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City of Regina projects year-end deficit of $1.6 million

December 1, 2023
in News
City of Regina projects year-end deficit of $1.6 million
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Administration forecasted a deficit of $237,000 in September.

Published Nov 30, 2023  •  2 minute read

city hallCity Hall on Tuesday, October 4, 2022 in Regina. Photo by KAYLE NEIS /Regina Leader-Post

Mere months after saying the budget was “essentially balanced,” The City of Regina is now forecasting a $1.6 million deficit by the end of the year.

In September, city council reviewed the 2023 mid-year forecast which projected a deficit of $237,000.

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According to a report for city administration, the $1.3 million difference primarily comes from the requirement of the city to pay back $5.2 million outstanding to SaskPower.

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The owing balance is due to five years of overpayments in municipal surcharges on electricity to the city from the Crown, due to a miscalculation of revenue since the introduction of the carbon tax.

When the mid-year forecast was presented to council in September Barry Lacey, executive director of financial strategy and sustainability, said administration was in talks with SaskPower about reducing the amount owed. It is unclear if the amount has been reduced or if the city will be paying back the total over a few years.

Lacey had said that it could take Regina four to five years to pay back SaskPower.

Municipalities are legislatively required to balance their budgets, meaning that the city will be considering options to address the $1.6 million deficit.

It is recommended by administration that the city dip into its General Reserve Fund to cover the deficit. There is currently $23.4 million in that reserve. Using some of that will leave the reserve balance at $21.8 million, just below the guideline minimum limit of $23 million.

“Administration will continue to monitor the General Fund Reserve balance over the next year, including the impact on the reserve once year-end actual results are known,” reads a report, which was set to be presented to the audit and finance committee Thursday afternoon.

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The city may also choose to use a combination of expenditure restraints for the remainder of the year with the General Reserve Fund or include the amount needed to cover the unfunded portion of the 2023 General Operating deficit in the 2024 Operating Budget.

The previously forecasted deficit of $237,000 was attributed primarily to increased costs for winter road maintenance, fuel and various unbudgeted expenses such as the emergency shelter.

City administration submitted at $13 million budget request for winter road maintenance to council in October after the previous winter’s expenditure nearly doubled its $8.6 million budget.

Regina Exhibition Association Limited (REAL) is being audited by the Canada Revenue Agency for a $7 million COVID relief incentive it received in 2021, posing a risk to the city depending on the outcome of the audit.

A meeting to discuss the new, larger forecasted deficit will be held on Thursday afternoon at Henry Baker Hall.

2024 budget deliberations are to commence on Dec. 13.

AnAmato@Postmedia.com

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