City’s projected deficit up to $7.1M

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This article was published 08/01/2024 (684 days ago), so information in it may no longer be current.

Winnipeg Mayor Scott Gillingham said although the city’s projected deficit for 2023 continues to balloon, he and councillors are diligently working to keep this year’s property tax increase to no more than 3.5 per cent, which was his election promise.

The latest report on city finances, to be discussed at the finance committee meeting Friday, shows the city is up against a projected deficit of $7.1 million, and Winnipeg Transit is facing a projected loss of $900,000.

The forecast, based on projected expense and revenue figures until to Nov. 30, 2023, represents a $4-million increase to the deficit from the city’s third-quarter forecast of $3.1-million announced in November. At that time, Transit’s projected deficit was $2.9 million.

Gillingham said they still hope the deficit will come in lower when the final 2023 figures come in.

“Our (chief administrative officer) has made every effort to reduce costs in December,” the mayor said Monday.

“We had depleted the rainy day fund. It was there in case we had significant financial challenges and the pandemic presented us with those challenges. We haven’t recovered from the pandemic impact yet.”

Gillingham said one area that took a hit last year is ‘net taxes added,’ which includes increases in taxes tied to home renovations or the construction of new residences.

In the 2023 budget, the city predicted it would earn an additional $17.8 million under that category, but it looks like it will come in about $3.9 million below that amount.

“A budget is a forecast budget,” he said. “We forecast revenue and we forecast expenses.”

“So when you look at a $7.1-million deficit, it is because of an over estimation of revenue and an under estimation of expenses. But any deficit we take very seriously.”

The financial picture is better than it was at this time last year when the city was predicting a deficit of $56.8 million thanks to the continued impact of COVID-19 and a huge increase in the cost of snow clearing.

Finance committee chairman Coun. Jeff Browaty pinned the $4-million increase to the forecast deficit on higher costs for snow clearing, roadway construction, maintenance and street cleaning.

The public works department forecasts an over-expenditure of $11.9 million.

“We’re in a tough fiscal environment,” Browaty said. “People don’t want to pay a ton of new taxes.”

The mayor and finance chairman said they wouldn’t comment about the details of a leaked report into a closed-door budget meeting last week. It suggested there would be cuts to city services in all departments and that major projects — such as the widening of Kenaston Boulevard or extension of Chief Peguis Trail — are not in the budget.

“I was very disappointed (Transcona) Coun. (Russ) Wyatt shared details of the city’s draft budget,” Gillingham said.

“(But) I made a commitment to keep the property tax increase to 3.5 per cent and I have every intention in keeping my promise. Winnipeggers are facing challenges with their household budgets. That’s one of the reasons why the city needs to control our costs.”

Browaty said Kenaston and Chief Peguis aren’t in the budget yet because economic impact reports, which are required by the provincial and federal governments before they can financially support the projects, are still being prepared.

He said replacement of the Arlington Bridge was left out of the budget because it just closed — in November — and the city is waiting for a consultant’s report on it.

Meanwhile, the city’s financial forecast shows other financial pressures include $6.9 million in overtime and workers compensation costs for the Winnipeg Fire Paramedic Service and lower-than-expected permit fees and decreased transfers from the land operating reserve.

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Enhanced security at the Millennium Library and a shortfall in recreation services revenue have resulted in a projected community services shortfall of $2.1 million.

Browaty said those shortfalls were partially offset by more interest revenue thanks to higher interest rates, as well as reduced pension costs and changes in corporate contingencies.

He said the city’s financial status will shift again and the government “should be in a position to reach balance over 2023” and might draw from the financial stabilization reserve fund if needed.

“It can be difficult to budget for certain factors over the course of the year, such as weather conditions or economic activity,” Browaty said in a release.

kevin.rollason@freepress.mb.ca

Kevin Rollason
Reporter

Kevin Rollason is a general assignment reporter at the Free Press. He graduated from Western University with a Masters of Journalism in 1985 and worked at the Winnipeg Sun until 1988, when he joined the Free Press. He has served as the Free Press’s city hall and law courts reporter and has won several awards, including a National Newspaper Award. Read more about Kevin.

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