City of Iqaluit has a $9.4 million debt
Iqaluit has a $9.4 million debt, up from $8.2 million last year
Iqaluit's new city council got a crash course on the city's difficult financial position at Tuesday's finance committee of the whole meeting. The city has a $9.4 million debt, up from $8.2 million last year.
The financial hole the city finds itself in is the result of three years of consecutive deficits. Over the last six months, the administration has been freezing spending and making changes to municipal services to try to save money.
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Iqaluit service changes aimed at getting finances in order, says official
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Iqaluit's switch to scheduled water delivery still causing concerns
But officials say, it's not enough.
"We have to snap out of this illusion of paying one cent for a litre [of water]," John Mabberi-Mudonyi, the city's director of corporate services told council.
"In Rankin, correct me if I'm wrong, they pay around nine cents, that's why they are managing their infrastructure very well."
This year, the opening balance for the city's water and sewer fund showed a deficit of $5.5 million. However, over the last 11 months, city staff have managed to keep their operating budget in the black, bringing in a net cash flow of $877,000. That surplus is a small but important first step to start chipping away at the opening balance.
The city's chief administrative officer, Muhamud Hassan, says it's absolutely necessary to move all of the city's operating funds to surplus before 2017.
Hassan says a true picture of the city's finances will only be clear in 2017 when the new $40 million aquatic centre opens.
"If we had a minus today on the general fund, imagine come 2018 you would have a deficit on a annual basis plus that debt," said Hassan.