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Winnipeg’s financial forecast hit a typical first-quarter snag with an early deficit in the tax-supported operating budget.
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According to its update released Monday, as of March 31 the City’s general revenue fund is staring down a projected deficit of a whopping $39.3 million with a slim surplus of $0.2 million in Transit.
The report, set to be discussed by the finance committee on Thursday, sheds light on the factors contributing to this financial crunch.
Public Works accounts for nearly a quarter of the deficit with $10.5 million extra due to unforeseen costs for snow clearing and ice control. Meanwhile, overtime and Workers Compensation costs for Winnipeg Fire Paramedic Services costs came in $12.7 million higher than expected. Lower than expected permit fees of $8.4 million are a hit from the Planning, Property and Development. And the Winnipeg Police Service is facing higher-than-expected expenditures of $11.3 million, though that is somewhat offset by increased revenues of $6.7 million.
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Councillor Jeff Browaty, chairman of the Standing Policy Committee on Finance and Economic Development, minced no words in addressing the predicament. “While it’s no surprise to see a deficit in the first quarter, this forecast poses a real challenge for the rest of the year,” Browaty said. He emphasized the need for city departments to tighten their belts and navigate these early operating shortfalls with precision.
The Financial Stabilization Reserve Fund could be used for up to $31.7 million of the deficit, pending Council approval. However, this lifeline comes at a cost, with the balance could be fully depleted by year’s end.
City Hall is working on a mitigation plan to tackle the forecasted deficit head-on which the finance committee will discuss in early July.
The City’s financial update is publicly available through its Decision Making Information System.
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