THE ROADS AHEAD: UPDATE & YEAR-END PROJECTIONS

The latest update on the City of Saskatoon’s 2014 Corporate Business Plan and Budget: The Roads Ahead shows many key Continuous Improvement projects are on track, with some completed and others progressing well.

“For example, in one of several Continuous Improvement initiatives, the City saved $450,000 by optimizing the chemical dosage at the Water Treatment Plant through a reduction in chemicals used in the process,” says Catherine Gryba, Director of Corporate Performance. “These types of initiatives demonstrate that the City goes beyond conventional approaches to create greater efficiencies and savings.”

Additionally, over $25 million in increased operational efficiencies, capital savings and service level enhancements was identified in 2014.

The report also forecasts the City’s year-end deficit at $1.169 million.

“We continue to effectively meet service demands, but there are several additional factors affecting our bottom line,” says Kerry Tarasoff, Chief Financial Officer. “In an attempt to reduce our debt as much as possible by the end of the year, City Administration has implemented a discretionary spending and hiring freeze.”

The following is a summary of the main issues contributing to the projected variance:

Transportation

Snow Removal:  An estimated $688,000 deficit is projected as a result of intensified snow removal operations due to a harsh winter. 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 $1.08 million deficit is projected as a result of intensified street cleaning and sweeping operations. Higher trucking costs to remove more debris and higher supply costs contributed to this deficit.

Transit Operations: Projected to be $1.755 million over budget due to two significant items: revenues are under budget by $900,000 due to a decrease in ridership, and $2.2 million from lost revenue during the labour disruption. This is offset by savings in expenses such as salaries and fuel of $1.4 million.

Taxation and General Revenues

General Revenue: Provincial utility franchise fees are higher than anticipated by $1.68 million due to increased consumption and customer growth in natural gas, while electrical usage increased related to growth. In addition, interest earnings are $1.36 million higher due to gains on residual bonds and higher balances held at the bank.

Property Levy: Assessment growth was $486,000 higher than the anticipated amount of $5 million due to increased construction activity. 

Municipal Revenue Sharing:  This will be $295,000 under the budgeted amount due to an adjustment in the estimated PST base which is used to calculate this grant.

Grant-in-Lieu of Taxation: Saskatoon Light & Power is projecting a lower grant-in-lieu of taxation in the amount of $110,000 resulting from decreased consumption revenue.

Environmental Health

Waste Handling Service: Increased equipment rentals for the landfill, as well as lower revenues, are contributing to a projected $542,000 deficit. 

Fire

The contract settlement for the Fire Department is expected to result in a deficit for salaries of $1.8 million. Through continuous improvement efforts identified to date, and one-time expenditure reductions, the overall deficit is forecast at $1.27 million. 

Recreation and Culture

Rec-Competitive Facilities: LeisureCard revenues are projected to be $378,000 lower than budgeted but offset slightly by higher paid admissions. Community Services is reviewing the services it provides to determine the necessary program changes. 

Utilities

Saskatoon Light & Power is projecting a $703,000 deficit due to overall reduced usage.  Expenditure savings and decreased transfers to reserves will bring the utility into a break-even situation by year-end. 

The Water and Wastewater utilities are projecting a combined deficit of $200,000 due mostly to the high volume of repairs required for water main breaks during a colder than usual winter. This deficit will be covered by the Water and Wastewater Stabilization Reserve.

City Council will receive the 2014 Corporate Business Plan and Budget: Roads Ahead update and year-end projections during its regularly scheduled meeting on Monday, November 24, 2014.

For more City of Saskatoon Public Service Announcements, News Releases, Traffic Detours and Service Alerts, visit www.saskatoon.ca or connect with the City of Saskatoon on Twitter and Facebook.

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