2019 Letter from the Mayor and Chairperson of the Standing Policy Committee on Finance
We are very pleased to table the 2019 preliminary capital and operating budgets.
Key priorities of the 2019 preliminary budgets include investments in transit, roads, innovation, and combined sewer overflow mitigation, maintaining front line services, reducing the water and sewer dividend rate while keeping taxes and fees affordable for Winnipeggers.
At the start of this year’s budget process, we were facing a deficit of almost $86 million in our tax-supported operating budget.
In the short time since the municipal election in October, we have worked with residents, stakeholder groups, and members of our new Council to present for Council’s consideration preliminary capital and operating budgets that are balanced from a fiscal and city building perspective.
Balancing this year’s budgets required many difficult choices and decisions.
Compounding the challenge this year was the ongoing uncertainty regarding the provincial government’s funding support to the City for 2019 and beyond as well as provincial funding commitments from prior fiscal years that remain outstanding.
We fully support the provincial government’s efforts to eliminate its budget deficit, but we do not believe that this objective should be achieved on the backs of Winnipeg property taxpayers.
Therefore, we will continue to seek clarity from the provincial government on its funding intentions for Winnipeg for prior years, the current year, and future fiscal years. The funding clarity we seek for future fiscal years is no different than the advanced funding notice that the provincial government provides school divisions or receives from the federal government prior to tabling the annual provincial budget.
Notwithstanding these significant challenges, we believe that the 2019 preliminary budgets present a balanced and responsible blueprint, a plan that keeps property taxes affordable while maintaining and investing in key infrastructure, services, and technology that are important to Winnipeggers and are essential to building our city for the future.
The preliminary budgets reflect the reality that Winnipeg is the economic engine of Manitoba and its largest city. Winnipeg’s population is on track to grow steadily and strongly over the next twenty-five years, and we need to manage and support this growth by investing in the right infrastructure at the right time so critical infrastructure is in place when we need it.
This year’s budget planning process also included extensive public engagement conducted by the Office of Public Engagement in the spring of 2018. Budget consultations were open to all members of the public and community organizations, and provided opportunities to discuss the challenges and opportunities facing Winnipeg. Residents also had the opportunity to provide input and feedback through various on-line platforms. Individual meetings with each member of Council were also conducted by the Finance Chair.
Overall, we believe the preliminary 2019 budgets strike the right balance between fiscal discipline, addressing immediate priorities, and continuing to invest in key services and infrastructure that will build our city for the future.
Operating Revenues & Expenditures
This year’s tax supported operating budget proposes to increase operating expenditures by 3.9 percent from last year’s budget, with the majority of this increase required to fund increases related to existing collective agreements.
Property tax increases this year are limited to 2.33 percent, and the entire increase is dedicated to addressing Winnipeg’s infrastructure requirements.
Two percent of the proposed 2.33 percent increase is dedicated to rebuilding and repairing our regional and local roads, and 0.33 percent of the proposed increase is dedicated toward the completion of the Southwest Rapid Transitway. This means that the average homeowner will pay an additional $40.00 in municipal property taxes in 2019.
To continue powering the economy and reduce the burden on small businesses, the business tax will be reduced from 5.14 percent to 4.97 percent and the business tax threshold will be increased from $33,300 to $33,900 in 2019.
Over the last five years, the business tax rate has been reduced from 5.7 percent to 4.97 percent and we have increased the business tax threshold from $23,880 to $33,900 which has eliminated the business tax for almost one-half of Winnipeg businesses.
Overall, Winnipeg continues to have among the lowest operating costs per capita and levels of expenditure growth as well as among the lowest property taxes of all major cities in Canada.
According to KPMG’s most recent Competitive Alternatives Study, Winnipeg continues to be the lowest cost city among 27 cities in Canada and the U.S. mid -west to own and operate a business.
There is no rate increase proposed to the frontage levy in 2019.
The water and sewer dividend rate is proposed to decrease from 12 to 11 percent of budgeted water and wastewater sales. This is the first time in the city’s history that the water and sewer dividend has been reduced. This measure will help fund significant upgrades to Winnipeg’s wastewater treatment infrastructure mandated by the Province of Manitoba, while also helping to keep water and sewer rates affordable for Winnipeggers.
There are no new fees or charges included in the 2019 preliminary budgets.
The waste diversion fee will increase to $63.00/year from the current level of $57.50/year to reflect the increased cost associated with the city’s new recycling contract that took effect last year.
Furthermore, the impact fee will increase at the rate of construction inflation which is 3.5% for
2019, but this fee will not be used as a funding source in the 2019 budgets.
Increases to all remaining fees and charges in the budget will be limited to the rate of inflation of 1.6% in 2019 with the exception of transit fares and on-street parking rates which will be frozen in 2019 at 2018 levels.
Investments in transit are essential for a modern, growing city and this year’s preliminary budgets propose significant new investments in transit, with a focus on safety, affordability, and enhanced service.
This will be a critical year for Winnipeg Transit, with the finalization of the Transit Master Plan as well as construction concluding on the Stage 2 of the Southwest Rapid Transitway.
In 2019, the tax supported transfer to transit is proposed to be $70.6 million, an increase of over six percent from last year’s tax supported transfer of $66.4 million.
Winnipeg continues to have among the lowest transit fares compared to other major Canadian cities. The 2019 preliminary budgets will maintain the affordability of transit by providing the financial resources necessary to freeze transit fares in 2019 at 2018 levels, as was previously approved by Council. This is the first time that transit fares have been frozen since 2007.
This year’s preliminary budgets recommend implementation of Winnipeg’s first low-income bus pass. To ensure successful implementation, our Public Service will continue to engage with key stakeholders throughout the year.
The preliminary budgets include a recommendation for Council to approve implementation of a low income bus pass starting on April 1, 2020, with eligible adults to qualify for a 30 percent discount on the cost of a full fare adult monthly pass in 2020, a 40 percent discount in 2021, and a 50 percent discount starting April 1, 2022. This will allow Winnipeg Transit to phase in the cost of this initiative over three years and properly assess what additional resources will be required within the broader context of the forthcoming Winnipeg Transit Master Plan.
A report will be brought forward to Council in 2019 providing more details on the implementation and financing of the low income bus pass.
The preliminary budgets also propose significant investments in transit safety. To date, Winnipeg Transit has implemented numerous safety enhancement initiatives. These enhancements included establishing reporting procedures with the Winnipeg Police Service, expanding the surveillance system on buses, providing safety training to transit inspectors and operators, and adding new inspectors on transit buses.
Building on previous safety initiatives, the 2019 preliminary budgets propose an investment of
$3.15 million to purchase and install bus operator safety shields for the entire bus fleet over the next year. We believe this is a positive step towards increasing transit safety. It is also consistent with best practices, and provides the most protection to bus operators.
The preliminary budgets also provide additional resources to equip transit inspectors with protective vests, and $100,000 to develop a long-term transit security plan that may include expanding the powers of transit special constables.
The preliminary budgets propose an investment of $22.2 million to purchase 34 new buses including buses for the opening of Stage 2 of the Southwest Rapid Transitway.
The preliminary budgets propose an investment of $1 million to enable transit to take the next step towards electrifying the bus fleet. The budgets also propose investments to improve the ridership experience by earmarking over $1 million for new heated bus shelters in 2019 and a further $500,000 to improve bus stops for individuals with accessibility requirements.
Looking ahead, completion of the Winnipeg Transit Master Plan is expected to be a critical document in helping guide the planning of investments over the next decade which will position Winnipeg Transit for success in the future by better meeting the needs of passengers and prepare for the transportation requirements of a growing city.
Investing in road renewal continues to be a top priority for Winnipeggers and the 2019 budgets propose significant investments in this key area.
In 2019, Winnipeg’s investment in regional and local road renewal will increase by the full value of the two percent increase in property taxes. This year also marks the first year of a five-year accelerated regional roads investment program jointly funded by Canada, the Province of Manitoba, and the City of Winnipeg.
However, the provincial government has recently made a unilateral decision to not fully fund the final year of a five-year $250 million road funding commitment to the city that expired at the end of 2018.
Given that the 2018 budget has now closed and projects have been completed with the expectation of receiving this funding from the provincial government, the city is now faced with a very difficult choice in how to address a $40 million provincial roads funding shortfall from 2018.
Council could choose to increase property taxes by approximately 7.1 percent in 2019 to cover this provincial shortfall which would require the average household to pay approximately $122.00 more in property taxes this year.
Alternatively, Council could choose to cover the $40 million provincial shortfall with long term debt which could have negative implications for the city’s current credit rating and/or reduce the city’s investment in other capital assets.
Instead, we propose a balanced and fiscally prudent approach in the 2019 preliminary budgets.
This balanced approach proposes to cover $20 million of the $40 million provincial funding shortfall from 2018 using resources from the Local Road Renewal Reserve in 2019, with the remainder of this provincial shortfall to be addressed in 2020.
Furthermore, given the provincial government’s decision to not fulfill the final year of its $250 million road commitment in 2018, it would not be prudent for the city to budget for this level of provincial road support in 2019 and beyond.
In 2019, the city will budget to receive $17 million from the province in 2019 which reflects their commitments made to date under the accelerated regional roads program.
The city’s total investment in new regional and local road renewals in 2019 from all funding sources will be $86.4 million. This represents a decrease of $42 million from the projected level of $128.4 million approved by Council for 2019.
This $42 million decrease in road renewal investments in 2019 compared to forecast is due to a reduced level of provincial funding on new road renewals in 2019 together with a decision to partially address the provincial road funding shortfall from 2018 out of the local road reserve funds in 2019.
The impact of this funding decrease will mean fewer local road projects will be undertaken in 2019 compared to last year. It will also mean less local roadwork in the future.
Innovation, Transformation & Technology
Building a city whose population is on track to reach one million people requires smart and strategic investments in services and as well as traditional infrastructure such as roads and community centers. However, investments in technology and innovation capital are also important.
The 2019 preliminary budgets include additional investments in technology to address years of deferred improvements for critical services such as minimizing 311 downtime, improving the public’s access to open data, as well as renewed investments in emergency services communications by replacing Tait Radio technology.
The preliminary budgets also propose investments in the smart cities program which will include enhancements to our internationally recognized Transportation Management Centre, expanding efforts to alleviate traffic pressures at congested corridors like at-grade train crossings, as well as beginning the process of providing priority traffic signals to emergency vehicles in an effort to improve service levels.
The 2019 preliminary operating budget proposes to invest an historic amount of $301.4 million in the police service, which reflects an increase of approximately $10 million or 3.4 percent from 2018.
This year’s increase in the police service operating budget will fund negotiated increases associated with the Winnipeg Police Service collective agreement as well as important investments in safety as determined by the Winnipeg Police Board and the Chief of Police.
The 2019 investment in the police service operating budget exceeds the projected level for 2019 and marks the first time that this budget will exceed $300 million.
The 2019 preliminary operating budget proposes to invest over $200 million in the fire paramedic service in 2019 which reflects an increase of 4.2 percent from 2018. The majority of this increase is required to fund negotiated increases associated with existing collective agreements.
The 2019 preliminary capital budget proposes an investment of $16 million in the fire and paramedic service including over $10 million in a new computer aided dispatch (CAD) system to modernize and improve communications within the fire paramedic service, conditional on receiving cost shared support for this from Shared Health.
The 2019 preliminary budgets also include additional resources to purchase new firefighting equipment and maintain existing fire halls. The preliminary budgets also reflect a full cost recovery of ambulance services by the city from the Province of Manitoba, recognizing that delivery of ambulance services is a provincial responsibility.
Six-year Capital Investment Plan
The city continues to face an immense infrastructure deficit of approximately $7 billion. About half of this deficit is required to upgrade existing infrastructure and the other half required to invest in new infrastructure to support a growing city.
The preliminary budgets propose a capital investment of $367.5 million which is a small decrease from the 2018 budget of $380.1 million. We are able to maintain our capital investment in 2019 at a reasonably comparable level to 2018 despite budgeting to receive a significantly lower level of provincial road investment in 2019 compared to 2018.
External debt in 2019 for new capital investment is $38.2 million, a decrease from the projected amount in the 2018 budget, and a decrease from the 2018 approved level of $48 million. Unlike the Province of Manitoba or Federal Government which do not have any debt limits, the City of Winnipeg adheres to a self—imposed debt limit which is among the most stringent of all major cities in Canada. Winnipeg’s proposed debt levels for 2019 are well within its self-imposed debt limit.
The city’s current State of the Infrastructure Report completed in 2018 indicates that assets within the area of Community Services and Municipal Buildings required significant investments.
The preliminary 2019 capital budget proposes an investment of $30.6 million in community service assets which is an increase of $10 million from last year’s level and in line with last year’s projected investment in this area for 2019.
Included in the overall level of investment for community services in 2019 is a proposal to more than double the funds available for the Community Centre Renovation Grant Program (CCRGP) from the previous level of just under $1 million to $2 million in 2019, and $2 million each year until 2023. The 2019 budget also includes a recommendation to increase the maximum eligible grant under this program to $100,000 from $50,000. A report will be brought forward for Council’s consideration in 2019 with more details on this proposed increase to the grant levels under the CCRGP.
Over $5 million is proposed to be invested in on going upgrades to infrastructure within Assiniboine Park, and $1.75 million is proposed to be invested in the development of a new recreation campus at Grant Park.
A capital investment of over $18 million is proposed in 2019 for municipal buildings including $10.4 million to demolish and ready the former public safety building and civic parkade for re-development. An investment of over $1.6 million is proposed to repair and renovate indoor pools, and over $500,000 to repair arenas.
Over the next six years, the city’s total capital investment is projected to be $2.3 billion.
Individual strategic capital investments over this six-year period include:
- An investment of over $800 million to renew the city’s existing local and regional roads
- An investment of over $169 million to reduce the incidence of combined sewer overflows;
- An investment of over $23 million for in our urban forest enhancement program;
- An investment of over $22 million in pedestrian and cycling infrastructure and other active transportation assets, and;
- An investment of over $11.8 million to build a new recreation facility in Waverley West.
In addition, the 2019 budget will include a recommendation for Council to refer an investment of up to $3 million to the 2020 capital budget to renovate and renew Rainbow Stage, a city-owned asset in Kildonan Park, subject to Rainbow Stage securing matching funds from fundraising and/or other levels of government.
New and ongoing program investments
The 2019 preliminary budgets propose new and ongoing investments to build complete neighbourhoods and strengthen communities including:
- $11.1 million of operating support for the Assiniboine Park Conservancy;
- $4.6 million for the Winnipeg Arts Council;
- Fourth year of a five year annual commitment of $1 million to the Winnipeg Art Gallery Inuit Art Centre;
- $1.25 million to support the Indigenous Youth Strategy;
- Over $400,000 to enhance snow clearing on active transportation paths and sidewalks, starting with the 2019 snow season;
- $150,000 to continue the Community Homeless Assistance Program (CHAT), and;
- Fifth year of a 5 year annual commitment of $150,000 towards the plan to end homelessness.
Efficiencies & Multi-year Budgets in 2020
Identifying efficiencies and ensuring value for taxpayers continues to be a top priority for the city in 2019. This will become even more critical as the city moves towards a multi-year budget planning framework in 2020.
In 2019, a vacancy management target of $18 million is proposed to be shared by all departments. This savings target will be achieved by holding existing vacant positions vacant for a longer period of time and by deferring the filling of newly vacated positions as existing employees leave employment. This exercise will not involve any layoffs of current city employees.
The city’s Chief Administrative Officer will be given delegated authority to allocate this additional vacancy management target among city departments in order to minimize the impact of this measure on front line service delivery.
In addition, the 2019 preliminary budgets include a total of just under $12 million of efficiency savings to be held corporately as well as $1.6 million of expenditure management savings to be allocated among all departments on a pro rata basis.
Finally, in preparation for the 2020 budgets which are expected to be the first capital and operating budgets to be balanced on a multi-year basis, this year’s budget will include recommendations for the public service to report back in 2019 with the following information:
- An analysis of the city’s core service responsibilities under The City of Winnipeg Charter and any other relevant legislation;
- A plan to introduce an evaluation framework to review current and future city grants;
- A review of the city’s current fees and charges; and
- A review of the city’s unfunded capital projects.
These reports, along with significant planning documents such as the Transit Master Plan and the OurWinnipeg review and Asset Management Plan will be used to make the difficult planning decisions required to balance the city’s capital and operating budgets on a multi-year basis starting in 2020.
