Saskatchewan

City of Saskatoon projects deficit of nearly $7M in 2022

The City of Saskatoon is projecting a deficit of around $6.8 million, mainly because of rising fuel prices and a snowy start to the year, the city says.

City says shortfalls are due mainly to to higher gas and diesel prices, amount of snow

As of Thursday, the city of Saskatoon projects a year-end deficit of around $6.8 million, a 1.17 per cent unfavourable variance from budget. (Courtney Markewich/CBC)

The City of Saskatoon is projecting a deficit of around $6.8 million, mainly because of rising fuel prices and a snowy start to the year, the city says.

The 2022 financial forecast, which will be presented to the city's standing policy committee on finance Monday, predicts a gross year-end deficit of $6.8 million, or a 1.17 per cent "unfavourable variance" from the budget.

"This is due in large part to higher than anticipated gas and diesel prices, which had a $3.5-million impact on the budget, and to high snow accumulations in the first half of 2022, which resulted in a projected $3-million unfavourable variance," said director of finance Kari Smith in a news release from the city.

"The mid-year forecast is our best estimate of the 2022 budget position at this time and is still subject to substantial change throughout the second half of the year."

The projected deficit also includes over-expenditures in information technology, the city said in its news release.

The projection also includes reduced revenues from leisure facilities and parking, according to the 2022 financial forecast document.

The report also includes some positive trends.

Utilities are expected to bring in a $1.2-million net surplus, according to the city's report, though they are offset by additional costs and lower revenues in water and wastewater utilities.

Other factors are $2.5 million in administrative savings due to reduced training and travel and staff vacancies, said Smith in the news release.

The city also expects $1.05 million more than expected in investment returns due to rising interest rates, and a $1.13-million increase in municipal revenue sharing, according to Smith.

The city's news release says it has already developed options that could reduce the deficit by up to $4.2 million, "including a one-time increase to the Return on Investment from the Water Utility, returning capital funds back to operating as opposed to reserve, and deferring reserve contributions to mitigate the deficit."

The city said it is looking at additional ways to save money, such as spending and hiring freezes, without affecting service levels.

Smith said the city has reserves to cover a deficit like this, but the goal for the year is to avoid depending on them.

The mid-year forecast also includes information about the financial status of the city's controlled corporations such as TCU Place and Remai Modern.

The city predicts a deficit of around $907,000 for TCU Place in 2022, while Remai Modern is estimated to break even for the year, the report says.

ABOUT THE AUTHOR

Theresa Kliem

Journalist

Theresa Kliem is a journalist with CBC Saskatoon. She is an immigrant to Canada and loves telling stories about people in Saskatchewan. Email theresa.kliem@cbc.ca.

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