Winnipeg keeps rainy day fund just above minimum, finance committee hears

Financial officials say the City of Winnipeg should have enough money in its rainy day fund to cover overspending by the end of the year — but just barely.

"As we sit today … we're above the floor. Not much, but we're above the floor," corporate controller Paul Olafson said during a Thursday meeting of city council's finance committee.

The city has taken money from the financial stabilization reserve fund — also known as the rainy day fund — to balance budgets during COVID-19. Last year, it took $22.3 million to break even, since the city isn't allowed to run a deficit.

City staff have to keep that fund at a minimum of $71.7 million for 2022 (six per cent of the year's operating costs). As of the end of 2021, the fund was sitting at $75.1 million, meaning it's $3.4 million — or just under five per cent — above the baseline.

Olafson said he predicts by the end of 2022, COVID-19 will have cost the city more than $220 million. This year alone, city administration projects a $55.4-million loss due to the pandemic.

Staff said they've been able to keep debt at bay by not filling vacancies, and by reducing discretionary and travel spending. Thanks to that, it looks like the fund will sit at $74 million by the end of 2022.

But the administrative report presented Thursday warns there could be some issues ahead.

The snow clearing budget was above its monthly allowance for January, and may have gone over budget in February.  A spring flood could cause financial issues, and the police service could also go over its budget again.

All of that could cause the rainy day fund to dip down to $67.7 million by the end of the year. If that happens, city staff have to come up with a way to replenish the funds.

Olafson said there are other options to save money, including transferring money from the animal services department and the parking authority, or deferring money for the community centre renovation grant program. The city has organized options into two "lever tiers."

"Any levers that may affect service levels are concerning to me," said Coun. Scott Gillingham (St. James), who is also finance chair.

"I wouldn't want to have to pull those levers … that would affect front-line services. My hope is that we are coming out of the pandemic and that, you know, we won't require all of those levers to be accessed."

Should the fiscal situation worsen, the finance department can suggest more money-saving options to council, who would need to give the final approval.

One of the city's main ways to make money is still falling short. Winnipeg Transit is at 56 per cent of its pre-pandemic ridership. By the end of the year, the city predicts COVID-19 will have cost $136.2 million in Transit revenue.