More-expensive snow clearing behind projected $13-M public works cost overrun: city report

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This article was published 05/11/2024 (355 days ago), so information in it may no longer be current.

A spike in the cost of private snow clearing contracts is the main culprit behind a projected $13.1-million overrun within the public works department.

The City of Winnipeg re-tendered its agreements with 10 external snow and ice contractors last fall, resulting in a 52 per cent average cost increase over two years, says a new departmental report.

The cost of equipment, fuel and labour has increased considerably in recent years, which has translated to price hikes in the private and public sectors, Coun. Jeff Browaty, chair of city council’s finance committee, said Tuesday.

“It’s a challenge,” he said. “Winnipeg is a winter city and we have to plow the snow regardless… We can’t shut Winnipeg down. It’s one of the most important services Winnipeggers count on.”

Browaty said he has already been looking into the report, which is to be tabled during a finance committee meeting next week. He stressed the tender process was competitive, with numerous contractors bidding on the jobs.

The report, which is based on financial forecasts from June, says the city will likely spend about $9.9 million over budget on snow services. Additional overruns of $2.6 million for “city beautification” and $1.4 million for roadway construction and maintenance are also expected.

The beautification expenses are mostly related to citywide cleaning efforts, including ongoing street sweeping, encampment cleanup and litter collection. Increased pothole-patching operations resulted in higher road maintenance costs, the report says.

The public works department is asking the finance committee to authorize the overruns, which are offset slightly by approximately $820,000 in net savings. It recommends using other savings in salaries and benefits to further mitigate the cost.

The department is also seeking approval to spend a further $9.9 million on snow-clearing, if needed, in the event of serious weather events before January.

The public service can only make payments that are approved within the budget, so it is pre-emptively requesting authorization to ensure contractors are paid on time, Browaty said.

In a best-case-scenario, the weather will co-operate through the rest of the year and the additional funds will not be needed, he said.

“I don’t want to curse anything, but the fact that we still have no snow on the ground is a very good thing.”

If the finance committee authorizes all of the projected over-expenditures and the full amounts are spent, it will leave the public works department approximately 6.7 per cent over its $343-million annual operating budget, the report says.

The request comes after the city announced an updated projected overall deficit of nearly $20 million in September. The city managed to reduce the deficit by roughly half since the last quarterly forecast, which projected a $39.3 million deficit back in March.

The city’s financial stabilization reserve fund — which functions as a rainy-day fund — can cover a deficit up to $16.3 million; Beyond that, it will be depleted.

“We’re estimating more than we can reasonably achieve at this point and that’s a problem, especially in an environment where we don’t have that rainy-day fund anymore. We have to make some tough decisions,” Browaty said.

“We’ve tried to keep everything as affordable for Winnipeggers as possible through the pandemic and through all of the massive inflationary periods we’ve had in recent years, but it’s come to roost.”

The overall deficit is subject to change before the end of 2024.

—With files from Joyanne Pursaga

tyler.searle@freepress.mb.ca