7. Capital Adjustments and
Closing of Projects – tax supported ADJUSTEMENTS DU BUDGET
DES IMMOBILISATIONS ET CESSATION DE PROJETS FINANCÉS PAR RECETTES FISCALES |
Committee Recommendations as amended
That Council:
1. Approve
the budget adjustments as detailed in Document 1;
2. Authorize
the closing of capital projects listed in Document 2, the funding of deficits
as identified and the return of balance of funds to funding sources;
3. Authorize
the refinancing of capital projects due to the receipt of $27.185 million
Provincial Transit Capital Grant, as shown in Document 3;
4. Authorize
the refinancing of capital projects due to the receipt of $14.645 million Municipal Road and Bridge
Infrastructure Investment Grant, as shown in Document 3;
5. Approve
a net decrease in debt authority of $23.842 million as a result of the
recommendations above;
6. Approve
additional authority of $33.73 million for the Central Archives Relocation and
Ottawa Library Technical Services Facility project to be funded with the $20
million in provincial revenue received under the Municipal Infrastructure
Improvement Initiative (MIII) and the balance of $13.73 million with tax
supported debt; and
7. Receive
the budget adjustments in Document 4 undertaken in accordance with the
Delegation of Authority By-law 2005-503, as amended, as they pertain to capital
works.
8. That the recommended reduction in capital budget authority for 900991 Bridlewood Community Centre (Document 1 – Budget Adjustments Requiring Council Approval) be removed and funds be held until a location within Bridlewood can be fully explored and cost be determined.
RecommandationS modifiÉeS du Comité
Que Conseil :
1.
approuve
les ajustements budgétaires décrits dans le document 1;
2. autorise la cessation des projets d’immobilisation énumérés dans le document 2, le financement des déficits indiqués et la remise des fonds restants aux sources de financement;
3. approuve le refinancement des projets d’immobilisations en raison de l’obtention de la subvention d’immobilisation provinciale de 27,185 millions de dollars destinée au transport en commun, tel qu’il est indiqué dans le document 3;
4. autorise le refinancement des projets d’immobilisations en raison de l’obtention la subvention de 14,645 millions de dollars destinée à l’amélioration des routes municipales et des infrastructures de pont, tel qu’il est indiqué dans le document 3;
5. approuve une diminution du pouvoir d’endettement de 23,842 millions de dollars, en conséquence des recommandations énoncées ci-dessus;
6.
accorde
une autorisation supplémentaire de 33,73 millions de dollars pour le projet de
déménagement des archives centrales et de l’installation des services
techniques de la Bibliothèque publique d’Ottawa, dont le financement proviendra
d’un paiement de 20 millions de dollars reçu de la Province en vertu de
l’Initiative d’investissement dans l’infrastructure municipale (IIIM) et, pour
le montant restant de 13,73 millions de dollars, d’une dette financée par les
recettes fiscales; et
7. prend connaissance des ajustements budgétaires
décrits dans le document 4, apportés aux termes du Règlement municipal 2005-503
sur la délégation de pouvoirs, modifié, et ayant trait aux travaux
d’immobilisation.
8. Que
l’autorisation recommandée de réduire le budget d’immobilisations pour le Centre
communautaire de Bridlewood – 900991 (document 1 – ajustements budgétaires
exigeant une approbation du Conseil) soit levée et que les fonds soient retenus
jusqu’au choix définitif d’un emplacement à Bridlewood et à la détermination
des coûts.
Documentation
1. City Treasurer’s report dated 29 April 2008
(ACS2008-CMR-FIN-0019).
