The City of Winnipeg has yet to see a dime from the lawsuit over the police headquarters project, even though it’s counting on those dollars to cover a big hole in last year’s budget.
In 2023, city council accepted a $22.5 million settlement related to a lawsuit around the construction of the new station. A report to the mayor’s executive police committee said no funds have been collected to date. It’s not known if or when that money will be paid out.
But a report earlier this month to the finance committee suggests the city was able to wipe out the large deficit from last year because of proceeds from the settlement.
“The improvement is mainly due to the year-end recognition of a receivable of $22.5 million related to the police headquarters settlement.”
City Finance Committee Chair Jeff Browaty said there’s a simple explanation.
“We are confident, and our very cautious public service is comfortable that we will be made whole on this agreement at this point,” said Browaty.
As per the terms of the settlement, he said the city has secured six properties as collateral that can be sold to recoup money owed if needed.
“Our lawyers, our auditors have now basically told us that it is a valid receivable,” said Browaty. “We do need to recognize it on our books even though the cash is not in hand.”
Still, Coun. Brian Mayes questions the timing of when the receivable is being recorded.
“Why are we accounting for it in this very foggy way?” asked Mayes.
The city was not only expecting a deficit in 2024, the plan was to drain the rainy day fund and carry over red ink into 2025. Now a surplus is on the books.
“It certainly looks like it was suddenly found money to solve the problem of the deficit, so let’s get some answers to that,” said Mayes.
