City administration has confirmed that the year-end deficit for 2023 will be close to $1 million, which is nearly twice as much as officials at city hall had predicted.
The topic of the deficit arose during the March 11 regular city council meeting after the parks and recreation department presented a report proposing to pursue eight more capital projects this year worth $314,500.
Besides the motion to approve the projects, director Derek Blais included an option for council to contribute this excess capital funding to the accumulated surplus to cover last year’s operating budget deficit partially.
Coun. Jamey Logan picked up on this suggestion and asked city administration where the municipality stood with its deficit.
“We have done the majority of work towards year-end. Certainly, that deficit is looking like it will come in higher than our estimates,” said finance director Brian Acker. “We had estimated (between) $500,000 and $1 million; we’ll be closer to that $1 million range, so certainly it is significant.”
Acker cautioned council about applying the excess capital money to the deficit because these eight projects could still require completion next year but at a higher cost. Therefore, there may not be any advantages to saving the money; it could create “a false savings.”
“I agree. It’s kicking the can down the road,” said Logan, before wondering what options council had to tame the deficit.
City administration will offer some suggestions when it presents the annual audited financial statements in late May or early June, said Acker. One option could include taking all money not earmarked for any project and putting it toward the deficit.
Coun. Doug Blanc believed that all eight capital projects were valuable and needed to be completed at some point, whether it was this year, next year or in 2026. However, he agreed that costs would increase the longer council waits.
Coun. Crystal Froese concurred, saying, “As we know, things get continually more expensive the longer we wait.”
Coun. Heather Eby was opposed to putting the money toward the deficit, saying it would give council a false sense of security and was “a really short-term Band-Aid to make our pain less.” She noted that council is facing a shortfall in the accumulated surplus account because previous councils used it for “things it shouldn’t have been used for.”
“I will support the motion, but hesitantly,” she added.
During a media scrum afterward, city manager Maryse Carmichael said one initiative she started at city hall is monthly reviews of finances with all department heads, which will continue.
She noted that her military and corporate background instilled in her the practice of closely following the financial side of an organization, which she plans to pursue this year with even more rigour and accountability with staff. She reiterated Acker’s point that city administration was reviewing options to fill the deficit.
The “entire story” of how the City of Moose Jaw ended 2023 with a deficit of nearly $1 million will be included in the report that council receives later this spring, Carmichael said.
It was only recently that the finance department finalized the 2023 financial statements, while that report will now be sent to the auditors — which is why council will receive this report around June, she added.
The next regular council meeting is Monday, March 25.
