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Snow-removal budget blown

Report forecasts $21-M deficit in '14

Hey there, time traveller!
This article was published 13/6/2014 (1160 days ago), so information in it may no longer be current.

The confluence of a full moon and Friday the 13th brought all manner of unpleasant financial news to the City of Winnipeg, now facing its worst year-end deficit in a decade.

In a series of financial reports published Friday, the city revealed it blew its entire snow-clearing budget for 2014 during the first three months of the year, racked up a $3.5-million tab for dealing with the frozen-pipe crisis and will incur up to $16 million in additional costs to complete a trio of major construction projects.

The most severe winter in more than a century is to blame for the depletion of the snow-clearing budget for 2014 in just three months.


The most severe winter in more than a century is to blame for the depletion of the snow-clearing budget for 2014 in just three months.

The city spent $40.6 million on snow-clearing from January to March, the quarterly financial status report shows.

The annual snow-clearing budget is $32 million, but only $26.7 million is devoted to clearing snow from roads alone.

The most severe winter in more than a century is to blame, controller Paul Olafson wrote in a report to the finance committee.

"The over-expenditures are the result of above-average snow accumulation of 103 centimetres versus a 30-year average of 52 cm; as well as an above-average number of days experiencing snow," Olafson wrote.

"Compounding this was the 45 cm of snow received in December 2013, resulting in significant snow-disposal costs in 2014."

The extreme cold in January and February made snow removal and ice-clearing especially challenging, boosting costs, the report said.

As a result of the additional spending on snow-clearing, the city is in position to record a $21.4-million deficit on its $968-million operating budget by the end of the year.

To prevent that from happening, the city will cut discretionary spending, said finance chairman Russ Wyatt (Transcona).

"There is no doubt it's going to be a challenge to do this by the end of the year. Departments have been told to reduce discretionary spending without affecting front-line services."

Early projections of year-end deficits regularly turn into surpluses by the end of the year. But the last time the city faced a potential deficit this large and this early was 2005, when the projected year-end deficit was $18 million in March.

The financial report pegged the cost of dealing with the frozen-pipe crisis at $3.5 million. Wyatt said the city hopes to recoup some of the cost through a disaster-financial-assistance claim.

"We put in a DFA claim and we hope the province accepts it's a disaster," he said. "Unfortunately, the province has been indicating so far (it won't) recognize it as a disaster. How far down does the frost have to go for them? Does it have to be the coldest winter in 500 years? Does it have to go down 16 feet to their gas pipelines?"

If the claim is rejected, the costs will be absorbed by water-and-waste ratepayers.

Status reports for major capital projects contained more bad news. The $77-million twinning of Plessis Road will cost an additional $3 million even though it's not over budget, thanks to a one-year delay that negated the terms of a funding deal with Ottawa and Manitoba.

A new Polo Park road-improvement project has seen its budget increase to $45 million from $40 million, though most of that cost may be recouped from developers through deals that have yet to be negotiated.

And the long-delayed construction of new roads through Waverley West is up to $77.6 million, or $7.9 million more than the figure stated in this year's capital budget. This job was originally announced as a $54.3-million project in 2010.


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