TOWN OF VIEW ROYAL FINANCE & ADMINISTRATION REPORT - BUDGET VARIANCE AND PROJECTS UPDATE REPORT

BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO AUGUST 31, 2023

RECOMMENDATION:

THAT the report titled “Budget Variance and Projects Update Report to August 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 August 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 report and attached schedules are provided to inform Council of the financial results of delivering services to the end of August this year. Prior year actual values are reported to the end of Quarter 3, September 30, 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 Council’s review.

Further details about capital and non-core projects can be viewed in the Budget Variance Dashboard at viewroyal.ca.

BACKGROUND:

On July 18, 2023, Council adopted Bylaw 1118, a bylaw to amend financial plan Bylaw 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 Council of the financial results of delivering services and capital and non-core projects to the end of August 2023 with prior year actual values to September 30 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 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 August 31, 2023 over $20.6 million (84%) in total operating revenue has been received or is receivable. Included in 2023 YTD revenue are the following:

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. Forty-seven percent or $17.3 million of the 2023 total consolidated expense is budgeted for operations. As of August 31, 2023, approximately 54% of total operating expense ($9.5 million) has been spent or is payable.

Generally, operating expense is spread evenly throughout the year such that at the end of August about 33% 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 exception is Recreation and Culture, due to the full Q3 requisitions having been paid to West Shore Parks and Recreation and Greater Victoria Public Library.

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 $78,120 to August 31, 2023, and includes projected completion dates. 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 $605,294 to August 31, 2023, and includes projected completion dates.

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.

ATTACHMENTS:

• Schedule A: 2023 Consolidated Budget Variance
• Schedule B: 2023 Non-core Projects
• Schedule C: 2023 Capital Projects