2. Extract of Draft Minutes
Corporate Services and
Economic Development Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
April 29, 2008 / le 29 avril 2008
Submitted by/Soumis par : Marian Simulik,
City Treasurer, Trésoriere municipale
Contact
Person/Personne ressource : Tom Fedec, A/Manager of Financial Planning
Financial
Services/Services financiers
(613)
580-2424 x 21316, Tom.Fedec@ottawa.ca
SUBJECT:
|
|
|
|
OBJET :
|
ADJUSTEMENTS DU BUDGET DES IMMOBILISATIONS ET CESSATION DE PROJETS FINANCÉS
PAR RECETTES FISCALES |
That the Corporate Services
and Economic Development Committee recommend Council:
1. Approve
the budget adjustments as detailed in Document 1;
2. Authorize
the closing of capital projects listed in Document 2, the funding of deficits
as identified and the return of balance of funds to funding sources;
3. Authorize
the refinancing of capital projects due to the receipt of $27.185 million
Provincial Transit Capital Grant, as shown in Document 3;
4. Authorize
the refinancing of capital projects due to the receipt of $14.645 million Municipal Road and Bridge
Infrastructure Investment Grant, as shown in Document 3;
5. Approve
a net decrease in debt authority of $23.842 million as a result of the
recommendations above;
6. Approve
additional authority of $33.73 million for the Central Archives Relocation and
Ottawa Library Technical Services Facility project to be funded with the $20
million in provincial revenue received under the Municipal Infrastructure
Improvement Initiative (MIII) and the balance of $13.73 million with tax
supported debt; and
7. Receive
the budget adjustments in Document 4 undertaken in accordance with the
Delegation of Authority By-law 2005-503, as amended, as they pertain to capital
works.
Que le Comité des services organisationnels et
du développement économique recommande au Conseil :
1.
d’approuver
les ajustements budgétaires décrits dans le document 1;
2. d’autoriser la cessation des projets d’immobilisation énumérés dans le document 2, le financement des déficits indiqués et la remise des fonds restants aux sources de financement;
3. d’approuver le refinancement des projets d’immobilisations en raison de l’obtention de la subvention d’immobilisation provinciale de 27,185 millions de dollars destinée au transport en commun, tel qu’il est indiqué dans le document 3;
4. d’autoriser le refinancement des projets d’immobilisations en raison de l’obtention la subvention de 14,645 millions de dollars destinée à l’amélioration des routes municipales et des infrastructures de pont, tel qu’il est indiqué dans le document 3;
5. d’approuver une diminution du pouvoir d’endettement de 23,842 millions de dollars, en conséquence des recommandations énoncées ci-dessus;
6.
d’accorder
une autorisation supplémentaire de 33,73 millions de dollars pour le projet de
déménagement des archives centrales et de l’installation des services
techniques de la Bibliothèque publique d’Ottawa, dont le financement proviendra
d’un paiement de 20 millions de dollars reçu de la Province en vertu de
l’Initiative d’investissement dans l’infrastructure municipale (IIIM) et, pour
le montant restant de 13,73 millions de dollars, d’une dette financée par les
recettes fiscales; et
7.
de
prendre connaissance des ajustements budgétaires décrits dans le document 4,
apportés aux termes du Règlement municipal 2005-503 sur la délégation de
pouvoirs, modifié, et ayant trait aux travaux d’immobilisation.
Generally, budget adjustments to capital projects are required to:
· Adjust for increases or decreases in project costs;
· Consolidate similar accounts to facilitate issuing of contracts;
· Create separate accounts to facilitate project tracking;
· Account for the receipt of revenues not previously anticipated or for the over / underestimation of revenues; and
· Adjust project financing.
In its Delegation of Authority By-law 2005-503, as amended, City Council included parameters in which budget adjustments may be made if authorized by the City Treasurer. Those capital budget adjustment requests that do not meet the delegated authority limits of the City Treasurer require approval of City Council. Generally, Council authority is required for those capital budget adjustments involving:
· Transfers between programs or internal orders in excess of 10% or $100,000 whichever is the lesser;
· Transfers of debt authority between programs with previously approved debt authority, regardless of amount;
· Establishment of new projects outside the budget process; and
· A reduction of or increase in funding authority.
As in the past, this report includes those capital adjustments that require specific Council approval (Document 1), as well as those that have been made as a result of the delegated authority provisions (Document 4). The latter is provided for the information of Council, as these adjustments have already been processed, while the adjustments in the former document are being recommended for approval.
