2018 Letter from the Mayor and Chairperson of the Standing Policy Committee on Finance
We are very pleased to table the 2018 preliminary capital and operating budgets.
At the start of this year’s budget process, we were facing an immense $89 million deficit in our tax-supported operating budget.
Over the last several months, we have worked collaboratively with citizens and stakeholder groups to present for Council’s consideration a preliminary budget that is balanced with no draw on the financial stabilization reserve while also reflecting the input received from many Winnipeggers. Â
Bringing this year’s budget back into balance has required many difficult choices and decisions to be made.
Balancing the 2018 budgets was even more challenging than previous years because of the Province of Manitoba’s decision to eliminate two key programs including the 50/50 transit funding agreement and the Building Manitoba Fund which provided stable, predictable and growth oriented funding for Winnipeg.Â Â Â Â
We appreciate the significant financial challenges that the current provincial government has inherited, but we do not believe that these problems should be downloaded on the backs of Winnipeg property taxpayers. We will therefore continue our efforts to secure a new long term stable, predictable and growth oriented funding commitment from the Manitoba provincial government.
Notwithstanding these challenges, we believe the preliminary budgets present a balanced, fiscally prudent and responsible blueprint, a plan that limits annual budgeted tax supported expenditure growth to one of the lowest rates in the city’s history, while maintaining and investing in key infrastructure and services that are important to Winnipeggers.
The preliminary budget reflects the reality that Winnipeg’s population is on track to grow steadily and strongly over the next twenty-five years, and that 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 included the most extensive public engagement conducted by the city. Budget consultations were open to all members of the public and community organizations, and provided opportunities to discuss the challenges and opportunities facing Winnipeg. Citizens 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 Chair of the Standing Policy Committee on Finance.
Demands on this year’s budget continue to be high for priorities such as improved roads and bridges, safe and secure communities, Dutch Elm Disease control, and other critical infrastructure and services. Â
We believe the preliminary 2018 budgets strike the right balance between fiscal discipline, addressing our immediate priorities, and continuing to invest in key services and infrastructure that build our city for the future.
Operating Revenues & Expenditures
Winnipeg continues to have amongst the lowest operating costs per capita across all major cities in Canada.
This year’s operating budget proposes to maintain Winnipeg’s competitive ranking in this regard by limiting operating expenditure increases to 1.2 percent, one of the lowest rates of budgeted growth in tax-supported spending in the history of Winnipeg. Â
The new collective agreements that were negotiated in 2017 between the city and its major unions contributed significantly in managing the overall level of expenditure growth in 2018. In 2017, these new collective agreements resulted in city-wide savings of $16 million which will increase to $21 million annually starting in 2018.
We thank all of our valued city employees for their efforts in helping us achieve negotiated collective agreements that are fair to employees, more affordable to taxpayers, and ultimately more sustainable over the long term.
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 (Stage 2). This increase means the average homeowner will pay an additional $39 in municipal property taxes in 2018.
To continue powering the economy and reduce the burden on small businesses, the Business Tax will be reduced from 5.25 percent to 5.14 percent and the Business Tax threshold will be increased from $32,220 to $33,300 in 2018.
Since this Council took office two years ago we have reduced the Business Tax rate from 5.7 percent to 5.14 percent, representing a 9.8% decrease to the Business Tax rate since 2014. We have also increased the Business Tax threshold from $23,880 to $33,300 which has eliminated the business tax for almost one-half of Winnipeg businesses.
There is no rate increase proposed to the frontage levy in 2018 and the water and sewer dividend rate remains fixed.
There are no new fees in the 2018 preliminary budget. There is also no increase proposed to recycling fees for 2018 beyond the rate of inflation.
The 2018 preliminary budgets propose an increase to the minimum tipping fee from $15.00 to $20.00 for solid waste delivered to the Brady Road Land fill as well as a $15 to $20 rate increase for additional garbage bags (up to 3) at the curbside effective March 1, 2018. Current tonnage rates for waste delivered to the Brady Road land fill will increase by $1.00 to $6.00 per tonne effective March 1, 2018 to encourage conservation and help offset the cost of the new recycling contract in 2018.
As a means to increase turnover and increase availability of on-street parking, the 2018 preliminary budget proposes an increase of $1.00 per hour to on-street parking effective April 1, 2018. Parking in low demand zones will increase from $1.00 per hour to $2.00 per hour. Parking in high demand zones within the downtown and exchange districts will increase from $2.00 per hour to $3.00 per hour, with all revenue raised from these increases invested in core service delivery.
Penalties for late payment of property and business taxes will increase from 2.25% to 2.50% per month effective July 1, 2018, and the early payment discount for parking tickets will be reduced from 50% to 25% of the amount of the ticket, effective April 1, 2018.Â
Increases to most remaining fees and charges will be limited to the rate of inflation of 1.2% in 2018 with the exception of transit fares.
The preliminary 2018 budgets have been balanced without any draw on the financial stabilization reserve. The Impact Fee will not be used as a funding source in 2018, and revenue accrued through the Impact Fee will be held in reserve.
Without a doubt, investment in roads continues to be a top priority for Winnipeggers and this budget reflects this priority with continued record levels of investment in 2018.
The 2018 budget proposes to increase investment in road renewal to a record level of $116 million in 2018, the highest annual level of investment in road renewals in Winnipeg’s history. This is an increase of $11 million from 2017 which reflects the value of the two percent property tax increase in 2018 dedicated to local and regional road renewal. Investments in road renewal will represent one-third of the entire capital budget in 2018.
The investment of $116 million in 2018 will allow us to undertake important road renewal projects across the city including:
- Reconstruction of Empress St./Empress Street E./Westway/Eastway from St. Matthews to Portage Ave;
- Reconstruction of McPhillips St north and south Bound from Logan to Jarvis;
- Rehabilitation of Fermor ave from St Anne’s to Archibald; and
- Rehabilitation of Roblin Boulevard east bound from Assiniboine Park Drive to Shaftesbury.
The capital forecast increases investments in road renewal each year starting in 2019 for a total investment of $811 million in road renewal over the next six years.
We will also continue to advocate for additional federal funding of up to $182 million for regional road renewals under the New Building Canada Fund which requires approval of both the federal and provincial governments. If the city is ultimately successful in this application, the six year investment in road renewals would increase to almost $1 billion.
Dutch Elm Disease Control
Winnipeg’s vast elm tree canopy comprises a significant portion of its total tree inventory and is one of our city’s greatest treasures. Unfortunately, due to the increasing spread of Dutch Elm Disease (DED) we continue to lose more of our precious elm trees at an increasing rate. If we do not reverse this trend now, we run the risk of losing even more of our tree canopy.
To address this reality, the preliminary budgets propose a record capital investment of $4.6 million to address the backlog of elm tree removals in 2018 which is the most important step in limiting the spread of DED. The additional funding for DED is being financed in part from the proceeds of the sale of the Winnipeg Square Parkade.
In 2018, the total capital investment in the Urban Forest Enhancement Program, including DED removal and the Reforestation Improvement program will increase from $2.1 million to $7.1 million. With a further investment of $11.6 million in the operating budget for tree planting, pruning and additional DED control measures, we will invest a total of $18.7 million in maintaining and enhancing Winnipeg’s tree canopy in 2018. Â Â Â
Over the last decade, the city of Winnipeg has made significant investments to build a modern, efficient, and affordable transit service. These investments have been supported by the 50/50 transit funding agreement with the Province of Manitoba.
In 2017, the Province unilaterally eliminated the 50/50 transit funding agreement leaving provincial transit funding to the City of Winnipeg frozen at 2016 levels.
