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Budget deliberations begin in December.

Despite the recent firefighters' arbitration award, which will cost the City of Windsor millions, the city is headed for a budget surplus this year..

Based on third quarter results, the city is expected to end the year with a surplus of $3.8 million. That includes a contingency of $1.5 million in the budget stabilization reserve. That money is used for unforeseen events.

Helga Reidel, the chief administrative officer, said the main reason for the projected surplus is fewer people on the welfare rolls.

"The reduction in our Ontario Works case load, certainly that's a high cost item, and the favourable variance in that account is over a million dollars this year. So we're very pleased about that. Certainly, that's good news," Reidel said.

City treasurer Onorio Colucci said most departments are keeping good control of their expenditures and there have also been some pleasant surprises in social services:

"We got some extra money that was unexpected. As well, we had budgeted for a slightly higher case loads of Ontario Works recipients but the improvements in the local economy has reduced that and so we're seeing some surpluses on that side," Colucci said.

Colucci cautioned the city could be hit with extra costs in the final two months of the year. There's always a possibility winter weather could change the numbers.

"Snowstorms are a $400,000 to $500,000 a hit, or more if it's a big storm," he said. "Certainly there's lots of moving parts in the projection."

The administration is in the process of preparing the 2014 budget documents.

Budget meetings are planned for early December.

The city's total operating budget is in the $700-million range.