(STANDARD FORMAT FOR REPORTS)

Council 1 2018 and 2019 Operating and September 2, 2020 Capital Results

Report No. CSR-2020-13

Staff Report

Department: Corporate Services/Finance

To: Mayor and Members of Council

Meeting Date: September 2, 2020

Report No.: CSR-2020-13

Report Title: 2018 and 2019 Operating & Capital Results

Recommendation:

That Report CSR-2020-13, 2018 and 2019 Operating & Capital Results dated September 2, 2020, be received; and

1. That the 2018 operating deficit of $2,312,032, including prior year PSAB adjustments of $513,535, be transferred to the Police Services reserve and;

2. That the 2019 operating surplus of $314,735 be transferred to the Police Services reserve to reduce the existing deficit and;

3. That capital projects totalling $5,780,224 be carried forward to 2020 as identified in Attachment 4 and;

4. That projects totaling $5,480,941 be funded from reserves as identified in Table C.

Background:

The purpose of this report is to:

1. Provide the 2018 and 2019 year-end results for operating and the 2019 year-endresults for capital and dispose of any surplus or deficit;

2. Establish the capital carryover projects to 2020;3. Re-baseline reserve and reserve fund balances to correct past omissions.

The analysis provided required a review of historical fund accounting processes and treatments and funding strategies (e.g. internal loans) for capital acquisitions. The final detailed 2018 and 2019 operating and capital results have not been provided to Council previously due to a variety of factors including: staff turnover and retirements, complexities in finalizing the results from the sale of the MPUC; quantifying the

Council 2 2018 and 2019 Operating and September 2, 2020 Capital Results Report No. CSR-2020-13

transition costs from Midland Police Service to OPP and lingering administrative impacts from the ransomware attack in 2018. This report will not impact the 2018 Audited Financial Statements that were provided to Council in late 2019. The 2019 year-end outcomes are in the process of being finalized from an external audit perspective but are not anticipated to materially change and are provided for Council information and direction. The 2009 financial statements were prepared under the Public Sector Accounting Board (PSAB) rules that came into effect at that time. These were Canada wide municipal reporting changes, not Midland specific. The new rules required Tangible Capital Assets (TCA) to be reported on the balance sheet instead of as a capital expense in the year of construction/acquisition; long-term debt as a liability that was previously shown as revenue in municipal reports; depreciation expense that had never previously been required to be recorded and future employee benefit liabilities disclosed for group benefit costs, vacation and sick leave obligations. Financial transactions and processes needed to be implemented to accommodate the new external reporting for PSAB compliance and traditional internal fund accounting for budgeting and reporting for tax and water/wastewater rate calculation purposes. Unfortunately, errors occurred in the recording of PSAB transactions that have gone undetected. This report includes adjustments that impact reporting of reserve balances for internal decision-making purposes but have no impact on current or previous external audited financial statements. Analysis: Financial Results – Operating 2018 The 2018 tax-rate based operating budget yearend deficit was $1,798,497. Attachment 1 provides a high-level summary of the budget and actual results with an explanation of the major contributing factors to the variance. The most significant contributing item is the cost for the disbandment of the Midland Police Service (MPS). Analysis on the expected impact of the change from MPS to OPP was provided in staff reports TR-2018-04 dated Feb 1, 2018 and TR-2018-07 dated Feb 12, 2018. The actual amounts have been segregated and reported separately in Attachment 1 as this was not a budgeted item. An arbitrator’s award did increase the costs greater than originally anticipated. Council approved the creation of a Police Services reserve that would accumulate the deficit from disbandment and draw on ½ of the expected future savings between the MPS and the OPP contract. The deficit reserve is an “internal loan” from other existing discretionary reserves and temporarily restricts the availability of funding for other purposes. The business case was to continue to budget at the same level as Midland Police Service even though the OPP contract is lower. The difference would be a


contribution reserve to reduce the balance. Eventually the reserve will be returned to zero and then the budget can be reduced, and the savings realized by taxpayers. The reserve was projected to be a deficit of $3,155,988. If the staff recommendations are approved the revised Police reserve deficit will be $3,047,058 as of December 31, 2019. As per the plan, this deficit will be reduced through budgeted contributions from the tax levy operating budget to return the reserve to zero. This ensures that reserves currently providing the “loan” are available to reduce vulnerability to other unplanned events (such as COVID). Water and wastewater rate based operating results for 2018 are also summarized in Attachment 1. In both cases revenues were higher than planned and expenditures were lower than budgeted. Although the transfer to reserves in the table is reflected as an unfavourable variance because it is higher than budgeted, this actually results in a healthier reserve balance than anticipated and will aid in funding of future capital works that are planned and a reduction in anticipated debt financing requirements. Financial Results – Operating 2019 The 2019 tax-rate based operating budget yearend was in a surplus position, expenses less than revenues, of $314,735. Attachment 2 provides a summary of the budget and actual results with a high-level explanation of the major contributing factors to the variance. Water and wastewater rate based operating results for 2019 are also summarized in Attachment 2. For water operations, revenues were higher than planned but expenditures were also higher than budgeted resulting in an increased transfer to reserves more than planned Wastewater operations reflect higher than planned revenues and lower than expected expenditures. Although the transfer to reserves in the table is reflected as an unfavourable variance because it is higher than budgeted, it continues to reflect a healthier contribution to reserve that will further aid in avoiding long term debt costs and interest carrying charges on the significant capital replacement program that is required in the coming years. Financial Results - Capital 2019 with previous year carryover The results for the 2019 capital plan are summarized in Attachment 3 and detailed in Attachment 4. The columns in Attachment 4 have been identified for transparency purposes and to identify projects where additional funding has been applied prior to year-end or where additional funding is required to finalize and close the project. Any remaining budget balance or unfunded over expenditure is shown in the requested carry over to 2020 column. A total of $124,839 will be funded from the appropriate reserves as per Procurement By-law 2018-52 Section 5.3 v., $325,507 in budget approval


