To provide an
overview of the year-to-date financial results at the end of June 2010.
BACKGROUND
There are 5 operating budgets that
are monitored on a monthly basis. The Town’s
primary operating budget (excluding Planning & Design, Engineering,
Building Services and Waterworks) is to support the Town’s day-to-day operations.
The remaining 4 budgets include Planning
& Design, Engineering, Building Services and Waterworks Operating Budgets,
and they are shown separate from the Town’s Operating Budget as they are
primarily user fee funded (e.g. planning and engineering fees, building permit revenue
and revenues based on water consumption, respectively) and separate reserves
have been established for each.
Departments provide details of
significant financial variances (actual to budget) in their areas. The variances are reviewed, substantiated and
summarized by the Financial Planning
department. Minor variances are reviewed by staff, but not discussed in detail
in this report.
OPTIONS/ DISCUSSION
YEAR-TO-DATE OPERATING BUDGET VARIANCES:
Town
At the end of six
months, the 2010 operating budget (excluding Planning & Design,
Engineering, Building Services and Waterworks) results reflected an overall $1.927M
favourable variance.
The $1.927M favourable
variance was comprised of variances in three main areas of the Town’s operating
budget:
$1.650M favourable variance in Non-Personnel
Expenditures
$0.471M
favourable variance in Personnel Expenditures
($0.194M)
unfavourable variance in Revenues
$1.927M
In
summary, the $1.927M favourable variance is driven by Winter Maintenance $0.789M,
lower fuel cost $0.129M and timing of various non-personnel expenses $0.497M.
The next
few sections provide details of the variances above, and details of the Planning
& Design, Engineering, Building and Waterworks year-to-date variances.
NON-SALARY EXPENDITURES
At the end of June, Non-Salary expenditures were $1.650M favourable.
|
Non-Salary Items
|
Fav. /
(Unfav.)
|
|
Purchased Services
|
$1.007 M
|
|
Materials & Supplies
|
$0.591 M
|
|
Other Expenditures
|
$0.052 M
|
|
Total Non-Salary Favourable Variance
|
$1.650 M
|
Purchased Services
The favourable variance of $1.007M
in Purchased Services was due to the following accounts:
- $0.481M
favourable variance in winter maintenance driven by lower requirements for
tandem axles and hired loaders due to favourable weather conditions;
- $0.283M
favourable variance in other contracted services (i.e. road maintenance) among
various departments due to timing;
- $0.162M
favourable variance in training, travel, promotion & advertising and
professional services due to timing;
- $0.050M
favourable variance in utilities and streetlight hydro across the Town due
to lower consumption
Materials & Supplies
The favourable variance of $0.591M
in Materials and Supplies was due to the following accounts:
- $0.308M
favourable variance in winter maintenance driven primarily by less usage
of salt;
- $0.129M
favourable variance in vehicle fuel due to lower fuel costs;
- $0.052M
favourable variance in office supplies due to timing
PERSONNEL
EXPENDITURES
The June year-to-date personnel expenditure variance was $0.471M
favourable:
|
Salary Expenditures Items
|
Fav./(Unfav.)
|
|
Full Time Salaries net of vacancy backfills
|
$1.198
|
M
|
|
Overtime
|
($0.087)
|
M
|
|
Other Personnel Costs
|
($0.185)
|
M
|
|
Favourable Variance before Salary Gapping
|
$0.926
|
M
|
|
Salary Gapping
|
($0.455)
|
M
|
|
Salaries & Benefits Favourable Variance
|
$0.471
|
M
|
The $1.198M favourable variance in full time salaries net of vacancy
backfills was the result of 32 net vacant positions. The unfavourable variance of ($0.087M) in overtime
was due to the Fire Department, however when compared to the second quarter of
2009, there was a $0.460M improvement in the variance driven by the filling of
15 firefighter vacancies.
Further, the 2010 budget included $0.455M of annual salary gapping
savings which has been fully allocated to the individual business units.
REVENUES
At the end of June 2010, revenues were
unfavourable by ($0.194M) due to the followings:
|
Revenue Items
|
Fav./(Unfav.)
|
|
User Fees and Service Charges
|
($0.246) M
|
|
Grant & Subsidy Revenues
|
$0.020 M
|
|
Other Income
|
$0.032
M
|
|
Net Unfavourable Variance
|
($0.194) M
|
User
Fees and Service Charges
The unfavourable variance of ($0.246M) was due to the following
accounts:
·
$0.087M
unfavourable variance in Recreation revenue resulting from timing of camp
revenue offset by higher fitness revenues
·
$0.087M
unfavourable variance due to timing of theatre ticket sales in the professional
entertainment series
·
$0.067M
unfavourable variance in sales of blue boxes, green bins and scrap metal
·
$0.064M
unfavourable variance in Fire dispatch fees due to the cancellation of the
Whitchurch-Stouffville contract and lower accident attendance revenue
·
$0.054M
favourable variance in Library revenue due to fund raising and program
registration revenue
Further details on the Town’s
Operating results are provided in Appendix 1.
