Dire budget warnings loom over February council meeting

On the eve of budget day in Winnipeg, city councillorswill gather for a council meeting overshadowed by dire warnings about the city's budget.

On Friday, Mayor Brian Bowman will unveil the city's spending plan for 2019, which will include another property tax hike, a Winnipeg Transit fare freeze and for the first time in Winnipegmulti-year fiscal planning.

The mayor has also softened Winnipeggersup for the prospect of a painful budget by going public with complaints about provincial funding.

Over the past two months, the mayor has drawn attention to the slow progress of provincial transfers to the city for 2017 and 2018 infrastructure projects, as well asthe province's desire to siphon away $34 million from sewage treatment upgrades to the Waverley underpass.

Premier Brian Pallister'sProgressive Conservative government responded by urging the mayor to negotiate in private and be thankful for the absence of strings attached to most provincial transfers to the city.

The mayor did not heed this advice. On Wednesday, Bowman ramped up the rhetoric by warning Friday's budget will include one of the following unpleasant bullet points: a property tax hike above the promised 2.33 per cent annual increase, more city borrowing or reduced infrastructure funding.

During last fall's election, the mayor promised to limit property tax hikes to 2.33 per cent a year for every year of his second term. But he gave himself some wiggle room by stating all bets are off if the province scales back funding.

Capitalspendingcuts started 2 years ago

Raising property taxes above 2.33 per cent in the first year of his new mandate runs the risk of angering voters, many of whom won't care whether or notPallisteris the politician squeezing the funding tap.

Borrowing money topay for infrastructure is not the most sustainable option, as the city is already pushing up against a self-imposed ceiling for combined debt that is not supported by utility bills.

The threat of infrastructure funding cuts, meanwhile, is even more curious, because Bowman spent the past two city budgetsslashing capital spending without blaming anyone at all.

In 2016, Winnipeg's capital budget was $369 million. That dropped to $318 million in 2017 and then to $246 million in 2018.

This reductionhappened partly because other levels of government stopped ponyingup as much infrastructure money. But Winnipegstopped spending its own money, too.

Cash transfers from the city's operating budget to the capital side dropped from $75 million in 2016 to $54 million in 2017. It then dropped down to $23 million last year.

You read that correctly: Winnipeg started slashing infrastructure spending a full two years before Bowman and Pallister started bickering in public.

So if the mayor turns around on Friday and tries to blame a similar move on the premier, not a single policy-maker on Broadway will be impressed.

Thursday's council meeting, however, gives the mayor one more chance to engage a bit of political theatre before the budget comes out. Several of the significant votes are related to the city-provincial funding tiff.

Here's some of what council will decide today:

1. Water and sewer rate freeze

Three weeks ago, Winnipeg water and waste managers recommended the city increase the residential water and sewer rate by 4.7 per cent this year. That hike would raise additional millions to help finance billions worth of sewage treatment upgrades.

The move would have added $61 to the average Winnipeg household's water and sewer bill. But only 11 days after the hike was proposed, Bowman and the rest of council's executive policy committee backed off.

• Water, sewer rates on the rise, along with price tag for sewage-treatment upgrades
• Winnipeg holds off on water and sewer rate hike in bid to gain more dollars from Ottawa, Manitoba

On Feb. 19, executive policy committee voted to freeze water and sewer rates at 2018 levels in what amounted to a political statement. Bowman and his allies signalled the city isn't going to collect additional revenue until Manitoba and Ottawa contribute more toward the city's multibillion-dollar sewage upgrade program.

In one sense, the city has no choice but to proceed with that program, as it was ordered by the province in 2003 to upgrade all three of its sewage treatment plans and reduce combined-sewer overflows into the city's rivers.

On the other hand, the provincial Clean Environment Commission recommended all three levels of government share this burden equally. That hasn't happened, necessitating a series of water and sewer hikes that have taken the average annual household bill in Winnipeg from $500 to $1,308 over the course of 15 years.

2. North End sewage audit

In a related vein, council will consider a report authorizing an audit of the way Winnipeg determined it will cost $1.8 billion to conduct upgrades to the North End Water Pollution Control Centre.

The largest of the city's three sewage treatment plants needs newheadworks that is, the screens and filters that remove solids at the start of sewage treatment as wellas a new power plant. The city is also planning to build a facility to process biosolids, or partly digested solid waste, from all three of the city's sewage treatment plants.

The North End plant also need a nutrient-removal facility that will scrub phosphorus and nitrogen from the effluent returned to the Red River.

City auditors say in a reportthey didn't have enough time to review the way water and waste officials came up with the cost estimate.

The Pallister government is watching closely, as it has relied on the steadily increasing price tag for the upgrades as an excuse not to fund the projectjust yet.

3. Manitoba Club joins heritage club

In late 2017, city heritage planners proposed adding the Manitoba Club on Broadway to the city's list of historical resources.

• Winnipeg's oldest private club opposes heritage designation

The oldest private club in Western Canada opposed the move, which proceeded to bounce around city committees for the next 16 months.

The end of the road is near, however, as the heritage designation has made it to council.