City council has lied to Whitehorse residents, said councillor Doug Graham on Monday.
It didn’t budget properly for the Canada Games Centre and now taxpayers will foot the bill.
Graham is referring to the five-per-cent tax increase in the 2007 operating budget that he attributes to the building of the Canada Games Centre.
“There should have been a contingency fund for the Canada Games Centre; we shouldn’t be dipping into capital funds,” said Graham.
“We haven’t been honest and haven’t explained to the public that we’re dipping into operating costs to fund the Games Centre,” said Graham.
The Games Centre must recover $1.8 million in revenue this year to get it out of the red.
“We’re in deep trouble, even if the Games Centre is able to recover the $1.8 million, which is almost unrealistic,” said Graham.
“We’re in tough shape for this year.”
At this rate, we’re going to have to add another five per cent tax increase over the next two years, said Graham.
Going into debt with capital expenditures may be OK as long as council tells people what it’s going to cost and, in this case, it hasn’t been open and honest, he said.
The city’s debt allowance is $50 million and currently it stands to incur a $4-million debt this year just for building a new fire hall.
But “we could be a lot worse,” said councilor Stockdale at the meeting.
“Sometimes you have to borrow money.
“I don’t think it’s true that we’re actually lying; maybe we just miscalculated running the Canada Games Centre,” he said.
Sure, this is a bad year, but next year will be better and fees will not have to be raised again, added Stockdale.
“The city is in a favourable situation,” said mayor Bev Buckway.
Like a mortgage on a house, you have to look past the dollars and cents in the first few years, said Buckway about the Games Centre.
By this she means that the centre will not begin to recoup its losses in the first couple of years, just as most houses need money put into them for renovations when first bought.
“I don’t believe we’re misleading people,” said Buckway on Tuesday.
“When you think back to the planning of the Canada Games Centre, which would be about five years ago now, the best estimates at the time were put forward and that’s what you work with; without a physical building there to heat, you can’t say for sure what those costs are going to be.
“Even after you’re in it for six months, you’re still learning how the building works … and so you have to get used to things and see what you can do.
“How much effect will it have if you turn the temperature down one degree? Those are things that we have to really work with.
“So we’re using the best estimates that we had at the time and yes, sometimes they change and yes, there are more costs than we had estimated for it.”
We now have to seek out creative solutions to the problem, said Buckway.
This will involve encouraging more people to use the building to get the Games Centre revenues up.
The Canada Games Centre problem needs a creative solution, said Councillor Jan Stick.
“We give city workers a discounted pass to the centre,” said Stick Tuesday.
“Why can’t (the Yukon government) do the same, then we’d have all those people using the centre.
“We just have to think outside the box a little bit to come up with a solution.”