Staff Report: BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO DECEMBER 31, 2023
Quarterly report detailing financial results and the completion status of various capital and non-core projects.
TOWN OF VIEW ROYAL FINANCE & ADMINISTRATION REPORT
TO: Committee of the Whole DATE: January 3, 2024 FROM: Steven Vella, Manager of Accounting MEETING DATE: January 9, 2024
BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO DECEMBER 31, 2023
RECOMMENDATION:
THAT the report titled “Budget Variance and Projects Update Report to December 31, 2023” from the Manager of Accounting be received for information.
PURPOSE:
To provide the Committee with information regarding the financial results of operations and progress of projects to December 31, 2023.
TIME CRITICAL:
Staff provides the Committee with a Budget Variance and Projects Update monthly to provide greater detail and analysis to supplement the Budget Variance Dashboard information available at viewroyal.ca.
EXECUTIVE SUMMARY:
This report and attached schedules are provided to inform the Committee of the financial results of delivering services to the end of December 2023. Prior year actual values are reported to the end of Quarter 4, December 31, 2022. Capital and Non-Core projects approved by Council as part of the amended 2023-2027 Financial Plan are presented, displaying actual costs incurred versus budget, as well as the completion status of each project.
On July 4, 2023, Staff brought forward to Council Financial Plan Amendment Bylaw No. 1118 which identified expenditures that were not anticipated and included in the originally approved Financial Plan Bylaw No. 1113. The amended financial plan has been incorporated into the monthly budget variance reports and accompanying schedules for the Committee’s review.
Further details about capital and non-core projects can be viewed in the Budget Variance Dashboard as a “Quicklink” at viewroyal.ca.
BACKGROUND:
On July 18, 2023, Council adopted Bylaw No. 1118, a bylaw to amend Financial Plan Bylaw No. 1113, 2023. This report reflects amended budget values for revenue, expense, and projects as presented in the Town’s amended 2023-2027 Financial Plan. The Budget Variance Dashboard provides additional views of the same budget information. The attached schedules inform the Committee of the financial results of delivering services and capital and non-core projects to the end of December 2023 with prior year actual values to December 31 for comparison.
Interested constituents can access the Budget Variance Dashboard through a “Quicklink” on the landing page at www.viewroyal.ca. The Budget Variance Dashboard includes information about the status of both non-core and capital projects along with related operating budget and spending to date. The Dashboard displays year-to-date values (YTD) for the current year, and up to four prior years’ comparative values and is updated weekly.
Please note that the year-to-date values provided are subject to change until finalized for the published financial statements. Also, the values in the dashboard may not match those on the attached consolidated reports, as the dashboard reflects segmented operating revenue and expense and specific project financial information, rather than the full consolidated budget.
DISCUSSION:
Consolidated Budget Variance and Projects Update Report
Revenues and expenses to date are within expected variances, with the exceptions and comments noted below. Staff have not yet completed their 2023 year-end work, so the actual amounts reported at this time may not be the final values that will be reported in the 2023 financial statements.
Consolidated Revenue
Schedule A – Consolidated Budget Variance shows revenue on a consolidated basis, which means that both operating revenue and capital sources of funding are added together in the same format as shown in the amended five-year financial plan bylaw. Sixty-seven percent or $24.6 million of the total 2023 budgeted revenue and transfers comes from operating activities. At December 31, 2023 over $25.4 million (103%) in total operating revenue has been received or is receivable. Included in 2023 YTD revenue are the following:
| Revenue Type | Actual | Budget | Variance | Explanation |
|---|---|---|---|---|
| Sales of services | $1,665,160 | $918,800 | $746,360 | Permit revenue – one of the components comprising the Sales of Service category - exceeds budget by $648,000, however some of this revenue may be deferred at year end if related activities are not complete. Additionally, $67,000 of the variance is due to recovery of unanticipated costs for work completed on behalf of other agencies. |
| Investment income | $1,067,137 | $115,000 | $952,137 | Interest earned on operational and reserve accounts – one of the components comprising the Investment Income category - exceeds budget by $895,000 due to increased interest rates on deposits. This figure does not yet include unrealized pooled investment gains or losses and may not be reflective of future investment positions. |
Consolidated Expense
Like revenue, expense is shown on Schedule A on a consolidated basis – operating, capital expenses, and transfers are added together. Forty-seven percent or $17.3 million of the 2023 total consolidated expense is budgeted for operations. As of December 31, 2023, approximately 83.2% of total operating expense ($14.5 million) has been spent or is payable.
Generally, operating expense is spread evenly throughout the year such that at the end of December there should be zero budget remaining for each of the service categories. Schedule A shows that most operational services have the expected level of budget or more remaining, which allows for timing differences, year-end accruals, and other project or contingency expenses.
Non-core projects
The 2023 amended budget includes $681,913 designated for specific non-core projects. Non-core projects are defined as those that represent a change to service levels or are new non-recurring or infrequent items. The attached Schedule B – Non-core Projects details the non-core budget and the actual expenditures that total $141,281 to December 31, 2023, and includes projected completion dates. Projects that are not completed in 2023 will be carried forward and included in the 2024-2028 Financial Plan. Note that discrete actual costs for non-core projects relating to increases in personnel are not available but are included as a part of the total non-core budget.
Capital projects
The 2023 amended budget includes $6,663,270 allocated for specific capital projects. The attached Schedule C – Capital Projects details the capital budget and the actual expenditures that total $1,600,622 to December 31, 2023, and includes projected completion dates. Projects that are not completed in 2023 will be carried forward and included in the 2024-2028 Financial Plan.
Further details about both non-core and capital projects can be viewed in the Budget Variance Dashboard and Financial Plan Insights app at viewroyal.ca.
SUSTAINABILITY/CLIMATE CHANGE IMPACTS:
This matter has no significant sustainability or climate change impacts.
FINANCIAL IMPLICATIONS:
Staff will continue to monitor financial results to ensure delivery of services and projects within the allocated budgets. Where applicable, staff will seek budget amendment approval in due course once the final funding requirements are known.
ALTERNATIVES:
N/A
CONCLUSION:
The Town’s financial results of operations and projects to date are within acceptable variances from budget, with highlights noted for the Committee’s information.
Due to timing differences between internal reporting timelines and invoices from vendors, there may exist variances between reported costs and final costs of some projects. As invoices are processed, a more complete calculation of actual variances will be made.
Cost overruns may be offset by deferring other projects with the same funding source, to the extent that there are no other significant impacts to levels of service. Should corrective measures be necessary, staff will inform Council of the effect, if any, on service levels or project completion timelines.
| CONCURRENCE: | Initials | Comments |
|---|---|---|
| Acting Chief Administrative Officer | SJ | Recommend approval |
| REVIEWED BY: | Initials |
|---|---|
| Director of Corporate Administration | Not requested |
| Director of Finance | DLC |
| Director of Development Services | Not requested |
| Director of Engineering and Parks | Not requested |
| Director of Protective Services | Not requested |
ATTACHMENTS:
Schedule A: 2023 Consolidated Budget Variance Schedule B: 2023 Non-core Projects Schedule C: 2023 Capital Projects
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