BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO JANUARY 31, 2023 STAFF REPORT
Initial 2023 budget variance report showing actual revenue and expenditures against targets as of January 31, 2023.
TOWN OF VIEW ROYAL FINANCE & ADMINISTRATION REPORT
TO: Committee of the Whole FROM: Steven Vella, Manager of Accounting DATE: February 8, 2023 MEETING DATE: February 14, 2023
BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO JANUARY 31, 2023
RECOMMENDATION:
THAT the report titled “Budget Variance and Projects Update Report to January 31, 2023” from the Manager of Accounting be received for information.
PURPOSE:
To provide Council with information regarding the financial results of operations and progress of projects to January 31, 2023.
TIME CRITICAL:
Staff provides Committee with a Budget Variance and Projects Update monthly to provide greater detail and analysis to supplement the Budget Variance Dashboard available at viewroyal.ca.
EXECUTIVE SUMMARY:
This is the initial Budget Variance report to report on 2023 actual revenue and expenditures. As the 2023-2027 Financial Plan is underway and not finalized, the report reflects revenue and expense targets as approved in the five-year financial plan (Bylaw 1096) for 2023 budgeted values. The attached schedules are provided to inform Council of the financial results of delivering services to the end of January this year. Prior year actual values are reported to the end of Quarter 1, March 31, 2022. Capital and Non-Core projects are not yet finalized for 2023; thus, project reporting is based on 2022 approved projects and their actual values.
Further details about capital and non-core projects can be viewed in the Budget Variance Dashboard at viewroyal.ca.
BACKGROUND:
On May 3, 2022, Council adopted Financial Plan Bylaw 1096. This report reflects budget values for revenue, expense and projects as presented in the Town’s 2022-2026 Financial Plan. The Budget Variance Dashboard provides additional views of the same budget information. The attached schedules inform Council of the financial results of delivering services and capital and non-core projects to the end of January, 2023 with prior year actual values to March 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.
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 five-year financial plan bylaw. Fifty-nine percent or $17.9 million of the total 2023 budgeted revenue and transfers comes from operating activities. At January 31, 2023 over $469,000 (2.6%) in total operating revenue has been received or is receivable. Included in 2023 YTD revenue are the following:
| Revenue Type | Actual | Budget | Variance | Explanation |
|---|---|---|---|---|
| User fees | ($5,476) | $3,089,761 | 3,095,187 | The negative actual value represents 2022 sewer user fee leak adjustments applied for and granted in January, 2023 |
| Contributions from developers and others | 192,500 | 10,000 | (182,500) | Community amenity contribution relating to 258 Helmcken Road |
A determination as to whether View Royal is on track to meet its total revenue target will become clearer in the coming months.
Consolidated Expense
Like revenue, expense is shown on Schedule A on a consolidated basis – operating, capital expenses and transfers are added together. Fifty-four percent or $16.5 million of the 2023 total consolidated expense is budgeted for operations. As of January 31, 2022, 6.1% of total operating expense ($1 million) has been spent or is payable.
Generally, operating expense is spread evenly throughout the year such that at the end of January about 92% of the budget should remain 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. The exceptions are recreation and culture services which reflects the full Quarter 1, 2023, payments to West Shore Parks and Recreation, and transfers to reserves which represents a community amenity contribution relating to 258 Helmcken Road.
Non-core projects
The 2022 budget included $716,340 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 $431,913 to December 31, 2022, and includes projected completion dates. Any non-core projects incomplete in 2022 will likely be carried forward to the 2023-2027 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 2022 budget included $3,888,140 allocated for specific capital projects. The attached Schedule C – Capital Projects details the capital budget and the actual expenditures that total $1,014,485 to December 31, 2022 and includes projected completion dates. Any capital projects incomplete in 2022 will likely be carried forward to the 2023-2027 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 Council’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 |
|---|---|---|
| Chief Administrative Officer | KA | 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: 2022 Non-core Projects Schedule C: 2022 Capital Projects
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