Whitehorse is $805,215 in the hole.
It is the largest shortfall in the city’s history.
Employee raises caused the shortage.
The city was forced to evaluate the work its employees did, rejigging their pay commensurate with their duties.
Administration set aside $1 million to cover the cost of the job-evaluation system.
But it underestimated the cost by 80 per cent.
“It’s a balancing act,” said Robert Fendrick, the director of administrative services. “You never know until the budget gets finalized.”
The intent of the job-evaluation system was to put all city employees on a pay scale, abiding by the principle of “equal pay for equal work.”
The city had a strict definition of what that meant.
When negotiations between Whitehorse and its unions broke down, the city sought clarity from the Yukon Human Rights Commission.
In December, the commission sided with the unions.
So, employees above the new pay scale would not have their salaries and benefits frozen.
And that meant the city would be paying more than it had budgeted.
The city can’t run a deficit. It is legally required to balance the books.
“It really does create some challenges,” said Robert Fendrick. “We have to do more work with less is what it amounts to.”
Last night, Fendrick proposed pulling cash from its capital reserves and delaying playgrounds, landscaping and street renovations to save $1.1 million.
All told, there are 18 projects administration wants to put on the back burner.
The rest of the savings come from the operating budget.
The plan proposes reducing wages, benefits and operating costs across all departments.
There are no plans to roll back salaries or lay people off, said Fendrick.
Instead, the plan is to simply not fill vacancies that come up.
That doesn’t mean there is a hiring freeze, but every position will be looked at closely, said Fendrick.
The trick is balancing revenue generation, saving money and providing service, he said
“We’re a service-oriented organization.”
The more than $1 million in savings is hundreds of thousands of dollars more than the city needs to cover the shortfall.
That extra $300,000 will help cover repairs to the Canada Games Centre, which was damaged by fire a few months ago.
“There may be some things that won’t be covered by insurance,” said Fendrick.
The large shortfall should be a catalyst to change city operations, said Coun. Ranj Pillai.
“I really hope now I’ll get support and buy in for an organizational review to look at our costs,” he said.
While he said he was saving most of his comments and questions for next week, he expressed frustration at how easily staff identified savings.
“Essentially, in four months, we are going to make up almost a quarter of a million dollars by just cutting back one per cent,” said Pillai. “It makes it difficult, because in our budget conversations we never get that sort of leeway, and we constantly ask how can we cut our budget.”
The plan will come back for more discussion next week.
Contact Josh Kerr at
joshk@yukon-news.com