City of Prince Rupert looking at deficit in excess of $900,000 in 2010
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Updated: November 24, 2009 2:16 PM
After going through some difficult time following the closure of the Watson Island pulp mill, the City of Prince Rupert is looking at more tough choices ahead due in part to rising costs and lower revenues.
“We have been working on the 2010 financial plan and at this point in time we’re looking at a fairly large deficit, in excess of $900,000...There have been a number of revenue drops that we’re not going to get in the way of tax penalties and grants. Additionally we have some fairly extensive cost increases, RCMP staffing, benefit costs, collective agreements and wages,” said chief financial officer Dan Rodin at the November 23 council meeting, whose report to council outlined the loss of $385,000 from Watson Island taxes not being counted and $956,000 in “one-time revenues”.
“We haven’t run a deficit in the past three years, which means our revenues have exceeded our expenditures, but our expenditures have only been exceeded through prudent spending,” he added, noting that the roads budget has been significantly cut in the amended 2009 five-year financial plan to balance the budget.
Since taking control of the majority of Watson Island due to Sunwave’s failure to pay taxes, the City has been on the hook for approximately $100,000 per month in maintenance and expenses.
“We are balancing our budget [in 2009] by taking down the reserve, which is what we had resorted to a few years ago and gotten away from,” said councillor Sheila Gordon-Payne.
“This is where, when we move ahead into the coming years, when we look at potentially a $100,000 a month burn rate as long as we are taking care of Watson Island, we’re going to have to choose whether we are going to continue to run down reserves in our community as we did in the past or whether we will look at some serious changes as to how we conduct day to day business.”
The report also noted that some cost savings could be achieved through the implementation of recommendations contained in a 2009 service review of municipal operations.
