City of Iqaluit has a $9.4 million debt

Iqaluit's new city council got a crash course on the city's difficult financial positionatTuesday's finance committee of the whole meeting. The cityhas a $9.4 million debt, up from $8.2 million last year.

The financial hole the city finds itself in is the result of three years of consecutive deficits. Over the last six months, the administration has been freezing spending and making changes to municipal services to try to save money.

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But officials say, it's not enough.

"We have to snap out of this illusion of paying one cent for a litre [of water]," John Mabberi-Mudonyi, the city's director of corporate services told council.

"In Rankin, correct me if I'm wrong, they pay around ninecents, that's why they are managing their infrastructure very well."

This year, the opening balance for the city's water and sewerfund showeda deficit of $5.5 million. However, over the last 11 months, city staff have managed to keep their operating budget in the black, bringing in a net cash flow of $877,000. That surplusis a small but important first step to start chipping away at the opening balance.

The city's chief administrative officer, Muhamud Hassan, says it's absolutely necessary to move all of the city's operating funds tosurplus before 2017.

Hassan says a true picture of the city's finances will only be clear in2017 when the new $40 million aquatic centre opens.

"If we had a minus today on the general fund, imagine come 2018 you would have a deficit on a annual basisplus that debt," said Hassan.