2013-05-01 Decision Letter - Budget Committee

The Budget Committee recommends to the Executive Committee that:

1. City Council authorize the Deputy City Manager and Chief Financial Officer to transfer $15.282 million gross and $0 million net from the 2013 Non-Program Expenditure Budget to the respective 2013 Approved Operating Budget for City Programs, Toronto Public Health and Leaside Memorial Community Gardens for CUPE Local 416 and Local 79 employees to provide the necessary funding for the 1.50% one-time non-base non-pensionable lump sum payment and the associated employer health tax.

2. City Council authorize the Deputy City Manager and Chief Financial Officer to transfer $1.264 million gross and $0 million net from the 2013 Non-Program Expenditure Budget to the Toronto Public Library and the Association of Community Centres to provide the necessary funding for the 1.50% one-time non-base non-pensionable lump sum payment and the associated employer health tax for unionized employees as these Agencies have similar provisions based on their negotiated collective bargaining settlements.

3. City Council authorize the Deputy City Manager and Chief Financial Officer to transfer $15.420 million gross and $12.808 million net from the 2013 Non-Program Expenditure Budget to the respective 2013 Approved Operating Budget for City Programs, Toronto Public Health and Association of Community Centres to provide the necessary funding for the 1.9% cost of living allowance and re-earnable lump sum payment for non-union employees.

4. City Council approve in-year budget adjustments detailed in Appendix D to the report (April 30, 2013) from the Deputy City Manager and Chief Financial Officer to amend the 2013 Approved Operating Budget between Programs with gross expenditures and revenues of $1.958 million, and no impact to the 2013 Approved Net Operating Budget.

The purpose of this report is to provide Council with the City of Toronto Operating Variance for the three-month period ended March 31, 2013 as well as year-end projections and to request Council's approval for amendments to the 2013 Operating Budget between Programs to ensure accurate reporting and financial accountability with no increase to the 2013 Approved Net Operating Budget.

For the three-month period ending March 31, 2013, Tax Supported Operations' net expenditures were under-spent by $57.533 million or 6.7% of planned expenditures and projections indicate that the 2013 year-end net under-expenditure is anticipated to be $14.265 million or 0.4% of the 2013 Approved Net Operating Budget. The year-to-date under-spending was driven largely by under-expenditures in corporate accounts due to timing delays for Non-Program Expenditures and salary savings from delays in filling vacant positions.

Rate Supported Programs were under-spent by $13.649 million or 28.5% compared to net planned expenditures for the three-month period ended March 31, 2013 primarily from overachieved revenues from water and waste water surcharges by Toronto Water. Although the Program overachieved revenues in the first quarter, revenues from sale of water and wastewater surcharges are forecasted to be on budget due to uncertainty in the residential sale of water. Rate Supported Programs project year-end under-spending of $10.001 million or 15.8% of the 2013 Approved Net Operating Budget due in large part to Toronto Water’s under-expenditure in salaries and benefits from vacancies that have not been filled.

Lower than planned Ontario Works caseload and winter maintenance costs plus under-spending in salaries and benefits due to vacancies that have not been filled has resulted in City Operations being under-spent by $16.818 million at March 31, 2013 and projecting to be under-spent by $19.204 million at year-end.

Table 1 Tax Supported Net Expenditure Variance ($ Millions)
	March 2013 Over/(Under)	Projected Y/E 2013 Over/(Under)
Citizen Centered Services “A”	(2.5)	(1.3)
Citizen Centered Services “B”	(8.6)	(9.7)
Internal Services	(4.4)	(7.0)
City Manager	(0.9)	(0.8)
Other City Programs	(0.3)	(0.3)
Council Appointed Programs	(0.2)	(0.1)
Total – City Operations	(16.8)	(19.2)
Agencies, Boards and Commissions	4.7	4.4
Corporate Accounts	(45.5)	0.5
Sub-Total	(40.7)	4.9
Total Variance	(57.5)	(14.3)

Agencies reported a net over-expenditure of $4.738 million or 1.2% at the end of the first quarter primarily driven by lower than budgeted ridership revenue and slightly lower average fare revenue stemming from marginally higher monthly pass sales for the Toronto Transit Commission. Agencies collectively forecast a net over-expenditure of $5.684 million or 0.3% for the 2013 Approved Net Operating Budget by year-end primarily from an over-expenditure of $5.0 million or 0.5% for Toronto Police Service due to an approved unallocated reduction for which actions to meet this target have not yet been fully identified.

Corporate Accounts were under-spent by $45.453 million as of March 31, 2013. The year-to-date favourable variance was primarily attributed to lower net expenditures of $38.210 million or 34.0% largely timing issue driven by the unsettled union agreement for Fire Services, outstanding re-numeration of the lump sum payment for unionized employees and non-union cost of living allowance payment plus delay in transferring funding for employee related liabilities. These will be transferred by year-end. In addition, revenue of $9.485 million was received earlier than expected in the first quarter due to the issuance of the 2013 Third Party Sign Tax invoices. As a result of this being only a timing issue, the year-end projection is estimated at $1.393 million over budget.

Rate Supported Programs were under-spent by $13.649 million or 28.5% compared to net planned expenditures for the three-month period ended March 31, 2013 and project year-end under-spending of $10.001 million or 15.8% of the 2013 Approved Net Operating Budget.

Appendices A, B and C attached summarize net expenditures, gross expenditures, and revenues, respectively. Appendix D provides the in-year budget adjustments for the first quarter ended March 31, 2013. Appendix E provides detailed variance explanations for City Programs and Agencies for the three months ended March 31, 2013 as well as projections to year-end.

Meeting No.	40	Contact	Kelly McCarthy, Committee Administrator
Meeting Date	Wednesday, May 1, 2013	Phone	416-392-4666
Start Time	9:30 AM	E-mail	buc@toronto.ca
Location	Committee Room 1, City Hall	Chair	Councillor Frank Di Giorgio

Committee Decision
The Budget Committee recommends to the Executive Committee that: 1. City Council authorize the Deputy City Manager and Chief Financial Officer to transfer $15.282 million gross and $0 million net from the 2013 Non-Program Expenditure Budget to the respective 2013 Approved Operating Budget for City Programs, Toronto Public Health and Leaside Memorial Community Gardens for CUPE Local 416 and Local 79 employees to provide the necessary funding for the 1.50% one-time non-base non-pensionable lump sum payment and the associated employer health tax. 2. City Council authorize the Deputy City Manager and Chief Financial Officer to transfer $1.264 million gross and $0 million net from the 2013 Non-Program Expenditure Budget to the Toronto Public Library and the Association of Community Centres to provide the necessary funding for the 1.50% one-time non-base non-pensionable lump sum payment and the associated employer health tax for unionized employees as these Agencies have similar provisions based on their negotiated collective bargaining settlements. 3. City Council authorize the Deputy City Manager and Chief Financial Officer to transfer $15.420 million gross and $12.808 million net from the 2013 Non-Program Expenditure Budget to the respective 2013 Approved Operating Budget for City Programs, Toronto Public Health and Association of Community Centres to provide the necessary funding for the 1.9% cost of living allowance and re-earnable lump sum payment for non-union employees. 4. City Council approve in-year budget adjustments detailed in Appendix D to the report (April 30, 2013) from the Deputy City Manager and Chief Financial Officer to amend the 2013 Approved Operating Budget between Programs with gross expenditures and revenues of $1.958 million, and no impact to the 2013 Approved Net Operating Budget.