Saskatoon city budget update estimates $7.9 M shortfall in 2017

According to city administration, council will need to find roughly $8 million to balance the books next year.

Last week, councillors voted in favour of releasing a budget update before next month's municipal election. The update projects spending increases will create a $7.9 million gap in revenue in 2017.

That gap will likely mean tax increases, cuts in services, or both. A tax increase of 3.89 per cent would be needed to make up the shortfall.

"The administration is still preparing the 2017 Business Plan and Budget and has not finalized its estimates that will be contained within it," the report reads. "What follows is the current estimate of known revenues and expenditures that will form part of the budget document."

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While revenues are expected to grow by $10 million, increased spending on roads, civic facilities and a $7.6 million increase due to inflation has created the almost $8 million gap.

The update said any spending increases tied to growth are still in development, and are not included in the budget update.

"Population increases will drive housing demand, and demand for new housing creates the need for new neighbourhoods," the report said. "The creation of new neighbourhoods typically requires the addition of new land to the city which requires civic services, such as paved streets, water and wastewater to name a few."

The 2017 budget will be officially brought to the Governance and Priorities Committee on November 7.

Saskatoon's municipal election will be held October 26.