Saskatoon may seek loan to pay for snow removal and repay it through tax levy

City councillors are facing another budget decision, this time on how to pay for snow removal during extreme weather events.

The unusually large dump of snow during the last week of December led to the city executing the Roadways Emergency Response Plan to clear the streets.

There have been major snow events in two of the last three years.

Although the exact cost of the work is not yet known, a report from city administration says it could be as high as $20 million, partly due to inflation for fuel and hourly rates.

The report says there will be an impact on operating budgets for 2022 and 2023.

It says reserve funds are normally used to plug budget deficits, but the money in those reserves is already going to be needed to address a projected $8.3 million deficit for 2022.

“As minimal or no stabilization reserve balances will be able to offset these additional expenditures, other financial strategies are required to fund this response,” the report reads.

It adds that during budget deliberations in 2021, once other budget decisions were made, council did not provide funding support for the Roadways Emergency Response Plan.

City administration is now recommending that council borrow the money to pay for the immediate cost of snow removal, and then add the cost of repayment to property taxes while building-in base funding to ensure there is money available for future weather events.

The report says the city could add a levy of 0.75 percent to property taxes each year for four years starting in 2024.

“This approach would build up $8.4 million worth of base funding by 2029 which could then be utilized for annual service level improvements as well as base funding/reserve contributions for the Snow and Ice Emergency Response Plan” the report says.

The report based the numbers on a repayment cost assuming $14 million was borrowed at 5 per cent annual interest.

The report is on the agenda for the Governance and Priorities meeting scheduled for Tuesday.