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Iqaluit, GN, sign five-year, $31-million deal

Ratepayers to vote next year on borrowing

Manitok Thompson, the minister of community government, and John Matthews, the mayor of Iqaluit, sign a $31-million capital contribution agreement. The city will use the money to pay for critical water and sewer projects.

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(PHOTO BY DENISE RIDEOUT)

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DENISE RIDEOUT

The Nunavut government is giving the City of Iqaluit a $31-million helping hand so that it can become the city it has always wanted to be.

Since Iqaluit became Nunavut’s capital city in 1999, it’s been asking the GN to give it the kind of funding dollars it needs to be a "real capital city" — with paved roads and water and sewage services that meet the demands of its booming population.

Now, Iqaluit’s wishes will be granted.

The Nunavut government will contribute $31 million to the city’s 2003-2007 capital plan. The GN’s funding represents a large portion of the $51 million Iqaluit is proposing to spend over the next five years.

The government funding, which was announced on Dec. 17, the day after Iqaluit city council released its five-year capital plan, is known as a "capital contribution agreement."

It’s the first such contribution agreement the Nunavut government has signed with any of the territory’s 25 communities.

"This agreement represents a new chapter for the City of Iqaluit," Manitok Thompson, the minister of community government, said before signing the official papers.

"Today is a wonderful day," said Iqaluit mayor John Matthews, a huge smile breaking out on his face. "Today is the day that has been in the making for many months."

"This strategy and this agreement will help make the community a better community," the mayor said.

Part of the effort to improve the community is working on projects that will provide Iqalungmiut with clean, healthy water and a sustainable sewage system, Matthews said.

For example, in its five-year capital plan, the city is proposing to spend $4.1 million to complete work on the sewage treatment plant. The city has already spent $7 million over the last four years on the plant, but structural flaws have prevented it from being up and running. The city’s plan is to have it working by 2007.

It’s proposing to spend $2.7 million to expand the tank that stores Iqaluit’s untreated water and another $2.1 million on a new tank for the treated water.

Iqaluit’s streets will get a make-over thanks to the capital plan. The city is looking to put $6.5 million towards paving roads and $300,000 to improving some of the secondary roads.

How the city spends the money will be under the watchful eye of the Nunavut government.

"Because this is the first funding agreement we have done in Nunavut, I have asked my staff to monitor it closely," minister Thompson said.

When Thompson discussed the capital contribution in the legislative assembly last month, the standing committee on government operations urged her to require the City of Iqaluit to submit financial documents outlining how it’s spending the money.

City still needs more money

Even with major GN funding, the city still doesn’t have the money it needs to pay for large infrastructure projects.

That means Iqaluit ratepayers will have to dig into their pockets to help out.

The city is raising property taxes in 2003 by 2.25 per cent, and is proposing to do the same until 2007. On average, Iqaluit homeowners can expect to pay an extra $45 a year.

In addition, the city is hiking water and sewer fees by five per cent in 2003. It is proposing to continue that increase until 2007.

Still, the city needs more revenue to cover its capital costs.

It’s proposing to borrow $4.1 million in 2004 to help finance projects. If the city goes with that option, it will have to pay back $476,000 each year for 15 years.

But under municipal law, a city cannot go into debt unless it gets approval first from its rate payers.

So the city will hold a plebiscite this spring to see if ratepayers support the borrowing proposal.

In addition to the vote, city council will hold a public consultation on Jan. 21 to get residents’ views on the proposed five-year capital plan.

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