The City of Yellowknife’s finances appear promising following an audit conducted for 2021, however, the municipality is keeping a little bit extra tucked away to deal with lingering effects from Covid-19.

Sharolynn Woodward, director of corporate services, presented the municipality’s 2021 financial report during the May 2 governance and priorities committee meeting.

She said the city is keeping more than is required in the general fund to address supply chain disruptions and increasing costs that the municipality continues to incur due to the pandemic.

According to the city’s budget fund stabilization policy, the municipality aims to keep between 10 and 15 per cent of budget expenditures in the general fund, however, that currently sits at 24.7 per cent, or $10.7 million.

“Given the likelihood that Covid is going to continue to have far-reaching impacts, administration believes that this balance can, at this point, be viewed as a prudent buffer for the upcoming months,” Woodward said.

Coun. Shauna Morgan pressed staff on why the budget policy isn’t being followed and pointed out that the city is supposed to offer full services and keep costs low for the public as much as possible.

“And so we’ve talked a lot about how these are exceptional times (with) the Covid pandemic. Is there a plan though?” she asked. “We can’t continue indefinitely, just saying we’re always in exceptional times. At some point, we either change the policy or decide we’re going to align ourselves with the policy.

“To me, it’s not ideal that we would continue to show these kinds of surpluses or extra cushions unless we decide that our policy is to have a certain sort of inflated cushion that we decide is just a good idea.”

Woodward replied that the fund stabilization policy had been created pre-Covid and that staff are recommending the extra amount be kept in the pot for another year because of uncertainties.

“We’re seeing the effects of Covid still, and we’re also going to feel this in our supply chain this year,” she said. “There’s going to be quite a roller coaster ride in our expenditures as things that we ordered a year to 18 months ago are finally getting here. But things that we’ve ordered now may or may not show up in the foreseeable future. So it would seem prudent, given these uncertainties to kind of ride out the Covid wave.”

Mayor Rebecca Alty said there were advantages and disadvantages of having the some extra money leftover in the general fund, although she agreed it does mean lesser services can be immediately provided.

Because of Covid-related facility closures and staff vacancies last year, the city saw salaries, wages and benefits all lower than budgeted in 2021.

“It’s not the ideal position at all, but I think on the flip side is we do have a bit of a surplus,” said Alty. “Inflation is the highest it’s been in 30 years and so we don’t have to freak out right now because we have have a bit of that surplus available.”

Woodward said the report is positive as there are higher-than-expected revenues and lower-than-budgeted expenditures during the year and that the city’s annual surplus reached $15.8 million over the last year.

Much of those results came about because of “extremely conservative” budgeting due to Covid fears and because of user fees, sales of goods and land sales being higher than expected, Woodward said.

Council is scheduled to cast a final vote on the financial report at the May 9 regular meeting.

Simon Whitehouse

Simon Whitehouse came to Yellowknife to work with Northern News Services in 2011. Simon obtained his journalism education at Algonquin College and the University of Ottawa. Simon can be reached at...

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