procurement of pandemic-related supplies, and increased sanitization, among others. In response to the pandemic, management has identified actions to partially offset the financial impact such as reducing labor costs and delaying some capital projects for the year. As a result, we estimate the operating balance could decrease in 2020 but that it would start recovering in 2021. Operating surpluses will partially finance Windsor's capital spending, keeping modest negative after-capital balances at less than 5% of total revenues during the same period. The majority of the city's capital plan is related to road construction, and sewer and transportation infrastructure.

Windsor's ability to employ increases in property taxes, utility rates, and user fees is less vulnerable to political and economic constraints than in previous years, in our view, given the recent levy increases approved by council. Legislative requirements and Windsor's maintenance-heavy capital plan continue to limit the ability to cut expenditures somewhat; however, this is in line with many Canadian municipalities and the management team has been able to take the necessary measures to maintain strong operating results. Windsor's postemployment obligations continue to constrain the overall budgetary performance, although the city has addressed them prospectively for all employee groups. Total postemployment obligations represented about 74% of operating revenues at year-end 2018.

We expect Windsor will maintain its robust liquidity, with average free cash and liquid assets totaling about C$332 million in the next 12 months and representing more than 29x estimated debt service. We expect coverage to improve with a declining debt burden. Similar to that of its domestic peers, Windsor's access to external liquidity is satisfactory, in our view.

Annual surpluses and healthy reserve levels help fund Windsor's capital plan and we expect the city to continue repaying its debt, with forecast tax-supported debt declining to less than 7% of operating revenues by 2022. The city has no plans to issue significant new debt in the outlook horizon and we expect interest costs will remain minimal at less than 1% of operating revenues. In addition, while the city has some exposure to the obligations of its major government-related entities, Windsor Canada Utilities Ltd. and Windsor Utilities Commission, and is liable for 50% of Essex-Windsor Solid Waste Authority's debt, we do not believe that these are material enough to affect our view of the city's debt burden. We believe Windsor's exposure and likelihood that it would provide timely and sufficient extraordinary support to the entities in the event of financial distress are limited, reflecting the entities' ability to raise rates and fees to recover losses.

Key Statistics

Table 1

(Mil. C$)	2018	2019bc	2020bc	2021bc	2022bc
Operating revenues	673	693	683	720	736
Operating expenditures	621	637	652	650	666
Operating balance	52	57	30	70	70
Operating balance (% of operating revenues)	7.7	8.2	4.5	9.8	9.5
Capital revenues	44	31	35	38	37
Capital expenditures	129	108	121	133	129