Budget Committee
The full agenda, as filed
All 6 items in the clerk’s order. Each carries the city’s own words: the staff recommendation, what the body decided, and its status. Nothing below is written by us.
BU32.1adopted
Operating Variance Report for the Year Ended December 31, 2020
The purpose of this report is to provide Council with the City of Toronto's Operating Variance results for the year ended December 31, 2020 and City's financial position before and after receiving Safe Restart Agreement funding. Since March of 2020, the City of Toronto, consistent with other major Canadian and Greater Toronto and Hamilton Area municipalities have been experiencing significant financial impacts, both in the form of added costs and significant revenue losses as a direct result of the COVID-19 pandemic. COVID-19 related financial impacts totalled $1.635 billion in 2020 for the City of Toronto, prior to offsets achieved through a series of implemented mitigation strategies that focus on spending and workforce restraints and various in-year funding programs ($558.5 million) and COVID-19 funding support from the Government of Canada and Province of Ontario in the form of Safe Restart Agreement and added Reaching Home funding totalling a combined $1.077 billion in COVID-19 support funding applied to 2020, reducing the 2020 year-end shortfall to $0. - COVID-19 related financial impacts predominantly reflect revenue losses, which account for approximately 77 percent of total COVID impacts. - Mitigation strategies coupled with non-Safe Restart Agreement/Reaching Home funding generated $558.5 million in in total 2020 offsets to COVID-19 impacts, with the majority of offsets achieved through workforce restraints, spending constraints and cost avoidance. - Workforce restraints including redeployment of staff to critical and essential service areas; implementing emergency and seasonal / part-time staff layoffs; the implementation of a hiring slowdown; and savings generated from labour negotiations. - Spending restraints such as reducing discretionary spending; and reviewing all services for criticality (prioritize critical, essential and priority services). - Cost avoidance arising from expenditure management and tracking and forecasting COVID-19 related savings - Total Safe Restart Agreement and added Reaching Home funding the City of Toronto received and recognized in year 2020 is $1.076 billion, comprised of the following: - Municipal Transit Funding Phase 1 and 2 - $639.8 million allocated to Toronto proportionately based on ridership. - Municipal Operating Funding Phase 1 and 2 - $257.6 million allocated to Toronto proportionately based on households. - Social Services Relief Fund Phase 1 and 2 - $150.1 million allocated to Toronto in addition to the $14.7 million for Reaching Home and $14.3 million for Public Health. The table below details the 2020 City-wide COVID-19 related financial impacts; offsets from mitigation strategies and COVID-19 support funding; and the resulting financial position reflected in year-end reporting. Table 1 - 2020 COVID-19 Financial Impacts, Offsets and Support Funding Description $Millions COVID-19 Impacts Savings / Offsets / Other Funding Fed / Prov SRA / RH COVID-19 Funding 2020 Net Impacts City Tax Supported Programs 1,569.0 (558.5) (1,010.5) 0.0 Toronto Parking Authority 56.1 (56.1) 0.0 Toronto Community Housing 9.9 (9.9) 0.0 2020 Year-End Total 1,635.0 (558.5) (1,076.5) 0.0 Tax Supported Programs: The following table summarizes the year-end COVID-19 financial Impacts; offset from mitigations strategies and Federal/Provincial COVID-19 support funding; and the resulting balanced financial position of the City's Tax Supported Operations for year ended December 31, 2020. Table 2 - Tax Supported Operating Variance Summary Variance ($M) Favourable / (Unfavourable) 2020 Year-End Budget Actual Var City Operations 2,458.4 2,542.0 (83.6) Agencies 2,166.6 2,777.5 (610.9) Corporate Accounts (200.6) (50.7) (149.8) Total Variance * 4,424.5 5,268.8 (844.3) Less Toronto Building and City Planning (Legislated / Council Directed) 16.1 61.1 (44.9) COVID-19 Related Incurred Obligations / Deferred Costs 187.3 (187.3) Total Adjusted Variance (Prior to Fed/Prov Safe Restart Agreement / Reaching