FINANCIAL STRATEGY TARGETS BALANCED YEAR-END BUDGET

Second quarter results as of June 30, 2015, from the City of Saskatoon’s 2015 Corporate Business Plan and Budget – Sustaining the Saskatoon Advantage, will be presented to the Executive Committee of City Council August 19, 2015. The City’s key projects as outlined in the 2015 Corporate Business Plan and Budget are on track and initiatives are progressing well, despite this latest projection indicating a 0.28% ($1.2 million) unfavourable deviation from the City’s planned 2015 operating budget of $431 million (excluding utilities).

“This second quarter projection is primarily the result of our aggressive snow removal and street cleaning, decreased transit ridership, and lowered revenue following the launch of the new FlexParking system,” says Clae Hack, Director of Finance. “An extremely dry spring season has also led to an $800,000 negative impact on our budget from extra watering to protect our park assets.  Our strategy is to undertake all reasonable measures to mitigate this forecast deficit.”

The 2015 budget projections to year-end are indicating a 0.28% variance from budget after applying transfers from reserves.  This latest projection includes transfers from the Snow and Ice Reserve ($0.520 million), the Parks Stabilization Reserve ($0.400 million) and non-transfers to the Landfill Replacement Reserve ($0.775 million).  It is cautioned that this projection relies on only six months of performance and subject to substantial variance as the remainder of the year proceeds. 

Full details of the Second Quarter budget results may be found in the Second Quarter Results – City of Saskatoon’s Corporate Business Plan & Budget – Sustaining the Saskatoon Advantage City Council Report.

City Administration will implement the following dedicated strategies to mitigate the deficit that is being forecast: 

-Reducing the contribution to the Landfill Replacement Reserve of $0.775 million to offset the variance in the Waste Services Utility due to the delay in Multi Materials Recycling Program and the corresponding loss of revenues. 
-A planned 25% reduction in the watering of well-established park areas.  Parks will be closely monitored to ensure no damage will occur to the asset.  This is estimated to save approximately $0.275 million assuming a return to normal rainfall from July 15 to August 31.
-Recreation fee changes approved by City Council aimed at increasing patronage at the Leisure Centres. The plan was to affect longer term increases in usage at the Leisure Centres.  There is no major change anticipated for 2015.
-Transit is undertaking a major marketing campaign starting in August to increase ridership, to help reduce the deficit in the short-term but also aimed at increasing long-term ridership.  Additional cost controls have been implemented for 2015 which are projected to save over $0.500 million in 2015.

Quarterly status updates on the City’s Corporate Business Plan and Budget help to ensure that City Council and the Administration are aware of emerging business plan and budget issues and challenges, so they can react accordingly.  By providing these quarterly reports, this helps the City to diminish any financial or corporate risks that may result from unplanned events or new challenges that emerge throughout 2015.

The City’s long-term Strategic Goal of Asset and Financial Sustainability focuses on continuous improvement, openness, accountability, and transparency when it comes to resource allocation,  so that the City of Saskatoon can be the best-managed city in Canada.