removed for completed and closed projects and the remaining net balance of $5,780,224 carried to 2020 to be addressed in and subsequent reports or spent on approved projects. Staff have fully analyzed capital budget approvals dating back several years, confirmed with departments that the projects are underway and/or intended to proceed and carried forward the unspent budget amount. Staff are advised to use this list for all projects approved prior to 2020 and seek Council approval or re-budget for all projects currently not listed if they come to light later. PSAB Adjustments The recording of assets and liabilities on the balance sheet (commencing in 2009 under PSAB) required an offsetting entry to be booked to the accumulated surplus/deficit section of the balance sheet. Reserve and reserve funds were also moved from liabilities to accumulated surplus while development charge balances and government funding (Provincial and Federal Gas Tax) became deferred revenue and remained in the liabilities section of the balance sheet. This large, accumulated surplus did not provide any additional capacity for future capital or operating initiatives, it was simply a change in the way financial information was presented. Accounting processes changed to ensure that various transactions continued to be included in levy requirements but excluded for external financial reporting purposes. Staff turnover and the lack of proper documented processes has led to items being recorded incorrectly for internal purposes resulting in incorrect reporting of operating and capital surpluses and ultimately reserve balance overstatement. Although this may sound alarming, external financial statements group reserves into accumulated surplus so the errors that have been discovered do not have an impact on the external financial statements but must be corrected so that Council can make informed decisions using accurate reserve balances. Proper processes are being put in place to ensure annual reconciliations of all balances are completed in a timely manner to avoid any future reporting errors of this nature. Required adjusting entries to correct past errors total $513,535.41. A list of items/issues can be found in Table A. Staff propose to net these items against the 2018 operating surplus (determined before the MPS disbandment costs) which would increase the reported overall deficit from $1,798,497 to $2,312,032 and the resulting motion, if approved, would be properly reflected as an overall decrease in Town reserve balances.


Table A

Prior Operating Surplus/Deficit Issues Through analysis staff have discovered that prior to 2018, operating surplus and deficits from tax and user rate results were not always disposed of correctly or in accordance with Council direction. It appears that staff may have reported results too soon and subsequent entries, perhaps discovered during the external audit process, were recorded that changed the results. It also appears that the water and wastewater year-end surplus for 2014 was not transferred to their respective reserves. Staff have reviewed the various entries and the following adjustment is required to correct or complete previous reserve transfers:

Table B Budget $ Amount Reserve

Tax Supported Deficit (6,880.92) Tax Rate Stabilization Reserve

Water Rate Supported Surplus 76,971.39 Water reserve

WW Rate Supported Surplus 382,326.57 WW reserve

Net Transfer (increase) 452,417.04

Prior Capital Budget Funding Issues In performing a review of the PSAB entries staff have also discovered capital expenditures and projects that have been improperly or inadequately funded in previous years. Prior to 2014 the year-end process was to combine operating and capital results into one report and dispense of any surplus or deficits that may have occurred. Since then the year-end process has not been consistent or complete leaving balances on project accounts. The accounting software moves the balances to a capital surplus/deficit account when a fiscal year is closed but the account has not been thoroughly analyzed to correct any remaining unfunded amounts.

Description Amount Comments

Interest accrual external debt 122,623.00

Accrued as PSAB, reversed as fund accounting -

surplus overstated

Building deficit recording error - 2014 6,152.00

Deficit recorded as PSAB, should have been as

fund accounting - surplus overstated

"Internal Loan" Interest errors - various 153,059.90

Interest recorded as revenue fund accounting ,

expense as PSAB - surplus overstated

Future Benefits payable - various 231,700.51

Accrued as PSAB, reversed as fund accounting -

surplus overstated

Total Adjustment required 513,535.41

Reduction to tax supported operating surpluses

previously reported

Public Sector Accounting Board (PSAB)

Correcting Adjustments


Carryover reporting for approved but unexpended projects has been inconsistent. In some instances, projects were funded based on budget, but funding was not returned to the appropriate source if the project did not advance or was under spent. In other instances, some projects prior to 2015 had funding applied but the expenditures did not occur until 2015 or later. Since the surplus had already been dispensed, the funding should have been reapplied as approved. As indicated in the capital reporting section, staff have addressed the inconsistent and incomplete previous approach by compiling a detailed project list as a starting point for 2020 reporting. Projects have been analyzed to verify that Council approval had been obtained and then staff applied amounts from overfunded projects against underfunded projects, all within the same approved and eligible funding sources (e.g. tax levy supported funding applied to tax supported projects, water & wastewater applied to their respective projects; no cross subsidization has occurred). Projects in a budget deficit position (expenditures exceed approved budget, or third-party funding sources were not received) are being recommended to be carried forward to 2020 with comments provided. For approved projects, a total of $450,590 of overfunding has been applied to underfunded projects with activity occurring between 2015 and 2019. An additional $530,505 in reserve, development charges and transit gas tax funding will be applied to approved, underfunded projects while $175,070 of other unapplied surplus is being returned to the reserve that was originally accessed. These adjustments have a net reduction in reserve and reserve fund balances of $355,435. It should be noted that this information is being provided for transparency purposes only as part of the overall correction of past recording and reporting errors. Had the accounting entries been processed at the time expenditures occurred, the funding sources would have been accessed and reserves would have been reduced accordingly. Unfunded Projects/Internal Loans The detailed review of PSAB adjustments and previous capital expenditures has also uncovered past projects where an “internal loan” was approved and/or an approved property acquisition occurred without any specific funding source being identified. These items remain unfunded in the Town’s financial records but used cash representing existing reserves. Since the property tax levy has never been adjusted to recover the outlay of the funds and restore the reserve cash balance they more appropriately should be reflected in the financial records as a reduction in reserve balances, either in their own deficit reserve (similar to the Police situation) or as a draw from existing reserves (which could put that reserve into a deficit position). It is important to note the distinction between financing source and funding source. Financing approval is used to obtain permission to borrow funds that must be repaid


