City of Saskatoon releases Mid-Year Financial Forecast

Each year, the City of Saskatoon’s Administration provides mid-year, third-quarter and year-end reports to the Standing Policy Committee on Finance (SPC Finance) on the fiscal performance of the City’s Business Plan and Budgets. The goal of this reporting is to keep City Council and residents informed on the expenditure and revenue variances from the business plan and budget estimates as the fiscal year progresses.

The 2024 Mid-Year Financial Performance Administrative Report will be presented to the Standing Policy Committee on Finance on September 4, 2024.

“It’s anticipated that the Snow and Ice Management Program will deliver a $5.3 million deficit due to the costs associated with the March 2024 snow event where the City activated the Roadways Emergency Response Plan and performed city-wide residential clearing,” says Kari Smith, Director of Finance” “The City currently has $6.9 million in its Snow and Ice Management Contingency Reserve and we would use this to offset any deficit through a transfer at year-end.”

The remaining Civic operating budget is forecast to be balanced at 2024 year-end with little change from the overall budget. However, it is important to note that the Administration faces several challenges that could impact achieving this result. Examples include:

• To find $3.75 million in budgeted/targeted savings as included in the 2024 approved budget, the City must commit to finding new efficiencies, revenue sources and possible expenditure deferrals to balance the budget;
• Parking revenue and Parking violations continue to trend behind budgeted targets and forecast a $548,800 and $415,200 shortfall, respectively;
• Franchise Fees are expected to have a shortfall of approximately $525,000 due to a larger impact than expected because of the October 1, 2023, SaskEnergy rate adjustments; and
• The Grant-in-Lieu from Saskatoon Light and Power is expected to be $1.1 million less than budget due to a budgeted utility rate increase that did not occur. 

“Administration will tightly monitor discretionary spending and work hard to offset these challenges. We plan to gain $3.5 million in savings by not filling staff vacancies and will defer expenses related to training, materials and supplies,” says Smith. “We also forecast $1.7 million in fuel savings, and a $779,000 positive variance for our Transit revenues due to increased ridership.”

“Administration based the preparation of the City’s mid-year forecast on the most current information we know, our June 2024 actual revenues and expenditures and our professional judgement,” adds Smith. “We note that future unforeseen events or challenges could impact several areas and the delivery of a balanced operating budget at the end of this year.”

Examples of unforeseen events could include items such as higher fuel prices than anticipated and/or weather fluctuations which could impact several areas such as the Snow and Ice Program, Utility usage, the City’s Franchise Fees and Grants-in-Lieu revenue sources. By legislation, municipalities must balance their budgets and cannot operate with a deficit.

The 2024 Mid-Year Financial Forecast Report’s Appendix 1 provides 2024 year-end projections for each of the City’s Business Lines.

The City’s Utilities forecast an overall net $157,100 (0.0% variance) projected deficit. Any utility variance realized at the end of 2024 for the City’s utilities will be offset through transfers to or from the Utility Stabilization Reserves. 

City Administration will provide financial performance reporting for its third-quarter projections in late fall. As the City Administration closely monitors the 2024 budgetary forecasts, it will, as much as possible, continue to seek and expand on additional cost-saving measures to mitigate any potential year-end deficit.

Visit saskatoon.ca/budget