Saturday, November 08, 2008

City set to deliver amended budget on Monday night

The financial picture for the City of Prince Rupert took a disappointing turn this week as the City revealed that a fall in income and an increases in expenses will make for a two million dollar hit. Not the first time that the city has suddenly found itself with less money to work with than previously planned for.

The findings were delivered at yet another special meeting of council on Tuesday, as the City’s Chief Financial Officer Dan Rodin delivered the bottom line when it comes to the city’s finances for this year.

Among the disappointments was a drop in revenues from the Prince Rupert Airport Ferry, which brought in 73,100 dollars less than had been previously anticipated.

The price tag on city works expenditures also has increased rapidly, with the anticipated cost of the departments plans to now cost 1.3 million more than the city had originally listed in its budget.

The need for the amended budget is a timely little thing, coming as it does on the last session of Council before the municipal election. Providing some instant talking points for the next election debate at Chances Gaming Centre next week.

The Thursday Daily News provided a review of the Special Session of council and the downward trend in the city’s financial picture.

City looks to absorb $2m cost
Fall in income and extra expenses hit city in the pocket book
By George T. Baker
The Daily News
Thursday, November 6, 2008
Pages one and three

The City of Prince Rupert has had an unexpected $2 million increase in costs for 2008, forcing it to amend its budget for the year.

The city’s Chief Financial Officer Dan Rodin reported his findings to city councilors Tuesday at a special meeting of council.

Rodin said that the city right now is carrying $1.3 million in debt this year, which he claimed was not bad for a municipality.

“The last couple of years, we have done well to pay off our debt,” said Rodin.

But the financial albatrosses known as the Alaska Ferry Dock retrofit and the Digby Island Airport Ferry are weighing the city down, according to Rodin.

According to the figures released Tuesday, the city had expected the airport ferry to generate $913,000 in revenues for 2008.

Such optimistic hopes, though, have been dashed, and the city is now only expecting an $840,000 return from the ferry, a drop of $73,100.

During the next five yeas, the city does not expect that number to increase much, with the city’s financial department believing that it will see a minor increase in revenues to $891,416 by 2012.

Likewise, the financial department does not expect any increases in its ferry expenditures by 2012, believing that expenditures will remain flat at just under $1.9 million for the next five years.

The decrease in ferry revenue was blamed on the realization that Air Canada Jazz has not, and is not expected to, increase its number of flights from the Prince Rupert Airport as it was hoped earlier in the year.

During Rodin’s presentation, councilor Sheila Gordon-Payne found three mistakes in Rodin’s report where the engineering department was bracketed when it should not be because the position was not filled; the recreation department centre was unbracketed when it should have been because it cost the city $56,000 and the solid waste revenues and expenditures were wrongly bracketed as well.

“I am a better accountant than typist,” said Rodin.

The biggest increase in costs was the city works expenditures that will be almost $1.3 million more than the city had originally budgeted for.

As far as the pulp mill is concerned, the city has spent some of the $6 million it expected to be generating this year from the Watson Island site. Sunwave, the current China-based owners of the pulp mill, were given a ‘sweetheart’ tax deal by the city to encourage the owners to get the mill up and running.

To this date the mill stands empty and the property will revert back to the city by next October if the Sunwave group does not pay the tax money owed.

The city will give the amended budget is final reading Monday at the scheduled regular council meeting.

No comments: