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Fiscal Sustainability, City Finances, Budgets

Winnipeg, Man. (October 14, 2022) - Aligned with my commitment to transparency and public participation in the election process, below you will find my commitments to fiscal sustainability and the City finances. I have also posted copies of much of my previous work on the topic below.

Image of cartoon men repairing a line on a cartoon graph to try to keep it up and showing a positive trend instead of crashing down

Fiscal Sustainability

With regards to financial sustainability. I will highlight that the City debt has quadrupled from $415 million in 2005 to $1.6 billion in 2020/21 (numbers directly taken from the City’s Financial Annual Reports). Simultaneously, in the past year the City has emptied it’s financial reserve accounts by $88 million – almost a 25% drop in savings over a 1 year period. At the beginning of 2021, the City’s Financial Stabilization Reserve fund was at $120 million and is now forecasted to be at $20.1 million by the end of 2022 – that’s a 85% drop, and $57 million below the City’s legal limits. Even while the City has had extra payments from other levels of government for pandemic support, and with an almost 20% increase in tax rates (2.33% a year) over the past 8 years.

Plus we have inflation of supplies and wage inflation as the various unions renew their collective agreements. Further gas prices have at least doubled, if not tripled from the average prices of the last several years.

I am very aware of these realities and have been the only Councillor to relentlessly push for improved fiscal accountability and debt management over the past four years. I have placed significant pressure on our financial department to be more transparent and accountable with its finances, debt management, taxation policies, and spending.

I was also the first Councillor to demand financial planning to address the realities of the Covid-19 pandemic and introduce the City’s Covid-19 Financial Plan and Recovery Strategy (which another candidate often takes credit for).

My YouTube channel has many videos that cover my stance on fiscal sustainability, and there are also several press releases on my website. For ease of access, a sample of these are listed below:

Articles on Covid-19 Economic Recovery

On taxation and tax increases

I've had emails from a few residents suggesting that property taxes must increase to pay for the City's increasing budget.

I do not necessarily agree to that statement. Something must be done to address the City’s fiscal issues, but what exactly must be done needs to be investigated further.

Besides seeking funding from other levels of government, the City has the ability to find financing through developing new revenue structures, eliminating waste or finding efficiency, and increased or decreased taxation.

Such decisions are complex, and will not be treated lightly or arbitrary.

The first step is to conduct zero based budget reviews and increase public knowledge of City’s financial status and align this with the public expectations. I have called for such budgeting processes for 4 years, and plan to introduce them as Mayor. Zero based budgeting is proven to save other cities millions of dollars in unnecessary expenditures.

Accountable finances, fully transparent and easily interpretable by the public, will allow the public to analyze and determine whether certain departments have enough funding, need more, or are wasting it and need to be reined in.

To increase taxes, the City needs to prove to the public it’s managing current resources well and requires tax increases directly to address service improvements, in alignment with public expectations/demands.

As an example, I have argued for years that the Planning Department, which determines the future of hundreds of millions of investment dollars and the City layout, is completely underfunded. As a result City planning and new developments are full of issues for residents, headaches for developers, and lawsuits. We finance the department at less than 1/3rd other major Canadian cities, yet it’s one of the departments that brings in the most non-property tax City revenue. Wouldn’t we want to increase funding to this department to increase value to residents, improve quality, reduce resident issues to find developments that work for our City, and also expand this revenue stream? This is not handing out a blank cheque to the department. There will be accountability for improvements from invested dollars, however, we can’t expect progress without strategic long term investment.

There are other departments which, in my opinion, are underperforming and require waste reduction and efficiency improvements. The savings found can appropriately be redirected to better finance underfunded departments, or can be put to better value within the existing department.

This data will be brought public, so that the City can prove how it’s managing its resources and whether it really needs to have taxation increases, or perhaps a tax decrease.

There are limits to tax increases. Residents may move to surrounding RMs or other provinces to find lower taxation, resulting in lower overall tax collection. Inflation is impacting resident’s budgets as are global economic conditions. There are many factors in setting appropriate rates.

As the next Mayor, I will work to end the arbitrary tax increases based on guesswork and politics. Taxation should be linked to data, well managed finances, and alignment of public expectations to reality.

The more we analyze and share, the more solutions we can find together.

For example, I like the idea of rebating taxes to efficient businesses and residents who can demonstrate they are saving the City on expenditures. Here are two such motions I raised, related to the reduction of City waste management costs through on-site composting:

Annual budget process, collaboration with the Provincial and Federal governments

I have made it very clear in many public comments, press releases, media conferences, and videos that the current budgeting process at City Council is a disaster.

Anyone who attended the multi-year budget meetings in 2020 knows how painful it was, and how the City tried to cut funding to many community organizations. The City tried to close libraries, pools, arenas, recreation facilities, sell off golf courses, eliminate transit routes, reduce service schedules, eliminate the UPass program, defund community centres, and much more.

Subsequent budgets have had little time for review and comment by residents and Councillors. Most decisions are made in advance, behind closed doors, with the budget working group that was hand selected by the Mayor.

The resulting policies and budget approvals are rammed through Council by the Executive Policy Committee voting bloc.

In short, public participation and ideas are largely ignored – which contradicts the City’s own Open Government Policy (located at the following link):

At my campaign launch and during my first campaign announcement (video links below) I made it clear that that: on day one, all Councillors will be participants in the budget working group, all Councillors will have equal access to information, and I will put an end to closed door meetings of the Executive Policy Committee where other Councillors are excluded.

First campaign media conference, announcing commitment to the participation of all Councillors on the Budget Working Group:

Winnipeg Free Press article on budget working group overhaul under Kevin Klein as Mayor:

As mentioned in a point above, as Mayor I will work with the Council to direct a zero-based budget review and increase the public’s knowledge of City’s financial status and align this with the public expectations.

Accountable finances, fully transparent and easily interpretable by the public, will allow the public to analyze and determine whether certain departments have enough funding, need more, or are wasting it and need to be reined in.

As Mayor, I will reintroduce transparent and accountable financial decision making processes, such as cost/benefit analysis and return on investment analysis, prioritization, and other methods so that the un-redacted facts are available to Councillors, the pubic, and other levels of government.

We will prove to other levels of government that City finances are best value for City and agreed upon. The Provincial and Federal governments will hand out money if they see proof of value, and little arguments over its spending. The City needs to set the conditions for this, through improved fiscal processes and inclusive decision making.

Here is one more historic video link on the budgeting for ambulances and the million dollar “oops”:

And we wonder why we can’t obtain provincial and federal buy in.

Policing Budget

For information on police budgeting, please refer to the article on Community Safety and Policing.


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