Dedicated funding and financial strategy help offset 2020 deficit
With the help of careful spending and provincial and federal financial support, the City will be able to cover a $701,813 deficit with a transfer from the Fiscal Stabilization Reserve.
Details of the financial strategy’s outcome are in a report for the City’s Standing Policy Committee on Finance April 12 meeting. The report outlines the 2020 fiscal year-end subject to the confirmation of the external audit.
“Without a doubt, 2020 was a challenging year for the City,” says Kari Smith, Director of Finance. “The COVID-19 pandemic, a major blizzard, implementation of our new FUSION Enterprise Resource Planning system and the 2020 civic election all presented significant financial impacts on our operations and organization.”
“Through the assistance of the provincial and federal governments and the results of our discretionary hiring and spending restrictions throughout most of 2020, the Administration made some astute fiscal projections given the information we had on hand at the beginning of the pandemic.”
2020 Preliminary Year-End Financials at a Glance
The deficit remaining for the year ended December 31, 2020, is $701,813, which the Administration recommends being funded from the Fiscal Stabilization Reserve. Included in this deficit is the $15 million reduction in the transfer to the Paved Roadways Infrastructure Reserve by using the Municipal Economic Enhancement Program (MEEP) funding to replace the reduction of the reserve contribution for the Paved Roadways program. This also assumes that the following recommended items will be approved by City Council:
• The transfer from the Snow and Ice Management Contingency Reserve as per Council Policy No. C03-003 in the amount of $3,453,144; and
• Waiving the transfer to the Internal Audit Program Reserve for $316,740.
“We view the 2020 Preliminary Year-End Financials as having a successful overall result, considering the extensive costs incurred due to cleanup of the 2020 blizzard, which resulted in the Snow and Ice Program being more than $10 million overspent, all included as part of the 2020 year-end figures,” Smith says.
The Administration recommends the City’s Fiscal Stabilization Reserve be used to cover the remaining $701,813 deficit leaving just over $4 million in that reserve.
The transfer of funds to the Fiscal Stabilization Reserve is an annual process based on Council Policy. It helps offset any tax-supported operating deficits incurred in a year.
“Several of the challenges presented to the City proved difficult to predict, given we had no previous historical data to rely on. We will continue our prudent fiscal management, accountability, and transparency, which will allow for the strengthening of this important Reserve as we navigate 2021 and the ongoing economic impacts of the pandemic,” adds Smith.
City utilities posted surpluses and the Saskatoon Police Service was under budget by $914,000. All three of the controlled corporations (SaskTel Centre, TCU Place, and Remai Modern) were able to cover their deficits through their own means, having no impact on the City’s year-end results.
View Preliminary Year-End Results Year Ending December 31, 2020
View all surpluses and variances within the Detailed Overview of Preliminary Year-End Financial Results