City of Saskatoon administration faces flood of questions as budget discussions begin

The first of many discussions began regarding the canyon-like funding gap the City of Saskatoon is facing for the budget in the coming years.

The city’s chief financial officer Clae Hack said on June 7 that Saskatoon is facing a $52.4-million funding shortfall next year, followed by a $23.2-million gap in 2025.

He said that would equate to an 18.56 per cent property tax increase in 2024, and a 6.95 per cent property tax increase the following year.

4:30 Saskatoon projecting a $52.4 million shortfall in 2024

Hack said $ 8.2 million of the shortfall next year relates to one-time funding to offset losses in revenue due to the pandemic no longer being available.

A presentation was made to the governance and priorities committee giving several examples of how the entire country is facing shortfalls, not just Saskatoon.

During the presentation, Hack said the revenues from the city have not been keeping up with the expenditures, noting solutions up to this point have either been temporary or not sustainable.

Hack said 24 total options will be available in next week’s meeting on June 22, potentially closing the shortfall gap by $22.4 million.

City manager Jeff Jorgenson said these are just recommendations from administration, noting the final decision comes down from council.

1:43 City of Saskatoon’s rising inflationary pressures expected to affect maintenance, property tax

Administration had a volley of questions fired at them from several councillors as they tried to get a handle on some of the costs the city faces. Here are some of the highlights.

Coun. Darren Hill looked for clarification on a range of different expenses and revenues, from green cart utility rates, to the city’s full-time equivalent employee numbers, costs from COVID-19, and other operating expenditures.

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Coun. Cynthia Block asked about the one-time funding and other temporary funding sources. “Is it fair to say that it was with the support of other levels of government that we were able to get through the pandemic without a large impact to property tax?” Block asked.

Hack said yes.

Block asked if impacts from not funding something will be given along with the reports.

Hack said their focus was to find as many options as possible for council, and impact statements will be a bit shorter due to time constraints. He added administration can come back with more information on certain options if council requests it.

He said he’d be surprised if other cities aren’t facing similar challenges, giving an example of Regina having a similar approach to Saskatoon.

1:47 Saskatoon mayor aims to uphold quality of life by delivering affordability, services

“They have a return to pre-pandemic revenues in 2023, though I don’t know what their mid-year forecast is; they haven’t released it yet in terms of whether they’re actually going to achieve that budget or not.”

Hack noted that other municipalities have more wiggle room than Saskatoon though, saying many have healthy fiscal stabilization reserves and contingencies built into their budget.

Block asked if this property tax pressure would have been easily foreseen.

Hack said they have been having these discussions for the past two years, noting that they’ve highlighted that 2024 would be a challenging year in the past. He said inflationary pressures have exacerbated that challenge.

Coun. Sarina Gersher asked about the operational budget and base budget, wondering if these shortfalls tie into service levels in the city.

“A big piece of the options being presented is going to be service levels. The roadways is the perfect example of a $10.2 million impact with that program that’s 3.0 per cent to 4.0 per cent property tax alone for that piece,” Hack said.

Coun. Randy Donauer asked if there’s a chance that costs being seen right now will come down, giving an example of fuel estimates being high last year, but the number coming down slightly.

Hack said they are predicting a small increase to the fuel budget due to the uncertainty, but noted that will be one of the options hitting the table.

Special budget meetings will be held throughout the summer to further discuss potential cuts and changes to the budget.

The next meeting will be held June 22, with follow-up meetings landing on July 25 and Aug. 15.