City of Saskatoon projects nearly $7M in deficit in 2022 IG News

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The city says the city of Saskatoon is projecting a deficit of about $6.8 million, largely due to rising fuel prices and a snowy start to the year.

The 2022 fiscal forecast, which will be presented Monday to the city’s Standing Policy Committee on Finance, predicts a gross year-end deficit of $6.8 million, or 1.17 percent “adverse variance” from the budget.

“This is due in large part to higher than anticipated gas and diesel prices, which had a $3.5 million impact on the budget, and due to higher ice accumulation in the first half of 2022, resulting in an estimated $3 million of unfavorable variance. Finance Director Kari Smith said in a news release from the city.

“The mid-year forecast is our best estimate of the 2022 budget position at this time and is still subject to substantial change in the second half of the year.”

The projected losses also include higher expenditure in information technology, the city said in its news release.

According to the 2022 financial forecast document, the projection also includes less revenue from leisure facilities and parking.

The report also includes some positive trends.

According to the city report, utilities are expected to bring in a net surplus of $1.2 million, although they are offset by additional costs and lower revenues at water and wastewater utilities.

Other factors are $2.5 million in administrative savings due to a reduction in training and travel and staff vacancies, Smith said in the news release.

According to Smith, the city expects $1.05 million more in investment returns than expected due to rising interest rates and a $1.13 million increase in municipal revenue sharing.

The city’s news release said it has already developed options that could reduce losses by up to $4.2 million, “including a one-time increase in the return on investment from the water utility, with capital funds being used as a reserve.” reverting to reverse operations, and deferring reserve contributions to reduce losses.”

The city said it is considering additional ways to save money, such as spending and renting a freeze, without affecting service levels.

Smith said the city has the reserves to make up for such shortfalls, but the goal for the year is to avoid relying on them.

The mid-year forecast also includes information on the financial position of city-controlled corporations such as TCU Place and Remai Modern.

The report said the city forecasts a deficit of about $907,000 for TCU Place in 2022, while Remai Modern estimates a breakdown.

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