Report to: General Committee – Finance & Admin.  Date of Meeting:  May 17, 2010

 

 

SUBJECT:                         March 2010 Year-To-Date Review of Operations

PREPARED BY:              Veronica Siu, Acting Manager Financial Planning

 

 

RECOMMENDATION:

THAT the report dated May 17, 2010 entitled “March 2010 Year-To-Date Review of Operations” be received.

 

EXECUTIVE SUMMARY:

 

Town

 

At the end of March 2010, the operating budget results (excluding Planning & Design, Engineering, Building Services and Waterworks) reflect a favourable variance of $1.834M.  The $1.834M favourable variance is comprised of favourable variances in Expenditures of $1.237M, and in Revenues $0.597M, as shown below:

 

 

 

 

Planning & Design

 

Planning & Design ended March with a year-to-date unfavourable variance of ($0.030M).  This was due to unfavourable variance of ($0.031M) in revenues.

 

 

 

 

 

Engineering

 

Engineering ended March with a year-to-date favourable variance of $1.091M.  This was due to a favourable variance of $1.047M in revenues, and a total favourable variance of $0.044M in personnel and non-personnel costs. 

 

 

Building Services

 

Building Services ended March year-to-date favourable by $0.395M.  This was due to a favourable variance of $0.302M in revenues, and total favourable variance of $0.093 in personnel and non-personnel costs.

 

 

Waterworks

 

Waterworks ended March with a year-to-date unfavourable variance of ($0.082M).  This variance was due to an unfavourable variance of ($0.534M) in the net water sales and purchases, offset by total favourable variances of $0.305M in personnel costs and non-personnel costs, and favourable variance of $0.147M in other revenues.

 

 

1. Purpose                                                                                                                                                                                                                                                         2. Background                                                                                                                                                                                                                                                         3. Discussion                                                                                                                                                                                                                                                         4. Financial                                                                                                                                                                                                                                                         5. Environmental

 

6. Accessibility                                                                                                                                                                                                                                                         7. Engage 21st                                                                                                                                                                                                                                                         8. Affected Units                                                                                                                                                                                                                                                         9. Attachment(s)

PURPOSE:

To provide an overview of the year-to-date financial results at the end of March 2010.

 

BACKGROUND

 

There are 5 operating budgets that are monitored on a monthly basis.  The Town’s primary operating budget (excluding Planning & Design, Engineering, Building Services and Waterworks) is to support the Town’s day-to-day operations.

 

The remaining 4 budgets include Planning & Design, Engineering, Building Services and Waterworks Operating Budgets, and they are shown separate from the Town’s Operating Budget as they are primarily user fee funded (e.g. planning and engineering fees, building permit revenue and revenues based on water consumption, respectively) and separate reserves have been established for each.

 

Departments provide details of significant financial variances (actual to budget) in their areas.  The variances are reviewed, substantiated and summarized by the Financial Planning department. Minor variances are reviewed by staff, but not discussed in detail in this report.

 

OPTIONS/ DISCUSSION

 

YEAR-TO-DATE OPERATING BUDGET VARIANCES:

 

Town

 

At the end of three months, the 2010 operating budget (excluding Planning & Design, Engineering, Building Services and Waterworks) results reflected an overall $1.834M favourable variance. 

 

The $1.834M favourable variance was comprised of variances in three main areas of the Town’s operating budget:

 

$1.260M      favourable variance in Non-Personnel Expenditures    

$0.597M      favourable variance in Revenues

           ($0.023M)    unfavourable variance in Personnel Expenditures

            $1.834M

 

In summary, the $1.834M favourable variance is driven by Winter Maintenance $0.824M, higher than budgeted Tax Interest and Penalties $0.381M and Investment Income $0.196 and timing of various non-personnel expenses $0.408M.

 

The remainder of the report provides more details of the variances above, and details of the Planning & Design, Engineering, Building and Waterworks year-to-date variances.

 

 

NON-SALARY EXPENDITURES

At the end of March, Non-Salary expenditures were $1.260M favourable.

 

Non-Salary Items

   Fav. / (Unfav.)

Materials & Supplies

$0.442 M

Purchased Services

$0.776 M

Other Expenditures

$0.042 M

Total Non-Salary Favourable Variance

$1.260  M

 

Materials & Supplies

The favourable variance of $0.442M in Materials and Supplies was due to the following accounts:

 

Purchased Services

The favourable variance of $0.776M in Purchased Services was due to the following accounts:

 

 

REVENUES

At the end of March 2010, revenues were favourable by $0.597M due to the followings:

 

Revenue Items

Fav./(Unfav.)

General Revenues

 $0.570    M

User Fees and Service Charges

 $0.058    M   

Grant & Subsidy Revenues

 $0.030    M

Other Income

 ($0.061) M    

Net Favourable Variance

 $0.597    M  

 

General Revenues

The favourable variance of $0.570M was due to tax interest and penalties $0.381M; investment income of $0.196M of which $0.302M was due to the interest rate, offset by unfavourable variance of ($0.106M) due to portfolio balance.

