City of Saskatoon looking to offset $5.7M deficit with contingency money

The City of Saskatoon is looking at ways to offset an almost $6-million deficit, created in large part by cleanup efforts from a large snowstorm last year.

The city's finance director is forecasting a $5.7-million deficit in Saskatoon's 2021 year-end financial forecast. The report said most of the deficit is due to $3 million spent on city-wide snow removal after a blizzard last year.

In a report, administration said the deficit could be largely paid for by $3.7 million from the federal Canada Community Building Fund that had been put into contingency to offset any shortfall incurred by the city this year.

The city also placed into contingency another $1.5 million from the provincial government for prior years' maintenance on highways that were maintained by the city.

Using the contingency money would bring the year-end deficit to $739,100.

There was some good news coming out of the city finances. Utilities, including Saskatoon Light & Power and Saskatoon Water, brought in an $8.1-million surplus in 2020, mainly due to hot, dry weather that had people using more water and power than normal.

Normally, any surpluses from utilities go into stabilization funds. However, at Monday's governance and priorities committee, some councillors were interested in using the money to offset future tax increases.

"We're in a tough financial year with COVID," said Coun. Randy Donauer.

"Is there any consideration when we get to the end of the year if we still have a negative variance? Is there any ability for us to take more of a return on investment out of this to help offset that?"

Angela Gardiner, the city's general manager of utilities and environment, said bumps in utility payments are generally put into reserves for a reason.

"If we were to perhaps take some of this money from a surplus, transfer it to general revenues, that could impact future rates, where we'd have to increase them in the future," she said.

"So, by putting it into either the stabilization reserve or into the utilities capital reserves, it helps us to minimize the utility rates in the future."

City manager Jeff Jorgenson said the issue would be best dealt with at budget deliberations later this month.

Some city controlled corporations have taken a hit during COVID-19. SaskTel Centre is forecasting a budget deficit of $3.7 million due to lost revenue and TCU Place is forecasting a deficit of $2.9 million.

Both venues plan to cover their deficits through the use of stabilization and capital reserves.

The Remai Modern is expected to break even in 2021.