with interest and provides the cashflow needed to construct or purchase assets. Funding is the permanent revenue needed to offset the cost of the expenditure and, if previously financed, retire the debt (e.g. tax levy, development charges, government grants etc.). Staff recommend that all acquisitions and construction projects need to clearly identify if financing or funding is being requested and, if financing, the ultimate funding source to be accessed/applied. If property or assets are being acquired with the intent to develop and dispose they should be funded from existing reserves and funds returned to their original source when the asset is sold. This will ensure that existing reserves and related cash balances are not over committed, and that external financing is identified and obtained, if necessary. Recent process changes requiring all staff reports to be reviewed by the CAO and CFO before they are placed on the Council agenda will improve the recommendations and clarify the source and type of the financial requests. Details of the items are as follows:

Table C Item Description Amount

to Dec 31, 2019 Recommended Funding Source

Comments

MBL Land Purchase and subsequent expenditures

4,216,726.74 Create a reserve for MBL activity that will remain in a deficit until repaid but total reserves will be reduced.

Acquisition in 2014 and various subsequent expenditures for studies etc.

Balm Beach Rd East Land Acquisition

507,169.99 Community Wide Reserve Fund

Approved to Finance, should be to fund. Need to reduce reserve.

Downtown Enviro Study 105,036.13 Contingency Reserve

Item in progress, funding required for total of $151,280 approved budget. Disposal proceeds will go back to reserve to replace funds used.

Tax Sale Property Vested in Town

175,855.98 Contingency Reserve

Town now owns land, need to fund until disposed

Internal Loan for Purchase of 2010 Fire Tanker & 2011 Fire Pumper

357,962.76 * Fire Equipment & Vehicle Reserve

“Internal Loans” approved to be repaid through annual budgeted contributions but stopped in 2018 budget process

Internal Loan NSSRC seasonal controllers from 2015

30,335.70 NSSRC Facility Reserve

Same as Fire internal loans

Internal Loan Little Lake Park 2010 Rinc Grant Projects

87,853.62 Parks Facilities Reserve

Same as Fire internal loans

Totals $5,480,940.92

* Reserve is already in a large deficit with annual operating contributions to slowly restore reserve to a positive position.


Recording these items as draws from reserves will make administrative tracking easier and transparent for future operating and capital funding decisions. Reserve & Reserve Fund Balances The following chart provides a summary of the yearend balances of the Town’s reserves and reserve fund accounts before the adjustments and corrections recommended in this report. Reserves are segregated between obligatory; those pertaining to Development Charges Act, Planning Act, Gas Tax (Federal & Provincial) and Building Code Act amounts and, discretionary; those approved by Council including the MPUC Legacy and Community Wide Initiatives accounts. The sum of the adjustments including the 2018/2019 operating results are reflected in the following table to provide a more transparent view of available funding/deficit situations as follows:

Table D Discretionary Reserve Balances

Communtiy MPUC

Wide Legacy Total

Discretionary Operating Capital Water Wastewater Parking Initiatives Reserve Discretionary

Balance Jan 1, 2019 1,547,237 3,828,091 3,725,929 2,030,651 117,352 - 11,249,260

Add: Contributions 1,468,038 2,444,140 2,190,638 1,882,520 50,000 10,169,487 10,500,000 28,704,823

Deduct: Utilization (1,150,073) (2,273,482) (505,696) (1,187,869) 0 (5,117,120)

Interest 316,473 326,872 643,345

Balance Dec 31, 2019 1,865,202 3,998,749 5,410,871 2,725,302 167,352 10,485,960 10,826,872 35,480,308

Adjustments:

Prior Capital 135,728 (97,123) (189,217) (158,767) (309,379)

2019 Capital report (9,316) (2,306) (113,217) (124,839)

Prior Operating (6,881) 76,972 382,327 452,418

Unfunded Aqusitions (280,892) (4,692,879) (507,170) (5,480,941)

PSAB adjustments (507,363) (507,363)

2018/2019 operating (1,483,762) (1,483,762)

Adjusted Balances (277,968) (800,569) 5,296,320 2,835,645 167,352 9,978,790 10,826,872 28,026,442

Tax Funded User Funded


Table D Obligatory Reserve Balances and Totals

Options for Consideration: Council could choose to:

1. Allocate and distribute the operating deficit for 2018 and operating surplus for 2019 in a different manner than staff have recommended. This would not change the overall financial position of the Town but may lead to decisions being made to spend funds in one reserve while ignoring deficits in other reserves.

2. Not approve funding projects identified in Table C. This would not change the cash balance for the Town but would add additional administrative tracking processes to ensure reserve balances consider previously spent but unfunded projects. The recommendation simply makes reporting easier and more transparent for reporting.

3. Not approve the carry forward projects. This is not recommended as staff have reviewed the projects and their status with departments to verify that these should proceed as originally approved.

