COVID, snow-clearing costs could leave Winnipeg with $18M deficit, Gillingham says

The city of Winnipeg’s finance chair says the costs of COVID-19 and snow-clearing means the city will finish the fiscal year in debt.

Coun. Scott Gillingham says the city is currently projecting a deficit of at least $17.9 million for the end of the financial year, thanks to a larger-than-expected drop in general and transit revenue, and an increase in COVID-related and snow clearing costs.

The numbers look as follows:

• $17.9 million shortfall in general revenue, made up mostly of a $14 million increase in COVID costs and a $4.6 million increase in snow clearing costs — and counting
• $3.5 million shortfall in transit revenue

The city’s financial stabilization reserve fund will be used to cover the shortfall in the general revenues, Gillingham said.

“The city is forecasting an over-expenditure related to snow removal and ice control for 2021 following a significant snow event in November that saw an estimated 30 centimetres of snow fall in Winnipeg,” said the city, adding it is also calculating December’s snow clearing costs.

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“Snow clearing and ice control expenses in November totalled $9.7 million, $6.6 million higher than the budget allocated to November,” said Melissa Wensel, manager of financial reporting for the city in the report to be presented to the city’s finance committee on Tuesday.

“Savings in salaries and benefits and insect control have largely offset the projected $4.6 million snow removal and ice control over-expenditure.”

However, another significant snowfall in December is still being counted.

“It is expected that the Public Works Department will request a 2021 over-expenditure authorization for snow clearing and ice control,” Wensel said.

0:54 Winnipeg road conditions frustrating motorists, crews working to clear ruts, ice

The transit shortfall will be covered by “$16 million in retained earnings available to fund this.”

As for the extra COVID-19 costs, Wensel said the city is considering numerous options, including:

• use of transit unallocated retained earnings
• reduced discretionary spending (including non-discretionary travel)
• review and approval of all vacancies ahead of position postings, delaying hiring when possible
• voluntary furlough program
• additional transfer from Financial Stabilization Reserve
• delaying issuance of debt
• deduced operating costs from transit service reduction (2021 approved budget)
• one-time transfers from the Southwest Rapid Transit Corridor Reserve and Transit Bus Replacement Reserve (2021 approved budget)
• reduction of services and supplies expenditures in Winnipeg Parking Authority

“We will continue to carefully manage the city’s finances while navigating the challenges of the Omicron variant,” Gillingham said.

“The city is also looking to the future and will implement the Economic Response and Recovery Plan to support Winnipeg residents and strengthen the local economy.”