They bet on good weather and lost. Now they're attempting to appear fiscally prudent

In university, there were always a couple of classmateswho would blow their studentloanson beer and pizza every fallbefore they bought their textbooks or paid for theirtuition.

Every spring, they'd be living off Kraft Dinner, scrounging for empties and maybe couch-surfing just to make it to the end of the semester.

By all accounts, Brian Bowman was not one of those students. But his financial planning as mayor is starting to take on a spend-now, pay-later quality, at least when it comes to the latest city budget.

In November, when Bowman tabled the city's $1.08-billion spending plan for 2017, about one per cent of the budget was supposed to come from snow-clearing savings.

At the end of November, the city was on track to underspend itssnow-clearing budget. So instead of nipping a few services here or cutting a few projects there, the 2017 budget banked on carrying $9.5 million forward from the 2016 budget to the 2017 fiscalyear.

Unfortunately for the mayor, weather does not adhere to municipal spending plans. The month after the release of the budget was the second-snowiest December on record. Winnipeg's presumed snow-clearing savings disappeared into the gas tanks of 400 snowplows and graders, along with the expected year-end budget surplus.

• White stuff turns Winnipeg budget from black to red
• Second December snowstorm buries Winnipeg's projected surplus

It's important to note that overall, 2016 was not a particularly snowy year. The hefty snow-clearing tab for the entire year only wound up pushing the city into a year-end deficit of $5.1 million, or about half a percentage point of last year's budget.

Not so long ago, the city had something called a snow-clearing reserve to cover off small snow-clearing deficits. Just like insect control, whose annual pricetag is dictated by the weather, snow-clearing costs fluctuate wildly.

ButWinnipeg's snow-clearing reserve has been drained to spare the city the headache of cutting services or raising property taxes further. Council has gone from creating a contingency for snow clearing to operating with no wiggle room at all to actually banking on mild weather to balance the budget, at least on paper.

Had the city actually posted a surplus at the end of 2016, the fiscally prudent movewould have been to replenish the city's rainy-day fund, which councilhas drawn down in recent years. That pot of money now sits at just six per cent of the overall budget, which most accountants consider the minimum acceptable level for a municipality.

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

But no, this mayor and this council banked on spending this windfall, which of course failed to materialize.

Now,the city is using the shortage of funds as a rationale for a so-calledhiring freeze. As of last week, vacant city positions will go unfilled, unless they involve police, paramedics, firefighters or bus drivers.

• Analysis: There's no budget for snow? Fudge it!
• Snowed under to the tune of $9.5M, Winnipeg enacts hiring freeze

This is kind of likespending your student loanon pizza and beer and then not just scrounging for empties, but telling your professor you're not going to purchase all those textbooks you're supposed to read.

Leaving positions unfilled, a process euphemistically known as vacancy management, often results in less efficient city services, simply because fewer people have to perform more work.

Crisis? What crisis?

Nonetheless, this emergency order would make sense if the city was facing a sudden and insurmountable crisis. But that's not what's happening right now. In these early stages of the year, a $9.5-million funding shortfall on a $1.08-billion budget is at worst a minor headache.

For starters, this pool of red ink represents less than one percentage point of the city's overall spending. Every June, when Winnipeg's first-quarter financial update is published, council is told of a projected deficit that usually winds up becoming a surplus by the following February, when the actual year-end spending is tallied.

Small projected deficits turn into modest year-end surpluses because the city's financial managers are always keeping tabs on discretionary spending. That includes vacancy management, which is almost indistinguishable from a hiring freeze.

In other words, the freeze they announcedlast week,with an unusual degree of fanfare,is already takingplace.

Three reasons to declare a freeze

The city's declaration of a hiring freeze accomplishes three things for the mayor and senior members of the public service. First, it marks an attempt to position city officials as prudent financial managers as negotiations with most of the city's unions head into rocky waters.

• Winnipeg enters whirlwind of labour negotiations

More than 80 per cent of theCity of Winnipeg's unionized workforceentered this year without a collective bargaining agreement, as labour deals covering most city employees expired over the winter holidays.

This talk also amounts to posturing ahead of April 11, when the Pallister government unveils Manitoba's spending plans for the year. Members of the Progressive Conservative cabinet, including the premier, have declined to promise Winnipeg will receive the same provincial support it received in 2016. The city is eager to appear worthy of receiving scarce provincial funds.

Finally, this hiring freeze amounts to politicaltheatre, as it deflects attention from council's decision to bank on something as ephemeral as good weather to balance the budget. To be fair, Brian Bowman is not the first mayor to use nonexistent money to balance the budget.

Former mayor Sam Katz tabled a 2010 budget that called for $10.6million worth of revenue from the proceeds of a lawsuit against Manitoba Hydro. The city wound up receiving only half that amount in a settlement and ended the year $3.8 million in the red.

• Council OKs tax settlement with Hydro

To avoid budget surprises, the city must either reduce costs or increase revenue. The former means service cuts. The latter means tax hikes.

Neither are popular, but governing is not easy work. Everyone would run for mayor if the job were as easy as buying pizza and beer.