City of Winnipeg deficit forecast grows to $7.1M
Snow clearing, fire-paramedic overtime costs among factors pushing deficit higher
The City of Winnipeg's shortfall in its general revenue fund is millions of dollars more than forecast three months ago.
In its latest budget forecast, the city predicts its deficit for 2023 will be $7.1 million, an increase of $4 million since the last budget forecast was released in November.
"The entire city revenue and expenditures over the course of a year, including utilities, is over $2.1 billion," finance committee chair Coun. Jeff Browaty said in an interview.
"So by that metric, $4 million [increase] is not a large amount, but again, things are pretty tight citywide."
The forecast deficit represents 0.5 per cent of the city's $1.3 billion tax-supported budget.
The latest numbers reflect city spending up until the end of November. The report will be presented to the finance committee on Friday.
Higher-than-expected costs for snow clearing, road construction and street cleaning pushed public works $11.9 million over budget.
Overtime and workers compensation costs in the Winnipeg Fire Paramedic Service added up to $6.9 million in cost overruns.
Other contributors to the deficit are lower than expected permit fees, a decrease in transfers from the land operating reserve, enhanced library safety and security improvements at the Millennium Library, and a shortfall in recreation services revenue.
Reduced pension costs and increased interest revenue partially offset those extra costs.
Winnipeg Transit has improved its deficit forecast since the last update. It now expects a shortfall of $900,000, down from $2.9 million. Winnipeg Transit's budget is accounted for separately from the general revenue fund.
At this time last year, the city faced a projected deficit in the operating budget of $56.8 million. It ended the year with a record deficit of $83 million.
The city is legally required to balance its budget each year.
A statement from the city says there are a number of items that are expected to shift the city's finances, and it may draw from the financial stabilization reserve fund.
"We were fortunate to have a very mild December with very minimal snowfall amounts," Mayor Scott Gillingham said.
"It's quite possible that we'll see a bit of a pickup in what the forecasted expenses were for the month of December."
A preliminary final report on the 2023 budget will be presented to the finance committee on Feb. 5. The final audited report will be released in the summer.
A tight financial position
The city's latest forecast comes as council is drafting its next four-year budget for 2024-27.
On Friday, Coun. Russ Wyatt (Transcona) shared details of a confidential briefing given to councillors. He warned the city could face cuts across all departments, as the city planned for inflationary increases of two per cent to all departments, below the actual rate of inflation.
Browaty says that number doesn't account for wage increases, which are the city's biggest expense.
"We are definitely in a tight financial position ... but at the same time, we recognize that Winnipeggers count on services," he said.
"I'm optimistic that when the budget is tabled there'll be a fairly lengthy period of time where people will be able to provide their feedback to their own councillors and have a really good debate."
Both Gillingham and Browaty criticized Wyatt for releasing information shared in confidence.
Browaty said the budget working group wanted to bring the rest of council in to let them know that despite the financial challenges, they are addressing a lot of the priorities they identified as a group during a council retreat early last year, as part of preparing council's strategic priorities action plan.
"So a little disappointing that one member of council decided to go and sort of break that confidence," he said.
Browaty says a draft of the budget will be released in February. Council will cast a final vote at its meeting in March.
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