Transit reserves likely won't cover OC Transpo shortfall for 2023

The City of Ottawa hadto cover a $29.3-milliondeficit for 2022 and doesn'thaveenough left in its transitreserve fundfor thebig shortfall expected at OC Transpo this year.

At last week'sfinance and corporate services committee where staff presented the report with final results for last year a few councillors raised concerns about how staff intend todeal with the latest financial juggling act at OC Transpo.

Council passed a budget on March 1 based on receiving $39 million from the Ontario and federal governments for operating costs.

Since then, both governments' budgets have been tabled. Neither has operating funds for municipal transit systems.

• Transit commission greenlights budget with $39M hole
• City's transit deficit not fully covered off by provincial grants

And yet, staff explained that by the end of 2023, the transit reserve is forecast to have a balance of just $8.9 million.

"We do not have enough reserves to cover that hole," notedKitchissippi Coun. Jeff Leiper, who asked staff for its backup plan.

Cyril Rogers, the city's acting chief financial officer, told him they would review capital programs and be careful withhiring.

OC Transpo general manager Rene Amilcarsaid the transit agency would increasemarketing to attract customers and aim to improve bus reliability to keep existing ones.

A pandemic problem

Since the COVID-19 pandemic hit three years ago, the transit department has posed the biggest budgeting difficulties for the city.

Ridership has onlyrecoveredto about two-thirdsof its 2019 numbers, as people continueto work from home or only commute a few days a week.

• Federal public servants mandated to return to office 2-3 days a week by March 31

The cityhad received bad news last fall, when provincial grants didn't quite cover their costs. The cityhad to take $25 million out of the transit reserve, dropping the balance tojust $1.2 million at the outset of 2023.

The pain was alleviated a little bit two weeks ago when the city learned it would receive an extra $7.4millionbecause other communities didn't use up their own allocations.

Deficit in 2022

That overalltransit funding gap from 2022 wasn't the only struggle for the City of Ottawa last year, however. Overall, it had to cover off a loss, compared to having a surplus the year before.

The City of Ottawa spent $18.8million responding to the May 21 derecho wind storm, which knockedout power to 180,000 customers for days and caused a lengthy cleanup of downed trees.

The city has not been reimbursed for those costs.

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Municipal costs related to thetruck convoy protest have been pegged at$6.7 million, a figure that includes $2.2 millionfor the city's response and $4.5 millionfor foregone transit revenue while trucks occupied the downtown.

Reimbursement money in the recentfederal budgetmight cover only a third of that, Rogers suggested to committee.

Meanwhile, thecity was $5.2 million short when it cameto running the wastewater system, which is paid by water bills.

All those shortfalls were somewhat offset by higher than expected revenues or savings, especially in the recreation department, aspeople returned to cityprogramsfaster than expected after pandemic restrictions lifted.

The Ottawa Police Service posted a $1 millionsurplus, while the Ottawa Public Library was $4.6 million in the black at the end of 2022.

At the end of the day, however, Rogers assured councillors that the city didn't have to use as much from the tax stabilizationreserve as expected last year and that"overall, the reserves were in a good balance."