Financial Impact: The report provides the financial impacts of the various items within the analysis section. The adjusting entries for past capital expenditure activity, correction for PSAB recording errors and the disposal of the 2018/2019 operating surplus/deficit have no impact on the financial position of the Town. However, by recording the draws and alterations to the reserves and reserve funds as noted in Table D, Council and staff will have a better understanding of available amounts for future decision making.

Total

Obligatory Provincial & Cash-in Reserves &

Buliding Federal Lieu of Development Total Reserve

Code Gas Tax Parkland Charges Obligatory Funds

Balance Jan 1, 2019 106,601 1,795,003 141,222 3,867,806 5,910,632 17,159,892

Add: Contributions 407,943 1,231,866 29,125 1,700,414 3,369,348 32,074,171

Deduct: Utilization - (1,790,647) - (1,106,483) (2,897,130) (8,014,250)

Interest 2,532 43,361 2,453 94,909 143,255 786,600

Balance Dec 31, 2019 517,076 1,279,583 172,800 4,556,646 6,526,105 42,006,413

Adjustments:

PSAB adjustments (6,152) (6,152) (513,515) Table A

Prior Operating - 452,418 Table B

Prior Capital (2,099) (19,848) (24,108) (46,055) (355,434) Prior capital issues

Unfunded Aqusitions - (5,480,941) Table C

2019 Capital report - (124,839) Schedule 4

2018/2019 operating - (1,483,762)

Adjusted Balances 508,825 1,259,735 172,800 4,532,538 6,473,898 34,500,340


Although some reserve balances will now be in a deficit position, plans are in place to ensure they are being addressed through annual operating budget contributions and returned to either a zero or a surplus position. For deficit capital reserves, temporary cashflow is being provided from the restricted MPUC reserves. Once the projects are completed and proceeds realized, funds will be used to replenish the balances. Transparency in reporting is critical to making informed decisions on future initiatives and the corrections and recommendations in this report will be a valuable step towards achieving corporate goals and objectives of Pillar 1 of Council’s Strategic Priorities. Council’s Strategic Priorities: This recommendation is consistent with the following Council Strategic Priority:

Pillar 1 - Accountable, Responsive and Innovative Governance

Conclusion: The year-end reporting of operating and capital activity is an important and necessary process to ensure Council and the public are aware of what has occurred in the previous fiscal year. Any surpluses or deficits need to be properly addressed and allocated according to Council direction. The timing of the reporting will improve with new processes and procedures in place as interim reporting begins to occur on a more regular basis. Staff at all levels of the organization are committed to ensuring spending is occurring within approved budget approvals. Any additional requirements that cannot be accommodated within a “total budget management” philosophy on the operating accounts or within approved spending envelopes on the capital program will be brought to Council in a timely manner with recommendations and alternatives for consideration. Although the corrections being made have no impact to the Town’s current financial situation, rectifying and modifying reserve balances for will ensure that Council and staff have a clear and transparent view of the Town’s financial position for better decision making options. Process improvements to avoid future issues of this nature include:

• Reconciliation between internal (fund accounting) reporting and external (PSAB) reporting – written procedures being developed

• Carry forward reporting on capital projects for remaining budget to be spent, unused budget to be closed and deficit (over expenditure) funding disclosure/approval – this report formalizes the process. Budget software (FMW) has already been updated to include a carry forward project amount column

• Finance review of all staff reports – this has been implemented and will ensure that terminology is clear and that Council motions reflect proper


funding sources or financing options will fulsome analysis of reserve, tax or user rate impacts

• Communication of interim results to departments, Boards and Council – this is underway and will be enhanced over time. Ensures proper financial management is occurring, issues are addressed in a timely manner and priorities shifted to stay within budget approval

The discovery of reporting and recording errors and related process improvements are part of the Lean Six Sigma strategy of improving workflow, automating processes, reducing duplication and identifying areas for future enhancements that will ultimately lead to better quality of information and decisions to mange the expectations of Council, residents and stakeholders. Prepared by: L. Davis, Financial Leadership Advisor

Reviewed by: M. Jermey, Chief Financial Officer Approved by: D. Denault, Chief Administrative Officer Attachments:

1. Operating Results Year-End December 31, 2018 2. Operating Results Year-End December 31, 2019 3. 2019 Capital Budget Reporting Summary 4. 2019 Capital Budget Reporting Detail


Attachment 1

Operating Results for year ended December 31

2018 Favourable

Levy 2018 (Unfavourable)

Property Tax Based Budget Actual Variance Explanation

Taxation (19,956,864) (19,848,615) (108,249) Unfavorable variance due to tax write-off

expenses higher than budget

General - Corporate (1,275,227) (1,614,745) 339,518 Favourable results due to higher than

budgeted interest income; purchase price

adjustment and cost recovery from sale of

MPUC greater than actual costs incurred in

2018.

Administration 3,457,851 3,244,158 213,693 Favourable variance primarily due to

Community Task Force consulting

budgeted costs of $50,000 not incurred;

various Committee expenses less than

budgeted; CAO office consulting fees less

than planned.

Planning and Building 462,975 255,407 207,568 Favourable variance due to Planning site

plan application fees higher than budget

and legal fees less than expected. Building

favourable variance from lower than

expected legal and contract costs; higher

than expected building fee and other

revenue; partially offset by not drawing

$26K of planned use of building reserves.

Culture, Tourism, Special Events 469,275 429,421 39,854 Lower than expected Butter Tart Festival

and special events costs

Fire 2,737,546 2,958,375 (220,829) Unfavourable deficit resulting from overtime

incurred during short term disability

absences, banked time paid greater than

budget and unbudgeted "internal loan"

repayment for fire vehicle purchases 2010

& 2011. Partially offset by higher than

budgeted development charge revenues

and lower than planned operating

expenditures.