PLANNING &
DESIGN
Planning
& Design reported the June year-to-date result being approximately on
budget ($0.003M).
ENGINEERING
Engineering
reported a year-to-date favourable variance of $1.667M (see Appendix 3). The favourable revenue variance of $1.580M is
due to higher user fees resulting from higher development application activity,
and a favourable variance of $0.087M in personnel due to vacancies and
non-personnel expenditures.
BUILDING SERVICES
Building Services reported a favorable variance of $0.253M
at the end of six months (refer to Appendix 4).
The favourable variance was due to $0.179M in personnel and
non-personnel costs, and $0.074M from higher building permit revenues.
WATERWORKS
Waterworks reported a year-to-date favourable variance of $0.869M
at the end of June (see Appendix 5).
The favourable variance was due to
favourable variances in non-personnel costs of $0.457M due to timing of water
and wastewater construction activity, user fees and other charges $0.252M, and personnel
costs of $0.162M as a result of 4 YTD net average vacancies.
ECONOMIC KEY INDICATORS
In 2009, Staff
identified 15 key economic indicators to monitor the Town operations due to the
economic downturn. These indicators are
as follows:
1.
Building Revenues
2.
Planning Revenues
3.
Engineering Revenues
4.
Building Reserve Balance
5.
Planning & Engineering Reserve Balance
6.
DC Revenues
7.
Winter Maintenance
8.
Financial Services Administration Fees
9.
Legal Fees
10.
Recreation Revenues
11.
Theatre Revenues
12.
Art Gallery Revenues
13.
Museum Revenues
14.
Investment Income
15.
Streetlight Maintenance
Additional
details are provided on the first seven indicators below. The other indicators are either trending
favourably or on budget.
Development Related Revenues
The
development related revenues include planning, engineering and building
fees. These revenues have shown significant
growth in the first six months in 2010 compared to the same period in 2009, due
to increased development activities. This is evident in the chart below which outlines
the declining trends in the years 2006-2009, followed by a rebound in 2010.
YTD June Actual Development
Related Revenues
Development Charges (DC) Revenues
The DC Revenues in the first six months of 2010 are higher
compared to the same period in 2009 due to an increase in new subdivision
agreements. DC Revenues peaked in 2007
as a result of increased development activity prior to the Region of York’s
development charges by-law update, which also contributed to lower 2008 DC
revenues. In addition, the economic downturn had negatively impacted
development activity and DC revenues in 2008 and 2009. Another update to
the Region of York’s development charges by-law has contributed to an increase
in new subdivision agreements in 2010. As a result of the increase in new
subdivisions, DC Revenues in the first six months of 2010 are higher when
compared to the same period in 2009.
YTD June Actual DC Revenues
Expenditures
Staff also continued
to monitor the spending on winter maintenance. The winter maintenance costs were
lower in the first six months of 2010 compared to the same period in 2009 due
to the milder winter. The winter maintenance expenses peaked at 2009
due to the severe winter conditions.
YTD
June Expenditures
YEAR-END PROJECTION
Town
Based on the June
year-to-date results, it is anticipated that the year-end projection will range
from on budget to $1.000M favourable included funding for the year-end
accounting accruals of $2.100M.
It is expected
that the year-end revenue variance will range from being on budget to $0.500M
favourable resulting from higher Provincial Offenses Act Revenue (one time
revenue), Assessment Tax Revenue (2.45% actual assessment growth versus 2.00%
budgeted growth) , Financial Services Administration Fee (due to higher development
charges received) and Waste Diversion Ontario grant, offset by lower revenues
from Museum donations and sponsorship revenue, Fire revenue due to lower
inspection fees and vehicle accident fees, and sales of blue boxes and green
bins.
The year-end expenditure
variance will range from being on budget to $0.500M favourable. This variance is due to favourable personnel
expenditures resulting from vacancies and lower than budgeted fuel cost, offset
by an unfavourable variance in external legal fees.
Planning & Design and Engineering
Planning & Design is projecting a
year-end surplus of $0.220M compared to a budgeted surplus of $0.157M. This will result in an additional transfer to
reserves of $0.063M.
Engineering is projecting a year-end
surplus of $0.014M compared to a budgeted deficit of ($1.570M).
Building Services
The budget
anticipated a draw from reserves of ($2.724M) in order to achieve a balanced
budget. The improved projected year end
deficit will result in a draw of ($1.191M) from reserves, which is a lower draw
of $1.533M.
Waterworks
Based on the June year-to-date
results, Waterworks is projected to be in the range of being on budget to $0.750M
favourable by year end. The favourable
variance is due to favourable personnel
resulting from vacancies and non-personnel expenditures.
FINANCIAL CONSIDERATIONS:
Staff will continue
to monitor variances for the remainder of the year and report the September
year-to-date results in November.
RECOMMENDED
BY:
