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Transit officials expect the trend to “marginally improve” over the rest of the year.

The transit service was already $7.7 million over budget for the first six months of the year, but management has taken steps to cut spending for the rest of the year.

The measures include elimination of five management posts, an across-the-board cut of 20 per cent on discretionary items and tight controls on overtime and other expenses.

Of the $5 million in cuts and changes to plans that the transit commissioners will be asked to approve at Monday’s meeting, the largest is for an item called “transit priority road and signal projects,” which could save $2.3 million.

It was the second piece of bad financial news out of city hall recently.

The city has projected a $41-million deficit — believed to be the largest in Ottawa’s history since amalgamation — and ordered a hiring freeze and discretionary spending controls to deal with the shortfall, which was largely due to higher snow-clearing costs, arbitration awards to city workers, and the Ontario government’s decision to expand regulations to compensate firefighters for six additional cancers presumed to be work-related.

However, Mayor Jim Watson was not unduly concerned about the deficit, although that was before the additional multi-million deficit for OC Transpo was known.

“I have every confidence that this short-term deficit is manageable,” Watson said Tuesday at a meeting of the finance and economic development committee, pointing out that the deficit represents less than 1.3 per cent of Ottawa’s $3-billion budget.

“I have no doubt that we will end 2015 with a balanced budget, just as we have for the last five years,” the mayor said. “We’ve done it before and we’ll do it again.”

— With files from Joanne Chianello