Home Funding) 4,440.6 5,517.2 (1,076.5) Safe Restart Funding - Transit Operations (639.8) 639.8 Safe Restart Funding - Municipal Operations (257.6) 257.6 Social Services Relief Fund / Reaching Home - Shelters (164.8) 164.8 Safe Restart Funding - Public Health (14.3) 14.3 Adjusted Variance 4,440.6 4,440.6 0 *Note to Table 2: - The Total Variance excludes Safe Restart Agreement/Reaching Home funding, which are reflected later in the table. - Appendix A of this report includes the combined $179 million in COVID-19 funding for Shelter, Support and Housing Administration and Public Health within their divisional results. - Expenses related to distribution of COVID-19 support funding to offset Toronto Community Housing Corporation and Toronto Parking Authority impacts are reflected in Corporate Accounts. As noted in Table 1 above, for the year ended December 31, 2020 Tax Supported Operations experienced an adjusted unfavourable net variance of $1.077 billion prior to Safe Restart Funding. This is mainly driven by COVID-19 related cost and revenue impacts experienced beginning mid-March onwards, including: - Toronto Transit Commission - Conventional Service ($634.8 million unfavourable net) primarily due to significant loss of ridership revenue from the impact of COVID-19. Ridership losses peaked at 88 percent below budget in late April. With a resurgence of COVID-19 cases in the fall, ridership retracted back to 35 percent of budget in October, and with the implementation of the grey lockdown fell to 30 percent of budget in December. Revenue losses were partially offset by the implementation of cost containment strategies and matching service capacity to demand. - Seniors Services and Long-Term Care: ($7.0 million unfavourable net) primarily due to increased salary and benefits and non-payroll expenditures for infection prevention and control measures including additional Personal Protective Equipment and cleaning supplies related to the COVID-19 response. - Corporate Accounts ($149.8 million unfavourable net) primarily due to the impact of COVID-19 resulted in losses in multiple revenue streams for the City including, Municipal Accommodation Tax, Parking Tag Enforcement, and Casino Woodbine. - The above unfavorable net variances were partially offset by various expense savings from across the City's divisions and agencies as part of the expense mitigation strategies previously discussed. - The remaining $1.077 billion shortfall was addressed through Federal and Provincial funding support in the form of Safe Restart Agreement and added Reaching Home funding directed toward experienced COVID-19 financial impacts. Rate Supported Programs: Rate Supported Programs reported a favourable year-end variance of $20.5 million. The favourable variance is attributed to lower than budgeted expenditures from Toronto Water, which is partially offset from lower than planned revenue in Toronto Parking Authority due to the impact of COVID-19. Rate Supported Programs are funded entirely by the user fees that are used to pay for the services provided and the infrastructure to deliver them. Solid Waste Management Services and Toronto Water's respective year-end surpluses, if any, must be transferred to the Wastewater and Water Stabilization Reserves and Waste Management Reserve Fund, respectively, to finance capital investments and ongoing capital repairs and maintenance. Table 3 - Rate Supported Net Variance Summary ($ Millions) Variance ($M) Favourable / (Unfavourable) 2020 Year-End Budget Actual Variance Solid Waste Management Services 0.0 (7.1) 7.1 Toronto Parking Authority (70.1) (14.0) (56.1) Toronto Water 0.0 (69.5) 69.5 Total Variance (70.1) (90.6) 20.5
The Budget Committee recommends that: 1. City Council approve the recommended adjustments as detailed in Table 4 in the Financial Impact statement, titled Recommended Adjustments - Tax and Rate Supported Programs and Agencies, in the report (June 16, 2021) from the Chief Financial Officer and Treasurer.
Staff recommendation as filed
The Chief Financial Officer and Treasurer recommends that: 1. City Council approve the recommended adjustments as detailed in Table 4 in the Financial Impact statement: Recommended Adjustments - Tax and Rate Supported Programs and Agencies.