The Province’s decision to eliminate the 50/50 transit funding agreement created an estimated $10 million shortfall in Winnipeg transit’s operating budget in 2018. We were disappointed with this decision and urge the provincial government to reinstate the 50/50 transit funding agreement in the 2018/19 provincial budget.
We do not, however, think it is fair for transit riders to bear the entire burden of addressing this funding gap, nor do we believe it is fair that this burden be borne entirely by property taxpayers who already provide a significant subsidy to transit. Instead, we have opted for what we believe is a balanced approach to address this significant provincial funding shortfall in transit.
Barring a decision by the provincial government to re-instate the 50/50 transit funding agreement, transit fares for all riders will increase by an additional 20 cents above the annual five cent inflationary increase, for a total fare increase of 25 cents effective January 1, 2018.
Winnipeg currently has among the lowest transit fares compared to other major Canadian cities and Winnipeg’s transit fares will continue to be below the national average and among the lowest fares compared to other major Canadian cities even with the proposed 25 cent fare increase. Â Â Winnipeg Transit fares for seniors will continue to be the lowest of all major Canadian cities with the proposed 25 cent fare increase.
To further address the provincial transit funding reduction the Winnipeg Transit department has prepared a preliminary list of service reductions involving 23 routes throughout the city that have the lowest volume of riders. These service reductions are primarily limited to off peak hours in the mornings, evenings, and weekends. The department will further review and refine the preliminary list as part of the transit scheduling process for implementation in June 2018.
The additional transit fare increase of 20 cents, together with the service reductions, will make up approximately $5 million or one-half of the $10 million provincial transit funding gap. The remaining $5 million will be made up through a draw on transit reserves as well as financing the purchase of new buses in 2018 with debt rather than cash. Â Â Â
Notwithstanding the new fiscal reality that we face in transit we also recognize the need to continue to invest in transit. The 2018 capital budget proposes an investment of $28.4 million to purchase 40 new transit buses to modernize and renew the bus fleet.
The 2018 budgets also proposes a new investment of $1.2 million including a capital investment of $460,000 for additional bus fleet cameras and shelters for bus inspectors and $717,000 of incremental operating funding to support additional transit security and point duty inspectors. This investment will implement the transit safety recommendations that were approved by Council in 2017 following the tragic death of bus operator Irvine Jubal Fraser.
We also recognize that transit is facing a new fiscal reality in light of the provincial funding reductions and a new operating environment in light of declining ridership and new service transportation service providers in the vehicle for hire industry. Therefore, a recommendation in the 2018 preliminary budgets will require Winnipeg Transit to undertake a long term strategic plan in 2018 to address operating, financial, and service objectives to help ensure that transit can be positioned for success in the future.
Investments in active transportation support active healthy active lifestyles and are essential to building a modern and growing city. The 2018 preliminary budgets propose a total investment of $17.3 million in new active transportation infrastructure, a record level of investment which is an increase of $4.1 million or 31% from $13.2 million in 2017.
Investments in 2018 include:
- New protected bike lanes on Empress Street;
- New protected bike lanes on Garry Street and Notre Dame;
- A new mixed use sidewalk along the Fermor Bridge; and
- Acquisition of land for the Churchill Pathway from Churchill Drive to Togo, with construction to begin in 2019.
The 2018 preliminary budget proposes to invest a total of $292 million in the
Police Service which reflects an increase of approximately $3.5 million or 1.2 percent from last year’s budget. This increase is in-line with the rate of inflation and consistent with the level of increase recommended in the Winnipeg Police Board Strategic Plan.
Despite the significant progress our city has made in reducing the crime rate, public safety remains a concern for residents across our city and in our downtown. To address this concern the preliminary budgets include a recommendation for the public service to prepare a multi-year strategy to improve public safety and security in our downtown to be funded by the proceeds of the Accommodation Tax. In formulating this plan the public service will be asked to seek input from multiple stakeholders including but not limited to the Downtown Biz, the Manitoba Hotel Association and the Winnipeg Police.Â
The proposed budgets provide $193.5 million to be invested in the Fire Paramedic Service in 2018. The 2018 preliminary budgets include additional resources to purchase new firefighting equipment and maintain existing fire halls.
