The City of Winnipeg’s second quarter financial status and forecast report reveals a projected deficit of $19.2 million in the tax-supported operating budget (General Revenue Fund) as of June 30, 2024. However, the Transit budget shows a surplus of $0.4 million. The report will be presented at the Standing Policy Committee on Finance and Economic Development meeting on September 16, 2024.
This forecast marks a significant improvement of $20.1 million from the previous quarter, which had projected a $39.3 million deficit as of March 31, 2024. The improvement is attributed to better interest earnings, reduced debt charges, and measures from a mitigation plan introduced at the Standing Policy Committee meeting on July 5, 2024. These measures included eliminating the transfer to the Financial Stabilization Reserve for 2024, deferring debt charges, better interest earnings, and expenditure management actions.
Despite the progress, the remaining deficit is due to several factors:
- Higher than budgeted costs in Public Works ($12.1 million) for snow clearing, ice control, spring clean-up, and roadway construction and maintenance.
- Increased overtime and Workers Compensation costs in Winnipeg Fire Paramedic Services ($12.9 million).
- Lower than budgeted permit fees in Planning, Property and Development ($2.5 million).
- Higher expenditures in Winnipeg Police Service ($14.9 million), largely offset by increased revenues of $11.2 million.
Councillor Jeff Browaty, Chairperson of the Standing Policy Committee on Finance and Economic Development, acknowledged the progress but emphasized the need for continued efforts. “The City has made progress on the deficit forecasted at the first quarter, but there’s much more work to be done by the end of the fiscal year,” said Browaty. “The mitigation plan brought forward over the summer has definitely helped in that regard. However, we will need to address the replenishment of the Financial Stabilization Reserve fund in future years.”
The Financial Stabilization Reserve Fund can cover up to $16.3 million of the deficit, which would deplete the fund by the end of 2024.
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