Police 5,364,280 5,064,398 299,882 Favourable variance reflects lower than

budgeted OPP contract services costs in

year one during start-up year. Surplus

helps reduce the impact of disbandment

costs incurred.

Library 1,114,183 1,170,512 (56,329) Unfavourable variance resulted from

donations and contributions from other

municipalities lower than budget;

collections material expenses higher than

budget. Work underway in 2020 to

implement flat rate agreements to mitigate

variance in other municipalities revenue.


Attachment 1 (continued)


2018 Favourable

Levy 2018 (Unfavourable)

Property Tax Based Budget Actual Variance Explanation

Operations 7,440,524 6,550,691 889,833 Favourable variances: $200K greater than

budgeted development charge revenue for

NSSRC debt serving costs; $211K of debt

for New Op Centre not incurred; $75K

unbudgeted MPUC property rental income;

$141K from storm sewers lower than

expected contract and maintenance costs;

lower than planned salary & benefit costs

through various service areas, unplanned

developer contributions of $37K.

Engineering 528,073 181,766 346,307 Favourable variance is from higher than

budgeted inspection revenues and lower

than planned consulting costs related to

Midland Bay Landing activities

Joint Boards/Wholly Owned (342,616) (342,136) (480)

Subtotal - Operating Surplus - (1,950,768) 1,950,768

MPS Disbandment Costs - 3,749,265 (3,749,265) Unfavourable variance reflects Midland

Police Service disbandment expenses and

one-time OPP start-up costs as per staff

report TR-2018-07. Exit costs higher than

expected due to arbitrator award.

Net Operating Deficit - 1,798,497 (1,798,497)

Favourable

2018 2018 (Unfavourable)

User Rate Based Budget Actual Variance Explanation

Water Revenues (3,322,369) (3,611,940) 289,571 Billing revenue higher than budget

Water Expenditures 1,929,369 1,903,459 25,910 Various expenses less than budget

Transfer to Water Reserves 1,393,000 1,708,481 (315,481) Surplus to reserve greater than planned

Wastewater Revenues (3,826,709) (3,988,437) 161,728 Billing revenue higher than budget

Wastewater Expenditures 2,833,765 2,789,359 44,406 Various expenses less than budget

Transfer to WW Reserves 992,944 1,199,078 (206,134) Surplus to reserve greater than planned


Attachment 2


2019 2019 Favourable

Levy Actual (Unfavourable)

Property Tax Based Budget Results Variance Explanation

Taxation (21,432,758) (21,332,681) (100,077) Unfavourable variance resulting from lower

than planned supplementary tax revenue

and higher than expected tax write-off

expenses

General (976,660) (1,227,362) 250,702 Favourable variance is a result of higher

than planned interest income

Administration 3,887,564 3,580,573 306,991 Favourable variance as follows: Gain on

sale of Whitfield Cres. land $125K,

Community Task Force consultant cost not

incurred $50K, Midland Bay Landing

internal financing applied/expenditures not

incurred $240K partially offset by higher

than budgeted insurance costs, grants and

financial assistance to others greater than

budgeted

Planning and Building 497,398 431,965 65,433 Favourable variance as a result of

significantly higher than planned building

permit fee revenue and lower than

budgeted salaries, benefits and other costs

results in no tax rate subsidy required.

This is partially offset by higher than

expected legal fess in the Planning service

area.

Culture, Tourism, Special Events 523,975 492,342 31,633 Special events costs lower than budgeted

Fire 2,732,425 3,083,041 (350,616) Unfavourable variance from higher than

budgeted overtime costs incurred to cover

short term disability absences, unbudgeted

"internal loan" repayments for 2010 & 2011

vehicle purchases, lower than planned

revenues

Police 5,745,947 5,364,040 381,907 Favourable variance planned to achieve

overall budgeting/reserve repayment

strategy as per staff report TR-2018-07

Library 1,173,017 1,234,460 (61,443) Unfavourable variance resulting from lower

revenue than planned from other

municipalities of $50K and donations of

$12K. Work is underway to implement flat

rate contract to mitigate future variances

from other municipalities.


Attachment 2 (continued)


2019 2019 Favourable

Levy Actual (Unfavourable)

Property Tax Based Budget Results Variance Explanation

Operations 7,500,310 7,767,353 (267,043) Net unfavourable variance resulting from

overtime costs greater than planned, bus

repair and parking lot maintenance

recoveries less than budgeted; NSSRC

labour and plant maintenance costs higher

than budget; Harbour revenues less than

budget, dock and grounds maintenance

higher than expected

Engineering 377,474 255,467 122,007 Favourable variance resulting from higher

than planned inspection and grading

review fees $85K and internal financing

revenue for Midland Bay Landing of $50K

partially offset by higher than budgeted

salary and benefit expense.

Joint Boards/Wholly Owned (28,692) (33,228) 4,536

Subtotal - Operating Surplus - (384,031) 384,031

MPS Disbandment Costs - 69,296 (69,296) Additional actual and estimated costs to

address pending legal settlement issues.

