As tax season comes to a close, the City of Yellowknife says it had a “strong financial year” in 2020, ending with a surplus of $7.96 million.
According to the city’s latest financial report, revenues came in slightly above budget and expenses under budget in 2020. The city says this represents a mix of higher income from grants, transfers and investment, alongside lower-than-expected costs for salaries, wages, benefits, and contracted work.
“This leaves the city in a strong position to manage financial implications that may arise in the future as a result of the ongoing global impacts of the Covid-19 pandemic,” the document states.
The city has had an operating surplus for the past five years. That surplus and some debt repayment has helped the city get to a point where, since 2018, its assets have outweighed its liabilities. The city expects that to continue in 2021 but it could change in 2022 if construction of a new aquatic centre goes ahead, which will require the city to borrow a significant sum.
Due to the “unpredictable financial impacts of Covid-19,” the city opted to maintain a higher-than-normal balance in its general fund for 2020. This fund supports city operations like public safety, transit and street maintenance.
Currently there is $13.3 million in the general fund, or 31 percent of 2020’s budgeted expenditures. The city’s budget policy specifies that the general fund should maintain a balance between 10 and 15 percent of budgeted expenses.
Leaving more money in the fund means more flexibility if unexpected operational costs arise, but runs contrary to the city’s normal policy of moving extra money out of that fund so it can be spent on things like infrastructure instead.
The city’s regular operating expenses have increased on average by 3.6 percent annually over the past five years. That trend is expected to continue: costs are expected to rise due to inflation, as are wages and benefits through collective bargaining.
Local spending target met
Eighty-six percent of the City of Yellowknife’s total spending in 2020 went to local businesses, exceeding the city’s 85-percent annual target, councillors heard on Monday.
According to its 2020 local spending report (pages 16-19), the municipality spent $34.3 million in Yellowknife and $5.5 million outside the city.
“We’re very proud of our work in 2020 to support the NWT Yellowknife-based economy,” city manager Sheila Bassi-Kellett told councillors on Monday.
Councillor Niels Konge said the report was helpful as it shows which goods and services aren’t currently available in Yellowknife, gaps he said local businesses could potentially fill.
The report states goods and services unavailable locally included chemicals used for water treatment, parking metres and maintenance, video streaming, software updates, solid waste facility equipment, ice rink and pool equipment and maintenance, traffic light equipment and maintenance, and firefighting equipment.
Over the past decade, city figures show it has reached or neared 85-percent local spending in all years except 2014 and 2015. The percentage dropped in those years, the city said, because of large payments to the non-local business that was awarded the contract for a new water treatment plant.
The percentage spent locally in 2020 was fractionally lower than in the past two years. The city’s local spend represented 88 percent of expenditures in 2018 and 87 percent in 2019.