Capital project closures are also included in this report with details provided in Document 2. In closing these projects, surplus funds are firstly applied to those projects being closed that are in deficits. Secondly, and as directed during the 2008 budget process, one time operating requirements will be funded from the net surplus funds that will be returned to source.
Council approval is also
recommended to refinance capital projects with provincial funding. This reduces the requirement to issue debt
as well as making available city wide reserve funding for other Council
directed purposes (Document 3). The
advancement of project authority in the Central Archives Relocation and Ottawa
Library Technical Services Facility project is also recommended due to the
receipt of Municipal
Infrastructure Improvement Initiative (MIII) grant.
In previous Capital Adjustments and Closing of Projects reports, adjustments to both the tax supported and rate supported capital projects were presented in a joint report. In keeping with Council’s direction to separately table and approve the tax and rate supported budget requirements, two separate reports have been prepared. The rate supported report will be submitted to the Planning and Environment Committee on May 13.
As indicated above, those capital budget adjustments that require Council approval because they are not within the delegated authority limits for the transfer of funds are detailed in Document 1. An explanation for why each budget adjustment is required, as provided by the submitting department, is also included.
Document 1 includes those adjustments requested by project managers as well as administrative adjustments. Unlike those requested by departments, administrative adjustments do not have an impact on the scope or nature of the work, nor do they involve transfers between projects or change total project authority. Generally, they revise the financing of a project and require Council approval because they either involve debt or exceed the authority limits provided to the City Treasurer as identified in the delegation of authority by-law.
Among these administrative adjustments is the refinancing of some solid waste projects because they qualify for funding from the solid waste reserve fund. The refinancing of these projects results in a return to the city wide reserve fund of $1.715 million. Some child care and environmental projects were also funded from the city wide reserve fund because insufficient funding was available in the dedicated reserves at the time of Council approval. These projects are also being refinanced resulting in $4.193 million and $0.266 million, respectively, being returned to the city wide reserve fund.
In March 2006, Executive Management Committee (EMC) approved a policy for the closure of capital projects. Generally, capital projects that have been open longer than three years or have had no spending within the last year are considered candidates. In the absence of a justification to EMC for keeping the projects open, the policy directs that these projects will be recommended to Council for closure. Document 2 includes those project closures that are the result of the application of this policy as well as others that are deemed complete by project managers.
Document 2 also provides information related to the adjustments required that will return excess funds to source or fund deficits. An explanation is provided for those projects recommended for closure with deficits that exceed $100,000. The same project may be included in both document 1 and 2 with the understanding that the adjustment will occur prior to closure. The financial information provided on the list of recommended closures is based on the assumption that the adjustment has been made.
The integrated program is included in both the tax supported and rate supported Capital Adjustments and Closing of Projects reports. This is because both tax and rate sources of funding are affected if there is a deficit or a surplus when these projects are closed. Although this report seeks Council approval for the tax supported portion of these projects only, the impact on the rate side is also shown for information purposes.
One Time Operating Costs
During the 2008 budget process, City Council approved one time operating costs to be funded from surplus funds when capital projects are closed or project authority reduced through budget adjustments. There is sufficient funding made available from the closures and reductions to fund the one time operating costs of $4.596 million. The list of operating works to be funded is provided in Document 5.
Recommendation 3 – Provincial Transit Capital Grant
On February 29, 2008, the Province announced that the City would receive $27.185 million as a one time grant for municipal transit capital purposes. This report recommends that these funds be applied to bus additions and replacements with an offsetting reduction in the total debt authority required ($1.7 million in tax supported debt, $14.689 million in federal gas tax debt and $10.796 million in provincial gas tax debt). The details of the refinancing are provided in Document 3.
On March 27, 2008, the Province announced that the City would receive $14.645 million towards the funding of road and structure rehabilitation capital projects. These funds can be used for any road or bridge project. Document 3 provides the list of projects that are recommended for refinancing upon receipt of provincial funding.
