October storm weighs heavy on 2019 deficit projection

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This article was published 03/11/2019 (1836 days ago), so information in it may no longer be current.

Officials suspect the costs associated with the October snowstorm and ongoing cleanup will force Winnipeg city hall to dip into its rainy day fund to avoid ending 2019 in the red.

While the projected year-end deficit normally gets smaller as the year progresses, the recent storm and cleanup are already being blamed for pushing the expected deficit to $9.4 million — $2.5 million more than little over a month ago.

Finance chairman Coun. Scott Gillingham told reporters Monday all indications are the city will have to borrow from its fiscal stabilization reserve fund to avoid a deficit.

“There’s two months to go where we can see improvement, but there’s no doubt the impact of the October storm is going to be felt in our finances,” Gillingham said.

By law, municipal governments aren’t allowed to budget for a deficit, and while department heads are often pressured to find savings as the year winds down to ensure the books are balanced, Gillingham said the ongoing costs of the storm make such a scenario unlikely.

“We just want to be realistic and very up-front at this point in the year,” he said. “I am optimistic we may still see some improvement in our financial position, but the costs associated with the storm is going to make it challenging to end the year balanced.”

The $9.4-million projected as the year-end deficit is stated in a report to Friday’s finance committee meeting, which cites $5 million in “incremental” costs associated with the cleanup: $1.1 million for additional snow-clearing costs and $3.7 million for cutting down trees and branches and clearing up debris.

The report predicts the City of Winnipeg will incur an additional $2.9 million in 2020 for ongoing cleanup costs.

Jim Berezowsky, director of public works, said normal snowclearing costs in October are around $600,000.

Berezowsky said the city was fortunate the storm arrived in early October (Thanksgiving weekend) and temperatures remained mild, which helped to eliminate much of the heavy equipment needed for a typical snowstorm later in the year.

City hall still hopes to recoup some funds from the provincial and federal governments. Council has informed the province it will be applying to the financial disaster assistance program when the total cost has been determined, which Gillingham said should be known by late January.

aldo.santin@freepress.mb.ca

CoW 2019 Q3 Financial Status Report