City updating rules about dividends it can take from operating agencies By: Joyanne Pursaga Posted: 7:00 PM CST Monday, Feb. 10, 2020 Last Modified: 7:34 PM CST Monday, Feb. 10, 2020 Updates

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The City of Winnipeg appears set to impose formal limits on the dividends it takes from special operating agencies.

Council’s innovation and economic development committee approved Monday a new dividend policy with that goal, which still requires council approval.

The updated rules would allow the city to transfer funds from each of the four SOAs: animal services, golf services, Winnipeg Fleet Management Agency and Winnipeg Parking Authority.

However, the city could no longer take that transfer when it would reduce an agency’s accumulated operating surplus below $500,000.

“This dividend policy is really designed to be more predictable and certainly more transparent,” said Paul Olafson, Winnipeg interim chief financial officer.

A city report notes the parking authority produces large surpluses, while the city provides subsidies to golf and animal services. In 2019, the city devoted about $770,000 of tax revenue support for animal services and $730,000 for golf services.

By contrast, fleet management produced dividends of about $240,000 after recovering costs through city departments, the report notes.

Meanwhile, the city’s parking authority dividend reached about $9.9 million last year.

“(The) whole notion of SOAs and their design and purpose really is to be acting in a more business-like fashion, to be financially sustainable,” said Olafson. “The reality is… really only one of the SOAs meets that bar (and) that would be the Winnipeg Parking Authority.”

The report states animal services receives less tax support than its counterparts in many other cities, while golf services funding helps pay off a $6-million line of credit.

Coun. John Orlikow (River Heights-Fort Garry) said the policy change should make the agencies more financially secure. Orlikow, chairman of the innovation committee, said a minimum level for surplus funds will ensure agencies can eliminate in-year operating deficits and make some capital investments.

“This provides them at least an assurance that they’ll have at least some money left over,” he said.

Orlikow said he sees value in reviewing the SOA concept in the future, since only the parking authority was deemed to clearly fit it.

Only Coun. Shawn Nason (Transcona) voted against the policy change Monday. Nason argued financial policies shouldn’t change “in the 23rd hour” of a budget process. The city expects to finalize its 2020-23 budget next month.

joyanne.pursaga@freepress.mb.ca

Joyanne Pursaga
Reporter

Born and raised in Winnipeg, Joyanne loves to tell the stories of this city, especially when politics is involved. Joyanne became the city hall reporter for the Winnipeg Free Press in early 2020.

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