|
1. CAPITAL aDJUSTMENTS AND
CLOSING OF PROJECTS – RATE SUPPORTED AJUSTEMENT DU BUDGET DES IMMOBILISATIONS
ET CESSATION DE PROJETS FINANCÉS PAR REDEVANCES |
Committee recommendationS
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.
Approve a net decrease in debt
authority of $2.531 million as a result of recommendations 1 and 2;
4.
Permit those projects in
Document 3 that qualify for closure, based on the policy endorsed by Executive
Management Committee (EMC), to remain open; and
5. Receive
the budget adjustments in Document 3 undertaken in accordance with the
Delegation of Authority By-law 2005-503, as amended, as they pertain to capital
works.
RecommandationS DU Comité
Que le
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
une diminution du pouvoir d’endettement de 2,531 millions de dollars à la suite
des Recommandations 1 et 2;
4.
de
permettre que, en vertu de la politique adoptée par le Comité de la haute
direction (CHD), les projets mentionnés dans le Document 3 qui se qualifient
pour une cessation, restent ouverts;
5.
de
prendre connaissance des ajustements budgétaires décrits dans le Document 3, apportés
aux termes du Règlement municipal 2005-503 sur la délégation de pouvoirs,
modifié, et ayant trait aux travaux d’immobilisation.
Documentation
1.
City
Treasurer’s report dated 14 April 2009 (ACS2009-CMR-FIN-0018).
Planning
and Environment Committee
and Council / et au Conseil
14 April 2009 / le 14 avril 2009
Submitted
by/Soumis par: Marian Simulik, City Treasurer/Trésorière municipale
Contact Person/Personne ressource: Tom Fedec, Manager, Budget and
Financial Planning,
Finance/
Gestionnaire, Planification budgétaire et
financière, Finances
(613)
580-2424 x, 21316
SUBJECT:
|
CAPITAL aDJUSTMENTS
AND CLOSING OF PROJECTS – RATE SUPPORTED |
|
|
|
OBJET :
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AJUSTEMENT DU BUDGET DES IMMOBILISATIONS ET
CESSATION DE PROJETS FINANCÉS PAR REDEVANCES |
That Planning
and Environment 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. Approve a net
decrease in debt authority of $2.531 million as a result of recommendations 1
and 2;
4. Permit
those projects in Document 3 that qualify for closure, based on the policy
endorsed by Executive Management Committee (EMC), to remain open; and
5.
Receive the budget adjustments
in Document 3 undertaken in accordance with the Delegation of Authority By-law
2005-503, as amended, as they pertain to capital works.
Que le Comité de l'urbanisme et de
l'environnement 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
une diminution du pouvoir d’endettement de 2,531 millions de dollars à la suite
des Recommandations 1 et 2;
4. de
permettre que, en vertu de la politique adoptée par le Comité de la haute
direction (CHD), les projets mentionnés dans le Document 3 qui se qualifient
pour une cessation, restent ouverts;
5. de
prendre connaissance des ajustements budgétaires décrits dans le Document 3,
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.
The Delegation of Authority By-law 2005-503, as amended, specifies those 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 the 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;
· A reduction of or increase in funding authority; and
· Project closures.
This report includes those capital budget adjustments that require specific Council approval (Document 1) as well as those that have been made as a result of delegated authority provisions (Document 5). The latter is provided for the information of Council, while 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 and the net surplus is returned to source.
As in 2008 and in keeping with Council’s direction to separately table and approve the tax and rate supported budget requirements, two separate “Capital Adjustments and Closing of Projects” reports have been prepared. The integrated service area 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 budget adjustment or if there is a deficit or surplus when these projects are closed. Although this report seeks Council approval for the rate supported portion of these projects only, it is with the understanding that there is also an impact on the tax supported portion.
As indicated above, the detail of those capital budget adjustments that require Council approval because they are not within the delegated authority limits of the City Treasurer for the transfer of funds is provided in Document 1. An explanation for why each budget adjustment is required, as provided by the submitting department, is also included.
Document 1 separates those budget adjustments requested by project managers from administrative adjustments. Unlike those requested by departments, administrative adjustments do not have an impact on scope or nature of work, nor do they involve transfers between projects. 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.
All capital projects recommended for closure are listed in Document 2. Also provided is information related to the adjustments required that will return excess funds to source or fund project deficits.
For those integrated projects that will be closed, the information provided includes both tax and rate funding. This is because both tax and rate sources of funding are affected if there is a deficit or surplus when these projects are closed. Although this report seeks Council approval for the rate supported portion of these projects only, the impact on the tax supported portion is also shown for information purposes. The “Capital Adjustments and Closing of Projects – Tax Supported” report will show the same integrated projects, but will make recommendations related to the tax portion of the projects while the rate portion will be included for information.
Changes in debt authority require the specific approval of City Council. As a result of project closures, reductions, and project refinancing, there has been a net reduction of debt authority of $2.531 million. This reduction is in development charge debt, primarily due to an administrative adjustment.
|
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Debt not required ($000) |
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2,531 |
Policy for Closure
In August 2008, Executive Management Committee (EMC) revised the policy for the closure of capital projects. Until that time, capital projects that had been open longer than three years or had no spending within the last year were considered candidates for closure. A justification for each project as to why it needed to remain open was provided to EMC for approval.
The revised policy focuses on the year of project completion identified by project managers. Capital projects will now be closed the year following the identified year of completion; that is, if a project is identified as being completed in 2008, then it will be closed in 2009. If the project manager deems the project not complete, an explanation will be provided and a new year of completion recommended to City Council. The current policy is provided in Document 4.
Document 3 lists those capital projects that qualify for closure based on the revised policy, but are recommended to remain open. Project managers have provided reasons why each of these projects is to remain open. Upon Council approval of this recommendation, the year of completion for these projects will be revised accordingly.
Those capital budget adjustments processed under the authority delegated to the City Treasurer (By-law 2005-503) for the period, January 1, 2008 to March 15, 2009 are detailed in Document 5. This document is provided for the information of Council as these adjustments have been processed. Included in this list are adjustments made to reflect the procurement savings that have been realized in support of the Management Efficiency target.
The purpose of this report is administrative in nature and therefore no public consultation is required. All departments have been involved in its preparation.
There
are no legal/risk management impediments to implementing the recommendations of
this report.
The impact of the budget adjustments recommended in Document 1 and the closing of capital projects recommended in Document 2 are summarized in the chart below.
|
|
Budget Adjustments (Document 1) $000 Return to Source/ (Funding Required) |
Project Closures (Document 2) $000 Return to Source/ (Funding Required) |
Total $000 Return to Source/ (Funding Required) |
|
Rate supported reserve funds · Water · Wastewater Subtotal |
944 2,014 2,958 |
931 868 1,799 |
|
|
Development charges |
(2,832) |
6 |
(2,826) |
|
|
2,500 |
31 |
2,531 |
|
Total |
2,626 |
1,836 |
4,462 |
Document 6 is an update to the City’s reserve fund position and incorporates the recommendations in this report.
Document 2 – Capital Projects Recommended for Closure
Document 3 – Capital Projects Not Recommended for Closure
Document 5 – Budget Adjustments Processed Under Delegated Authority
Document 6 – Reserve Fund Status
Upon approval of this report, Finance will process the necessary adjustments.