CITY CLERK

Clause embodied in Report No. 7 of the Strategic Policies and Priorities Committee, as adopted by the Council of the City of Toronto at its meeting held on April 13, 14 and 15, 1999.

11

Capital Accounts Closing

(City Council on April 13, 14 and 15, 1999, struck out and referred this Clause to the Budget Committee for further consideration, and the Chief Financial Officer and Treasurer was requested to again circulate, to Members of Council, the list of projects to be closed and/or transferred, in order that Members can indicate items of concern.)

The Strategic Policies and Priorities Committee recommends the adoption of the Recommendation of the Budget Committee embodied in the following communication (March30, 1999) from the City Clerk:

Recommendation:

The Budget Committee on March 29, 1999, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (March 17, 1999) from the Chief Financial Officer and Treasurer, wherein it is recommended that:

(1)approval be given to transfer funds, as required, from unexpended funds on individual completed projects to projects that experienced over expenditures and that funds in the amount of $3,090,487.00 be transferred to an unexpended capital account to be used for future tax supported capital projects and $2,108,632.00 be transferred to a capital financing reserve for water rate capital projects, as identified in Appendix "A";

(2)any future over/under expended capital projects from 1997 and prior, when closed, be transferred; and

(3)capital financing approval in the amounts of $568,629.00 and $87,192,273.00 representing unspent capital approval in the former Borough of East York and Metro respectively, be cancelled.

The Budget Committee also reports having requested the Commissioner of Corporate Services, to report to the Corporate Services Committee on a possible usage for the Old Terrace Roller Rink.

Background:

The Budget Committee had before it a report (March 17, 1999) from the Chief Financial Officer and Treasurer, recommending that:

(1)approval be given to transfer funds, as required, from unexpended funds on individual completed projects to projects that experienced over expenditures and that funds in the amount of $3,090,487.00 be transferred to an unexpended capital account to be used for future tax supported capital projects and $2,108,632.00 be transferred to a capital financing reserve for water rate capital projects, as identified in Appendix "A";

(2)any future over/under expended capital projects from 1997 and prior, when closed, be transferred; and

(3)capital financing approval in the amounts of $568,629.00 and $87,192,273.00 representing unspent capital approval in the former Borough of East York and Metro respectively, be cancelled.

(Report dated March 17, 1999, addressed to the Budget Committee,

from the Chief Financial Officer and Treasurer.)

Purpose:

To obtain approval to transfer funding between capital projects to cover over expenditures on projects with unexpended funds from other completed projects.

Financial Implications:

Funding for future tax supported capital projects would be available in the amount of $3,090,487.00 and $2,108,632.00 would be available for future water rate capital projects.

Recommendations:

It is recommended that:

(1)approval be given to transfer funds, as required, from unexpended funds on individual completed projects to projects that experienced over expenditures and that funds in the amount of $3,090,487.00 be transferred to an unexpended capital account to be used for future tax supported capital projects and $2,108,632.00 be transferred to a capital financing reserve for water rate capital projects, as identified in Appendix "A";

(2)any future over/under expended capital projects from 1997 and prior, when closed, be transferred; and

(3)capital financing approval in the amounts of $568,629.00 and $87,192,273.00 representing unspent capital approval in the former Borough of East York and Metro respectively, be cancelled.

Discussion:

The Finance Department has completed a review of capital accounts that are completed and can now be closed. A review of these accounts indicated that there are a number of projects that have experienced cost over runs. Although the interim financial control by-law did not address the issue of over expenditures and therefore by default did not allow them, departments operated early in 1998 as if the policies in place in the former municipalities still were in effect. Some of these over expenditures occurred late in 1997. There were also a number of completed projects that came in under budget. Appendix "A" details all completed projects that are either under or overspent.

The former municipalities of Etobicoke, North York, York, Scarborough and Toronto fully funded capital projects immediately upon approval of the capital project while Metro and East York funded projects on an annual basis. Where projects were funded upon approval of the budget, any excess funds could either be allocated to other capital projects or returned to a corporate account to be used for future projects. Metro and East York under expenditures are approval amounts only and cannot be transferred to other projects.

Likewise, funds are required to be transferred to capital accounts, as detailed on Appendix "A", to cover expenditures in excess of the approved budget.

Conclusion:

The capital projects detailed in Appendix "A" can be closed resulting in unused capital financing of $3,090,487.00 being available for future tax supported capital projects and $2,108,632.00 being available for water rate capital projects. In addition, there are capital approvals in the amount of $87,760,902.00 that are no longer required and can be cancelled.

Contact Name and Telephone Number:

A. C. Shultz

Director, Accounting Services

Finance Department

416 397 5240

(A copy of Appendix "A", entitled "City of Toronto Capital Projects to be Closed", was forwarded to all Members of Council with the April 7, 1999, agenda of the Strategic Policies and Priorities Committee and a copy thereof is also on file in the office of the City Clerk.)