City of Winnipeg approves plan to deal with $40M deficit

Posted on July 5, 2024 by Peggy

The City of Winnipeg has a plan to deal with a nearly $40-million projected deficit this year.

The fiscal stabilization reserve, which provides a cushion for the city when operating expenses go over budget, started the year with a balance of $15.7 million — less than half of what would be needed to cover the projected $39.3-million deficit.

The city plans to forgo transferring more than $15 million from its general revenue into the reserve fund as a way to cut down the deficit. It will also use debt deferral, interest savings and expenditure management to further reduce the shortfall.

The plan does not call for service reductions or staff cuts.

The finance committee approved the plan at its meeting on Friday.

Committee chair Coun. Jeff Browaty (North Kildonan) said he feels confident in the plan, but acknowledged the city faces challenges keeping the deficit down.

“There are some systemic challenges that I find with the budget, where we are, on an ongoing basis, short-funding things — like snow removal in particular,” he said.

Years of the COVID-19 pandemic, along with higher-than-expected snow-clearing costs, overtime and other expenses have depleted the reserve fund.

Browaty expressed concern about how the city will replenish it.

“We do need that fiscal stabilization fund for future major problems and major concerns,” he said.

“I think [the solution is] economic growth and economic activity, seeing all the housing starts. Hopefully … the Housing Accelerator Fund will spur development and have new properties on our tax roll going forward.

“It’s not necessarily an overnight fix, but I think it’s a long-term piece that we’ll do to get there.”

In addition to cancelling the $15.4-million transfer to the reserve fund, the city will use debt deferral to save $2.8 million.

Additional interest earnings due to higher interest rates are expected to bring in about an extra $4 million this year, the plan presented to the finance committee says.

Departments will also be asked to find $800,000 in savings.