Net Operating Surplus - (314,735) 314,735

Favourable

2019 2019 (Unfavourable)

User Rate Based Budget Actual Variance Explanation

Water Revenues (3,322,369) (3,534,974) 212,605 Billing revenue higher than budget

Water Expenditures 1,929,369 2,034,476 (105,107) Contracted service costs and consulting

fees higher than budget

Transfer to Water Reserves 1,393,000 1,500,498 (107,498) Surplus to reserve greater than planned

Wastewater Revenues (3,602,132) (4,033,369) 431,237 Billing revenue higher than budget

Wastewater Expenditures 3,020,770 2,554,547 466,223 Contracted services for sludge removal and

maintenance activities less than expected

Transfer to WW Reserves 581,362 1,478,822 (897,460) Surplus to reserve greater than planned

Council 16 2018 and 2019 Operating and September 2, 2020 Capital Results

Report No. CSR-2020-13

Attachment 3

Capital Budget Reporting Summary

December 31, 2019 (A + B) (C-D-E-F)

A B C D E F G

Service Area

Carry Over

from Prior

Years

2019

Approved

Budget

Total

Approved

Budgets

Actual

Spend in

2019

Additional

Funding

Applied/

Requested

Budget

Close

Adjustment

Carryover to

2020

Council - - - 507,170 (507,170)

IT 300,000 190,322 490,322 205,122 (14,800) - 300,000

Town Hall - 120,000 120,000 138,905 (18,905) - -

Fire 1,309,067 234,000 1,543,067 1,375,174 (44,271) - 212,164

Police - 15,404 15,404 2,713 12,691

By-Law (56,384) - (56,384) 119,472 (175,856)

Parking - 195,000 195,000 - 195,000

Public Works 524,833 601,000 1,125,833 409,592 - 20,306 695,935

Roads 315,814 1,197,000 1,512,814 2,094,923 (261,360) 0 (320,749)

Sidewalks/Curbs 171,010 150,000 321,010 110,550 0 210,460

Transit 395 80,000 80,395 51,575 (2,556) 11,376 20,000

Street Lighting (20,302) 30,000 9,698 - 9,698

Storm Sewers 25,000 175,000 200,000 - - 200,000

Harbour - 71,000 71,000 105,708 (34,708) - -

Parks 24,108 207,976 232,084 97,634 (17,649) 3,674 148,425

NSSCR/Arenas - 232,500 232,500 190,458 - - 42,042

Wastewater 1,585,057 1,102,100 2,687,157 1,529,642 (196,683) 288,038 1,066,160

Water 1,076,457 1,505,345 2,581,802 464,736 (9,666) 2,113 2,124,619

Engineering 3,200,340 1,132,000 4,332,340 2,956,624 (255) 0 1,375,971

Huronia Airport - 209,500 209,500 - 209,500

Tourism/Special Events 24,659 - 24,659 - 24,659

Library (87,026) 65,000 (22,026) 52,049 12,951 - (87,026)

Planning 1,494 67,500 68,994 50,516 18,478

Building 9,315 - 9,315 4,092 0 5,223.00

Totals 8,403,837 7,580,647 15,984,484 10,466,656 (587,902) 325,507 5,780,224

Capital Budget Project Details for 2019

Project # Project Description Service Area

Carryover fromPrevious

Years

2019 Approved

Budget

Total Approved

Budget Expenditure

in 2019

Additional Funding Applied

Additional Funding to be Applied

Project Closed Budget

Removed

RequestedCarry

over to2020 Comments

111-1213 Land Acquisition Total Council - - - 507,170 (507,170) Finance from Community wide reserve, no funding source approved125-1111 Various - 190,322 190,322 205,122 14,800 - Closed and funded as per FIN-2019-28125-2105 Internet Conectivity 125,000 - 125,000 125,000 125-2106 Phone System Replacement 175,000 - 175,000 - 175,000

Total IT 300,000 190,322 490,322 205,122 14,800 - - 300,000 129-1111 Town Hall Various Total Town Hall - 120,000 120,000 138,905 18,905 - Closed and funded as per FIN-2019-28211-1111 Aerial Truck/Command 1 Replace 1,239,067 - 1,239,067 1,167,903 71,164 Expected completion in November211-1111 Fire Master Plan CF 2019 - 26,000 26,000 - 26,000 Deferred to 2021211-1111 Command 3 fire vehicle - 45,000 45,000 - 45,000 Vehicle ordered, COVID has delayed delivery211-1111 Bunker Gear/Portable Radios - 95,000 95,000 121,114 26,114 - Add'l funding applied, project closed211-1111 Building Improve/Parking Lot 70,000 68,000 138,000 86,157 18,157 70,000 Add'l funding applied, Parking lot project carried forward as per FIN-2019-

28, expected completion by Sept 1Total Fire 1,309,067 234,000 1,543,067 1,375,174 44,271 212,164

221-1111 Police Building improvement Total Police - 15,404 15,404 2,713 12,691 Heating issues to be resolved with the boiler work.265-1111 Tax Sale Land Vesting Total By-law (56,384) - (56,384) 119,472 (175,856) Tax Sale property - hold for disposal proceeds265-1111 Parking Meters Total Parking - 195,000 195,000 - 195,000 Procurement complete, waiting on Council direction.315-1111 1 Ton Dump Truck (2008) - 57,000 57,000 - 57,000 315-1111 Tri-axle Dump Truck (2007) - 180,000 180,000 - 180,000 315-1111 Various vehicles and equipment - 364,000 364,000 343,694 (20,306) - Projects complete, budget closed315-8512 Operations Complex - building 524,833 - 524,833 65,898 458,935 Remaining grounds work to be completed

Total Public Works 524,833 601,000 1,125,833 409,592 - (20,306) 695,935 325-3200 Trails capital (7,947) 60,000 52,053 - 52,053 325-3201 General Resurfacing 610,500 504,000 1,114,500 751,186 247,186 610,500 Funding applied as per FIN-2019-28; contract in progress325-3230 Tree Planting - 17,000 17,000 - 17,000 325-3236 Noreen St Reconstruction (187,592) 616,000 428,408 18,077 410,331 Project complete, final payment certificate to be procsessed. Some

deficiencies that will be completed late fall 2020. 325-3239 King St Bayshore to Yonge (99,147) - (99,147) 1,311,487 (1,410,634) 2020 Project with early approval. Substantial completion Nov 2020 with

