Multi-Year Budget

 Approved 2024/2025 Detailed Operating & Capital Budget

 Approved 2024/2025 Capital Budget Project Details

 2024/2025 Climate Budget

What is an operating budget?

The City’s operating budget outlines the City’s spending plan to deliver core civic services to residents, and for the operational priorities to advance City Council’s priorities within the 2022-2025 Strategic Plan. The operating budget provides for the day-to-day expenses to keep the City’s operations running, including property taxes, user fees, licenses, and government grants.

Roads, bridges, pathways, and public transit that move people; police, bylaws, and fire services to keep people safe; parks, waste management, and drainage to keep neighbourhoods clean and healthy; and social programs and leisure activities to make Saskatoon a great place to live, work learn and play.

Operating Expenditure increases are usually the result of two key considerations:

• The cost to maintain existing services: Every year the City is faced with increases in expenditures because of inflationary requirements such as cost of living increases to wages, contractual obligated increases to contractors and vendors, and utility rate increases. And, as Saskatoon grows, there is the need to provide the existing service level over an expanded service area. For example, new neighbourhoods require transit service, street sweeping, roadway and park maintenance, and garbage collection, among other requirements. Without increases to the operating budget to account for inflation and growth pressures, the City may be unable to continue to provide the existing service levels.
   
• Service level improvements: Based on the City’s 2022-2025 Strategic Plan, there are several areas that City Council has directed the Administration to prioritize over the next several years. While some of these priorities can be achieved without financial impact, several initiatives may require financial investment. Examples include enhanced support for efforts within the reconciliation, equity, diversity and inclusion spaces, community safety, and Bus Rapid Transit.

What is the City’s capital budget?

The City’s capital budget focuses on the long-term, it provides investments in assets for the future of the city. The capital budget provides for the cost of construction, major repairs, major purchases, and the replacement and renewal of assets such as bridges, buildings, roads, technology and equipment.

The City uses a variety of revenue sources and tools to pay for the projects contained in the capital budget such as borrowing, government grants, utility rates, and reserves. Although the City’s Capital and Operating Budgets are distinctly different, there is a relationship between the two.

The City’s capital budget and operating budget are linked.

To pay for some capital projects, the City transfers funds from the operating budget to various reserves. These reserves are then used to provide funding for the capital costs of various projects. Similarly, when the City borrows to pay for capital projects, the debt repayment comes from the City’s operating budget.

Once the projects in the capital budget are fully constructed or operational, the City is required to pay for the ongoing maintenance and/or the operation of the project.

For example, when the City builds a new bridge, there is an obligation to ensure the bridge is maintained. When the City constructs a new recreation centre, we must ensure there is enough staff to operate the building. If a new transit vehicle is purchased, it will require a driver and yearly maintenance costs. These obligations, therefore, have an impact on the operating budget.

Can the City budget for an operating surplus or a deficit?

As required by The Cities Act, all municipalities in Saskatchewan need to approve a balanced budget each year. Operating expenditures must be covered by operating revenues and if there is any remaining gap, property taxes must fund the remaining portion.

Legislation mandates that the City cannot budget for an operating surplus or deficit, unlike federal and provincial governments.

How does inflation impact the City’s budget?

The costs to deliver City services rise with inflation as the cost of goods for the City continues to increase. As the cost of asphalt, labour and materials rises, so does the costs to maintain services. Unlike the Province or Federal Government, the majority of the City’s revenues do not receive inflationary increases, and this creates significant pressure on the City’s budget, especially when inflationary pressures are high.

Does population growth impact the City’s budget?

The cost to deliver services rises as the city grows with new neighbourhoods and more people calling Saskatoon home. As additional hectares of park space or kilometres of roadways are added, so are additional costs to maintain them. However, many of the City’s revenue sources also benefit from growth as new properties are constructed or facilities and programs see increased users. While not always perfectly aligned, revenue growth typically covers expenditure growth in a well-planned city.

Where does the operating money come from for the City to pay for its programs and services?

The City of Saskatoon generates operating revenue to pay for the delivery of its programs and services from seven source categories: general revenues, taxation, franchise fees, grants-in-lieu of taxes, government transfers, user fees, and investment income.

In 2024 and 2025, approximately half (50.1% and 50.3%) of the City’s operating revenue comes from taxation. Taxation has been steadily rising as a share of operating revenues for two reasons:

• Tax-supported expenditures have been consistently increasing due to inflation, growth and service level increases; and
• Other non-tax revenues have not been keeping pace with rising costs, and this puts more pressure on the property tax to fund the revenue gap or shortfall.

• Improved transparency and decision-making by providing City Council and residents with more information early in the budget planning process about the funding the City requires, where City funds are used, linking service costs to service levels and outcomes, and better connecting long-term goals to short-term spending decisions.
   
• Increased accountability for the City to deliver services to residents effectively and efficiently, while maintaining its focus on a sustainable future.
   
• Creates capacity within the organization by allowing more time in off-cycle years for Administration to perform value added work for residents as opposed to constantly budgeting. The City is often asked to do more with less and multi-year budgeting has saved thousands of hours every cycle in staff time.
   
• Importantly, the multi-year budget process provides the framework which allows the City to quickly adapt, respond and adjust to changing municipal, provincial, and federal environments if needed. There could be unforeseen changes to economic forecasts, council-directed changes or external factors (such as a pandemic) that could require the City’s budget to be adjusted over the multi-year cycle.