Document 4

Policy for the Closure of Capital Projects

August 2008

Background

Executive Management Committee (EMC) approved a policy regarding the closure of capital projects on March 6, 2006. According to this policy, those projects that have not received new Council authority within the last three years or where there is no spending in the last year will be closed unless the department provides an explanation acceptable by EMC for keeping them open. This policy is now being revised at the request of EMC.

Revised Criteria for Project Closure

· Capital projects will be closed the year following the year of completion identified at the time the capital project is opened. For example, if the year of completion is identified as 2008, then the project will be closed in early 2009.

· Projects currently identified as ‘ongoing’ will be closed in the fourth year; that is, they will remain open for three years. No new capital projects will be designated as “ongoing”.

Process

· Based on the revised policy, the list of projects to be closed will be provided to departments in the latter part of the year prior to closure. This will allow departments time to:

• Expedite any outstanding work and / or payments and satisfy commitments;
• Determine a revised year of completion and prepare an explanation to justify why a project requires additional time to complete, if a project will not be completed within the year specified. This includes “ongoing” projects.

· The revised years of completion and the respective explanations will be consolidated in a report to Council recommending the extended timelines.

· All projects that meet the criteria for closure and are confirmed complete will be locked early in the new year and closed through the Capital Adjustments and Closing of Projects report.

Changes as a Result of the Revised Policy

· The list of projects that meets the criteria for closure and the preparation of a justification for keeping a project open will no longer be reviewed by EMC.

· Projects that meet the criteria for closure will require Council approval to revise the year of completion.

· Projects will no longer be identified as “ongoing” and all new projects will require a year of completion. New capital projects will be created every year there is a request for funding. There may be exceptions if funding is required to complete a project or if there is a change in project scope.

· Greater attention in identifying the ‘year of completion’ is required at the time a project is opened.