City’s forecasted $3.1-M deficit seen as improvement

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This article was published 27/11/2023 (690 days ago), so information in it may no longer be current.

The City of Winnipeg’s overall deficit is expected to be about $3.1 million this year, but snow-clearing costs might still tack millions more onto the tab.

A finance update predicts the city will end the year with the deficit, while Winnipeg Transit prepares for an additional $2.9-million projected loss, based on financial figures up to Sept. 30.

Coun. Jeff Browaty said the financial picture is looking up, compared to recent pandemic years.

“Going through the whole experience of COVID-19, during that time (budgeting) was certainly a challenge … I think (our) overall $3.1-million deficit for the course of the year is not too, too bad,” Browaty, chairman of the finance committee, said.

The city’s public works department is expecting one of the largest forecasted overruns, including $8.6 million in extra snow clearing, construction and city beautification (such as street cleaning) expenses.

In a separate report, the department asks the finance committee to approve a total $21.9 million cost overrun, which would also include up to $13.2 million more to clear snow and ice during the final months of the year, if needed. About $73,000 would be spent on renaming Bishop Grandin Boulevard as Abinojii Mikanah.

Snow clearing alone is expected to cost an extra $5.3 million so far, based on weather up to the end of September, on top of the $36.3 million council set aside for the work in 2023.

Overall, Public Works expects to end the year with a $10.4-million budget deficit, once revenue shortfalls are factored in.

“This is still symptomatic of the underfunding for snow (removal). I am fighting right now, through the budget working group process, to try and move our annual budget closer to… reality. The current funding is certainly less than (what’s needed to clear) the average snowfall, which in a city like Winnipeg, I don’t think makes a lot of sense,” said Browaty.

Meanwhile, the average price for Winnipeg’s 10 external snow-clearing contracts jumped 24.3 per cent higher this year, the report notes.

“We are seeing certain inflationary pressures in those contracts… (and) the cost of fuel is sometimes borne by the city in these contracts (as well),” said Browaty.

Other municipal departments are also predicting year-end deficits, including a $6.9-million expected loss for the Winnipeg Fire Paramedic Service, mostly due to increased overtime and workers’ compensation costs. The planning, property and development department expects a $4.8-million deficit due to reduced permit fees and transfers.

The city’s total forecasted deficit would be much higher, if not for millions of dollars of savings, including $12.9 million from decreased Winnipeg Police Service pension costs. The city also benefited from increased interest on its investments.

Browaty noted the municipal government’s finances often improve over the final months of the year, so the initial $3.1-million deficit could still be eliminated, especially if Mother Nature doesn’t deliver much snow.

While Transit fares are now expected to fall $4.9-million short of budget expectations, which is offset by fuel, salary and benefit savings, the councillor noted pandemic hits to the city’s budget are now much less significant.

At this time last year, the city was predicting a deficit of $56.8 million, largely due to the combined pressures of COVID-19 and massive snow-clearing costs, he noted.

“Things are more stable now. We’re not seeing the drastic (budget) movements we did previously,” said Browaty.

The legacy of those COVID-19 losses, however, continues to affect Winnipeg’s overall financial picture.

The finance report notes the city’s financial stabilization reserve, also known as the rainy-day fund, is currently expected to drop to just $16.5 million by the end of this year. That level would fall $61.5 million short of the $78-million minimum target council set for the reserve this year, which equates to six per cent of the tax-supported operating budget.

The finance chairman said he doesn’t expect the city will make any sudden moves to boost the reserve, such as service cuts.

“I don’t think that any in-year changes right now are warranted but certainly we’re taking a look at that bigger, multi-year picture right now,” he said.

joyanne.pursaga@freepress.mb.ca

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