Saskatoon city council begins process of eliminating $52 million budget shortfall
Saskatoon city councillors and city administration met publicly Wednesday for the first time since last week's budget bombshell, which detailed a $52.4 million funding gap in 2024, and a projected $23.2 million revenue gap in 2025.
"It's easy to see that our expenses and revenues are headed in the wrong directions creating additional pressure on our property tax budget," chief financial officer Clae Hack said during his initial presentation to councillors.
The usually straightforward governance and priorities committee ran hours longer than usual because of the "unprecedented" financial situation facing the city. Hack spent more than three hours answering questions from council to understand how inflation upended the city's books.
Hack cited costs for products like asphalt, plastics and wood products rising anywhere from 20 per cent to 52 per cent since 2019. He said inflationary increases like that are the largest driver of the shortfall. With federal COVID-19 funding ending in 2023, the city will be unable to maintain service levels without large tax increases.
If the revenue gap isn’t confronted, the city would be faced with an 18.56 per cent property tax impact for 2024 and 6.95 per cent the following year.
"There will not be an 18 per cent tax increase period," councillor Zach Jeffries said. "In fact, as far as I'm concerned, there will not be a double-digit tax increase."
"Buckle up -- it's gonna be a fun few months in Saskatoon city council chambers."
A series of summer special budget meetings are scheduled to find as many savings as possible. On Wednesday, many councillors were targeting a four to six per cent property tax increase. Sarina Gersher put forward a motion to task administration to explore a nine per cent tax increase.
"I think now is the time we need to ask some big questions of ourselves and our residents, and we need to decide what our business is," Coun. Randy Donauer said.
The first special budget meeting is scheduled for June 22, where administration will present options to reduce upwards of $20 million of the funding gap.
The targeted six per cent property tax increase would be about $35.5 million in reductions. A four per cent increase would save $41.1 million in the 2024 budget.
For the June 22 meeting, administration will present three options to reduce the required inflationary requirements for city programs, ranging from a 50 per cent reduction, a 75 per cent reduction and a combination of both while also reducing other programs more significantly.
Administration is recommending option two, which would see a 75 per cent reduction in inflationary allocations, with some budget items reduced further. Those increases would be phased in for future budgets.
The rationale provided by administration says option two provides the most readily available path to getting any property tax increase under 10 per cent.
With the magnitude of the financial issues facing the city, councillors are well aware of the implications of a looming tax hike.
"Everything is on the table," coun. Troy Davies said. "I think that you'll be seeing an entire new council in the next election if we don't do something about this."
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