City’s projected revenue falls short by $3.1M in 2017

The City of Saskatoon will likely have to draw from a reserve fund to make up for lower than expected revenue in 2017.

The city raised $5.6 million less than it budgeted for in 2017 due to lower than expected revenue from waste handling, transit and parking fines and penalties. The city also spent $2.6 million less than expected in 2017 due to a spending and hiring freeze.

Overall, the city needs to make up a $3.1 million shortfall since municipalities are prohibited from running an operating deficit.

A report to be considered by city council’s finance committee on Monday recommends drawing money from a reserve fund set aside to cover such shortfalls.

The city’s director of finance, Clae Hack, said in an email that the reserve fund is replenished during years when the city runs a surplus so the city has extra money during years when there’s a deficit.

The fund would drop from $8.1 million to about $5 million if city council ultimately approves the strategy.

The shortfall in 2017 marks only the second time in the last seven years the city has had a year-end deficit. The last shortfall came in 2013 with $3.4 million less revenue than budgeted. In the other five years, the city raised more money than it spent.

The shortfall in parking fines and penalties in 2017 is linked to greater compliance. The city has struggled for several years with lower than expected money from its waste operations, mainly linked to revenues at the landfill.

Saskatoon Transit ridership dropped in 2016 compared to the year before, but the city has yet to release ridership or revenue numbers for 2017. The city’s 2017 budget showed operational spending of $26.1 million for Saskatoon Transit, down from $26.2 million in 2016.

The city ’s overall operating budget in 2017 was $477.6 million, meaning the shortfall indicates a variance of less than one per cent, Hack noted.