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Saskatoon city council may have to make some extremely difficult decisions in coming months, as the City grapples with a big hit to its revenues during the COVID-19 pandemic.
City reports released Friday afternoon revealed it faces a budget deficit of between $20.2 million and $43 million dollars in 2020, depending on when restrictions over the virus are lifted.
This comes as the City faces little to no revenue from sports field rentals, parking fees and tickets, recreational facilities and delays in property tax payments.
If current COVID-19 restrictions in Saskatoon were to continue until June 30, the City would face a $20.2 million deficit. If the restrictions continued until Sept. 30, that number would grow to $32 million. If revenues didn’t go up by Dec. 31, the City would be dealing with a $43 million gap.
The major issue councillors and city administration face is that under the provincial Municipalities Act, it’s illegal for any municipality to run on a deficit budget. Therefore, the money has to be made up somewhere.
“While sobering, we feel the situation is manageable, thanks to the prudent financial management practices in place,” city manager Jeff Jorgenson said in a release issued Friday.
Jorgenson and his administration are recommending a slew of measures to lessen the financial blow to Saskatoon’s bottom line.
Those actions include freezing non-essential spending, travel and hiring. Staff are also recommending pulling $2.8 million from the City’s fiscal stabilization fund — leaving $2 million in the reserve to use in 2021.
If all those actions are taken, the potential deficit numbers decrease to between $10.1 million and $32.9 million.
Mayor Charlie Clark noted in a media call on Friday that he and other municipal leaders are lobbying the provincial and federal governments for financial relief to help fill the remaining gap, so that service cuts or tax increases aren’t required at the city level.
“This is a real situation where the federal government could make a huge difference and not having the financial impacts of COVID-19 carry out over several years,” Clark said, referring to a national $10 billion ask from municipalities to Ottawa.
City council will debate options to deal with the budget deficit at their meeting on April 27.
