City of Regina projecting year-end deficit of $1.6M, could be covered by reserve funds

Regina’s city administration is projecting a deficit of $1.6 million at the end of 2023, recommending the city use its reserve funding to cover the difference.

The latest projection going before the city’s Audit and Finance Committee this week and city council on Dec. 6 reflects an increase from the mid-year projection of a $237,000 deficit.

According to administration, some key factors in the $1.3 million difference include winter road maintenance, increased fuel costs and “various unbudgeted expenses”, with the emergency shelter given as an example.

Another issue is the need for the city to pay back an overpayment in municipal surcharge funding from SaskPower not previously included in the mid-year projection. The program was established to compensate municipalities for giving up the right to build and operate their own power distribution systems.

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The forecast could be further impacted based on the outcome of an active audit by the Canada Revenue Agency into $7.5 million in wage subsidies received by the Regina Exhibition Association Limited (REAL) during the COVID-19 pandemic, as part of the Canada Emergency Wage Subsidy program.

Administration also said it’s working with the Saskatchewan Roughriders to address an outstanding $3.6 million owed “related to rent and other receivables” during the pandemic time period.

The city has to submit a balanced budget, required by legislation. If council approves the recommendation to use reserve funding to offset the deficit, it will leave the reserve balance at $21.8 million, below the recommended minimum of $23 million.

During Thursday’s meeting, administration will also take questions on the proposed 2024 budget released previously.