City of Saskatoon reports $6 million deficit in 2021 year-end financials

The City of Saskatoon is reporting a $6.54 million deficit in civic operating programs for its 2021 preliminary year-end financials.

Municipalities are not legally allowed to operate with a deficit. City dministration will present a plan to a standing policy committee on Tuesday that sets out the city’s financial strategy to offset the deficit.

“The preliminary $6.54 million deficit represents a variance of just over one per cent from the City’s overall Civic Operating Budget of $546.6 million,” director of finance Kari Smith said in a city news release. “Our shortfall is largely the result of snow and ice removal costs resulting from the November 2020 blizzard, higher than anticipated information technology costs, and lower than budgeted operating revenues. I’m confident in the well-laid financial plan and strategy administration is recommending to address the preliminary deficit, and importantly, it won’t impact our future service delivery to residents.”

According to a news release, there is a $12.25 million surplus in utility programs. Final numbers are yet to be confirmed in a year-end audit confirmation.

The city reduced training budgets and carefully examined spending to help make up for reduced revenue and other “budget pressures arising from the pandemic.” With plenty of staff working from home, fuel savings also helped reduce the deficit.

“While the city has continued to face significant non-tax revenue challenges in user fees and our other forms of revenue have remained flat or decreased year over year, it is important to recognize that several of our businesses also achieved surpluses in 2022 including Saskatoon Light & Power and Saskatoon Water,” Smith said.

Administration is recommending the deficit be funded by:

• $3.71 million from the reallocation of Canada Community Building Funds originally put into contingency for this specific purpose;
• $1.72 million through a one-time increase from the Water Utility Return on Investment;
• $1.11 million to be transferred from the fiscal stabilization reserve.

2021 Preliminary year-end Surpluses include:

• Saskatoon Light & Power (SL&P) reported a surplus of $4.49 million.
• Saskatoon Water reported a year-end surplus of $3.63 million.
• Wastewater Utility reported a year-end surplus of $2.74 million.
• Storm Water Management Utility reported a year-end surplus of $345,485.
• Waste Services Utility reported a year-end surplus of $1.04 million.

Additionally, the Police Board was under budget by $860,000. SaskTel Centre and TCU Place posted preliminary deficits of $3.96 million and $3.37 million respectively. Those will be balanced through contributions from their facility and capital reserves, and Remai Modern posted a preliminary surplus of $310,526.