FIRST QUARTER BUDGET RESULTS PROJECT $1M DEFICIT

The City of Saskatoon is committed to being more accountable, transparent, and efficient in the management and allocation of its key priorities and financial resources. First quarter projected results for the City of Saskatoon’s 2015 Corporate Business Plan and Budget: Sustaining the Saskatoon Advantage, as of March 31, 2015 forecast a net deficit of $1.043 million. It is cautioned that this is still an early projection and subject to substantial variance as the remainder of the year proceeds. The Administration will be taking all reasonable measures to bring in a balanced budget at year-end.

“This projected deficit is early in the fiscal year and open to many variables that can change over the course of the year.  It is based on the information we have to the end of the first quarter,” says CFO, Kerry Tarasoff.  “By examining our numbers now, we can identify solutions to recover costs and eliminate a deficit before year-end.”

“Much of this first quarter projected deficit can be linked to costs for increased street sweeping in the Business Improvement Districts and the industrial areas, as well as a revenue reduction from a decrease in Transit ridership, that compounded by a shift to discounted bus passes from regular fares,” Tarasoff says. 

Following is a brief summary of the main issues contributing to the projected variance; full details can be found in the Administrative Report, page 96.

Transportation is projecting a $2.16 million deficit due to unfavourable variance in Snow Removal ($0.461 million), Street Cleaning ($0.519 million) and Transit Operations ($1.17 million).  The Snow Removal deficit can be offset by its stabilization reserve however the deficit in this program as well as the street cleaning deficit will be managed through reductions in overtime and by closely managing contracts to bring costs within budget. The Transit division will be focusing on continued cost control efforts, and a targeted marketing plan related to the University Bridge Closure to help offset the current projection.

While Utilities are projecting a $1.475 million deficit, this will be offset by $0.675 million from a corresponding Stabilization Reserve.  The remaining deficit of $0.775 million will be offset by reducing a corresponding transfer to the Landfill Replacement Reserve in the Environmental Services Division.

An anticipated surplus in Taxation and General Revenues of $1.065 million is helping reduce the overall deficit. This surplus is attributable to increased payments from the Provincial utility franchise fees.   

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. Providing quarterly reports helps the City to mitigate any financial or corporate risks that may result from unplanned events, or new challenges that may emerge throughout 2015.

The City is committed to the Strategic Goals of Continuous Improvement, and Asset and Financial Sustainability, and dedicated to: creating a more visible budget process; reducing revenue reliance on the property tax; providing financial information frequently and earlier so City Council can make informed decisions; and planning opportunities for residents to have their say in shaping the 2016 budget and Saskatoon’s financial future.

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