 

 

User Fees and Service Charges

The favourable variance of $0.058M was primarily due to favourable Recreation revenue of $0.110M (primarily from fitness revenues), offset by timing of theatre ticket sales in the professional entertainment series of ($0.068M).

 

PERSONNEL EXPENDITURES

The March year-to-date personnel expenditure variance was ($0.023M) unfavourable:

 

Salary Expenditures Items

Fav./(Unfav.)

Full Time Salaries net of vacancy backfills

 $0.546

M

Overtime

($0.047)

M

Other Personnel Costs

($0.067)

M

Favourable Variance before Salary Gapping

 $0.432

M

Salary Gapping

($0.455)

M

Salaries & Benefits Favourable Variance

($0.023)

M

 

The $0.546M favourable variance in full time salaries net of vacancy backfills was the result of 33 net vacant positions.  The unfavourable variance of ($0.047M) in overtime was due to the Fire Department, however when compared to the first quarter of 2009, there was a $0.225M improvement in the variance driven by the filling of 15 firefighter vacancies.

 

Further, the 2010 budget included $0.455M of annual salary gapping savings which has been fully allocated to the individual business units.

 

Further details on the Town’s Operating results are provided in Appendix 1.

 

PLANNING & DESIGN

Planning & Design reported a year-to-date unfavourable variance of ($0.030M) at the end of March (see Appendix 2) due to lower user fees than budget.

This is in comparison to a prior year Planning March year-to-date unfavourable variance of ($0.433M).

 

ENGINEERING

Engineering reported a year-to-date favourable variance of $1.091M (see Appendix 3).  The favourable revenue variance of $1.047M is due to higher user fees resulting from higher development application activity, and favourable variance of $0.044M in personnel and non-personnel expenditures.

This is in comparison to a prior year Engineering March year-to-date unfavourable variance of ($0.229M).

 

BUILDING SERVICES

Building Services reported a favorable variance of $0.395M at the end of three months (refer to Appendix 4).  The favourable revenue variance of $0.302M is mainly due to higher building permit revenues, and favourable variance of $0.093M in personnel and non-personnel costs.  

This is in comparison to a prior year Building Services March year-to-date unfavourable variance of ($0.1239M).

 

WATERWORKS

Waterworks reported a year-to-date unfavourable variance of ($0.082M) at the end of March (see Appendix 5).

The unfavourable variance was due to the net water sales and purchases unfavourable by ($0.534M), as a result of lower water sales and higher than budget unmetered water usage; offset by favourable variances in non-personnel cost of $0.231M, user fees and other charges $0.147M, and personnel costs of $0.074M as a result of 3 average vacancies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ECONOMIC KEY INDICATORS

 

In 2009, Staff identified 15 key economic key indicators monitor the Town operations due to the economic downturn.  These indicators continue to be monitored in 2010.    

 

Development Related Revenues

 

The development related revenues include planning, engineering and building fees.  These revenues have shown significant growth in the first quarter in 2010 compared to the first quarter in 2009, due to increased development activities resulting from the economic recovery. This is evident in the chart below which outlines the declining trends in the years 2006-2009, followed by a rebound in first quarter of 2010.

                                   

YTD March Actual Development Related Revenues

 

 

 

 

 

 

 

 

 

 

 

Development Charges (DC) Revenues

 

The DC Revenues in first quarter of 2010 are higher compared to the first quarter in 2009 due to an increase in new subdivision agreements.  DC Revenues peaked in 2007 as a result of increased development activity prior to the Region of York’s development charges by-law update, which also contributed to lower 2008 DC revenues.  In addition, the economic downtown had negatively impacted development activity and DC revenues in 2008 and 2009.   

                                                           

                                                YTD March Actual DC Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenditures

 

Staff also continued to monitor the spending on winter maintenance. The winter maintenance costs were lower in the first quarter of 2010 compared to that in 2009 due to the milder winter.   The winter maintenance expenses peaked at 2009 due to the severe winter conditions. 

 

                                                YTD March Expenditures

 

The other key economic indicators that are being monitored include financial services administration and legal fees, Recreation and Culture revenues and streetlight maintenance, which have been trending consistent to prior year first quarter actuals.

 

FINANCIAL CONSIDERATIONS:

Staff will provide a June 2010 year-to-date review of operations and year-end projection in the Fall of 2010.

 

 

RECOMMENDED

 

                           BY:    ________________________          ________________________

                                      Joel Lustig, Treasure                         Andy Taylor, Commissioner

                                                                                                Corporate Services

                                     

 

ATTACHMENTS:


Appendix 1 – Operating Budget - Financial Results for the Three Months Ended March 31, 2010

 

Appendix 2 – Operating Budget for Planning & Design - Financial Results for the Three Months Ended March 31, 2010

 

Appendix 3 – Operating Budget for Engineering - Financial Results for the Three Months Ended March 31, 2010

 

Appendix 4 – Operating Budget for Building Services - Financial Results for the Three Months Ended March 31, 2010

 

Appendix 5 – Operating Budget for Waterworks - Financial Results for the Three Months Ended March 31, 2010