City of Winnipeg's projected deficit increases to $3.1M in latest financial outlook
Forecast is $1.9M increase over deficit projection from 2nd-quarter report
The City of Winnipeg's projected deficit has more than doubled in its latest financial outlook but it's still dramatically better than where it was early in the year.
The third-quarter financial status and forecast report, which will be presented at finance and economic development committee meeting on Friday, shows an anticipated operating budget deficit of $3.1 million. It was projected to be $1.2 million in the second-quarter statement.
Initially, the deficit was a staggering $27 million, but that fell after a reduction in the city's contributions to the Winnipeg Police Service pension plan. An actuarial valuation resulted in the city's contribution rate being dropped to eight per cent, rather than nearly 22 per cent, leading to an estimated saving of $23.7 million.
The current forecast deficit is mainly the result of an extra $6.9 million for overtime and Workers Compensation costs at the Winnipeg Fire Paramedic Service, a shortfall in permit fees and decrease in transfers from the land operating reserve to the planning, property and development department, and overruns in of $10.4 million for snow clearing and street cleaning.
The shortfalls are partially offset by reduced pension costs, changes in corporate contingencies and increased interest revenue due to higher interest rates, a news release from the city said.
The third-quarter report says the $3.1 million to cover the deficit can be drawn from the financial stabilization reserve fund, leaving a balance there of $16.5 million.
An additional shortfall of $2.9 million is expected for Winnipeg Transit, up from $2.2 million in the second quarter.
Transit continues to see lower ridership and lower fare revenue compared to pre-pandemic levels, the report says. Ridership has averaged out to be 13 per cent below normal levels as of the end of September.
As a result, fare revenue is forecasted to be under budget by $4.9 million.
At this time last year, the city was facing a projected deficit in the operating budget of $56.8 million. It ended the year with a record deficit of $83 million.