Saskatoon turns to reserves to make up $3M deficit

City of Saskatoon administration is proposing to use money from reserve funds to make up for a $3-million shortfall in 2018.

A report to be considered by city council’s finance committee on Monday recommends using money from four different funds to cover the $3 million.

City hall’s budget is usually somewhat off projections, but the 2018 shortfall marks the first time this decade that deficits of $3 million have occurred two years in a row.

Saskatchewan municipalities are prohibited from posting operating deficits, so they must find a way to make up any shortfalls.

Since 2011, the city has fallen short only three times: $3 million last year, $3.1 million in 2017 and $3.4 million in 2013.

The culprits in last year’s shortfall are familiar — they contributed to the 2017 deficit and have presented challenges for several years.

The city’s waste handling services continue to cost more than budgeted with a $1.4-million deficit in 2018, as does parking ticket revenue with a $1.37-million deficit.

“(The parking ticket) deficit is largely related to the effectiveness of the new parking system and the implementation of the parking app provided increased compliance,” a city report says.

Despite an impressive increase in bus ridership from 8.7 million in 2017 to 9.4 million in 2018 and higher revenue, Saskatoon Transit still ran a deficit of $691,200 in 2018.

While the Remai Modern art gallery ran an operating surplus of $1,000, the new facility cost $500,000 more than budgeted to operate in its first full year. That helped contribute to overspending of $1.4 million on facilities management.

Revenue from admissions to city-operated recreation centres also came in $503,00 below budget.

The city’s fuel costs were also $970,600 higher than expected in 2018 due to higher than expected costs for fuel. The city’s public golf courses also netted $352,810 less than expected due to a late start to the season last year.

Traffic violations resulted in a surplus of $750,000, which is attributed to higher fines introduced by the provincial government. The city also received an extra $2 million in restored Saskenergy grants-in-lieu that were reinstated by the province.

The city administration recommends pulling most of the money out of a fuel stabilization reserve fund to cover the higher-than-expected fuel costs, the report says.

The report also proposes $800,000 be diverted from a reserve fund to maintain municipal facilities and another $488,500 be diverted from a fund for snow and ice management.

The remaining $760,466 would be covered by a reserve fund that is intended to address annual shortfalls under the plan. That reserve fund sits at about $5 million.

The variance in 2018 represented less than one per cent of the operating budget of $490.6 million.