BU32.2adopted
Capital Variance Report for the Twelve Months Ended December 31, 2020
The purpose of this report is to provide City Council with the City of Toronto capital spending for the twelve month period ended December 31, 2020. As illustrated in Table 1 below, City's 2020 actual capital expenditure was $3.666 billion or 73.2 percent of the 2020 capital budget of $5.006 billion for the period ended December 31, 2020. - Tax Supported Programs and Agencies reported capital expenditures of $2.503 billion representing 68.8 percent of their collective 2020 approved Capital Budget of $3.638 billion. - Rate Supported Programs reported capital expenditures of $1.164 billion, representing 85.1 percent of their collective 2020 approved Capital Budget of $1.368 billion. Table 1 - Capital Variance Summary Table 1 Corporate Capital Variance Summary for the Period Ended December 31, 2020 2020 Approved Budget* 2020 Actual Expenditures $M $M % City Operations 2,278 1,483 65.1% Agencies 1,360 1,020 75.0% Tax Supported 3,638 2,503 68.8% Rate Supported Programs: 1,368 1,164 85.1% TOTAL 5,006 3,666 73.2% * Note: Includes 2019 carry forward funding and 2020 in-year adjustments While further efforts to improve capital spending continue, divisional and agency improvements in capital planning along with refinements in capital budgeting have resulted in improved capital spend rates in 2020. - 2020 spending rates on Tax supported (68.8 percent) and Rate supported (85.1 percent) are both greater than the 5 year historical average spend rates of 60.2 percent and 77.5 percent respectively. - These improvements were achieved in 2020 despite the impact that COVID-19 had on capital delivery. At the onset of COVID-19, due to the uncertainty of pandemic related financial impacts and the amount of financial assistance to be provided from other levels of government, delivery was slowed for capital projects funded by Capital from Current to enable potential funding offsets to experienced COVID-19 financial impacts. Moving forward, the City will continue to plan annual capital projects in line with both affordability and achievability, based on the historical actual capacity. The strategy is expected to improve capital spend rate in future years; enabling funding capacity otherwise going unspent to be directed to capital priorities.
The Budget Committee recommends that: 1. City Council receive the report (June 10, 2021) from the Chief Financial Officer and Treasurer for information.
Staff recommendation as filed
The Chief Financial Officer and Treasurer recommends that: 1. Council receive this report for information.
BU32.3adopted
Operating Variance Report for the Four Months Ended April 30, 2021
The purpose of this report is to provide City Council with the Operating Variance for the four months ended April 30, 2021 as well as projections to year-end. This report also requests City Council's approval for amendments to the 2021 Approved Operating Budget that have no impact on the City's 2021 Approved Net Operating Budget. Since March of 2020, the City of Toronto has been experiencing significant financial impacts, both in the form of added costs and significant revenue losses as a direct result of the COVID-19 pandemic. COVID-19 related financial impacts are projected to total $1.596 billion for the City of Toronto's 2021 Operating Budget. 2021 COVID-19 funding support from the Government of Canada and Province of Ontario in the form of Safe Restart Agreement, added Reaching Home funding and other funding programs total $1.477 billion in combined COVID-19 support funding, reducing the 2021 year-end funding shortfall to $119.8 million. Table 1 below details the anticipated 2021 City-wide COVID-19 related financial impacts against secured and assured COVID-19 support funding; and the resulting financial position that is reflected in the year-end variance projections: Table 1 - 2021 Projected COVID-19 Financial Impacts Category ($M) Impacts Funding Net Impacts (Funding) Transit 796.4 721.9 Municipal* 459.7 467.2 Shelter 281.3 228.5 Public Health** 59.0 59.0 City Tax Supported Programs 1,596.4 1,476.6 119.8 * Includes Toronto Community Housing Corporation impact of $37.5M ** Excludes immunization costs While the City is currently reporting a 2021 budgeted funding shortfall of $119.8 million, 92.5 percent of budgeted 2021 COVID-19 impacts have secured funding support from the Federal and Provincial governments through the first four months of the year and staff continue to expect that 2021 COVID-19 impacts will be fully funded by year-end. In addition to the COVID-19 related budgeted funding shortfall, staff are also reporting on a projected year-end