Efficiency Savings & Innovation
Identifying efficiencies, ensuring value for taxpayers, and encouraging innovation is more important than ever in this year’s preliminary budgets.
In 2018, we have identified a further $11.5 million of efficiency savings through various measures. These savings have been invested back into the capital budget to help rebuild regional roads. This will fulfill a commitment to re-invest a total of $40 million into regional roads from efficiency savings over the four year term of this Council.
This year’s preliminary budgets have also included $3.4 million of efficiency savings in the form of an additional vacancy management target for a total of $21.9 million that will be shared by all tax-supported departments, special operating agencies, but excluding the Fire and Police 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 their employment with the city. This exercise will not involve any layoffs of current city employees.
The city’s Chief Administrative Officer will be given delegated authority to manage this vacancy management target among city departments in order to minimize the impact of this measure on front line service delivery.
Six-Year Capital Investment Plan
The city continues to face an immense challenge to address a projected infrastructure deficit of $7 billion, about half of which is required to upgrade existing infrastructure and the other half required to invest in new infrastructure to support a growing city.
The preliminary 2018 capital budget proposes an investment of $357.4 million which is primarily targeted to investments in roads and bridges, water and wastewater infrastructure, and transit.
The 2018 total city capital budget of $357.4 million is a decrease of $75.5 million from $432.9 million in 2017 due primarily to one-time projects in the 2017 capital program as well as changes in cash to capital and provincial funding.
External debt in 2018 for new capital investment is $48.2 million in 2018, up from $36.3 million from 2017. While this reflects an increase of $11.9 million from last year, Winnipeg’s overall level of external debt is still well within its self-imposed debt limits which are among the most stringent in Canada.
Over the next six years, the capital budget is projected to invest a total of $2.2 billion. Â
Individual strategic capital investments over this 6-year period include:
- Replacement of the Saskatchewan Avenue Culvert at Sturgeon Creek with a new bridge in 2018 -$8.0 million;
- Rehabilitation of the Fermor Avenue Bridge over the Seine River in 2018-$4.1 million;
- Enhancements to Parks and recreation assets, $3.7 million in 2018 and $20.2 million over the 6 year period;
- Investments to reduce the incidence of Combined Sewer Overflows, $26.1 million in 2018 and $157.2 million over the 6 year period; and
- Redevelopment of the former Public Safety Building and Parkade, $8.9 million in 2019.
New and ongoing program investments
The 2018 preliminary budgets propose new and ongoing investments to build complete neighbourhoods, strengthen community amenities, and review the governance structure at City Hall including:
- $150,000 to continue the Community Homeless Assistance Program (CHAT);
- Fourth year of a 5 year annual commitment of $150,000 towards the United Way’s Plan to End Homelessness;
- $175,000 to support a review of the city’s current governance framework;
- $10.8 million of operating support for the Assiniboine Park Conservancy and a further capital grant of $5.1 million to support their on-going infrastructure renewal efforts;
- Third yearÂ of a five year annual commitment of $1 million to the Winnipeg Art Gallery Inuit Art Centre; and
- $1.25 million to support the Indigenous Youth Strategy, consistent with 2017.
We are also pleased the 2018 preliminary budgets continue with an investment of over $43 million in grant support to many different organizations, museums, and community centres who deliver important services to residents across our city.
The preliminary budgets also recommend an enhanced tourism and events acquisition strategy to be funded from Accommodation Tax revenue. Criteria for this new strategy will be developed by the Manitoba Hotel Association in consultation with Economic Development Winnipeg.
Moving into the final year of this Council’s mandate, we believe City Hall is on a better track today than it was three years ago.
We have made significant progress toward making City Hall more open and transparent, more accessible and responsive, and we have strengthened our sense of pride in our city. We have also made record levels of investment in new and existing infrastructure over the last three years.