Final Completion May 2021.325-3241 Estate Ct Resurfacing - - - 14,071 14,071 - Additional funding applied as per FIN-2019-28325-3242 Love your laneways - - - 103 103 - Add'l funding to be applied

Total Roads 315,814 1,197,000 1,512,814 2,094,924 261,257 103 - (320,750)335-1111 Various Sidewalks 142,600 150,000 292,600 110,550 182,050 Carryover funds to complete in 2020335-1111 Midland: w/s Hugel to Elizabeth 28,410 - 28,410 - 28,410

Total Sidewalks 171,010 150,000 321,010 110,550 - 0 210,460 345-1111 Transit building improvement - 20,000 20,000 - 20,000 Replacements/new shelter on Victoria St. will get pricing in next round

345-3411 Replace 2006 Access Van #64 - 60,000 60,000 48,624 (11,376) - 345-3412 Transit Study 395 - 395 2,951 2,556 - Project complete, balance funded from Transit Capital Reserve

Total Transit 395 80,000 80,395 51,575 2,556 (11,376) 20,000 355-1111 Street Lighting equipment Total Street Lighting (20,302) 30,000 9,698 - 9,698 375-4332 William St. Culvert Replace 25,000 - 25,000 - 25,000 375-4333 Storm pond maint plan - 175,000 175,000 - 175,000 Tiffin Pond cleanout to be completed 2020, balance deferred to 2021

Total Stormwater 25,000 175,000 200,000 - - - 200,000

Report CSR-2020-13 Attachment 4




Years

2019 Approved

Budget

Total Approved

Budget Expenditure

in 2019




Removed

RequestedCarry


385-1111 Various projects - Harbour Total Harbour - 71,000 71,000 105,708 34,708 - Closed and funded as per FIN-2019-08390-1111 1995 Tractor - 35,240 35,240 - 35,240 390-1111 2013 Kubota - 22,550 22,550 18,876 (3,674) - Project complete, budget closed390-7122 P&R Master Study 24,108 - 24,108 24,758 650 - Add'l funding to be applied, project to be closed390-7221 Little Lake Park - various - 37,000 37,000 53,999 8,691 8,308 - Add'l funding to be applied, project to be closed390-7223 Pete Petterson Grounds Improve - 20,000 20,000 - 20,000 390-7226 Sports Fields Grounds - 40,146 40,146 - 40,146 390-7230 Bayview Park equipment - 23,040 23,040 - 23,040 390-7230 Bayview Park Grounds Improve - 15,000 15,000 - 15,000 390-7241 Waterfront Trail - 15,000 15,000 - 15,000

Total Parks 24,108 207,976 232,084 97,633 8,691 8,958 (3,674) 148,426 399-1111 Various Total NSSRC - 232,500 232,500 190,458 42,042 Approx 9-12 month delivery for new ice resurfacer411-1111 Various 70,822 - 70,822 70,822 - 411-4215 WWTC Aerator Purchase 2,561 - 2,561 25,368 29,119 (6,312) - Add'l funding applied, budget closed411-4221 Pump Station No. 1 44,181 - 44,181 1,679 (42,502) - Project complete, budget closed411-4224 Vindin Pump Station 262,366 - 262,366 2,921 259,445 411-4227 Disinfection - - - 2,572 2,572 - Add'l funding to be applied, project to be closed411-4229 Relining 393,211 - 393,211 479,824 (86,613) Work still in progress - separate report to be provided411-4231 WWTC Master Plan 179,741 - 179,741 130,082 49,659 In progress411-4233 1 1/2" Booster Pump 5,100 - 5,100 164 (4,936) - Project complete, budget closed411-4242 Soft Start Pump Stn #1 11,485 - 11,485 74,605 54,347 8,773 - Add'l funding to be applied, project to be closed411-4244 Plant Instrumentation upgrade 79,645 - 79,645 21,274 (58,371) - Project complete, budget closed411-4437 SCADA Servers 193,149 - 193,149 123,248 69,901 Project in progress411-4478 Auger for Headworks 120,147 - 120,147 - (120,147) - Funding moved to MNSTR GRNDR, close project411-4479 Channel MNSTR GRNDR Replace 35,422 - 35,422 120,871 85,449 - Funding from Auger Headworks under expenditure411-4495 Emergency Equipment Replace - 66,950 66,950 77,392 10,442 - Unexpected replacment of transfer switch, add'l to be applied411-4505 Passenger Vehicle - 43,260 43,260 39,611 (3,649) - Project complete, budget closed411-4506 Replacement of Storm Tank - 15,450 15,450 - 15,450 411-4507 Gas Flow Meters - 92,700 92,700 - 92,700 411-4508 Flowmeter for Aberdeen SPS #3 - 21,630 21,630 8,476 (13,154) - Project complete, budget closed411-4509 Hypo Tank Level Measuring - 7,210 7,210 - 7,210 Project complete, remaining expenses to be processed411-4510 SPS#1 VFD Upgrade 187,227 41,200 228,427 228,427 - 411-4511 Replacement of Milltronics - 7,210 7,210 6,064 (1,146) - Project complete, budget closed411-4512 Sewer Pole Camera Equipment - 16,480 16,480 20,337 3,857 - Project complete, additional funding to be applied411-4513 Replace Portable Gas Detector - 2,060 2,060 4,184 2,124 - Project complete, additional funding too be applied411-4514 Digester Covers - 412,000 412,000 - 412,000 RFP and Feasibility Study in 2020411-4515 Repair & Replace Insulation - 154,500 154,500 52,292 102,208 411-4516 Ultra Violet Treatment Effluent - 25,750 25,750 - 25,750 411-4517 WWTC Replace Alum Tank - 41,200 41,200 - 41,200 411-4518 PLC Replace Egg Shape Digester - 77,250 77,250 39,429 (37,821) - Project complete, budget closed411-4519 Collection system condition - 77,250 77,250 - 77,250

