FINANCE & ADMINISTRATION REPORT: BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO NOVEMBER 30, 2023

BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO NOVEMBER 30, 2023

RECOMMENDATION:

THAT the report titled “Budget Variance and Projects Update Report to November 30, 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 November 30, 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 November this year. 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 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 the Committee of the financial results of delivering services and capital and non-core projects to the end of November 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.

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 November 30, 2023 over $25.1 million (102%) 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	1,639,227	918,800	720,427	Permit revenue exceeds budget by $647,000, 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	893,037	115,000	778,037	Interest earned on operational and reserve accounts exceeds budget by $720,000 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.

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 November 30, 2023, approximately 79.8% of total operating expense ($13.8 million) has been spent or is payable.

Generally, operating expense is spread evenly throughout the year such that at the end of November about 8.3% 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 and debt-related expenses which have been paid in advance to December 31, 2023.

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 November 30, 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 $1,147,989 to November 30, 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 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	Not requested
Director of Development Services	Not requested
Director of Engineering and Parks	Not requested
Director of Protective Services	Not requested