A new report prepared by Regina city administration says the financial outlook is tough.

The Economic Update and Preliminary 2020 Budget Review report was presented to the Priorities and Planning Committee on Wednesday.

"Funding all the City's capital needs over the next ten years will be challenging," the report said.

Council needs create the 2020 budget with the long-term in mind, the report says.

City's reserves low

The city tries to balance affordability with sustainability, the report said.

Regina City Council meets again on April 29. (CBC)

Challenges highlighted in the report include the city's GDP only growing modestly, some parts of the economy being expected to face challenges and population growing, driven by international immigration.

As the city grows, it costs more because it increases demand on city services, the report said.

The report said the city cannot quickly and easily generate new revenue. Costs for the city are expected to overtake the amount of money being brought in.

Meanwhile, the city's key reserves — the General Fund Reserve and Asset Revitalization Reserve — are low. The report said these two funds are key for the city in the long-term.

Property taxes are the main source of money for the city, along with fees, charges and grants. In the future, the City needs to be innovative and "do things differently," the report said.

The next city council meeting is scheduled for Monday, April 29.