Seeking specifics on Transit surplus spending By: Tom Brodbeck Posted: 7:00 PM CST Wednesday, Feb. 12, 2020

Opinion

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This article was published 12/02/2020 (2035 days ago), so information in it may no longer be current.

Winnipeg Transit has been generating millions in operating surpluses every year for at least the past decade, but it appears only a fraction of it has been reinvested into transit services.

It’s something Coun. Scott Gillingham, chairman of the City of Winnipeg’s finance committee, said he wants to get to the bottom of.

After the Free Press raised the issue last week, Gillingham said he has asked for documentation from Transit and the city’s interim chief financial officer on how the surpluses are spent.

“I’ll be requesting that an annual report be presented to the standing policy committee on finance that details the allocation of Transit surpluses,” said Gillingham. “A summary report like that would help council, and it would help the public, better understand how Transit surpluses are used by compiling it and presenting it in a single document.”

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From 2009 to 2018, Winnipeg Transit posted annual operating surpluses ranging from $12.6 million to $33.2 million, according to the city’s audited financial statements. Preliminary figures show the agency’s operating surplus last year was $6.9 million.

Surpluses occur when revenues are higher than projected (including higher-than-anticipated fare revenue) and/or when expenditures are lower than expected.

The surpluses are rolled into the city’s retained earnings. Some of that money is spent in subsequent years on Transit capital and other projects (those expenditures are logged in the city’s annual capital budget). However, the published expenditures have fallen well short of the surpluses generated.

The highest spending from Transit’s retained earnings in recent years was in 2017, when $8.4 million was budgeted. That included $5 million for the expansion of the Fort Rouge garage, $2 million for new buses, $345,000 for bus fleet cameras, $565,000 for bus stop technology upgrades, and $445,000 for building upgrades.

However, the previous year, Transit posted an operating surplus of $33.2 million, and underspent its budget again in 2017 by $13 million.

There were no retained earnings expenditures for Transit listed in the 2018 capital budget.

In 2019, $7 million was budgeted from retained earnings, including money for bus safety shields, an electric bus study, a heated bus shelter program, and the low-income bus pass program.

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All told, Transit generated operating surpluses of $180.2 million in 2009-18 — but total budgeted expenditures from retained earnings over those 10 years was only $25.7 million.

Gillingham says he doesn’t know how the rest of the money was used — which is why he wants to produce annual summaries of how surpluses are spent.

“That retained earnings account is a rolling account, as I understand it, so the retained earnings account may not all get allocated in a single year — it may roll forward and get allocated in future years,” said Gillingham. “Some of the allocations are not as obvious.”

Amalgamated Transit Union Local 1505, which represents Transit drivers and mechanics, has complained surpluses should be used to improve the service, including increasing capacity.

The Free Press contacted Transit for a better explanation on how annual surpluses are spent.

After a week of inquiries, Transit responded via email: “Unallocated funds are carried forward and are disclosed as such as part of Transit’s year-end financial statements in the note disclosure, which discloses how much of the retained earnings are allocated versus unallocated."

A vague and entirely unsatisfactory answer.

Governments often do a poor job of providing the public with clear financial statements to show taxpayers how their money is spent. The City of Winnipeg is no different. When the chairman of the finance committee can’t even figure out where Transit surpluses have gone, there’s obviously a reporting problem.

Transit service has deteriorated significantly over the past several years, with an increase in the number of buses running early or late — or not showing up at all — and a spike in pass-ups (buses too congested to pick up would-be passengers at stops).

Despite that, Transit is under-spending its budget every year by more than $12 million. That’s a lot of money in a $204-million operating budget.

Something doesn’t add up.

tom.brodbeck@freepress.mb.ca

Tom Brodbeck
Columnist

Tom Brodbeck is an award-winning author and columnist with over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.

Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.