Plans are underway for the City of Winnipeg to address concerns over its operating budget.
This follows a forecasted drop in the budget at the end of March, stating that the city could be $27 million in debt by the end of the year. The city had previously sought to balance that loss using money from the Financial Stabilization Reserve fund, emptying it of $19.5 million.
But with $7.5 million still remaining, a new Deficit Action Plan is aimed at finding ways to achieve a positive forecast balance.
A report, expected to be brought forward to the finance and economic development committee on June 30, reads that despite the budgetary shortcomings, it is not necessary for the city to issue debt this year. Such a move could bring in $3.4 million from interest savings as a result of the debt deferral. Similarly, interest earnings from higher-than-budgeted interest rates could bring in $2 million by the end of the year.
Additionally, the limiting of operational expenditures — such as the reduction of overtime — could yield the city $2.3 million.
Such efforts could in fact yield more than the required amount to pay off the city’s debt, reads the report, but it comes amid ongoing pressure faced by the city’s reserve fund.
“(The) Public Service is investigating further actions given the length of time to complete the current budget year,” the report reads. “All departments were canvassed and provided feedback on potential additional savings or potential additional revenue generation.”
The report notes that costs related to snow and ice control could be higher than forecasted. But plans to provide funds to the Sewage Disposal System Fund could end up freeing $8 million in retained earnings, possibly alleviating the pressure felt by the reserve fund.
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