‘Ottawa’ City Racked up $13.8M Deficit in Snow Clearing Last Year
Old Man Winter drained the city’s snow clearing budget last year and forced another $13.8 million in unplanned work.
The city budgeted $63.1 million for winter operations in 2016 and ended the year with expenses totalling $76.9 million.
According to public works general manager Kevin Wylie, a big snowstorm at the end of 2015 meant crews had to remove loads of snow from streets in January 2016. There was also a major storm on Feb. 16, 2016 that dumped 51.2 centimetres of snow on Ottawa.
To cap off the year, there were several snowfalls in December that helped push the winter budget into the deficit position.
“The winter season resulted in higher costs for the maintenance of roads, sidewalks, pathways and snow disposal facilities,” Wylie said in an email.
The city has a tough time putting aside enough money to handle Ottawa’s volatile winters. Take as an example the 2017 winter, with several freeze-thaw-freezes and big snowfalls.
Annual winter maintenance budgets have been awash in red ink: in 2015 the deficit was $7.5 million, in 2014 it was $11.4 million, in 2013 it was $23.9 million and in 2012 it was $5 million.
That’s a combined deficit of $61.6 million over five snow-clearing budgets.
The city toyed with the idea of tweaking snow-clearing standards to save money, but that didn’t go over well with council members last year.
So, for the 2017 budget, the city built an extra $4.5 million into the winter maintenance program to guard against wild swings in the weather. The city will have a better idea near the end of 2017 if that increase was enough.
The snow budget wasn’t the only part of the 2016 financial results finishing the year with a big fiscal hole.
There was large deficit in the account for tax rebates and remissions as more property owners win assessment appeals and ask for tax breaks.
The $26.3-million deficit in rebates and remissions was largely because of property assessment appeal outcomes, but city treasurer Marian Simulik said $10 million was attributed to tax breaks for vacant properties.
The city specifically cites office space vacancy in the core as a driver of the tax rebates.
Commercial and industrial property owners can apply to the city for tax relief if they have vacancies in their buildings. It’s hugely irritating for municipalities and they have been asking the provincial government to close the loophole. The City of Ottawa is exploring some options to get rid of the rebate.
The massive rebate and remission deficit throws the entire city budget off-kilter because the shortfall must be absorbed by all departments.
Operationally, the transit department had a successful budget year ending with a $561,000 surplus, but absorbing its share of the rebate deficit means the agency finished $1.8 million in the red.
The Ottawa Police Service finished 2016 with an operational $2.7-million deficit, but assigning its share of the tax rebate shortfall means the police force finishes the year with a $6.4-million deficit.
Overall, the city’s 2016 year-end results were saved by the water and sewer rate budget, which had a $13.7-million surplus, mostly because residents used more water last summer. The tax-funded side of the ledger ended with a $8.2-million deficit, requiring help from the reserves.