City of Saskatoon faces $52-million shortfall heading into next year's budget

The City of Saskatoon is facing a $52-million shortfall as it begins its budget process for next year.

That revenue gap is "probably close to double" the amount that city administrators have faced in the past when starting the budget process, chief financial officer Clae Hack said at a media briefing on Wednesday.

If there are no cuts to services or future growth plans, city residents would face a property tax increase of 18.56 per cent next year and 6.95 per cent the year after, the city said. But the multi-year budget process for 2024 and 2025, which is starting this month and will wrap up in November, will be focused on lowering that number.

Hack stressed the city isn't recommending a property tax rate at this point, just offering a "fully transparent view" of what administrators and city council will be wrestling with.

"We have to find that balance between what is the service level and what citizens and residents and the city can afford going forward," Hack said. "Everything's on the table at this point. As I mentioned, nobody's happy presenting these numbers. Administration's not happy. We don't expect residents, businesses or city council to be happy with where the numbers are at right now."

Inflation, growth and base budget "adjustments" are among the pressures facing the city, Hack said. As well, revenues have not recovered post-pandemic as much as the city expected.

Examples of the inflationary pressures include a 60 per cent increase in the cost of a new fire engine — $1.5 million this year compared to $900,000 as little as two years ago — and a 30 per cent increase in road maintenance contracts.

Growth pressures cited by the city include the Recovery Park landfill expansion, Saskatoon Transit services to newer neighbourhoods, a future east leisure centre, a future fire station, bus rapid transit phase-in and emergency snow response.

The downtown entertainment event district — featuring the planned new downtown arena — is not part of the budget process, as the city is working with a consultant to come up with funding options that would not rely on property tax, Hack said.

He noted the transition of the black cart garbage bins to a utility program in 2024 has been factored in. That will result in a savings of $7.4 million in the operating budget — "lowering any property tax potential increase" — but residents will see a new fee for the carts on their utility bills.

In previous years, administrators have given city council an indication of what potential tax increases could be, tied to certain decisions. This year, they are not.

"Our approach so far is not to budget toward a number, but really to consider the implications of every decision that needs to be made and balancing that against the property tax impact that it would have on residents and businesses," Hack said.

"It's the start of the process, and there will be lots of decisions and discussions over the next couple months as that number, no doubt in my mind, begins to get whittled down. But in terms of where it actually ends up, there's lots of implications to be considered in those future reports."