Saskatoon city manager says reserves can't be used to fund deficit

Saskatoon city manager MurrayTotlandsays the municipality's reserve funds shouldn't be seen as a rainy day fund to backstop cuts to provincial transfers.

On Tuesday, Premier Brad Wall reiterated that the province's towns and cities should use a small part of their reserves to cushion millions of dollars in budgetary shortfalls generated by the provincial budget.

• Sask. premier insists cities use reserve funds to account for budget shortfalls

Regina and Saskatoon are dealing with multimillion-dollar funding crunches due to the province scrapping its grants-in-lieu program. Regina is facing a $10.3-million budget deficit, while Saskatoon is facing a $9-million shortfall.

• 'No real easy or painless way' to address Saskatoon funding shortfall: city manager

However,Totlandsaid Saskatoon's current reserve of $140 millionplays an important role in the city and must remain intact.

Some people think this is money we've stuck in a mattress, and it's just sitting around. That's not the case.- MurrayTotland, Saskatoon city manager

"What would Saskatoon look like if we didn't have the reserve?"Totlandasked CBC Radio'sSaskatoon Morning.

"I think you would see a situation where our roads are deteriorating, our sidewalks are cracking and crumbling. You would go to the tap and the water may not come out."

Totlandsaid the city's reserve funds are continually fluctuating, and are used every day to fund 65 per cent of Saskatoon's repairs.

"Some people think this is money we've stuck in a mattress, and it's just sitting around," hesaid. "That's not the case."

Totlandsaid the money has also been used to leverage federal grant money in the past, and has been used to attract millions of dollars for projects to the city.

"This strategy has served the city very well," he said. "Our credit rating agency looks to Saskatoon and they see the positive aspects of the reserve strategy and the financial strategy the city has. It's one of the reasons we have a AAA credit rating."

He said the city is actually looking at expanding its reserve program, setting aside money specifically for parks and infrastructure.