The City of Yellowknife's draft 2021 budget will be released on Nov. 3 and based on discussions this week, the municipality is expecting revenues and expenses to be under budget with some capital projects expected to be carried forward into next year.
City administration presented its third quarter forecast and variance report at Monday's governance and priorities committee which provided the city's most up to date financial reality to the end of September.
Simon Whitehouse/NNSL photo
The city's corporate services department provides quarterly variance and forecast reports to council to provide regular updates to elected members and keep track of budgetary spending.
RELATED COVERAGE: Budget update shows Covid-19 'depleting city's bank account'
The city stated that as of Sept. 30, the projected annual surplus is to be $2.171 million, which is $3.56 million lower than what had been budgeted for 2020.
"Of the $3,560,000 variance, $2,042,000 can be mainly attributed to the Covid-19 pandemic and $1,518,000 to delays in capital projects," states the Oct. 26 governance and priorities committee package.
In July's report, the projected annual surplus has been at $3,236,000.
On the revenue side, council heard that there is to be $4.672 million lower than had been budgeted for 2020, with expenses to be $884,000 under budget.
In July, total revenues had been projected to be $3.014 million lower than budgeted with expenses estimated to have been $519,000 lower than budgeted.
"It has been a roller coaster of a year alright and beyond anything we have predicted as it comes to setting the budget and implementing the budget," senio radministrative officer Sheila Bassi-Kellett said to council.
"This year at a very high level, the city's total revenues -property taxes, fees and charges, land sales - we are now projecting $4.6 million less than budgeted with total expenses projected to be almost $900,000 under budget."
Bassi-Kellett used similar language from earlier this year to describe the fiscal outlook noting that Covid has led to "depleting the bank account and moving onto savings."
"Wee are okay to (use savings) for a reasonable period of time but we can only live off of savings for so long," she said. "We are hoping to have some potential relief from the GNWT and some support from the federal government and we are very much hopeful that this will help us for preparing to step into 2021."
Budget season and GNWT relief
While the city is forging ahead with the budget season with the first draft to be presented to council next Monday (Nov. 3) the city is also hoping to have relief announced by the GNWT – ideally by that same date.
"We are eagerly awaiting how the GNWT will allocate Covid funding to communities because that will have an impact on the budget for 2021," said Mayor Rebecca Alty.
"If we receive funding it decreases the necessary tax increase."
Last week, minister of Municipal and Community Affairs Paulie Chinna announced in the NWT Legislative Assembly that the GNWT would be providing $2.6 million toward community funding.
On Sept. 21, the federal government announced its Safe Restart Agreement, which will provided almost $15 million to the Government of the Northwest Territories. The communities were to see $4.7 million of that.
Details on what the City of Yellowknife may receive were still uncertain this week.
Capital projects
Some councillors noted that it appeared that more planned municipal capital projects have come under budget for 2020 and/or are being carried forward to future date.
The city stated in an email on Thursday that capital spending is expected to be $15,545,000 under budget.
"Of this, $13,510,000 is expected to carry forward to 2021," according to an email from city spokesperson Alison Harrower. "This is considerably higher than most years, due in large part to COVID-19 related challenges encountered by the City, its contractors, and its suppliers."
Bassi-Kellett said that there are a whole myriad of reasons as to why projects don't get completed, often coming down to what city staff can manage.
"This year it was not just our capacity within city administration, but it is capacity of the community at large – the contractor and consultants to take on many of the projects," she said. "Lots of people were very busy and some projects didn't have anyone bid. There was a myriad of different reasons why there were some delays."
Coun. Shauna Morgan warned that the city can't kick the can down the road forever.
"We will have a draft budget soon but the issue is that we likely can't defer and carry over and just assume that we will be able to catch up."