Budget talks are starting early in Saskatoon as city administration is beginning the daunting discussion at Wednesday’s governance and priorities committee meeting.
The city of Saskatoon is gearing up for the end of the 2022-2023 budget cycle and the start of the 2024-2025 cycle, but the COVID-19 pandemic has brought about challenges leading to pressure being placed on the budget.
“The expectation was that our revenues would fully recover to pre-pandemic levels by 2024. So we still have a little bit of a ways to go to get to pre-pandemic levels, and with that one-time funding going away in 2024 we have a gap we need to address,” said Clae Hack, chief financial officer for the City of Saskatoon.
Hack said recovery continues to be an issue as charge-based operating revenues like transit, leisure centres, parking, fines and penalties haven’t met pre-pandemic levels yet.
The report noted the city would need to see an increase of $10 million in operating revenues from 2023 to 2024 to offset the removal of the one-time funding.
Hack said the report to council highlights a lot of the pressures the city is facing, but added that Saskatoon is still in a very good spot.
“We have a AAA credit rating, we’re delivering on our services, any deficits that we’ve had in the past we’ve been able to mitigate.”
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According to the report being brought forward, the city will continue to use a discretionary hiring and spending freeze in 2023 to produce savings.
The report states the implications of a spending and hiring freeze include:
- more expenditures in future years as many discretionary spending freeze items are still required
- employee morale and turnover issues
- more focus on urgent items, meaning non-urgent items may be deferred
- potential for unintended negative impacts to service levels
Some of the 2023 budget pressures and trends listed in the report are:
- $5.5 million savings target or negative contingency built into the 2023 budget
- recovering operating revenues
- $2.6 million information technology structural budget issues
- higher than normal inflationary impacts
Beginning in 2024, the funding plan will phase in multiple city projects which had previously been deferred, such as the bus rapid transit and recreation game plan.
Hack noted there is some funding set aside for these projects, and taxes won’t be rising all at once to fund these capital projects. In 2024 and 2025 a combined $710,000 each year will be contributed to the projects, and in 2026, $900,000.
The report states the exact details of the repayment plan are coming in a future report, but it was directed to administration for a portion of the repayment as well as the development of a fund for future events would be mill-rate funded. It also states the $20 million in borrowing to fund the 2022 snow and ice emergency response will be paid with annual phase-ins of $2.1 million beginning in the 2024-2025 budget cycle.
Hack noted there’s still a bit of time before the budget gets tabled in November, and said they are looking to have discussions about revenues and service levels.
He said this is the first of several reports going to council over the next six or seven months.
“We always try to balance service expectations of citizens with manageable property tax increases.”
He said through discussions he’s confident they’ll get to an even balance.
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