City projects $23-M deficit– better than expected

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This article was published 05/11/2020 (1270 days ago), so information in it may no longer be current.

The City of Winnipeg’s financial picture looks brighter after service cuts and temporary layoffs reduced the pandemic-driven deficit.

While the city expects about $72 million of federal “safe restart” funding to arrive soon, the mayor warned COVID-19 could still trigger significant shortfalls next year.

“The COVID costs have been mounting and the dollars (from) the federal government will help us this year but… we don’t expect the COVID storm is going to be over by the end of this calendar year,” said Mayor Brian Bowman.

As of Friday, the city said it expected to end 2020 with an overall $22.9-million deficit, with all departments included, based on data up to Sept. 30, a finance report noted.

The deficit includes a $32.4-million Winnipeg Transit shortfall due to a major reduction in ridership and fare revenue. The report said ridership is expected to plummet to 35 per cent of normal levels by year’s end, since Winnipeggers have again been asked to stay home to cut transmission of the virus.

The Transit loss was partially offset by savings from temporary layoffs and service reductions, such as recreation facility closures.

City finance officials said the city would be on track for a $59.7-million shortfall, had it not significantly cut costs earlier this year. Those cuts included temporarily laying off more than 900 staff and reducing Transit service.

“The financial picture has improved because council made decisions to pull (cost-saving) levers… The plan that we have put in place has been working, but COVID-19 is not finished,” said Coun. Scott Gillingham, council’s finance chairman.

The city update noted Winnipeg recently received $42.2 million in federal COVID-19 funding and expects another $29.7 million from Ottawa for Winnipeg Transit.

The city said it hasn’t factored the funding into its deficit projections because it’s waiting to see if the province will impose any conditions on the money.

Gillingham noted that cash is welcome relief for COVID-19 costs, as well as much of the initial losses expected in 2021. An early estimate predicts the city could face another $56 million of pandemic losses next year, including another $22-million Transit deficit.

“The federal restart money has come at a critical time,” said Gillingham.

He said it’s tough to predict future pandemic losses, since case counts and the economic fallout can change daily.

“We are developing the 2021 budget on the assumption that the pandemic will continue well into 2021 and perhaps beyond,” he said.

Meanwhile, the city says it has settled a funding dispute with the province. A report noted the two levels of government reached an agreement over $23 million in the cost of the Southwest Rapid Transitway. Gillingham said provincial funding has made “the city whole” on that file.

Finance updates reveal that Winnipeg had raised $36 million in impact fees as of Sept. 30. A court ordered the city to refund that money, which it expects to do once an appeal period for the decision ends later this month.

Joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga