5. 2012 Operating and Capital Budget q1 status report

Budgets de fonctionnement et des immobilisations 2012 – T1 - Rapport d’étape

COMMITTEE RECOMMENDATION

That Council approve the capital budget adjustments as outlined in Document 5.

RECOMMANDATION DU COMITÉ

Que le Conseil approuve les ajustements budgétaires décrits dans le document 5.

DOCUMENTATION

1. City Treasurer’s report dated 24 April 2012 (ACS2012-CMR-FIN-0018).

2. Extract of Finance and Economic Development Committee Minutes dated 1 May 2012.

Report to/Rapport au :

Finance and Economic Development Committee

Comité des finances et du développement économique

and Council / et au Conseil

24 April 2012 / le 24 avril 2012

Submitted by/Soumis par: Marian Simulik, City Treasurer/trésorière municipale

Contact Person/Personne-ressource: Tom Fedec, Manager Budget and Financial Planning, Finance / Gestionnaire, Planification budgétaire et financière, Finances

613-580-2424 ext./poste 21316, Tom.Fedec@ottawa.ca

City Wide / À l’échelle de la Ville

Ref N°: ACS2012-CMR-FIN-0018

SUBJECT:

2012 Operating and Capital Budget q1 status report

OBJET :

Budgets de fonctionnement et des immobilisations 2012 – T1 - Rapport d’étape

REPORT RECOMMENDATIONS

That the Finance and Economic Development Committee:

1. Receive this report for information; and

2. Recommend Council approve the capital budget adjustments as outlined in Document 5

RecommandationS du rapport

Que le Comité des finances et du développement économique :

1. Prenne connaissance de ce rapport; et

2. Recommande au Conseil d’approuver les ajustements budgétaires décrits dans le document 5.

Background

Quarterly operating and capital status reports are prepared as part of the reporting framework approved by Council. Operating reports present actual year-to-date revenues and expenditures against the amounts previously budgeted for the corresponding period. Year-end forecasts are also presented in the second and third quarter reports. Capital reports provide a listing of the capital projects / programs, the authorized expenditure budgets, along with the actual expenditures and commitments incurred to date.

The purpose of this report is to present the first quarter operating and capital results for City Wide Tax Supported Programs and Rate Supported programs along with providing an overview of any issues or risks that will be monitored during the year and reported upon in subsequent quarterly reports. Compensation information, showing the actual salary / benefit and the overtime costs incurred by department and branch for Q1 versus the full year budget, is also presented in this report. First quarter results for Police Services, Library, Public Health and Transit operations will be presented in separate reports.

DISCUSSION

Document 1 provides operating budget detail on year-to-date results for the various Departments / Branches.

Document 2 provides detailed listing of the capital projects of the below noted Departments / Branches sorted by category namely, Renewal, Growth and Strategic Initiatives.

First Quarter year-to-Date Results

The year-to-date budget figures are prepared on a “calendarized” basis. Departments have allocated their 2012 budgets on a monthly / quarterly basis based primarily on past experience. Programs such as winter maintenance and recreational programs (outdoor pools / beaches) have definite seasonal spending patterns. There are other program expenditures or revenues which are not seasonal in nature or do not occur evenly through the year. These are therefore more difficult to allocate to a specific month or months. These types of program costs or revenues may occur at specific time periods during the year, for example, a maintenance contract may be expected to be paid by the end of March – therefore the budget is reflected in March.

A high-level corporate summary of the operating results for each City department, as shown in Document 1, are summarized below in Table 1. Document 1 shows the first quarter actual expenditures and revenues compared to the same period budget. For reference purposes, the annual budget for the department or program area is also provided. At this point in the year, it would be expected that the majority of actual results against budget for the first quarter would be close to the 100% level. Although the results for the first quarter indicate a small deficit, the June 30 Status Report will provide a better indication as to whether actual spending and revenues are tracking to budget and whether any mitigation measures need to be undertaken.

All Departments / Branches were asked to review their first quarter results to ensure that their respective spending and revenue results were not indicative of any underlying issues needing to be highlighted or addressed at this time. Additional information on specific program areas is provided below where a significant variance from budget has occurred.

Table 1 – 2012 Q1 Operating Results

	1st Qrt Net Budget	1st Qrt Net Actual	YTD Net Surplus / (Deficit)
	$000	$000	$000
Tax Supported
Elected Officials	2,707	2,503	204
Office of the Auditor General	248	252	(4)
City Manager's Office	15,010	15,199	(189)
City Operations	170,571	174,369	(3,798)
Planning & Infrastructure	3,414	2,591	823
Non Departmental Accounts	(698,077)	(700,379)	2,302
Total Tax Supported - City Services	(506,127)	(505,465)	(662)

Transit Commission	53,758	54,508	(750)
Crime Prevention Centre	95	103	(8)
Committee of Adjustment	(5)	60	(65)
Public Health Board	2,748	2,748	-
Library Services	9,847	9,859	(12)
Police Services	57,782	57,782	-
External Boards, Commissions & Agencies	124,225	125,060	(835)
Total Tax Supported Programs	(381,902)	(380,405)	(1,497)
Water	(9,572)	(10,856)	1,284
Wastewater	(9,956)	(8,314)	(1,642)
Total Rate Supported Programs	(19,528)	(19,170)	(358)
Total Tax & Rate Supported Programs	(401,430)	( 399,575)	(1,855)

City Operations $3,798 million deficit

The main areas contributing to the first quarter deficit are follows:

· Housing $1.198 million surplus

Housing provider reconciliations continue throughout the year and can result in an increase or decrease in expenditures. The reconciliations to date have resulted in lower expenditures. As well the Short-Term Rent Support – Ottawa Extension program had the eligibility criteria, rules and implementation plan approved by Council at the end of January causing a year-to-date surplus. Any surplus from the Housing & Homelessness Investment Plan (H&HIP) is transferred to capital to re-invest in the H&HIP Social Housing Repairs / Renewal.

· Roads & Traffic Management $3.879 million deficit

The deficit in this program relates primarily to increased cost in winter maintenance operations due to the abnormal number of freezing rain events in January and February.

Planning & Infrastructure Services $0.823 million surplus

· Planning and Growth Management - surplus in revenues due mainly to increased temporary encroachment permits resulting from large condominium developments staging construction works on the City’s Right-of-Way.

Non Departmental Accounts $2.302 million surplus

· The surplus is attributable to the receipt of revenues from the sale of surplus properties. Revenues from this source are not budgeted since the amount of land available for sale will vary significantly from year to year.

Boards and Commissions - $0.835 million deficit

The main area contributing to the first quarter results is in transit services. Details on Q1 results will be submitted to each of the respective boards and commission as follows:

Police Services April 27

Transit Commission May 16 (REVISED per Motion FED 20/01)

Library Services May 1

Public Health May 7

Q1 Compensation Results

Document 3 provides compensation information showing the actual salary / benefits and overtime costs incurred by departments for Q1 versus the full year budget. On a corporate basis, actual overtime costs as a percentage of the annual budget are 35% spent. The main area contributing to these results is in Public Works – Roads & Traffic Maintenance. Overtime usage in the first quarter is reflective of the seasonal nature of this service.

Overall total actual compensation costs for the first quarter were 25% of the full year 2012 compensation budget.

Staffing – Retirements

City Council at its meeting of March 24, 2010 approved the following motion with respect to positions that become vacant due to retirement:

“That staff routinely analyze each position that will become vacant due to retirement looking at the job description, compensation level and whether work could be consolidated with another position and report to Committee on the results of such analysis on a quarterly basis.”

Results in Q1 2012 indicate that eighty-five positions were vacated by active employee retirements. Of this total, fifty-five positions were planned for staffing with no change in job requirements. Twenty-two positions were placed on hold while job and organizational requirements are examined. Five positions were referred for review under our job evaluation system with three positions re-evaluated to date. Of these re-evaluations two positions remain at the same pay level and one position decreased by two pay grades. During this quarter three positions were deleted from departmental position allocations.

Provision for Unforeseen and One Time Expenditures

The 2012 budget contained a provision of $2.8 million to address expenditures of a one-time nature and unforeseen expenditures that may occur during the year. Through the 2012 budget process, Council approved spending of $0.730 million against this provision for:

· replacement of the integrated claims and insurance database ($0.200 million).

· employment survey conducted every five years to collect data used to finalize results of the 2012 origin-destination transportation survey ($0.130 million)

· revitalization and renewal of Planning and Growth Management, including the creation of a Green Team ($0.400 million)

No additional requests for funding have been approved by Council in the first quarter, resulting in a remaining balance of $2.070 million in the provision.

Budget Adjustments and Transfers

A summary of the budget adjustments and transfers made in the first quarter of 2012, either through the delegated authority given to the City Treasurer or through Council-approved reports is reproduced in the following two tables.

Adjustments between departments (Table 2) were made to reflect administrative adjustments and to realign program costs and revenues. These adjustments do not result in any increase or decrease to the total corporate expenditure or revenue budgets. Table 3 summarizes the budgets adjustments made that have increased / decreased the City’s overall expenditure or revenue budget.

Table 2 - Intra-departmental Budget Adjustments & Transfers

	$ Millions
Transfer of 1 FTE from Transit to Finance	0.070
Transfer of 1 FTE from Services Ottawa to City Manager's Office	0.040
Transfer of 4 FTE from Social Services to General Manager of Social Services	0.065
Transfer of 1 FTE from Child Care to General Manager of Social Services	0.039
Transfer of 1 FTE from By Law Services to Service Ottawa	0.079
Transfer of 1 FTE from By Law Services to Security & Emergency Management	0.073
Transfer of 1 FTE from Solid Waste to Wastewater Services	0.089
Realignment of Ottawa Youth Commission Program from General Manager of Social Services to Community Development & Funding	0.029
Realignment of Sponsorship Program from Real Estate Partnerships & Development to Parks & Recreation Services	(0.215)
Service Ottawa saving from Roads & Traffic Maintenance through to Transit	(0.128)
Realignment of Senior Initiative Program from City Manager's Office to Community Development & Funding	0.500
Realignment of Community Agency Funding from Community Development & Funding to Housing and Child Care	0.057
Realignment of New Lease Contracts from Real Estate Partnerships & Development to Various Departments	(0.060)
Realignment of General Manager of Social Services to Community Development & Funding	0.698
Transfer Electronic Ambulance Call Solutions from paramedics to Information Technology	0.061
Service Ottawa savings - Infrastructure Services reduced recoveries to capital projects	0.215

Table 3 - Budget Adjustments & Transfers Impacting Overall Expenditures / Revenue

Nature of Budget Adjustment	$ Millions	Funding Source	Net Effect on Budget Revenues & Expenditures
Administrative adjustment to amend the debt servicing charges by functional area and to reflect funding sources in Solid Waste, Water and Waste Water	3.658	City Wide Reserves / Development Charges	Increase in Revenue & Increase in Expenditure
Additional funding for Home Support Services &Ontario Works changes for bus tickets & discretionary employment benefits	0.110	Provincial Funding	Increase in Revenue & Increase in Expenditure
Funding from Ministry of Training, Colleges and Universities ceases July 31, 2012	(0.785)	Provincial Funding	Decrease in Revenue & Decrease in Expenditure
One-time funding from 2011 surplus for Committee of Adjustment as approved by Council ACS2012CMR-FIN-0008	0.217	City Wide Reserves	Increase in Revenue & Increase in Expenditure

Capital Projects / Programs

Document 2 provides a listing of the capital program provided by the Department/Branches that are tax supported. Separate Q1 reports for the Transit Commission and the Environment Committee (Water and Sewer supported) will provide a status on projects that are under their respective mandates.

The listing identifies the lead department, Ward, financial status – budget versus actual results and anticipated completion date. The total for capital works in progress is $5.321 billion, of which $1.835 billion is uncommitted to date. The capital listing indicates that projects are generally on track with no significant issues noted.

Capital Budget Adjustments

Document 4 provides a listing for the information of Committee and Council of all capital budget adjustments that have been processed under delegated authority since April 2011. These have been processed under the authority delegated to the City Treasurer under By-law 2009-231.

Document 5 provides a listing of capital budget adjustments that require Council approval as they exceed the delegated authority limits. An explanation for each adjustment is also provided by the requesting department.

RURAL IMPLICATIONS

There are no rural implications.

CONSULTATION

The purpose of this report is administrative in nature and therefore no public consultation is required. All Departments reporting to Committee were consulted in the preparation of this report.