Over the next 25 years, Winnipeg’s population is expected to chart strong and steady increases. On average, population growth over the next 25 years in Winnipeg is estimated to increase by 8,200 people per year. This means Winnipeg is expected to add the equivalent population to the City of Morden each year over the next 25 years.
We can achieve this by working closely with the federal government to maximize Winnipeg’s share of infrastructure funding. We will work with our provincial government to ensure Winnipeg receives not only a fair say in how provincial grants are spent, but also access to stable and predictable funding. And, we must continue to review and scrutinize expenditures to ensure we are investing tax dollars in ways that provide maximum benefit and value to taxpayers.
We now invite all residents and members of Council to continue the discussion to finalize the preliminary 2019 operating and capital budgets.
CHAIR, Standing Policy Committee on Finance
Budget 2019 Presentations
- 2019 Preliminary Operating and Capital Budgets
- 2019 Property, Planning & Development (Riverbank Stabilization) Preliminary Operating & Capital Budget
- 2019 Water and Waste Department Preliminary Operating and Capital Budget Presentation
- 2019 Transit Preliminary Operating & Capital Budget
- 2019 Public Works Department Preliminary Capital Budget Presentation
- 2019 Public Works Department Preliminary Operating Budget
- 2019 Winnipeg Police Service Preliminary Operating & Capital Budget
- 2019 Winnipeg Fire Paramedic Service Department Preliminary Operating & Capital Budget
- 2019 Public Works (Parks & Open Spaces Division) Preliminary Operating Budget Presentation
- 2019 Community Services Department Preliminary Operating & Capital Budget Presentation
- 2019 Public Works (Parks & Open Spaces Division) Preliminary Capital Budget Presentation
- 2019 Innovation Department Preliminary Operating & Capital Budget
- 2019 Animal Services Special Operating Agency Business Plan
- 2019 Fleet Special Operating Agency Business Plan Presentation
- 2019 Golf Services Special Operating Agency Business Plan Presentation
- 2019 Winnipeg Parking Authority Special Operating Agency Business Plan Presentation
- 2019 Planning, Property & Development Department Preliminary Operating & Capital Budget Presentation
After the tabling of the budgets on March 1, 2019, the schedule of public meetings to hear delegations and consider the preliminary 2019 Operating and Capital budgets include:
Thursday, March 7, 2019, 9:30 a.m.
Standing Policy Committee on Water and Waste, Riverbank Management and the Environment (Regular Meeting)
Thursday, March 7, 2019, 1 p.m.
Standing Policy Committee on Infrastructure Renewal and Public Works (Special Meeting)
Friday, March 8, 2019, 9:30 a.m.
Winnipeg Police Board (Regular Meeting)
Friday, March 8, 2019, 1 p.m.
Standing Policy Committee on Protection, Community Services and Parks (Special Meeting)
Monday, March 11, 2019, 9 a.m.
Standing Policy Committee on Innovation (Regular Meeting)
Monday, March 11, 2019, 9 a.m.
Standing Policy Committee on Property and Development, Heritage, and Downtown Development (Special Meeting)
Wednesday, March 13, 2019, 9 a.m.
Executive Policy Committee to hear public delegations on budgets (Special Meeting)
Tuesday, March 19, 2019, 9 a.m.
Executive Policy Committee to table final recommendations (Special Meeting)
Wednesday, March 20, 2019, 9:30 a.m.
Council to consider budget (Special Meeting)
Thursday, March 21, 2019, 9:30 a.m.
Regularly scheduled monthly Council meeting
Members of the public are encouraged to continue participating in the budget process. To register as a delegation at any of the above committee meetings, residents can contact 311.
The Office of Public Engagement undertook a comprehensive public engagement exercise last spring providing residents an opportunity for input into the 2019 budget. The engagement process incorporated a public workshop, fifteen pop up events (one in each civic ward), over 600 interactions with residents, and more than 850 online surveys were completed.
The 2019 budget proposes key investments in public transit including: a. $3.15 million to purchase and install bus operator safety shields for the entire bus fleet over the next year b. Implementation of a low-income bus pass beginning April 2020 c. $22.2 million to purchase 34 new buses d. $1 million study to support further electrification of buses e. Invests more than $1 million in heated bus shelters f. $500,000 to improve bus stop accessibility