Budget Variance and Capital Projects Update Report to September 30, 2019
Report detailing the Town's financial results and progress on capital projects through the third quarter of 2019.
TOWN OF VIEW ROYAL Finance & Administration Report
TO: Committee of the Whole DATE: September 30, 2019 FROM: D. Christenson, Dir. of Finance MEETING DATE: October 8, 2019
BUDGET VARIANCE AND CAPITAL PROJECTS UPDATE REPORT TO SEPTEMBER 30, 2019
RECOMMENDATION:
THAT the Committee receive the Budget Variance and Capital Projects Update Report to September 30, 2019 for information.
CHIEF ADMINISTRATIVE OFFICER COMMENTS:
I concur with the recommendation.
PURPOSE OF REPORT:
To provide Council with information regarding the financial results of operations and progress of capital projects to September 30, 2019.
BACKGROUND:
In April 2019 Council adopted a five-year financial plan (Bylaw 1018) that identifies revenue and expense targets and authorizes capital projects to further its strategic objectives. The attached Appendix A – Consolidated Budget Variance and Appendix B – Capital Projects Update are provided to inform Council of the financial results of delivering services and capital projects to the end of the second quarter this year.
DISCUSSION:
Analysis shows that revenues and expenses to date are within expected variances to the end of this quarter with the exceptions and comments noted below:
Revenue
| Revenue Type | Actual | Budget | Variance | Explanation |
|---|---|---|---|---|
| User fees | $525,392 | $1,365,566 | $840,174 | Annual sewer user fees will be billed in October (est. $842,450) |
| Sales of services | 583,070 | 814,240 | 231,170 | Building and other development permits issued are lower than expected ($256,000), partially offset by other revenue in excess of anticipated ($24,000) |
| Other revenue | 158,319 | 338,743 | 180,424 | Year-end accrual of policing facility rental and capital funding not yet recorded |
| Gov’t grants and transfers | 2,393,280 | 3,204,915 | 811,635 | Casino revenue lags one quarter behind, but is on track for budgeted amount (52%); gas tax payment $246,000 more than budgeted |
Expense
Generally, expenses are spread evenly throughout the year such that at the end of third quarter, at least 25% of the budget should remain for each of the functional services. Schedule A shows that most services have greater than 25% budget remaining, which allows for the timing differences between quarter-end and pay cycles, year-end accruals, and other project or contingency expenses. Recreation and culture services show 12% variance remaining, because payments to Greater Victoria Public Library and West Shore Parks and Recreation are typically made in advance. Transfers to surplus, reserves and for internal cost allocations and amortization will be completed as a part of year-end work.
Capital expenditures
| Project | Actual | Budget | Variance | Explanation |
|---|---|---|---|---|
| Ford F350 additions | $8,862 | $0.00 | ($8,862) | Funding not carried forward for completion of 2018 project |
| Watkiss Way improved pedestrian walkway | 4,499 | 0.00 | (4,499) | Funding not carried forward for completion of 2018 project |
| Watkiss Way at Burnside Beautification | 27,783 | 25,000 | (2,783) | Increased aesthetic area after site review. Provided additional connectivity to the bus stop. |
| Kayak launch on Shoreline Drive | 74,123 | 45,000 | (29,123) | Project delay, significant environmental requirements |
| VR Park Bike Skills Park | 168,882 | 150,000 | (18,882) | Design required more material than anticipated. |
Cost overruns can 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.
Staff will continue to monitor financial results to ensure delivery of services and capital projects within the allocated budgets. Where applicable, staff will seek budget amendment approval in due course once the final funding requirements are known.
Should corrective measures be necessary, staff will inform Council of the effect, if any, on service levels or project completion timelines.
RECOMMENDATION:
THAT the Committee receive the Budget Variance and Capital Projects Update Report to September 30, 2019 for information.
SUBMITTED BY:
D. Christenson, Director of Finance
Attachments:
- Appendix A: Consolidated Budget Variance
- Appendix B: Capital Projects Update
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