Saskatoon city councillor says budget pressures have 'nothing to do with past decisions'

Gough: 'Misinformation' abounds about city budget WATCH: Ward 2 councillor Hilary Gough says it's irresponsible to cut city staff without first agreeing what service level we need.

A Saskatoon city councillor says a $52 million shortfall projected for next year's budget "has nothing to do with past decisions" and is due to economic forces beyond the city's control.

In her conversation with CTV News at Five's Matt Young, Ward 2 city councillor Hilary Gough explains what she sees as the way forward as the city grapples with an unprecedented budget shortfall.

The interview that follows has been lightly edited for length and clarity. You can watch the entire chat using the player above.

Clearly, finances at city hall are not in the best shape. Where did things go wrong and do you think there are areas where the city's spending too much?

Yeah, I mean, that's a great question. I think the first thing we need to clarify is that this $52 million isn't $52 million dollars that was overspent, it wasn't overspending in 2023 or years previous. It's what we're projecting to be a problem in 2024 and the reason I clarify that is because a lot of things have changed over time as we head into 2024. That's creating that pressure.

We are seeing inflation like we've never seen it before in some of our really core areas of spending, places where we spend a lot of money every year, roadways and sidewalks and those sorts of things where our buying power is not going to be the same. So if we want to do the same amount of work, we're going to have to spend a lot more money.

So that's one of the pressures that we're projecting that has nothing to do with past decisions; nothing to do with past overspending and everything to do with the market that we're operating in. The other place where there's pressure, is in building up base funding for some of the things that we have fallen behind on and those are also kind of tricky.

So what that looks like is, in places where we have seen our revenues go down, largely because of COVID or transit revenues or leisure revenues, and they haven't recovered, and so we were able to get some relief from other levels of government through the pandemic and those funding sources have [now] dried up.

So if we want to, we need to fill that gap somehow and the only tool the city has other than those revenues, the fees and transit fares is property taxes. So we have to fix some of those holes that weren't created by overspending but are created by a different overall economic picture that we're operating in, but we have very few tools to turn to.

We're really facing a tricky spot here. I think it's going to take all of us to figure it out.

You say it's not overspending, but other cities are dealing with inflation they're dealing with crime, they're dealing with addictions. Their books are not in the same situation as Saskatoon. Even if you look at last year, Saskatoon ran a deficit of more than $10 million or a shortfall more than $10 million. I mean, Edmonton ran a surplus. Calgary ran a surplus. Regina had a very small deficit of $1.6 million and they're paying for a stadium. Why [do] Saskatoon's finances, at least for right now, appear to be in considerably much rougher shape if you're saying it's not spending?

When we look at how cities budget everybody does it a little bit differently. So some cities put a lot of money upfront in a fiscal stabilization reserve, for example and so when they get to the end of the year, if there's some balancing to do, there's a lot [of money] there. We've chosen to keep it pretty tight in Saskatoon and so what that's meant is when there are shifts in things like the pandemic, or you know, user fee revenues, we don't have a lot to kind of fall back on there.

We've built up revenues or reserves and through the pandemic, we had to make the tough choices about whether to use those or not. But you know, each city runs their books a little differently. I think one of the things that's important to know is that we have extremely responsible fiscal management in our city as reflected in things like our AAA credit rating, we are deemed to be in the top cities, in the country, that banks are willing to lend to because we're so responsible with how we handle that.

So while I understand cities face these pressures at different times, and they appear in different ways, I do think some of these pressures are going to end up being felt by cities, even if they haven't started reporting on them yet.

So we do need to sort this out. The only way to sort it out is to look ahead and figure out what the solutions are for 2024 and beyond.

So you do not think there's an area at city hall where the city is spending too much?

I'm certain there are further ways where we can find efficiencies and council has been directing [city administration] to get reporting on that every year. We received our savings report just last month, I believe. There's always improvement that can be made and I'm absolutely in favour of seeking those and working through where we can find efficiencies. Every budget is a good time to be doing that. Every year is a good time to be doing that. That isn't what has driven this $52-million gap.

The CEO of the Chamber of Commerce was on this program, saying that there needs to be, the city needs to look at cuts, possibly in middle management. There are a number of groups who have said there need to be layoffs at city hall. We have asked this question to other city councillors: Do you believe the city needs to look at its staffing complement as it looks at finding ways to trim spending?

I think we need to look at absolutely everything. I think the most responsible way to do that is go business line by business line. If we look at a business line and we find that there's something that doesn't need to be there, then we should talk about that.

From a service-level perspective, I think it's irresponsible to talk about randomly cutting staff without talking about what the impacts of that are. Staff is not where the spending starts. The spending starts by setting the service level and directing our administration to put that into place.

So we need to talk about service levels, Matt, and what this budget has told us, is in order to keep up our service level on roadways and sidewalks, we'll need to spend an extra $10 million. If we cut a couple of management positions, that's not gonna get us any more sidewalks and roadways and it's not going to fix that $10 million or $52 million shortfall.

There's also been some misinformation shared about, you know, where our numbers are compared to other cities. So I think we also need to be really deliberate about getting accurate information about where the [city's at financially]. But the reality is here, Matt, the trouble this year is going to be trickier than that. We actually need to look at service levels. We need to look at very hard decisions about some of the biggest areas of our budget, which is basic things like roadways and sidewalks and figure out whether we actually [should] be chasing inflation on this, or whether we need to figure out a different strategy. That's where I'll be looking, making sure we're looking at the big areas. Absolutely, we need to look everywhere though.

Finally, always give 30 seconds to my guest to end off. Is there anything else that you wish to add?

Yeah, absolutely. You know, none of this is fun. I know that residents don't want to spend their summers talking about this any more than I do. I'm grateful to the administration for bringing this forward early. Because when there's big problems to solve, we need to put big effort into it. So I think that the process we've laid out is to put council's brains next to administration's to work hard on it, but to especially lay this out business line by business line, and give residents a good opportunity to give us feedback on every part of our budget so that we can make the best and most sustainable decisions for what is an absolutely unprecedented and very tough budgeting process.