As Iqaluit’s finances improve, mayor, council eye new subdivisions
“We should be able to borrow the necessary funds to finally develop a new neighborhood”
Iqaluit’s mayor is eyeing new residential subdivision developments “this year or the next,” after reviewing end-of-year financial statements for the city that show some signs of recovery from a systemic deficit.
“Without a doubt, we are years behind developing a new neighborhood,” Mayor Madeleine Redfern told members of Iqaluit City Council’s finance committee, which met April 10 to review the city’s 2016 financial statements.
“We should be able to borrow the necessary funds to finally develop a new neighborhood,” she said.
Iqaluit’s chief administrative officer, Muhamud Hassan, agreed with the mayor, adding that development is possible as various city accounts start operating in surpluses—some for the first time in years.
“In 2015, all our funds were running deficits and we promised, come 2018, we would be doing everything possible to have all the funds balanced or in the surplus,” Hassan said, who described the city’s credit as laughable less than two years ago.
“Without a doubt we should be happy about what is in front of us…because we are in a good financial situation,” Deputy Mayor Romeyn Stevenson told the finance committee.
But while bluer skies are on the horizon, the city still has a long way to go before it gets there.
All but one of the city’s six operating funds improved over 2015’s closing numbers, but the city still ended last year with a net debt of about $21 million.
That’s $2 million more than 2015’s net debt of about $19,085,000, due in part to new expenses related to the city’s new aquatic centre.
So far, the aquatic centre cost the city more than $37 million as of Dec. 31 last year, spread out between long-term debt, federal grants and city cash reserves.
More thanb $6.9 million came directly out of the city’s general operations fund for the project, accounting for over half of the fund’s expenses last year.
But beyond the bottom line, councillors are right to see a silver lining inside the financial clouds.
The city’s lands and planning fund reports a surplus of about $594,000, and the general operating and reserve funds are in the black.
That’s due in part to a one-time influx of cash through a forgiven debenture by the Government of Nunavut—totalling about $600,000—and funneled into the fund.
Between that and its $6.5 million general operating fund, the city now has cash reserves to commit to new projects in 2017.
But critical to any major project is the continued recovery of the city’s water, sewer and sanitation funds, the city’s CAO said, which despite some improvement are still operating at a $5.8 million combined deficit.
That’s a $1.96 million improvement over the deficit reported by the city in 2015.
“The water and sewer fund is one of the most difficult… we’ve had a legacy where we did not charge what was the true cost,” Hassan explained, but he said current charges will allow for the funds to slowly recover.
City council officially approved its financial statements at a council meeting the following day, April 11.
At that same meeting, councillors passed second reading of a bylaw amendment that would rezone land behind Joamie Elementary School as residential.
That area will likely be the next residential subdivision the city develops—its first in years—due to its proximity to the existing utilidor.
Kyle Sheppard, one of two new councillors elected during a municipal byelection April 10, campaigned on a central promise that he will focus on land development for the city.
Sheppard will likely be sworn in ahead of the council’s next scheduled meeting, April 25, along with Iqaluit’s other new councillor Noah Papatsie, who has served on city council in the past.
Third place candidate Sutheat Tim, who narrowly missed out on a council seat by less than 40 votes, criticized the city during the campaign for reckless spending on contracted services—like lawyers—that could be invested in-house.
According to the city’s 2016 financial statements, the city spent over $1 million on contracted services last year.