Working on Improving Internal Efficiencies to Reduce Operating Costs

I’ve received much feedback (and rightly so)  from people on the City increasing property taxes, sewer rates and garbage rates. In addition I’ve had many questions on ‘what is the city doing INTERNALLY to cut costs’.  I want to provide you with an overview of some of the key initiatives. Many are underway, but these are significant.

Background:

Like many Canadian municipalities, Winnipeg is facing persistent cost pressures requiring a laser focus on managing expenditures, setting service levels and seeking new or growth-related revenue  sources. These cost pressures can be attributed to many things – here is a list of what I believe are the top reasons:

1. In Winnipeg, unlike many other cities, there were 14 years of property tax reductions or freezes (1998-2011),
2. In Winnipeg, unlike many other cities, there were 10 years of modest tax increases (2.33% from 2013-2022), mainly used for capital projects,
3. During and post pandemic, there were record high inflationary increases which caused an increase in many of the City’s  collective agreements, and increased the cost of many goods that the city purchased.
4. The favorable Federal and Provincial immigration policies increased population and a demand for more housing and services. On average, every new home needs an investment of $107,000 in municipal infrastructure, covering everything from roads, pipes and water treatment plants, to fire halls, community centers and more. Property taxes alone do not cover the cost of adding new infrastructure to support the housing surge. In the last 3 years, Winnipeg has grown by 71,000 people who require services.
5. Cities across Canada have an outdated revenue model. Municipal revenue, mainly property tax, is not able to match the cost demands for infrastructure and services. Cities are not able to access Provincial and Federal revenues that are generated by growth. Much discussion is occurring around funding Cities in a more fair and equitable manner, but until something changes, Cities have few tools to raise revenues to support the increasing demands for services.

Key Actions to Streamline Service Delivery and Improve Efficiency:

Again, as noted earlier, the Public Services has been directed to focus on many continuous improvement activities. Here is a list of some key actions.

Continuous Improvement Activities

The Public Service is directed to continue and renew continuous improvement activities to identify efficiencies control expenses, augment existing processes, improve customer service and / or generate additional revenue;

The goal is for 2025 is to find a total of: $51.1 million, consisting of:

• $30.7 million for expenditure management
• $20.4 million for vacancy management

The result of the Continuous Improvement activities will be included in an annual report to the appropriate committee of Council on or before December 31st of each year Commitment to identifying efficiencies in operations, controlling expenses, enhancing processes, and improving customer service.

Continuation of the Budget Working Group:

• Councillors who sit on the budget working group are working throughout the year to focus on efficiencies in each department vs the usual 7 months.

Hiring of a Chief Administrative Officer:

This process is underway and I expect a CAO will be hired by summer.

• This role is a critical component of running the City – the CAO oversees the operations of approximately 10,000 people. The CAO oversees management, production and efficiencies of the City.
• In addition, currently the City has added two additional staff to work on a comprehensive review and implementation of performance management processes.

Comprehensive Departmental Reviews:

• High-cost departments such as Fire Paramedic Services, Public Works, Police Service, and Transit are undergoing an efficiency review – a very detailed look at processes and efficiencies.
• Management is working to determine how to reduce overtime / associated costs and ensuring stronger fiscal discipline.
• Management is working to improve systemic issues including fare evasion and budget forecasting.

Revenue and Expenditure Management

• The City is looking at new revenue reliability by expediting new streams such as the 911 levy – in addition to other service deliveries which are being considered.
• Strengthening fiscal management  tools & providing more oversight to support Fire Paramedic Services, Public Works, Transit, and Fleet Management in meeting budget targets.
• Collaborating with Workers Compensation Board (WCB) to review and reduce claims, particularly in Winnipeg Transit and Fire Paramedic Services is underway.

Housing Accelerator Fund Reserve

• Council is working to accept $122.4 million federal funding through Canada Mortgage and Housing Corporation – which will facilitate accelerated housing approvals.
• This more streamlined approach to accelerating housing  – will enable more housing to come on line and be entered into City’s Tax Base.

Winnipeg Transit Service Restoration

• Transit will be increasing service level increase from 94% to 100% by June 29, 2025.
• This will increase transit revenue and reduce reliance on transit subsidization.

Procurement and Bulk Buying Efficiencies

• City is exploring collaboration with Province of Manitoba and Manitoba Hydro for fleet acquisitions and rentals and will be utilizing public sector buying groups to achieve cost savings.

I welcome any comments / suggestions / feedback you may have.