GENERAL COMMITTEE

 

 

 

 

 

TO:

Mayor and Members of Council

 

 

 

 

FROM:

Andy Taylor, Commissioner of Corporate Services

Barb Cribbett, Treasurer

 

 

 

 

PREPARED BY:

Fuwing Wong, Manager, Financial Planning

 

 

 

 

DATE OF MEETING:

2005-Nov-07

 

 

 

 

SUBJECT:

Status of Capital Projects as of September 30, 2005

 

 

 

 

RECOMMENDATION:

THAT the report entitled “Status of Capital Projects as of September 30, 2005” be received;

 

AND THAT $2,349,468.00 from closed capital projects be transferred to the sources of funding as listed on Exhibit A entitled “Summary of Closed Capital Projects by Account”;

 

AND THAT projects listed in Exhibit C entitled “Summary of Open Capital Projects 100% (or Greater) Encumbered at September 30, 2005” be closed upon payment of final invoices and any outstanding amount returned to/from the original source(s) of funding;

 

AND THAT the Section 4.0 of Capital Budget Control Policy be amended, as attached in

Exhibit D, to provide the Treasurer authority to approve funding from the original sources to pay invoices that are received after the closure of a capital project, provided the payment of invoice is within the original approved budget and within the original scope.

 

PURPOSE:

To inform Council on the status of Capital Projects as of September 30, 2005 in accordance with the Capital Budget Control Policy.

 

DISCUSSION:

As at the end of September 2005, the Town of Markham had $230.29M of open capital projects.

  • $191.25M which are projects still in progress
  • $39.04M which are projects that are substantially completed and awaiting final invoice                   payment or fully committed (Page 4 of Exhibit C)

 

In addition, 157 capital projects, with a total budget of $22.98M are recommended for closure.  This will return $2.35M to original funding source(s) as described in the next section.

Capital Projects to be Closed:

As capital projects are completed (e.g. construction of facility complete, asset purchased) the project and related accounts are closed.  Excess budgeted funds, if any, are returned to original funding sources.  Exhibits A and B provide details of the projects being recommended for closure.  Exhibit A “Summary of Closed Projects by Account” summarizes where the closed capital project balances will be transferred.  Exhibit B “Summary of Closed Capital Projects - Detail” provides a detailed summary by project where the closed capital project balances will be transferred. The net amount $2.35M to be transferred back to the original source(s) of funding is as follows:

 

            Source of Funding                              Amount

            Reserves                                              $0.74M

            Reserve Funds                                      $0.52M

            DCA                                                    $0.92M

            Developer                                            $0.02M

            Corporate Wide Contingency               $0.15M

                Total                                                    $2.35M

 

 

A total of $2.18M will be returned to various Reserves, Reserve Funds and the Development Charges Reserve ($0.74M+$0.52M+$0.92M).  In accordance with the Capital Budget Control Policy, surplus funds from closure of tax funded capital projects will be transferred to the corporate-wide contingency project to a maximum of $0.25M.  Once the corporate-wide contingency account is at the maximum $0.25M, further closures of tax funded capital projects will be returned to the Life Cycle Replacement & Capital Reserve Fund.  As of September 30, 2005, the balance in the corporate-wide contingency capital project was $5,695.00.  The amount to be transferred to the corporate-wide contingency capital project from the closure of tax funded capital, listed on Exhibit A, is $0.15M (up to a maximum of $0.25M).  $0.02M will be returned to a Developer for Signal Installation.  As noted in the Subdivision Agreement, the owner, in this case the Developer, is obligated to fund construction of traffic control signals within and adjacent to the subdivision.  The project cost estimate of $115,000 was up-fronted by the Developer.  The project is now completed and the final total costs for the project is $90,300, leaving a balance of $0.02M ($115,000-$90,300) to be returned to the Developer. 

 

The purpose of the corporate-wide contingency capital project is to encourage timely closure of  completed projects to ensure the surplus funds can provide alternate source of funding for unbudgeted projects or existing projects that require additional funding.  This practice will be beneficial to all departments throughout the Town.  Therefore, departments are encouraged to close capital projects in a timely manner. 

 

The majority of the projects listed in Exhibit B are projects that were completed within budget.  Projects that were under spent will have the balance transferred back to the original source(s) of funding.  Projects that have over expenditures fall within the guidelines established in the Expenditure Control Procedures and will have the necessary funds allocated from other identified closed projects.

 

Status of Capital which is 100% (or Greater) Encumbered:

Exhibit C, “Summary of Open Capital Projects 100% (or Greater) Encumbered at September 30, 2005” lists open capital projects (by Commission/Department) with a total budget of $39.04M.

 

This exhibit identifies projects which are fully expended or committed.  The purpose of

Exhibit C is to obtain approval at this time to close the projects listed on the exhibit, upon payment of final invoices.  Obtaining pre-approval, at this time, to close fully expended/ committed projects will allow for more timely and frequent closing of capital projects in the future.

 

Amendment to Capital Budget Control Policy

 

For instances where an invoice is received after the closure of the capital project, the proposed amendment to Section 4.0 of Capital Budget Control Policy (Exhibit D) will provide authority to the Treasurer to approve payment of the invoice from the original source(s) of funding, providing the invoice amount is within the original approved budget and within the scope of the closed project.

 

FINANCIAL CONSIDERATIONS:

It is recommended that $2,349,468.00 from closed capital projects be transferred to the sources of funding as per Exhibit A and that the tax funding portion of this amount $147,770.57 be transferred to the corporate-wide contingency capital project.  Further, projects listed in

Exhibit C ($39,039,839 budget) will be closed upon payment of final invoices, and any outstanding amount be returned to/from the original source(s) of funding.

 

ATTACHMENTS:

Exhibit A - Summary of Closed Capital Projects by Account

Exhibit B - Summary of Closed Capital Projects - Detail

Exhibit C - Summary of Open Capital Projects 100% (or Greater) Encumbered at September 30, 2005

Exhibit D – Capital Budget Control Policy  

 

 

 

 

 

 

Barb Cribbett, Treasurer

 

Andy Taylor, Commissioner, Corporate Services

Q:\Finance and Administration\Finance\SHARED\2005FinAdminCtteeReports\0535 Status of Capital Projects as of September 30 2005.doc