Operating Variance Report for the Six-Month Period Ended June 30, 2019

as of June 30, 2019 and the projection at year-end: Table 1 - Tax Supported Operating Variance Summary Variance ($M) Favourable / (Unfavourable) 2019 Q2 YTD 2019 Year-End Projection Budget Actual Var Budget Actual Var City Operations 1,166.1 1,138.3 27.8 2,287.7 2,272.5 15.4 Agencies 1,032.8 1,022.7 10.1 2,098.5 2,100.3 (1.9) Corporate Accounts 223.3 72.7 150.6 (73.2) (172.0) 98.8 Total Variance 2,422.2 2,233.8 188.5 4,313.0 4,200.8 112.3 Less: Toronto Building* (1.1) (18.7) 17.6 (16.9) (41.6) 24.7 Adjusted Variance 2,423.3 2,252.4 170.8 4,329.9 4,242.4 87.6 % of Gross Budget 3.0% 0.8% * In accordance with the Building Code Act, any surplus from Toronto Building must be contributed to the Building Code Act Service Improvement Reserve Fund. Year-to-Date and Year-End Spending Results: As noted in Table 1 above, for the six months ended June 30, 2019 Tax Supported Operations experienced a favourable net variance of $188.5 million or 8 percent of planned expenditures. The key factors contributing to the favourable year-to-date variance are: - Year-to-date net under expenditure in City Operations is primarily due to lower than planned salary and benefits, as well as higher than planned revenue in Fire Services, Municipal Licensing and Standards, and Toronto Building. Favourable year-to-date variance was partially offset by over spending in Shelter, Support and Housing Administration. - Lower than planned gross expenditures in Toronto Zoo and Toronto Transit Commission. - Favourable revenue from Interest/Investment Earnings and Municipal Land Transfer Tax, as well as lower than planned Debt Charges. For year-end, the City is projecting a net favourable variance of $112.3 million or 3 percent of the 2019 Approved Operating Budget that is partially offset by Shelter, Support and Housing Administration due to continued high demand for Hostel Services. An overview of the key variance drivers can be found in the "Comments" section of this report as well as in a detailed summary provided in Appendix E. Rate Supported Programs: Rate Supported Programs reported a favourable year-to-date variance of $47.3 million. The favourable variance is attributed to gross under expenditures in salary and benefits, earlier than planned receipt of revenue, and one-time capital gain from the sale of property. At year-end, a favourable projected variance is anticipated to be $32.6 million that is primarily driven by gross under spending in Toronto Water. Rate Supported Programs are funded entirely by the user fees that are used to pay for the services provided and the infrastructure to deliver them. Solid Waste Management Services and Toronto Water's respective year-end surpluses, if any, must be transferred to the Wastewater and Water Stabilization Reserves and Waste Management Reserve Fund, respectively, to finance capital investments and ongoing operations. Table 2 - Year-To-Date Rate Supported Operating Variance Summary Variance ($M) Favourable / (Unfavourable) 2019 Q2 YTD 2019 Year-End Projection Budget Actual Var Budget Actual Var Solid Waste Management Services 4.0 (12.8) 16.8 0.0 (1.1) 1.1 Toronto Parking Authority (31.9) (39.9) 8.1 (66.5) (69.0) 2.4 Toronto Water 17.8 (4.5) 22.4 0.0 (29.0) 29.0 Total Variance (10.0) (57.3) 47.3 (66.5) (99.1) 32.6

3. City Council direct that the confidential information contained in Confidential Attachment 1 to the report (August 26, 2019) from the Chief Financial Officer and Treasurer remain confidential in its entirety, as it involves the security of property belonging to the City of Toronto.