REGINA -- Regina city council will have to make tough choices early next year as the city is expected to be in a challenging financial situation.
Speaking during the Priorities and Planning Committee on Monday, finance staff with city administration outlined a bleak economic forecast.
Staff told city councillors that Regina is expected to pull in revenue of $1 million, but faces costs of at least $7 million, meaning the city may experience a shortfall of at least $6 million.
The shortfall could grow to $8.5 million if the city doesn’t move forward with already planned tax increases to pay for Mosaic Stadium and the Recreational Infrastructure Program.
On top of this, COVID-19 is expected to cost the city anywhere from $12 million to $20 million, said Barry Lacey, the executive director of financial strategy and sustainability, during the meeting.
“The financial situation Lacey has laid out is one of the most challenging we’ve ever faced as an organization,” said Chris Holden, the city manager and chief administrative officer, during the meeting.
City council will have to figure out how to close the shortfall. They could do it by hiking property taxes, spending fewer dollars on services or dipping into the reserve fund.
During the meeting, councillors wondered if there are other ways the city can generate revenue.
Lacey said Regina, like all other municipalities, is fairly limited in finding new revenue sources given restrictions in provincial legislation.
As well, it appears the city won’t be getting extra dollars through municipal revenue sharing from the province. The revenue sharing program sees dollars collected through the provincial sales tax.
Lacey said the province is forecasting lower revenues from the PST, which would mean fewer dollars for Regina.
It could mean a loss of revenue of $4 million for the city, Lacey said.
“This is a sobering but realistic state of city finances,” Coun. Bob Hawkins told the committee.
Coun. Lori Bresciani told the committee that Regina shouldn’t sacrifice its services. Instead, she said the city may need to look at cutting certain projects to get through the next couple of years.
“I knew this was not going to be pretty and I think administration has been sending signals to be carful with the decisions you make,” she said.
Lacey said the city will need to be mindful of its long-term plans to maintain its financial viability.
He said economic activity is expected to be modest going forward, with slower growth in revenues from property taxes.
Lacey said the 2021 budget won’t be finalized until after the election this year. He expects the 2021 budget to be released in February.
