$19.5 million budget hole can be filled in 2021, councillors hear

City officials expect an anticipated $19.5-million funding gap can be bridged, as councillors got a snapshot of what the upcoming municipal budget will look like when they met Wednesday for the first executive committee of 2021.

Barry Lacey, executive director of financial strategy and sustainability, said the 2021 budget is being developed in an “environment of continued uncertainty.” But the city fully expects to make up the $19.5-million funding gap it faces, $12 million of which is attributed directly to the pandemic.

“Since 2019 we have achieved savings of approximately $15 million annually due to efficiencies and cost savings, so we are looking at finding additional savings,” said Lacey. “We do believe we have achieved that.”

Over the previous budget Lacey said the city can expect a $2.3-million increase in overall revenue to the city while also experiencing a $6.6-million expenditure increase. That's a gap of about $4.3 million.

But Lacey was quick to point out this is a “status quo budget.” The city has been able to shave off $900,000 in energy costs, $400,000 from the winter road maintenance program and $500,000 from facility operations, cutting travel, conference and training expenses too.

“It was very much focused on status quo, not impacting current service levels and the current services we provide,” said Lacey. In the budget update, Lacey said money has been earmarked for a transit master plan and the development of the city's sustainability framework, which aims to make Regina a 100 per cent renewable city by 2050.

But, there appears to be a mill rate increase of at least 2.35. Of that, 1.40 per cent is for police while 0.45 per cent is for the stadium and 0.50 is for the recreational infrastructure program. The proposed mill rate increase does not include changes to civic operations.

The budget will be proposed in late February or early March and will be voted on during a March council meeting.

Coun. Bob Hawkins ( Ward 2) was pleased with the presentation, considering the city's financial situation.

“I would like to invite Mr. Lacey over to my house to do my 2021 home budget,” quipped Hawkins, garnering laughs from those present in Henry Baker Hall.

Also discussing budgets on Wednesday were representatives from Regina Exhibition Association Limited (REAL), Economic Development Regina (EDR) and the Regina Public Library (RPL).

CEO and president Tim Reid said REAL — which operates the grounds at Evraz Place, including Mosaic Stadium, the Brandt Centre and the International Trade Centre among others — is facing a deficit of $2 million for 2021, down from earlier projections of $5.5 million.

Despite finding savings, Reid said it's far from where he and his board want to be.

“Our goal as an organization has always been to reduce our ask,” said Reid.

Two key budget assumptions for REAL are that there is no way to really know what 2021 is going to hold with COVID-19 affecting its ability to host large events and generate income. As such, its ask from the city is more “conservative” and higher than in 2020.

REAL is expecting the recovery to be slow due to guest uncertainty and spending habits in 2021.

For 2021, REAL is setting its budget at $2.1 million while anticipating that there will be no major event held on-site this year. That's why REAL is asking for $400,000 in grants from the city.

This goes against REAL'S past commitment to shave off its borrowing request from the city by 50 per cent each year.

Coun. Shanon Zachidniak (Ward 8) asked about the timeline and intention behind this. “The goal is to get it to zero as quickly as possible?” she asked. Reid said yes, and while the pandemic has thrown a wrench in things, REAL still plans to be self reliant.

“Our goal is four years, and by year five we're back to a zero grant request,” said Reid, though if possible, the board would be willing to do that quicker.

Zachidniak then asked if diversifying the REAL lands with restaurants and other businesses would sufficiently prepare it for an uncertain future.

Reid felt attracting businesses like Mcdonalds is going to be critical to the path forward.

“That's exactly why we're doing it. To mitigate the potential loss of big events,” said Reid.

Coun. Andrew Stevens (Ward 3) praised REAL for developing the Iceville skating rink for the community, asking if there were plans for future programs that were free and accessible for people in the city. Reid said Iceville and the Toronto Raptors watch parties were part of REAL'S mandate, and it plans to expand such programs and events.

The committee voted unanimously in favour of REAL'S ask as well as RPL asking for a mill rate increase of 3.9 per cent and EDR'S request for $1,885,205.