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A 'rather different fiscal reality' set to inform future Whitehorse councils, says city manager

City of Whitehorse city manager Jeff O’Farrell painted the bleak picture at an August standing committee
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Whitehorse city manager Jeff O'Farrell at a Whitehorse standing committee meeting on Sept. 3, 2024.

Months before Whitehorse's new city council was elected, city staff already had a dire warning for them. 

“The next Council's selection of strategic priorities is going to be informed by a rather different fiscal reality than this council, or recent councils, has faced,” said city manager Jeff O’Farrell at a standing committee meeting on Aug. 20, 2024.  

“We've essentially drawn down our reserves to the extent that they can be drawn down upon. And there's no more money in reserves to draw down upon to meet our financial pressures,” said O’Farrell.  

Whitehorse is facing financial concerns.  City staff say external funding sources are dwindling, and senior financial advisors within the city say Whitehorse can’t afford to drop down on reserves any more than it already has.  

Reserves are a collection of funds the city uses to maintain the city and prepare for emergencies, Svetlana Erickson, the city’s manager of finances, told the News on Oct. 25. Most reserve funds have specific purposes: for example, the equipment reserve is used to buy equipment.  

Some reserves are uncommitted: they can be used for any capital project, said Erickson. Those reserves are the capital reserve, the general reserve and the contingency reserve.  

As of the most recent financial report, the city’s reserves are currently at $70.8 million. However, that number is held against the budget for 2024 and any project from earlier years that is not yet complete, said Erickson. Even though it’s not realistic that every ongoing project in the city will be done before the end of 2024, city officials will subtract all project costs from the opening reserves balance, with any expected contributions included, said Erickson.  

This gives a picture of how much money the city has already committed to capital projects, using the current level of reserves, said Erickson. "If everything is working as planned, and you know, all projects are completed with no cancellations, with every project completed on budget, but then the reserves would be withdrawn to $40 million.” 

$40 million may not seem like a pittance, but the City of Whitehorse has some expensive projects coming down the pipe.  

At the Aug. 20 standing committee meeting, O’Farrell estimated the city’s infrastructure needs for the next 15 years could cost a total of $1 billion. 

One example he listed is the Selkirk Water Treatment Plant. The water treatment plant was named as a priority in former mayor Laura Cabott’s capital budget speech in November 2023, as she referenced the influence of surface water on the city’s aquifers, where the drinking water comes from. 

The city detected giardia – a parasite which can cause gastrointestinal distress in humans – in city water well 10 in March of 2024. The well was deactivated promptly. 

READ MORE: Giardia detected in Whitehorse well, city promptly deactivates it

The discovery followed non-viable giardia cysts being found in other water wells in 2014, 2016 and 2020.  

In June 2024, the city announced it had awarded a contract to Wildstone Construction and Stantec Ltd. to start on the first phase of the project. The contractors will look at expanding the current Selkirk Water Treatment Plant in Riverdale, according to the city’s announcement of the contract. The expansion will involve drawing drinking water from Schwatka Lake in addition to the Selkirk Aquifer.  

 The project is expected to cost $55 million. There is currently no confirmed funding source for this project, said O’Farrell at the August standing committee meeting.  

“If it has to be covered by all internal reserves, if we know that with all projects completed, we'll have 40 million,” said Erickson in the Oct. 25 interview. “So what's going to happen, where the rest of 15 million comes from?” 

In an interview with the News on Aug. 23, 2024, then-mayor Laura Cabott said the city does not have the money for the project.   

Cabott petitioned the federal government for funds over her term as mayor.  

As reported by the News in December 2023, she visited Ottawa and met with federal housing and infrastructure minister Sean Fraser.  

READ MORE: Mayor’s trip to Ottawa sought federal funds as Whitehorse continues to grow

She asked Fraser to double the amount of funding that Whitehorse receives from the Canada Community Building Fund. He told her the contribution would likely be the same size as it had been in years previous.  

Cabott also tabled a motion about federal funding with city council in April 2024. The motion’s three resolutions asked the federal government to maintain the CCBF as a source of direct, predictable long-term funding, to commit to the next generation of infrastructure funding streams, including one for water and wastewater infrastructure and an increased Disaster Mitigation and Adaptation Fund, and to convene jurisdictions to negotiate a “Municipal Growth Framework,” to modernize the way municipalities are funded.  

The motion was carried unanimously.  

Federal money has already covered three-quarters of the $61-million price tag for the Robert Service Way restabilization – leaving $15 million outstanding. The city still has to find the money for the remainder for the project, said Cabott in the August interview with the News.  

During the Aug. 20 standing committee, O’Farrell also identified the Canada Games Centre as a facility that will face significant needs in the future. In the 2024 to 2027 city capital budget, the Centre is listed as needing over $8 million in repairs and upgrades.  

 “You look at some of our aging residential neighbourhoods for which we don't have confirmed funding sources to rebuild the infrastructure there,” O’Farrell told councillors. “You look at some of the city's buildings, like Takhini Arena, we don't have confirmed funding sources to do significant upgrade work there.” 

Additionally, O’Farrell said reconstructing a given downtown street alone costs $10 million. 

In an emailed statement sent to the News on Sept. 26, Housing, Infrastructure and Communities Canada said it has made 51 infrastructure investments with a funding total of almost $300 million in Whitehorse since 2016.  

The federal ministry said it provides funding through bilateral agreements with provinces and territories, and to project owners who submit funding applications.  

It said regions will see varying infrastructure investment from year to year based on multiple factors such as the number of applications submitted, funding stream envelopes, project eligibility and merit.  

“The recent renewal of the Canada Community-Building Fund agreements with all provinces and territories will ensure continued funding through this program for another ten years,” the ministry said in an emailed statement.  

They said the territorial government has until the end of March 2025 to identify the projects for funding from the Investing in Canada Infrastructure program.  

“Project construction and claims payment under this program is expected to continue for the coming decade,” said the ministry.  

Cabott told the News on Aug. 23 that the federal government has no major municipal infrastructure funding programs that Whitehorse would be able to utilize.  

“There's some, but it's small compared to what we've had in the past,” said Cabott.  

“So we have these challenges, these realities, and both the federal government the territorial government, aren't providing the same kind of infrastructure funding that we have relied on,” she said. “We have to tighten our belts.” 

Contact Talar Stockton at talar.stockton@yukon-news.com

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