Saskatoon budget facing 'headwinds,' projecting $5.3M operating deficit

The City of Saskatoon says it will have to use reserve funds to cover a projected $5.3 million operating deficit this year according to a mid-year financial report.

The report says the deficit is largely due to city-wide snow clearing in March, when the city’s emergency response plan was triggered following a heavy snowfall. The city would draw from the snow and ice management reserve to cover the shortfall.

While the rest of the budget is currently still balanced, the city sees some potential pitfalls on the horizon.

“While a balanced budget is currently forecasted it is important to note that the administration is facing several headwinds in its efforts to achieve this result” the report says.

The budget calls for the city to find $3.75 million in savings this year to balance the books, but it leaves little wiggle room.

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“This targeted savings approach puts pressure on the 2024 budget with little margin for additional unforeseen circumstances.”

City administration says spending restrictions throughout this year have helped save a projected $3.5 million.

Legislation does not allow the city to run budget deficits. If expenses surpass revenues, it has to dip into its already diminished reserves, raise taxes, or borrow to cover the shortfall.

The city faces several financial challenges this year, including lower than expected parking revenue, and the grant-in-lieu from Saskatoon Light and Power is expected to be lower because a planned rate increase was never implemented.

The report is projecting $1.7 million in fuel savings due to slightly lower than projected gas prices, and transit operations are forecasting $779,000 more in revenue than predicted, mostly from improved ridership.

The fiscal update is on the agenda for next week’s finance committee meeting at city hall.