The City of Regina is set to see a slight deficit for 2023.
A report brought forward before city council last week showed that the Mid-Year 2023 General Operating Fund forecasts a small year-end deficit of $237,000; however, that doesn’t include a recently received from SaskPower of a $5.2 million liability that the City is required to pay back.
The liability is due to an overpayment in the municipal surcharge on electricity resulting from a calculation error by SaskPower, which started in 2019.
The forecasted deficit of $237,000 on budgeted revenues and expenses of $539.7 million represents a 0.04 percent variance. Some of the key factors contributing to the deficit include increased expenses for winter road maintenance, increased fuel costs, and various unbudgeted expenses like the temporary shelter.
The increased costs are partially offset by salary lag and increased investment revenues.
Since the City is legislatively required to balance its budget, the forecasted operating deficit will need to be addressed by city administration.
In the report, city administration recommends that no further action be taken at this time, and should the deficit still hold at year-end, administration is recommending the General Operating Fund deficit be addressed by accessing funds from the General Fund Reserve.
The City’s mid-year Utility Operating Fund forecast projects a year-end surplus of $3.6 million due to increased water sales and salary lag.
Meanwhile, the City’s mid-year projection for its Capital Plan projects forecasts $196.1 million of General Capital and $119.6 million of Utility Capital work to be completed in this fiscal period, with an anticipated $316 million for future years of capital work.