unfavourable variance of an additional $114.7 million comprised of the following elements: - Unanticipated COVID-19 related impacts attributed to the third wave of COVID-19/variant restrictions; and additional mass immunization costs incurred by Toronto Fire projected to total $16.3 million, including costs for efforts to vaccinate people experiencing homelessness, for which provincial reimbursement will be sought consistent with funding assurances received from the Province related to vaccination costs. Tax Supported Programs: The following table summarizes the anticipated year-end financial position of the City's Tax Supported Operations as of April 30, 2021 and the projection at year-end. This is driven through a combination of a COVID funding shortfall of $119.8 million and additional pressures of predominantly revenue losses of $114.7 million that is projected for 2021, resulting in an unfavourable projected variance of $234.5 million at year-end for tax supported programs. Table 2 - Tax Supported Operating Variance Summary Variance ($M) Favourable / (Unfavourable) 2021 April YTD 2021 Year-End Projection Budget Actual Var Budget Actual Var Tax Supported Operating Variance Summary City Operations 821.4 740.9 80.5 2,831.4 2,798.7 32.7 Agencies 1,023.7 1,010.7 13.0 3,051.3 3,068.1 (16.9) Corporate Accounts (730.7) (256.7) (474.0) (1,393.5) (1,164.5) (229.0) Total Variance 1,114.4 1,494.9 (380.5) 4,489.2 4,702.3 (213.1) Less Toronto Building 5.3 9.2 (3.9) 16.1 37.5 (21.4) Total Variance-Excluding Toronto Building 1,119.7 1,504.1 (384.4) 4,505.3 4,739.8 (234.5) Percentage of Gross Budget -11.5 percent -1.9 percent Note - Rate supported programs and Toronto Community Housing variance information is not reflected in the table above, which details Tax Supported Programs only. Four Month Year-to-Date and Projected Year-End Spending Results: As noted in Table 2 above, for the four months ended April 30, 2021 Tax Supported Operations experienced an unfavourable net variance of $380.5 million or 11.5 percent of planned expenditures. This is mainly driven by the timing of receiving COVID-19 related Federal and Provincial funding and higher than anticipated COVID-19 impacts through the first four months of 2021. The impact on the year-to-date results are reflected in the following areas: - Non-Program Revenues: An unfavourable year-to-date net variance of $477.0 million due to the remaining COVID-19 related funding shortfall as well as lower than planned revenues for Interest and Investment Earnings, Parking Tag Revenues and Casino Woodbine. A portion of this variance is also attributed to funding being secured and reflected in divisional results as opposed to Non-Program, where it had originally been budgeted. (e.g. SSHA variance detailed below) - Shelter Support and Housing Administration: A favourable year to date net variance of $34.9 million primarily attributable to the inclusion of Shelter Support and Housing Administration specific COVID-19 related funding within Shelter Support and Housing Administration actuals, which has been expected and budgeted within Non-Program Revenues given total funding had not yet been secured at time of budget approval. - Toronto Transit Commission - Conventional: A favourable year to date net variance of $8.0 million is mainly attributable to continued expenditure management resulting in deferred hiring and material purchases wherever possible. This was partially offset by underachieved revenue due to the impact of COVID-19 on ridership revenue. As of the week of April 26, revenue ridership is 26 percent of normal pre-pandemic levels. For year-end, the City is projecting an unfavourable variance of $234.5 million or 1.9 percent of the 2021 Gross Operating Budget, adjusted for Toronto Building. The unfavourable variance is primarily driven by the following: - $119.8 million - Remaining 2021 COVID-19 funding shortfall, where all but 7.5 percent of budgeted COVID-19 have secured Federal and Provincial funding support or received assurances towards cost reimbursement. - $98.4 million - Greater than anticipated COVID-19 financial impacts, primarily within budgeted revenues such as corporate revenues (i.e. Investment Earnings and Parking Tags) and user fees (i.e. Zoo and Exhibition Place) resulting from required public health measures resulting from the third wave / COVID variants. - $16.3 million - Additional mass immunization costs incurred by Toronto Fire. Toronto Fire will be working with Public Health to seek reimbursement from the Province on immunization costs consistent with provincial funding assurances. Rate Supported Programs: Rate Supported Programs reported a favourable year-to-date