6
Northern Guy on Jun 23, 2015 at 3:42 pm
Who is getting fired? Obviously someone did not forecast their budgets well... at least they have a reserve fund - please do not take it out on ratepayers!
Up 79 Down 8
Lost in the Yukon on Jun 23, 2015 at 3:36 pm
Where does one start ... maybe just an "unbelievable" is comment enough.
For those on pensions / fixed incomes who have saved all their lives to try and live reasonable well after retirement ... give up on that when you have a City Manager making $160,000.00 plus a year and Director's making not much less ... spending your money does not phase them. Heck they probably can't even balance their own cheque book.
Time to sweep this Council and Senior Management out and start fresh.
Up 105 Down 4
Scott on Jun 23, 2015 at 3:34 pm
I find it hard to believe this occurs every year. I bought my home in 2007 and every year the water/garbage costs go up, as do the property taxes. Water and garbage has doubled while property taxes have risen over 50%. In the meantime my pay has not risen. This is poor management and it must be rectified.
Up 52 Down 9
north_of_60 on Jun 23, 2015 at 3:26 pm
"the reserve will remain at a “healthy level,” she acknowledged, that is due in large part to federal gasoline tax funds the city has received."
Notice how the Mayor & Council use our federal gasoline tax refund as a slush fund to benefit those who use municipal utilities.
A responsible government would use it to upgrade traffic lights to improve traffic flow, reduce idling, and reduce use/pollution for everyone who uses fuel.