Finance & Administration Report: BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO JANUARY 31, 2022
A report providing Council with the financial results of operations and progress on capital and non-core projects as of January 31, 2022.
TOWN OF VIEW ROYAL
Finance & Administration Report
TO: Committee of the Whole
FROM: S. Vella, Manager of Accounting
DATE: February 3, 2022
MEETING DATE: February 8, 2022
BUDGET VARIANCE AND PROJECTS UPDATE REPORT TO JANUARY 31, 2022
RECOMMENDATION:
THAT the report dated February 3, 2022 from the Manager of Accounting titled “Budget Variance and Projects Update Report to January 31, 2022” be received for information.
CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:
I concur with the recommendation.
PURPOSE OF REPORT:
To provide Council with information regarding the financial results of operations and progress of projects to January 31, 2022.
BACKGROUND:
This is the initial Budget Variance report to report on 2022 actual revenue and expenditures. As the 2022-2026 Financial Plan is underway and not finalized, the report reflects revenue and expense targets as approved in the five-year financial plan amendment (Bylaw 1082) for 2022 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, 2021. Capital and Non-Core projects are not yet finalized for 2022; thus project reporting is based on 2021 approved projects and their actual values.
DISCUSSION:
The Budget Variance Dashboard, accessed through a “Quicklink” on the landing page at www.viewroyal.ca, 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 years’ comparative values and is updated weekly. A highlighted note informs the viewer that the 2022 budget values are as approved in the last budget cycle, and that the 2022-2026 Financial Plan process is currently underway. Viewers may click a link that shows them the Financial Planning Process calendar.
Please note that the financial values provided are subject to change until finalized for the published financial statements. Also, the values in the dashboard will not match those on the attached consolidated reports, as the dashboard reflects only operating revenue and expense and specific project financial information, rather than the full consolidated budget.
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 and capital revenue are added together in the same format as shown in the amended five-year financial plan bylaw. Sixty-eight percent or $15.9 million of the total 2022 consolidated revenue budget comes from current year operations. At January 31, $110,000 (0.7%) in total operating revenue has been received or is receivable. 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. Sixty-seven percent or $15.7 million of the 2022 total consolidated expense is budgeted for operations. At January 31, 2021, 4% of total operating expense ($629,000) has been spent or is payable.
Generally, operating expense is spread evenly throughout the year such that at January 31 about 92% budget should remain for each of the functional services. Schedule A shows that most operational services have the expected level of budget remaining, which allows for the timing differences, year-end accruals, and other project or contingency expenses. The exception is recreation and culture services which reflects the full Quarter 1 2022 payments to West Shore Parks and Recreation and Greater Victoria Public Library.
Non-core projects
The 2021 amended budget included $455,540 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 $177,180 to December 31, 2021 and includes projected completion dates. Any non-core projects incomplete in 2021 will be carried forward to the 2022-2026 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.
Further details about non-core projects can be viewed in the Budget Variance Dashboard at viewroyal.ca.
Capital projects
The 2021 amended budget includes $2,664,526 allocated for specific capital projects. The attached Schedule C – Capital Projects details the capital budget and the actual expenditures that total $811,399 to December 31, 2021, and includes projected completion dates. Any capital projects incomplete in 2021 will be carried forward to the 2022-2026 Financial Plan.
Further details about capital projects can be viewed in the Budget Variance Dashboard at viewroyal.ca.
Summary
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 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 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 report dated February 3, 2022 from the Manager of Accounting titled “Budget Variance and Projects Update Report to January 31, 2022” be received for information.
SUBMITTED BY: S. Vella, Manager of Accounting
REVIEWED BY: D. Christenson, Director of Finance
Attachments:
- Schedule A: 2022 Consolidated Budget Variance
- Schedule B: 2021 Non-core Projects
- Schedule C: 2021 Capital Projects
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