Raid on Winnipeg rainy-day fund cuts fiscal cushion to its minimum

Winnipeg plans to draw down its rainy-day fundby another $5 million next year, reducingits key financial cushion to within a whisker of the city's self-imposed minimum comfort level.

The 2017 budget calls for a $5-million transfer from the fiscal stabilization reserve, a pot of money set aside to ensure the city is capable of dealing with unforeseen financial hardship.

The transfer will reduce the rainy-day fund to $66.5 million, or 6.2 per cent of the city forecast spending of $1.08 billion in 2017.

Winnipeg chief financial officer Mike Ruta said the minimum safe level for the reserve is six per cent.

There are no plans to replenish the reserve, as the city intends to use surplus funds from 2016 to balance the 2017 budget instead.

• Winnipeg budget: Major projects delayed to keep taxes down

Based on figures from the end ofOctober, Winnipeg is projected to wind up with a surplus of $2.5 million at the end of 2016. Next year's budget, however, calls for thecity to carry forward $9.5 million worth of surplus funds.

At a Thursday meeting of council's finance committee, South Winnipeg-St. Norbert Coun. JaniceLukes tried to convince committee chair Scott Gillingham (St. James-Brooklands-Weston) to direct surplus cash from 2016 into the rainy-day fund instead.

Her motion did not pass, but she warns Winnipeg will no longer be able to raid its fiscal-stabilization reserves to balance future budgets.

"There's nothing left to raid," Lukes told reporters following the meeting. "There comes a point where we may have to raise taxes, above the 2.33 per cent [hike for 2017]."

Right now, the fiscal stabilization reserve stands at 6.7 per cent of city spending. The withdrawal of $5 million next year, in combination with increased spending, will take the ratio down to 6.2 per cent.

Rutasignalled no future raids are possible, stating he would not recommend council reducethe reserve below the six-per-cent ratio he described as a minimum comfort level.