The City of Regina is heading toward a $5.1-million year-end deficit, according to a mid-year financial report that projects numbers from the end of June forward.
"The forecasted deficit is primarily due to the negative financial impacts of the COVID-19 pandemic which have been partially offset by actions taken by administration to reduce the financial impact of COVID-19 on city finances," the report reads.
The report goes on to attribute the shortfall to reduced revenues, such as decreased transit and recreational fees, along financial relief programs for residents and businesses, and increased services to help the most vulnerable.
The report noted that in April, near the start of the pandemic, the city approved "up to $7.2 million in 2020 current contributions to capital to be redirected as necessary to offset the financial impacts of COVID-19." Now, $5.1 million of that money will be moved over to balance the city's general operating fund.
According to Barry Lacey, the city's executive director of financial strategy and sustainability, roughly $6 million of that $7.2 million comes from residential road renewal projects that didn't go ahead this year.
"A lot of that is because there was water work that needed to be done along with the rebuild of those roads, and — because of COVID — we didn't want to run the risks of having to turn off water and have temporary water lines," he said at Wednesday's finance and administration committee meeting.
Lacey assured councillors the road projects that were not completed this year will still get done in 2021 via funding from the province's Municipal Economic Enhancement Program.
He also said this financial forecast could change by the end of the year, listing the ongoing financial impact of the pandemic, potential bad weather events and/or extra support from the federal and provincial governments as unpredictable factors.
Lacey said additional funding is still expected from Ottawa's Safe Restart Program in the form of a general allocation of $12.8 million and another roughly $3.5 million to cover any transit woes. Any leftover cash is set to go toward paying pandemic costs in years to come.
Mosaic Stadium, REAL feeling the financial hit
Lacey also mentioned that, due to COVID-19 putting a stop to large events, the city's 30-year plan to pay off Mosaic Stadium could be impacted.
According to the report, the stadium is expected to miss out on between $4 million and $5 million this year. Lacey said this is mostly due to a $12-per-seat levy at Roughrider games that isn't being collected.
"Administration is actively working with the stadium operator, REAL and the SRFC to identify opportunities to ensure the long-term financial sustainability of Mosaic Stadium," the report said.
On the upside, because the stadium hasn't been hosting its usual events, Lacey added there could be some operating maintenance cost savings. However, that money would likely go to the Regina Exhibition Association Limited (REAL), which runs the stadium, not the city directly.
"Given that we're all consolidated, we've been talking to them about using whatever cash is left to help out with their other cash flow issues on other parts of their operation," he said.
The mid-year financial report lists the cancellations of this year's Farm Show, Queen City Exhibition and the CFL season as what have "pushed REAL's cash flow situation to a critical point."
In April, city council approved an amendment to increase REAL's operating line of credit to stabilize its cash flow. Since then, REAL has deferred utility and other payments, as well as temporarily laid off staff, the report said.