City launches action plan in face of projected $27-M deficit By: Joyanne Pursaga Posted: 3:57 PM CDT Monday, Jun. 26, 2023

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This article was published 26/06/2023 (1156 days ago), so information in it may no longer be current.

City of Winnipeg departments must find millions of dollars in savings this year to help address a $27-million projected deficit, which is also expected to drain its so-called “rainy day” fund.

A “deficit action plan” released Monday lists steps to reduce staff overtime, delay filling some positions, defer debt, and limit some extra staff pay.

Coun. Jeff Browaty, finance committee chairman, said he expects the action plan to effectively tackle part of the early deficit projection, which is largely blamed on emergency services shortfalls.

“We’re going through this in a balanced way, continuing to provide the services that Winnipeggers expect,” Browaty said.

The cash crunch comes after COVID-19 pandemic costs and losses greatly depleted the financial stabilization reserve that typically covers annual cost overruns. Based on finances up to March 31, council expects to restore that rainy day fund to $19.5 million by the end of this year. However, it will be all-but emptied to address the deficit.

The city’s action plan calls for $7.7 million of savings to cover the remaining shortfall and leave the rainy day fund with $200,000.

Long before the pandemic, council mandated the fund match the value of at least six per cent of the tax-supported budget, which would be $78 million for 2023.

“We’re looking to, in the multi-year budget, work toward replenishing the fiscal stabilization reserve. This is certainly not an ideal circumstance to be in right now,” said Browaty.

“This is certainly not an ideal circumstance to be in right now.”–Coun.  Jeff Browaty

Through the savings plan, city departments have now been instructed to defer debt to save $3.4 million in interest, reduce overtime and “acting pay” (increased wages for employees who temporarily take on more senior roles), defer operating expenses, and strictly manage vacancies (i.e. delay filling some staff positions).

The moves seek to produce a combined savings of $2.3 million.

The city also expects to earn $2 million through higher-than-expected interest rates.

Browaty said the city will continue to hire staff to protect key services and address labour shortages, such as swimming instructors and Winnipeg Transit drivers.

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“Those areas where we’re having challenges, I think the direction is still to be to continue (those hires),” he said.

However, the head of the city’s largest union said the plans bode poorly for Winnipeggers and civic staff.

“(Staff are) being asked to do more with less, they’re basically working in skeleton crews. Vacancy management… by increasing that, that’s just going to impact retention, that’s going to impact service delivery, and it’s going to increase workload on people,” said Gord Delbridge, president of the Canadian Union of Public Employees Local 500.

Delbridge said acting pay is also used to compensate employees for serving in higher classification roles, so reducing it could violate collective agreements.

However, City of Winnipeg spokesman Kalen Qually said any change to acting pay provisions will adhere to all collective agreements.

“The action plan is looking at ways to fulfill these positions with staffing at the same level in order to reduce acting pay,” Qually wrote in an emailed statement.

He said the city is “not anticipating” any service cuts due to the action plan and layoffs are not being considered.

Some councillors expressed concern about the financial outlook.

“We’ve had a really negative impact from COVID. We’re doing all we can not to cut services, but there’s always that worry,” said Coun. Janice Lukes, chairwoman of public works.

”We’re doing all we can not to cut services, but there’s always that worry.”–Coun. Janice Lukes

Lukes said it’s essential council rejuvenate the rainy day fund, since COVID proved the need to plan ahead for sudden economic downturns.

Coun. Russ Wyatt stressed the city needs to transparently fund its priorities and balance its budget.

“We have to be frank and honest and upfront about what that’s going to cost… Other cities are making those changes, including tax increases, to fund the things that need to be done,” said Wyatt.

A finance report warns further actions to save money could be needed, especially if the next round of ample snow arrives before the end of the year.

An additional $8 million is available to help, if required, from retained earnings linked to a sewage disposal fund, the report notes.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga

Joyanne Pursaga
Reporter

Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.

Every piece of reporting Joyanne produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.