SASKATOON – The city will be in the red come the end of the year with Saskatoon city administrators projecting a $1.17 million deficit for 2014, down from an earlier estimate of $1.95 million. The projection is contained in the city’s 2014 Corporate Business Plan and Budget: The Road Ahead which was released Friday morning.
The deficit comes despite officials saying there was over $25 million in increased operational efficiencies, capital savings and service level enhancements during the year.
“We continue to effectively meet service demands, but there are several additional factors affecting our bottom line,” says the city’s Chief Financial Officer Kerry Tarasoff.
Transit operations are expected to come in $1.75 million over budget due to $2.2 million in lost revenue during the transit lockout and revenues being under budgeted by $900,000 due to a decrease in ridership. Those losses were offset by $1.4 million in savings for fuel cost and salaries.
Intensified street cleaning and sweeping will also impact the bottom line. Officials are estimating a $1.08 million deficit due to higher trucking supply costs.
Snow removal operations, waste handling services and fire operations also contributed to the deficit. The fire department is expected to have an overall deficit of $1.27 million in part due to a $1.8 million deficit for salaries after a new contract was reached.
Tarasoff said a spending freeze will remain in place until the end of the year in an effort to reduce debt.
There were areas where the city saved money or realized increased revenue.
“For example, in one of several continuous improvement initiatives, the city saved $450,000 by optimizing the chemical dosage at the water treatment plant through a reduction in chemicals used in the process,” says Catherine Gryba, the city’s director of corporate performance.
The city had higher revenue from property levies due to increased construction activity, and higher interest earnings.
The update goes to city council on Monday.
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