General Committee

 

 

 

 

 

TO:

Mayor and Members of Council

 

 

 

 

FROM:

Andy Taylor, Commissioner of Corporate Services,

Barb Cribbett, Treasurer,

Joel Lustig, Director Financial & Client Services

 

 

 

 

PREPARED BY:

Fuwing Wong, Manager Financial Planning

 

 

 

 

DATE OF MEETING:

2005-May-30

 

 

 

 

SUBJECT:

2005 First Quarter Year-to-Date Review of Operations

 

 

 

 

RECOMMENDATION:

THAT the report dated May 30, 2005 entitled “2005 First Quarter Year-to-Date Review of Operations” be received.

 

PURPOSE:

To provide an overview of year-to-date financial results at the end of the first quarter, 2005.

 

EXECUTIVE SUMMARY:

The first quarter 2005 operating budget results (excluding Waterworks) reflect a favourable variance of $0.990M.  Revenues for the quarter were $1.163M favourable and Expenditures were $0.173M unfavourable.

 

The following table summarizes some of the major items that contributed to the $0.173M unfavourable variance in Expenditures and $1.163M favourable variance in Revenues:

 

Further details of all variances are available in the Discussion section of this report.

 

Waterworks ended the first quarter with a $0.127M favourable variance.  This variance is mainly due to watermain, value and hydrant work, originally planned for the first quarter, to be completed by the summer of 2005.  The favourable variance was partially offset by lower water purchases and water sales during the first quarter

 

 

BACKGROUND:

On February 8th, 2005, Council approved the 2005 Budget of $257.5M.  The 2005 budget consists of $137.4M in Operating, $44.2M in Waterworks, and $75.9M in Capital.  Each quarter, 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.

 

 

DISCUSSION:

 

YEAR-TO-DATE OPERATING BUDGET VARIANCES:

 

At the end of the first quarter, the 2005 operating budget (excluding Waterworks) results reflect a $0.990M favourable variance overall (see Appendix 1).  Revenues ($1.163M favourable) were partially offset by unfavourable variances in Expenditures ($0.173M unfavourable). 

 

The overall $0.173M unfavourable variance in Expenditures is due to an unfavourable Salary variance of $0.085M and an unfavourable variance in non-salary expenditures of $0.088M.  The unfavourable variance in non-salary expenditures is mainly due to winter maintenance which is partially offset by favourable variances in other operating expenditures.

 

SECTION 1 - REVENUES

 

At the end of the first quarter, revenues were favourable by $1.163M due to the following:

 

                                   

           

 

General Revenues

General revenues were $0.820M favourable mainly due to a $0.230M favourable variance in Building Permits Fees, and capital gains/higher investment portfolio balances resulting in $0.382M favourable variance in income from investments.  Details of the first quarter 2005 Investment Income was reported to the General Committee on May 15th, 2005.  Interest & Penalties due to late payment of taxes contributed $0.138M to the favourable variance and the balance is due to increased revenues from licensing, parking and other by-law operations.

 

User Fees and Service Charges

The $0.254M favourable variance is due mainly to a favourable $0.378M in higher Design and Planning fees collected from development growth exceeding expectations, offset by minor variances spread across different departments.

 

 

SECTION 2 – SALARY EXPENDITURES

 

The $0.365M favourable salary and benefit variance is comprised of:

                            

 

The $1.207M favourable variance in full time salaries is a result of vacant positions which includes full-time staff away on Long-Term Disability (LTD), sick leave or parental leave, and newly approved 2005 budgeted positions currently in the recruitment process.  This favourable variance in full time salaries was offset by a $0.987M unfavourable variance in part time and contract salaries, overtime and other personnel allowances related to departments backfilling vacancies and leaves. 

 

The favourable variance in employee benefits of $0.145M is mainly due to benefit expenses not incurred for the full time vacancies. 

 

Further, the 2005 Budget included $0.450M of annual salary gapping savings which has been fully allocated to the individual departments in the first quarter.

 

 

SECTION 3 - NON-SALARY EXPENDITURES

 

Non-Salary expenditures were on budget at the end of the first quarter with the unfavourable variance in winter maintenance costs offset by favourable variances in other non-salary accounts as outlined below:

                                               

                                                                                               

Materials & Supplies

The favourable variance of $0.100M is due to delays in the ordering, invoicing, and receipt of materials/services in the various business units.

 

Purchased Services

The $0.204M unfavourable variance in Purchased Services is due mainly to an unfavourable variance of $0.314M in Roads related to Winter Maintenance snow removal expenditures (plowing, sanding, sidewalk clearing). The unfavourable variance will be partially offset by recoveries from York Regional Transit (YRT) for snow clearing services the Town performs on YRT’s behalf.

The unfavourable winter maintenance variance was partially offset by $0.110M of minor favourable variances spread across the various business units.

 

 

SECTION 4 - WATERWORKS

 

Waterworks reported a $0.127M favourable variance at the end of the first quarter (refer to Appendix 2).

 

The favourable variance for Waterworks is mainly due to watermain, value and hydrant work, originally planned for the first quarter, to be completed  by the summer of 2005.  The favourable variance was partially offset by lower water purchases and water sales during the first quarter.

 

 

FINANCIAL CONSIDERATIONS:

 

Staff will continue to monitor and report on variances throughout the year.  At the end of the second quarter, a year-end financial forecast will also be presented.

 

 

ATTACHMENTS:

 

Appendix 1 – Financial Results for the Three Months Ended March 31, 2005 – Operating Budget

 

Appendix 2 – Financial Results for the Three Months Ended March 31, 2005 - Waterworks

 

 

 

 

 

 

 

 

 

 

Joel Lustig,

Director, Financial & Client Services

 

Barb Cribbett,

Treasurer 

 

 

 

 

 

 

 

 

 

Andy Taylor,

Commissioner of Corporate Services