City finally feeling world financial crunch

The city better pray it doesn't get a lot of snow this winter. At least that's what city manager, Robert Fendrick, is saying will help keep the city out of the red.

The city better pray it doesn’t get a lot of snow this winter.

At least that’s what city manager, Robert Fendrick, is saying will help keep the city out of the red.

At a council meeting Monday night, Fendrick announced the city will have “a potential deficit,” of nearly $500,000 at the end of this year.

This is based on figures drawn to December 31 from June 30.

Most of the deficit can be chalked up to dismal rates of return from city investments and having to pay for major projects, like the new public safety building, he said.

“We’ve also not sold land that we predicted, totalling $2 million,” said Fendrick.

The city has recently been trying to sell off property, particularly along the waterfront, as a way to boost city revenues, but with little success.

Added to the problem are low interest rates paid on investments through the Bank of Canada.

“We’ve been keeping an eye on that, but it has basically devastated our bottom line in terms of the global financial crisis,” said Fendrick

The city is hoping to offset some of the deficit using $210,000 in gas tax money from the Yukon government.

It will also try to squeak its way out of a deficit by “clampin g down on discretionary spending,” said Fendrick.

Laying off seasonal staff earlier than usual and keeping a close eye on overtime hours and staff scheduling are some of the suggestions he put forward.

“It’s not an easy situation, but it can be managed,” he said

“Basically we just have to batten down the hatches.”

City reserves may also be tapped, said Fendrick.

Contact Vivian Belik at

vbelik@yukon-news.com