All changes in debt authority require the specific approval of City Council. The change in debt authority resulting from the budget adjustments in Document 1, project closures in Document 2 and refinancing with provincial revenue in Document 3 is a net decrease of $23.842 million. As shown in the summary chart below, there is an increase in development charge debt and this is primarily the result of refinancing of the Riverside Drive (Hunt Club – Limebank) project due to revenue that will not be realized. Most of the reduction in gas tax debt is refinancing due to the receipt of the provincial transit capital grant.
|
Debt not
required /(Debt required) $000 |
Tax supported debt |
4,947 |
Federal / provincial gas tax debt |
25,520 |
Development charges debt |
(6,625) |
Total |
23,842 |
Recommendation 6 – Central Archives Relocation and Ottawa Library Technical Services Facility Project
During the 2008 budget deliberations, City Council approved $3.8 million towards the Central Archives Relocation and Ottawa Library Technical Services Facility Project. The budget authority identified in 2009 was $33.73 million and as an “identifiable legacy project that benefits multiple generations”, the full amount of $37.53 million was to be financed with debt.
Earlier this year, the City applied and was successful in securing $20 million under the provincial Municipal Infrastructure Investment Initiative (MIII) program. The recommendation in this report is for approval to advance the project authority of $33.73 million by one year and, after the application of the provincial grant of $20 million, to fund the balance of $13.73 million with tax supported debt.
Those capital budget adjustments processed under the authority delegated to the City Treasurer for the period May 1, 2007 to December 31, 2007 are detailed in Document 4. This document is provided for the information of Council as these adjustments have been processed.
Capital Budget Status
The capital budget status report showing capital projects that were open as of March 31, 2008 is posted on the City’s website. Excluded from this status report are the adjustments related to the recommendations in this report with the exception of those made under the authority delegated to the City Treasurer.
The purpose of this report is administrative in nature and therefore no public consultation is required. All departments have been involved in its preparation.
The impact of the budget adjustments on total authority recommended in Document 1, the closing of capital projects recommended in Document 2 and the refinancing of projects due to the receipt of provincial funding in Document 3 are summarized in the chart below.
|
Budget Adjustments (Documents 1 & 3) $000 |
Project Closures (Document 2) $000 |
Total $000 |
Tax supported reserve funds · City wide (1) · Transit · Corporate fleet ·
Environmental
resource areas acquisition · Child care Subtotal |
21,516 (558) - (266) (4,193) 16,499 |
670 279 (7) (9) 85 1,018 |
22,186 (279) (7) (275) (4,108) 17,517 |
Other Non Tax Reserves · Cash in lieu of parkland · Solid waste Subtotal |
(200) (1,715) (1,915) |
(94) 152 58 |
(294) (1,563) (1,857) |
Federal / provincial gas tax |
- |
257 |
257 |
|
7,287 |
1,436 |
8,723 |
Debt · Tax supported · Federal / provincial gas tax · Development charges Subtotal |
3,596 25,485 (6,625) 22,456 |
1,351 35 - 1,386 |
4,947 25,520 (6,625) 23,842 |
Revenue (2) |
(35,219) |
- |
(35,219) |
Total |
9,108 |
4,155 |
13,263 |
(1) Council directed that funding of $4.645 million be contributed to the Tax Rate Stabilization Reserve and $10 million to the Winter Maintenance Reserve.
(2) This is a net increase in revenue primarily due to the receipt of the Provincial Transit Capital and Municipal Road and Bridge Infrastructure Investment grants.
During the 2008 budget deliberation process, City Council directed that one time operating costs be funded from project closures and reductions. There is sufficient funding being returned to the city wide reserve to cover the one time operating expenditures of $4.596 million.
In approving these recommendations, the reserve fund balance for all tax supported reserve funds remains below the City’s policy limit of $50 million. An update to the City’s reserve fund position will be provided in the first Quarter Status report.
Approval of this recommendation advances the authority of $33.73 million identified in 2009. It will be funded from the Provincial Municipal Infrastructure Investment Initiative (MIII) grant ($20 million) and tax supported debt ($13.73 million).
