City projects deficit of nearly $40M this year

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This article was published 10/06/2024 (495 days ago), so information in it may no longer be current.

The City of Winnipeg expects to end 2024 with a deficit that would drain its rainy day fund and require an additional cost-cutting action plan, if the financial picture doesn’t improve.

The city is projecting a $39.3-million deficit for its tax-supported budget, based on finances up to March 31.

Deficits of $12.1 million for Winnipeg Fire Paramedic Service, $9.6 million for public works, $7.4 million for planning, property and development and $4.5 million for the Winnipeg Police Service are expected to contribute to the shortfall. Unrealized savings targets and recreation revenues are also expected to add to the red ink.

Aside from 2023, this is the only time in recent history Winnipeg’s first-quarter deficit projection was too big to be covered by the financial stabilization reserve fund.

“It’s not unusual that at the beginning of the year, we have a bigger deficit … (But) $39.3 million was a little bigger than expected… It’s something to keep on top of,” said Coun. Jeff Browaty (North Kildonan), chairman of the finance committee.

In recent years, Winnipeg’s financial picture typically improved in later months, with some pandemic exceptions. For example, the city projected a $27-million deficit in the first quarter of last year, which fell to just $300,000 by year’s end.

If finances don’t improve this year, Winnipeg’s financial stabilization reserve could cover $31.7 million of the projected 2024 deficit, which would empty the fund and leave no money for financial emergencies.

City finance officials are expected to share a plan to address $7.6 million of the potential deficit the reserve doesn’t cover, at a July 5 finance committee meeting.

Browaty said the city must prepare to address the potential deficit now, even though it could drop later.

“You don’t want to be basing your finances on hopes and prayers, so, certainly, it is concerning,” he said.

The finance chairman said it’s too soon to say whether the cost-saving measures could include service cuts or layoffs, though he expects the city would avoid cutting “public-facing” services. He said delays in filling empty staff positions would be more likely than job losses.

The fire paramedic service’s expected $12.1-million shortfall is the largest among city departments so far, which the report blames on increased Workers Compensation Board injury claims, overtime and other operating costs.

Browaty said he will seek ways to better control that budget, since there are 167 full-time firefighters needed to fill all shifts, but 216 are on staff.

“I find the large amounts of overtime in Winnipeg Fire Paramedic Service really troubling… The fact is at any given time 49 additional employees (are in place), you’d think they’d have enough resources in-house to avoid any overtime,” he said.

“You don’t want to be basing your finances on hopes and prayers, so, certainly, it is concerning”–Coun. Jeff Browaty

The councillor suggested more online training could occur to reduce the time firefighters aren’t available to respond to emergency calls.

But the head of the firefighters union said online training is already used for that purpose and the only realistic way to cut overtime costs would be to hire more staff.

“The answer is simple: hire more people, adjust your staffing ratio and it should directly mitigate overtime costs. We’ve been shouting that from the rooftop for decades now,” said Tom Bilous, president of the United Fire Fighters of Winnipeg.

Bilous said the city actually has fewer firefighters per shift today than it did in 1981, when there were fewer residents and calls for service.

“Our position is you’ve got to raise taxes, you’ve got to hire more staff and then you (wouldn’t) need overtime to backfill for injuries, long-term disability, vacation… (or other leave),” he said.

He said the city should have at least 200 active firefighters on shifts, rather than setting 167 as a minimum staffing level.

In an email, WFPS spokeswoman Terryn Shiells said the service’s overtime budget is typically set low, which leads it to ask for additional funding each year.

Shiells said the staffing ratio also doesn’t cover all absences.

“Recently, we are having to call in approximately 10 to 15 staff each shift in order to reach the 167… to operate all fire vehicles,” she wrote.

Shiells noted city council recently rejected a WFPS cost-saving option to staff fewer fire vehicles per shift.

Meanwhile, the police shortfall is linked to an inability to meet an in-year savings target, while planning, property and development is facing a drop in permit revenue.

The public works shortfall is being blamed on higher snow-clearing costs, which are expected to come in about $10 million over budget.

Browaty said that tab increased largely due to salting and sanding operations for icy streets, noting he supports calls to increase the overall snow and ice-control budget.

“We don’t budget (enough) even for an average snowfall… Every year, it’s predictable as anything that we have these over expenditures,” he said.

Winnipeg Transit’s overall outlook is more positive, thanks to fuel costs coming in $3.3 million lower than expected. However, Transit’s actual surplus is expected to be $200,000, mostly because fare revenue is on track to fall $3 million short.

joyanne.pursaga@freepress.mb.ca

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