PROJECTED DEFICIT DECLINES: 2ND QUARTER FINANCIAL REPORT
A regularly scheduled quarterly status update of the 2014 Corporate Business Plan and Budget projects a deficit of $818,000 to year-end – a decrease over the last quarter estimate.
“A projected deficit is just that: projected. It’s not the final outcome,” says Director of Finance, Kerry Tarasoff. “By examining the numbers now we can identify solutions to recover costs and eliminate a deficit before year-end and before it becomes a problem for tax payers.”
Quarterly reports are prepared to inform City Council and the Administration of challenges or emerging issues so they can react accordingly.
“Much of the projected deficit can be linked to meeting service level demands,” Tarasoff says. “For example, there were increased snow removal efforts and added trucking costs for our street sweeping and street cleaning programs.”
The following is a summary of the main issues contributing to the projected variance:
Snow Removal: An estimated $493,000 deficit (down from the $1.1 million projected in first quarter) is being projected as a result intensified snow removal operations. Significantly more resources were spent on removal than in typical years, due in part to a reassignment of crews following the formation of ice pack on residential streets and removing snow against freeway barriers. A $489,000 reserve balance would exist at year-end to help offset this deficit.
Street Cleaning and Sweeping: An estimated $1.032 million deficit is being projected as a result of intensified street cleaning and sweeping operations. There were significantly higher trucking costs to remove debris as well as higher supply costs contributing to this deficit. The Administration will strive to reduce this impact through deferral of purchases, deferral of discretionary spending and reduced contract costs in late 2014.
Water and Wastewater Utilities: A combined deficit of $514,000 is projected for the Water and Wastewater utilities mostly due to the high volume of repairs required for water main breaks during the first quarter of 2014. This deficit will be covered by the Water and Wastewater Stabilization Reserve.
Property Levy: Assessment growth was $486,000 higher than the anticipated amount of $5 million due to increased construction activity.
The report also provides highlights of key projects (as of June 30, 2014) as they relate to City Council’s Strategic Goals:
Continuous Improvement
As part of the Service Saskatoon plan, a strategy for a 311/Customer Relationship Management (CRM) System was approved by City Council in June. A 311/CRM System provides an easy to remember phone number and uses technology to focus on citizens' needs, providing one-stop, personalized access of their choice to the City's services by phone (including mobile devices), internet, or in person.
The development of a new customer and citizen friendly website continued in the second quarter, with an online project engagement site being launched in May. The site keeps citizens informed of the progress of the website project and allows them to provide input into testing and discussions that will support development of the new website.
Asset and Financial Sustainability
The Civic Operation Centre project is in the Request for Proposals stage, the request was sent out to industry with submissions coming back to the City in fall of 2014.
Quality of Life
Phase one construction on the new train station and train loop as well as rough grading of the play area and water feature site and parking lot are underway as part of the Kinsmen Park and area redevelopment project.
The Transportation Division has established a new standard for prototypes of accessible pedestrian signals and continues to progress on the installation of these new accessible pedestrian signals in priority areas. A tender has also been issued for the installation of more curb ramps this construction season.
Environmental Leadership
Teams have completed the application of barcode tags to black garbage and green yard-waste carts in approximately 40% of Saskatoon's neighbourhoods.
As part of the Landfill Optimization Strategy, efforts to maximize airspace, manage environmental and safety risks and improve customer service continue at the Landfill site; a report on the progress of these efforts is expected before year-end.
Sustainable Growth
The Saskatoon North Partnership for Growth (P4G) held two meetings in April and June. Foundational documents including a Terms of Reference, Work Plan, Communications and Engagement Strategy and a budget for the Regional plan for P4G were approved by the Councils of the five partnering municipalities in June 2014.
The Infill Implementation Strategy was approved by City Council in March and regulations for garden and garage suites were approved by City Council in May, 2014.
Moving Around
Further to the funding approval in June 2014, the City was able to complete the assembly of the team of Legal, Financial, Fairness and Technical Advisors to begin the process of delivering the project as a Private-Public-Partnership. Technical work on roadway and bridge alignments and project scope had been ongoing through the P3 Canada funding application process. The Request for Qualifications process will occur in the third quarter with a proponent selected in 2015.
Economic Diversity and Prosperity
The number of building permits issued to the end of June continues to be higher (10%) than issued in 2013 for the same time period. Permits issued for one-unit dwellings on single-family lots are approximately 3% higher than in 2013 for the same time period. Value of construction associated with permits issued to the end of June 2014 continues to be lower by approximately 10% from the June 30,2013 value.
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