We believe the 2018 preliminary budgets continue the momentum and progress made over the last three years.
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.
As a city, and a Council, we need to be thinking about and planning today for a future we know is going to create increased demand not only on our existing city infrastructure and services, but also demand for new infrastructure and expanded services. In this regard, the preliminary budgets include a recommendation for the Chief Financial Officer to conduct a review of multi-year budgeting techniques and best practices in other jurisdictions to address the tax-supported structural deficit to make recommendations for future implementation of multi-year balanced budgets by the City of Winnipeg.
Looking forward, we will also need to continue with a disciplined and responsible approach to investing scarce taxpayer dollars.
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, predictable and growth oriented 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 citizens and members of Council to continue the discussion to finalize the preliminary 2018 operating and capital budgets.
CHAIR, Standing Policy Committee on Finance
Budget 2018 Presentations
- 2018 Preliminary Operating and Capital Budgets
- 2018 Property, Planning & Development Preliminary Budget Presentation
- 2018 Water and Waste Preliminary Operating Budget Presentation
- 2018 Water and Waste Preliminary Capital Budget Presentation
- 2018 Property, Planning & Development Preliminary Operating & Capital Budget for Riverbank Stabilization
- 2018 Animal Services Preliminary Operating Budget Presentation
- 2018 Public Works Preliminary Operating Budget Presentation
- 2018 Public Works Preliminary Capital Budget Presentation
- 2018 Transit Preliminary Budget Presentation
- 2018 Fire Paramedic Service Preliminary Budget Presentation
- 2018 Parks and Open Spaces Preliminary Operating Budget Presentation
- 2018 Parks and Open Spaces Preliminary Capital Budget Presentation
- 2018 Community Services Preliminary Budget Presentation
After the tabling of the budgets on November 22, 2017, the schedule of public meetings to hear delegations and consider the preliminary 2018 Operating and Capital budgets include:
Monday, November 27, 2017, 9:00 a.m.
Standing Policy Committee on Property and Development, Heritage and Downtown Development (Regular Meeting)
Tuesday, November 28, 2017, 9:30 a.m.
Standing Policy Committee on Water and Waste, Riverbank Management and the Environment (Regular Meeting)
Thursday, November 30, 2017, 9:00 a.m.
Standing Policy Committee on Innovation (Regular Meeting)
Friday, December 1, 2017, 9:00 a.m.
Standing Policy Committee on Infrastructure Renewal and Public Works (Special Meeting)
Friday, December 1, 2017, 9:30 a.m.
Winnipeg Police Board (Regular Meeting)
Monday, December 4, 2017, 9:30 a.m.
Standing Policy Committee on Regular Protection and Community Services and Parks (Regular Meeting)
Tuesday, December 5, 2017, 9:00 a.m.
Special Executive Policy Committee to hear delegations on Budgets
Friday, December 8, 2017, 9:00 a.m.
Special Executive Policy Committee to consider Standing Policy Committee recommendations and table final recommendations
Tuesday, December 12, 2017, 9:30 a.m.
Special Meeting of Council to pass Budgets
Members of the public are invited to continue participating in the budget process. To register as a delegation at any of the above committee meetings, please contact 311.
Throughout last yearâ€™s budget engagement process, Winnipeggers indicated they wanted to be involved earlier in the budget development process. This year, the budget development process began much earlier by asking for the publicâ€™s input beginning in April 2017.
Throughout the public engagement process this year, Winnipeggers had multiple opportunities to provide input on the 2018 budget including an online survey, a budgeting tool, an idea forum, and pop-up events located throughout the city.
Overall, 17 pop up events were held across the city resulting in over 900 interactions with residents, over 850 online surveys were completed by the public and City employees, and many different ideas were submitted online for consideration as part of the 2018 city budget.
Please consult 2018 Adopted Budget Infographics for a compiled pdf file of infographics.