No reason to panic about city’s projected $29-M shortfall: councillor

The City of Winnipeg expects to end this year with a nearly $29-million shortfall in its tax-supported operating budget, as costs for fuel, snow-clearing and other expenses pile up.

The financial outlook is based on data up to June 30 and projects a deficit that is $8.5 million larger than the city’s first-quarter forecast.

“It’s obviously going in the wrong direction but … I wouldn’t necessarily consider it (reason for) panic at this point. It’s not surprising with fuel prices, in particular, being higher than forecast,” said Coun. Jeff Browaty (North Kildonan), city council’s finance chairman.

Traditionally, the city’s finances often improve in later months of the year, though there is no guarantee that will happen.

The public works department expects a $16.1-million shortfall by the end of this year, mostly due to high costs for snow removal and ice control, spring cleaning and roadway construction/maintenance, a finance report notes.

“Even with our larger budget for snow-clearing that we’ve increased over time to more closely match what it costs to remove snow … (we) do have it in a deficit position,” said Browaty, noting snow-clearing contract prices also increased.

The city may need to consider a further budget hike to cover that seasonal cost in future years, he said.

“I believe that’s probably the case. The contracts are up for very obvious reasons, the higher cost of fuel, the higher costs of equipment and, potentially … the higher costs of tariffs on that equipment,” said Browaty.

Winnipeg Fire Paramedic Service expects a $7.4-million shortfall, largely due to overtime costs, while the city’s planning, property and development department predicts a $4.3-million shortfall, mostly due to lower-than-expected fee revenues and higher salary costs.

Winnipeg Police Service expects to end the year $4.5 million in the red, mainly because it has yet to achieve a city council-directed target to save $7 million during the year.

Losses and gains in other city departments affect the final figure.

As a paid service, Winnipeg Transit finances are counted separately. Transit expects to end the year with a $20.7-million deficit, due to higher fuel costs (partly due to the U.S. war with Iran), rising overtime, increased Workers Compensation Board claims and reduced ridership.

“Even with (Transit’s) normal conservative budget, we are consistently above and beyond what was in the budget for (fuel) this year … So that is certainly one of the stresses on transit,” said Browaty.

City finance officials predict the municipal government will have a “consolidated shortfall” of $18.8 million by the end of the year. That broader figure includes the operating budget projection, as well as the financial outlook for city utilities and special operating agencies.

“I think it paints a better picture of the entire city organization, when you include things like Transit, water and sewer utility. It’s just a more consistent look at the entire operation,” said Browaty.

Winnipeg water and waste, for example, expects to earn $33.2 million more than its budget predicted. However, Browaty noted that revenue was raised to help fund billions of dollars of required sewage treatment upgrades.

joyanne.pursaga@freepress.mb.ca

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