City of Winnipeg's projected deficit increases to $3.1M in latest financial outlook

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 wasearly in theyear.

The third-quarterfinancial status and forecast report, which will bepresented 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 millionin the second-quarter statement.

Initially,the deficit was a staggering $27 million, but that fell after areduction 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 anestimated savingof $23.7 million.

The current forecastdeficit 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 theplanning, property and development department, and overruns in of $10.4 million for snow clearing and street cleaning.

Theshortfalls are partially offset by reduced pension costs, changes in corporate contingenciesand increased interest revenue due to higher interest rates, a news release from the city said.

The third-quarterreportsays 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. Ridershiphas 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 witha record deficit of $83 million.