Document
1 – Budget Adjustments Requiring
Council Approval
Document
2 – Capital Projects Recommended for
Closure
Document 3 - Provincial Transit Capital Grant and Municipal Road and Bridge Infrastructure Investment Grant
Document 4 – Budget Adjustments Processed Under Delegated Authority
Document 5 – Summary of 2008 One Time Items to be Funded from Capital Project Closures and Reductions
Upon approval of this report, Financial Services will process the necessary adjustments.
Capital Adjustments and Closing of Projects - tax supported
ADJUSTEMENTS
DU BUDGET DES IMMOBILISATIONS ET CESSATION DE PROJETS FINANCÉS PAR RECETTES
FISCALES
ACS2008-CMR-FIN-0019 city-wide / À l’Échelle de la
ville
Responding to a question from Councillor Wilkinson, Ms. M. Simulik, City Treasurer, began by explaining the purpose of the report. She advised that at the beginning of each year, departments reviewed their works in progress to identify projects that were finished and could be closed, projects where there was additional authority required and projects where there was additional authority no longer required. She indicated this was done in order to ensure the City was making the best possible use of the available capitals funds. With respect to the closing of the Sand Hill Park project, she explained that staff had realized it was a duplicate project in that it appear as a stand-alone as well as being included in a larger capital project called “Growth Parks”. As a result, staff was recommending closing the Sand Hill Park project because the work would be funded from the larger works in progress, which would remain open.
Councillor Wilkinson moved the following motion on behalf of Councillor Feltmate.
Moved by Councillor M. Wilkinson
Whereas capital funding was provided in
2002 for the construction of a new community center in Bridlewood, the Eva
James Centre and surrounding Deevy Pines Park development;
AND
WHEREAS the centre is complete and only a storage unit remains to be installed
in the park this spring;
AND
WHEREAS the Bridlewood community continues to grown, and at 20,000 does not
have an outdoor aquatic opportunity for its residents;
THEREFORE
BE IT RESOLVED that the recommended reduction in capital budget authority for
900991 Bridlewood Community Centre (Document 1 – Budget Adjustments Requiring
Council Approval) be removed and funds be held until a location within
Bridlewood can be fully explored and cost be determined.
CARRIED
In response to questions from Councillor El-Chantiry, Ms. Simulik confirmed that as a result of recommendation 6 of the report and $20M of funding received from the Province, the City would need to issue less debt in order to finance the Central Archives relocation project. She also confirmed that, under the terms of an agreement signed with the Province, the provincial gas tax had to be used for transit.
She advised that part of it was used for the transit operating budget and the rest would be used for transit capital works.
Councillor Desroches referenced recommendation 4 of the report and asked for confirmation that this related to a list of projects to be approved by the Province. Ms. Simulik confirmed the Province had indicated that, before receiving the funding, the City was to send a list of projects to them.
Following these exchanges, Committee voted on the item as amended.
That the
Corporate Services and Economic Development Committee recommend Council:
1. Approve
the budget adjustments as detailed in Document 1;
2. Authorize
the closing of capital projects listed in Document 2, the funding of deficits
as identified and the return of balance of funds to funding sources;
3. Authorize
the refinancing of capital projects due to the receipt of $27.185 million
Provincial Transit Capital Grant, as shown in Document 3;
4. Authorize
the refinancing of capital projects due to the receipt of $14.645 million Municipal Road and Bridge
Infrastructure Investment Grant, as shown in Document 3;
5. Approve
a net decrease in debt authority of $23.842 million as a result of the
recommendations above;
6. Approve
additional authority of $33.73 million for the Central Archives Relocation and
Ottawa Library Technical Services Facility project to be funded with the $20
million in provincial revenue received under the Municipal Infrastructure
Improvement Initiative (MIII) and the balance of $13.73 million with tax
supported debt; and
7. Receive
the budget adjustments in Document 4 undertaken in accordance with the
Delegation of Authority By-law 2005-503, as amended, as they pertain to capital
works.
8. That
the recommended reduction in capital budget authority for 900991 Bridlewood
Community Centre (Document 1 – Budget Adjustments Requiring Council Approval)
be removed and funds be held until a location within Bridlewood can be fully
explored and cost be determined.
CARRIED
as amended