Total Wastewater 1,585,057 1,102,100 2,687,157 1,529,642 83,466 113,217 (288,038) 1,066,160




Years

2019 Approved

Budget

Total Approved

Budget Expenditure

in 2019




Removed

Requested Carry


431-1111 Building Additions/Improvements 2,328 - 2,328 2,328 - Project complete, budget closed431-1111 Equipment Purchases 43,132 - 43,132 - 43,132 431-1111 Computer Hardware and Software 13,195 - 13,195 13,195 - Project complete, budget closed431-4409 Water Master Plan Update 150,986 - 150,986 130,709 20,277 In progress, add'l funding will be required when complete431-4419 Well Rehabilitation 227,328 - 227,328 48,099 179,229 Ongoing program431-4437 SCADA Remote Servers 18,321 - 18,321 10,747 7,574 Expected completion in 2020431-4439 Well Depth Sensors 33,903 - 33,903 7,911 25,992 431-4440 Emergency Equipment Replacement - 74,160 74,160 21,903 52,257 431-4447 Hwy 12 Watermain Repair - - - 7,360 7,360 - Project complete, Add'l funding applied and project closed431-4465 Valve Replacement - 12,360 12,360 - 12,360 Dependant on King Street Rejuvenation 431-4471 Lanigan Infrastructure Replacement (45,963) - (45,963) (45,963) - Previous costs moved to operating in 2019, project closed431-4482 Booster Zone (from E to W) (80,560) - (80,560) (80,560) - Previous costs moved to operating in 2019, project closed431-4485 Source Water Protection Plan RVW 9,504 - 9,504 - 9,504 431-4490 4th St Watermain Loop (DOM - HUG) (20) - (20) 2,286 2,306 - Add'l funding to be applied, project to be closed431-4491 College watermain loop (YNG-HAN) 15,424 - 15,424 - 15,424 431-4492 Yonge Watermain Replace (N side W Klr) 18,424 - 18,424 - 18,424 Waiting results of Water Master Plan431-4493 Hannah St Waterman 95,455 - 95,455 - 95,455 Design only in 2020 expected $15K431-4494 HWY 12 Treatment System Well 7 575,000 1,030,000 1,605,000 341,109 1,263,891 In progress431-4500 Segment over well #3 - 7,725 7,725 5,612 (2,113) - Project complete, budget closed431-4501 Tractor Backhoe - 87,550 87,550 - 87,550 431-4502 Auto flushers - 12,360 12,360 - 12,360 Underway in 2020431-4503 Hannah Street Watermain - 180,250 180,250 - 180,250 Design only in 2020 expected $15k 431-4504 Reline Well #7B - 100,940 100,940 - 100,940 Dependant on Water Master Plan

Total Water 1,076,457 1,505,345 2,581,802 464,736 7,360 2,306 (2,113) 2,124,619 505-1111 Level/Survey Equipment - 2,000 2,000 - 2,000 Deferred to 2021505-3505 Downtown Enviro Risk Assessment (67,654) - (67,654) (13,498) (54,156) Project to be funded from sale of property505-3507 Yonge St (King to Eighth) 731,632 - 731,632 - 731,632505-3508 Area Stormwater Mgmt Study - - - 255 255 - Add'l funding to be applied, project to be closed505-3510 Line Painting/Speed Bumps - 25,000 25,000 12,715 12,285505-3512 Hugel Reconstruction 2,536,362 1,030,000 3,566,362 2,921,273 645,089 Final Line Paint, tree planting and deficiencies to be completed in 2020.

Project will be completed under budget. 505-3515 Town Asset Mgmt Program - 75,000 75,000 9,335 65,665 For Building condition assessments505-3516 Balm Beach Road Servicing - - - 26,545 (26,545) 2020 Approved project, funding from new area specific development

charges revenueTotal Engineering 3,200,340 1,132,000 4,332,340 2,956,624 - 255 - 1,375,970

605-6700 Huronia Airport projects Total Huronia Airport - 209,500 209,500 - 209,500 RFP is complete in 2020, work in progress750-1111 Wayfinding Signage Total Tourism 24,659 - 24,659 - 24,659




Years

2019 Approved

Budget

Total Approved

Budget Expenditure

in 2019




Removed

RequestedCarry


762-xxxx Various items 2015 - 2018 (87,026) - (87,026) - (87,026) Library Board to address under separate report762-1111 Vestibule Wall (safety) - 15,000 15,000 15,418 418 - Donations funds applied762-7627 Library Makerspace Equipment - 50,000 50,000 36,631 (13,369) - Excess donations transferred to Library capital reserves

Total Library (87,026) 65,000 (22,026) 52,049 (12,951) - (87,026)811-8202 Development Charges Study - 42,500 42,500 33,416 9,084 Appeal of DC by-law in progress, budget required811-8208 Official plan 1,494 25,000 26,494 17,099 9,395 Project complete, remaining costs processed in 2020

Total Planning 1,494 67,500 68,994 50,515 - - - 18,479 820-1111 Building Software/Furniture Total Building 9,315 - 9,315 4,092 5,223 Tablet purchase for inspectors

GRAND TOTAL 8,403,837 7,580,647 15,984,484 10,466,653 463,063 124,839 (325,507) 5,780,224

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