December snowstorms leave city hall with $6.2-million-deficit headache

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This article was published 12/01/2017 (3495 days ago), so information in it may no longer be current.

City hall will end 2016 with an operating deficit of $6.2 million, and the flurry of December flurries is to blame.

A financial report released by city hall Thursday reveals snow-clearing efforts last month cost $18.9 million, $13.3 million more than what the city had budgeted for the month.

“Immediate steps are being taken to address the 2016 forecasted deficit, and impacts to the 2017 budget,” Coun. Scott Gillingham, chairman of council’s finance committee, said in a statement released by city hall. “This includes identifying ways to control discretionary spending and departmental expenses in 2017.”

The cost of cleaning up after storms on Dec. 6 and Dec. 25 not only blew a big hole in the 2016 budget; there is collateral damage to 2017’s. Finance officials built this year’s budget around an assumption the city would have a $9.5-million surplus on New Year’s Eve.

The city says the snow-clearing tab for all of 2016 was $39 million — $11 million more than had been budgeted.

More detailed financial information will be presented to Monday’s finance committee meeting, but the statement said it’s expected the 2016 deficit could be reduced after year-end statements from other departments are finalized.

The finance committee will be dealing with a financial status update to the end of November, but it also includes the December snow-clearing costs.

The last time the city ended the year in a deficit situation was 2013, coming up $1.8 million short of a balanced budget before transfers from reserve accounts to cover the shortfall.

The status update indicates the deficit, whatever the final amount, will be covered by a transfer from the city’s financial stabilization reserve fund. The city is not allowed, by legislation, to run a deficit.

The bigger problem facing council is how to make up the expected $9.5-million surplus.

On Wednesday, before the total cost of snow clearing had been released, Mayor Brian Bowman said he didn’t know how the shortfall will be covered.

“That’s a question that will have to be answered at a later date,” he told reporters. “We’ll have to work within our means. That’s how I anticipate we’ll deal with this, like we do for other situations.”

aldo.santin@freepress.mb.ca