City of Winnipeg forecasts deficit of nearly $40M

The first-quarter financial forecast for the City of Winnipeg projects a shortfall of $39.3 million in the operating budget.

The report, whichwill be presented at the meeting of the standing policy committee on finance and economic developmenton June 14, blameshigher-than-expected costs for snow clearing and ice control, higher overtime and Workers Compensation costs in Winnipeg Fire Paramedic Services, andincreased expenditures in the Winnipeg Police Service.

At the same time, the city has receivedlower than expected revenues from permit fees, the report says.

It is not uncommon for the first-quarter report to forecast a deficit. Last year at this this time, the city was looking at a $27-million shortfall, which eventually turned intoa surplus of $12 million.

Still, to ensure the deficit doesn't balloon by the second-quarter report, Coun.Jeff Browaty, chairof the finance standing policy committee, said in a news release that all departments will need to adjust to addresstheearly operating deficit.

The city will also bringforward a mitigation plan at the next meeting of that committee on July 5, to help address the forecastdeficit, the news release says.

The city has a reserve fund that is intended to help with financial challenges, but its balance at the moment is$31.7, which means it would be fully used if the deficit scenario doesn't improve by year's end.