Saskatoon City Hall projecting $5.7M deficit, has plans to get out of the red

SASKATOON -

The City of Saskatoon is projecting a year-end deficit of $5.7 million for 2021, which it says is driven by the $3 million overage in the transportation business line because of the snow cleanup following the November 2020 blizzard.

The city said a contingency fund of $3.7 million from the Canada Community Building Fund, as well as $1.25 million from the province as payment for prior years’ highway maintenance by the city, brings the total year-end deficit to $739,100.

City administration put spending and hiring restrictions in place at the start of the COVID-19 pandemic that have carried into 2021, which the city anticipates will offset the overall deficit by $1.3 million, the city said. 

Surpluses and deficits by business line:

Utilities – Projected $8.1 Million Surplus (will be offset through transfers to reserves)

Community Support – projected $350,000 surplus

Corporate Asset Management – projected $950,200 surplus

Urban Planning and Development – projected $185,000 surplus

Recreation and Culture – projected $411,700 surplus

Transportation – projected $3.6 million deficit

Corporate Governance and Finance – projected $2.5 million deficit

Environmental Health – projected $216,000 deficit

Fire Services – projected $971,000 deficit

Taxation and General Revenue - projected $37,300 deficit

According to an administration report, Sasktel Centre is looking at a deficit of $3.7 million because of cancelled events during the pandemic, but that amount could change if it’s required to repay $1 million to the Canada Emergency Wage Subsidy. The deficit will be covered by the organization’s stabilization reserve, as well as transfers from its capital reserve fund after board approval.

TCU Place is also forecasting a deficit of $2.9 million, which will be covered by its capital expansion reserve. The Remai Modern art gallery is projecting to break even in 2021, according to the city. 

City of Saskatoon Director of Finance Kari Smith said given the challenges the COVID-19 pandemic has presented, the city is in good financial shape heading into 2022.

"We still do have some COVID impact into 2022, around $13 million or so as an impact in ‘22, and that impact is still ongoing in ‘23 as well,” Smith said. “Those are going to be built into the budget as one-time funding essentially, that will be needed to cover that. 

“There will be COVID impact for the next number of years, and we do project that there will still be ongoing transit impacts passed that, but hopefully we can manage that with some of the funding that we have put away.”

Smith said preliminary tax increase numbers that the city released in June forecasting an increase of 5.96 per cent in 2022, and 5.42 per cent in 2023, could be adjusted when the city releases its preliminary budget later this month.

“You'll see that the percents that we have, have actually come come down quite a bit, and that was just a revision of estimates,” she said.

"That's just preliminary so council will still have to debate that at the end of November."