1.             CAPITAL ADJUSTMENTS AND CLOSING OF PROJECTS – RATE SUPPORTED

 

AJUSTEMENT DU BUDGET DES IMMOBILISATIONS ET CESSATION DE PROJETS        FINANCÉS PAR RECETTES FISCALES

 

 

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.                  Permit those projects in Document 3 that qualify for closure, to remain open; and

 

4.                  Receive the budget adjustments in Document 4 undertaken in accordance with the Delegation of Authority By-law 2009-231, as amended, as they pertain to capital works.

 

 

RECOMMANDATIONS DU COMITÉ

 

Que le Conseil :

 

1.                  approuve les ajustements budgétaires décrits dans le document 1;

 

 

2.                  approuve 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.                  permet que, les projets mentionnés dans le Document 3 qui se qualifient pour une cessation, restent ouverts;

 

4.                  prenne connaissance des ajustements budgétaires décrits dans le document 4, apportés aux termes du Règlement municipal 2009-231 sur la délégation de pouvoirs, modifié, et ayant trait aux travaux d’immobilisation.

 

Documentation

                                  

1.                  City Treasurer’s report dated 9 June 2011 (ACS2011-CMR-FIN-0035)

 

 

Report to/Rapport au :

 

Environment Committee

Comité de l'environnement

 

 and Council / et au Conseil

 

9 June 2011 / le 9 juin 2011

 

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 ext 21316, Tom.Fedec@ottawa.ca

 

City wide / À l’échelle de la Ville

Ref N°: ACS2011-CMR-FIN-0035

 

 

SUBJECT:

CAPITAL ADJUSTMENTS AND CLOSING OF PROJECTS – RATE SUPPORTED

 

 

OBJET :

AJUSTEMENT DU BUDGET DES IMMOBILISATIONS ET CESSATION DE PROJETS FINANCÉS PAR RECETTES FISCALES

 

 

REPORT RECOMMENDATIONS

 

That the 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.                  Permit those projects in Document 3 that qualify for closure, to remain open; and

 

4.                  Receive the budget adjustments in Document 4 undertaken in accordance with the Delegation of Authority By-law 2009-231, as amended, as they pertain to capital works.

 

 

RECOMMANDATIONS DU RAPPORT

 

Que le Comité de l'environnement recommande au Conseil :

 

1.               d’approuver les ajustements budgétaires décrits dans le document 1;

 

 

2.               d’approuver 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.               de permettre que, les projets mentionnés dans le Document 3 qui se qualifient pour une cessation, restent ouverts;

 

4.               de prendre connaissance des ajustements budgétaires décrits dans le document 4, apportés aux termes du Règlement municipal 2009-231 sur la délégation de pouvoirs, modifié, et ayant trait aux travaux d’immobilisation.

 

 

BACKGROUND

 

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 2009-231, 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 4).  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 first applied to those projects being closed that are in deficit and the remaining net surplus is returned to source.

DISCUSSION

 

Recommendation 1 – Budget Adjustments Requiring Council Approval

 

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 the budget adjustments requested by project managers from the 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 financing of a project and require Council approval because they either involve debt or exceed the City Treasurer’s delegated authority limits.

 

Recommendation 2 – Capital Projects Recommended For Closure

 

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.  As part of this process, explanations are required from project managers for those projects recommended for closure that had deficits in excess of $100,000.

 

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 rate is also shown for information purposes.  Similarly, the “Capital Adjustments and Closing of Projects – Tax Supported” reported the same integrated projects, but only made recommendations related to the tax portion of the projects while the rate portion was included for information.

 

Recommendation 3 – Capital Projects Requiring Council Approval to Remain Open

 

Criteria for Closure

As directed by the Executive Committee (EC), capital projects will be considered for closure if the stated completion date is 2010 or prior. 

 

Capital projects that qualify for closure, but are recommended to remain open based on the rationale provided by the project managers are listed in Document 3.  Upon Council approval of this recommendation, the year of completion for these projects will be revised accordingly. 

 

Recommendation 4 – Capital Budget Adjustments Processed Under Delegated Authority

 

Those capital budget adjustments processed under the authority delegated to the City Treasurer (By-law 2009-231) April 2010 to April 2011 are provided in Document 4 for the information of Committee and Council. Included in this list are adjustments made to reflect the procurement savings that have been realized in support of the Management Efficiency target.

 

RURAL IMPLICATIONS

 

There are no rural implications.

 

 

CONSULTATION

 

The purpose of this report is administrative in nature and therefore no public consultation is required.  All departments have been involved in its preparation.

 

 

LEGAL IMPLICATIONS:

 

There are no legal impediments to implementing the recommendations of this report.

 

 

RISK MANAGEMENT IMPLICATIONS

 

There are no risk implications.

 

FINANCIAL IMPLICATIONS

 

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.

 

 

 Document 1 - Budget Adjustments Return to Source/(Funding Required)

 Document 2 - Project Closures Return to Source/(Funding Required)

 Total Return to Source/(Funding Required)

 Revenue

2,160,000

-

2,160,000

 

 Rate Supported Reserves

 Water

(680,000)

4,084,091

3,404,091

 Waste Water

(1,201,000)

3,641,163

2,440,163

 

(1,881,000)

7,725,254

5,844,254

 

 Tax Supported Reserves

                             -  

122,875

122,875

 

 Development Charges

(139,500)

416,193

276,693

 

 Debt

 Tax Supported

-

209,777

209,777

 Water

(1,464,000)

1,252,971

(211,029)

 Wastewater

(1,995,000)

2,096,736

101,736

 Development Charges

-

60,000

60,000

 

(3,459,000)

3,619,484

160,484

 

 Grand Total

(3,319,500)

11,883,806

8,564,306

 *Includes the Integrated Roads, Water, & Sewer Program.

 

 

A Rate Reserve Fund Status schedule is attached as Document 5, and provides an update to the rate supported reserves.  The schedule reflects and incorporates the recommendations contained in this report.

 

 

TECHNOLOGY IMPLICATIONS

 

There are no technology implications with this report.

 

 

CITY STRATEGIC PLAN

 

There are no impacts on the City’s Strategic Plan.

 

 

SUPPORTING DOCUMENTATION

 

Document 1 – Budget Adjustments Requiring Council Approval

Document 2 – Capital Projects Recommended for Closure

Document 3 – Capital Projects Requiring Council Approval to Remain Open

Document 4 – Budget Adjustments Processed Under Delegated Authority

Document 5 – Rate Reserve Fund Status

 

 

DISPOSITION

 

Upon approval of this report, Financial Services will process the necessary adjustments.