variance of $32.7 million. The favourable variance is attributed to lower than budgeted expenditures from Toronto Water and Solid Waste Management Services which is partially offset from lower than planned revenue in Toronto Parking Authority. At year-end, a favourable projected variance is anticipated to be $14.7 million, again primarily driven by lower than budgeted expenditures from Toronto Water and Solid Waste Management Services by partially offset by Toronto Parking Authority. Rate Supported Programs are funded entirely by the user fees that are used to pay for the services provided and the infrastructure to deliver them. Solid Waste Management Services and Toronto Water's respective year-end surpluses, if any, must be transferred to the Wastewater and Water Stabilization Reserves and Waste Management Reserve Fund, respectively, to finance capital investments and ongoing capital repairs and maintenance. Table 3 - Rate Supported Operating Variance Summary Variance ($M) Favourable / (Unfavourable) 2021 April YTD 2021 Year-End Projection Budget Actual Var Budget Actual Var Solid Waste Management Services (7.2) (28.5) 21.3 0.0 (4.2) 4.2 Toronto Parking Authority 4.6 6.1 (1.5) 2.2 7.6 (5.4) Toronto Water (61.5) (74.4) 12.8 0.0 (15.8) 15.8 Total Variance (64.1) (96.8) 32.7 2.2 (12.4) 14.7
The Budget Committee recommends that: 1. City Council approve the budget adjustments and any associated complement changes detailed in Appendix D to the report (June 16, 2021) from the Chief Financial Officer and Treasurer, to amend the 2021 Approved Operating Budget, such adjustments to have no impact on the 2021 Approved Net Operating Budget of the City.
Staff recommendation as filed
The Chief Financial Officer and Treasurer recommends that: 1. City Council approve the budget adjustments and any associated complement changes detailed in Appendix D, to amend the 2021 Approved Operating Budget, such adjustments to have no impact on the 2021 Approved Net Operating Budget of the City.
BU32.4adopted
Capital Variance Report for the Four Months Ended April 30, 2021
The purpose of this report is to provide City Council with the City of Toronto capital spending for the four month period ended April 30, 2021, as well as projected expenditures to December 31, 2021. Furthermore, this report seeks Council's approval for in-year budget adjustments to the 2021 Approved Capital Budget and Plan. As illustrated in Table 1 below, City's 2021 capital expenditure was $688 million or 13.0% of the 2021 capital budget of $5.305 billion for the period ended April 30, 2021 and is projecting to expend $4.415 billion or 83.2% by December 31, 2021. Table 1: Capital Variance Summary Table 1 Corporate Capital Variance Summary for the Period Ended April 30, 2021 2021 Approved Budget* 2021 4M Actual Expenditures 2021 Projected YE Expenditures $M $M % $M % City Operations 2,186 280 12.8% 1,726 79.0% Agencies 1,640 217 13.2% 1,410 86.0% Tax Supported 3,826 497 13.0% 3,137 82.0% Rate Supported Programs: 1,479 191 12.9% 1,279 86.4% TOTAL 5,305 688 13.0% 4,415 83.2% *Note: Includes 2020 carry forward funding The Capital spending pattern for the first four month typically ranges between 5% and 22% of the total Council Approved Capital Budget, with the 2021 experience of 13%. Total City projected spend of 83.2% by year-end is comprised of a Tax Supported Programs spending rate of 82.0% and a Rate Supported Programs spending rate of 86.4%. Moving forward, the City will continue to plan annual capital projects in line with both affordability and achievability, based on the historical actual capacity. The strategy is expected to build on improvements experienced in 2020 and also improve capital spend rate in future years; enabling funding capacity otherwise going unspent to be directed to capital priorities.
The Budget Committee recommends that: 1. City Council approve in-year budget adjustments to the 2021-2030 Approved Capital Budget and Plan as detailed in Appendix 4 to the report (June 15, 2021) from the Chief Financial Officer and Treasurer.
Staff recommendation as filed
The Chief Financial Officer and Treasurer recommends that: 1. City Council approve in-year budget adjustments to the 2021-2030 Approved Capital Budget and Plan as detailed in Appendix 4.
BU32.5adopted
Planning Act (Section 42) Reserve Funds Statement, 2016-2019
This report provides a financial statement of Planning Act (Section 42) reserve funds for the fiscal years 2016, 2017, 2018 and 2019. It documents contributions, spending and financial activity associated with cash-in-lieu of parkland dedication payments secured through Section 42, and satisfies the requirement for a public report on these matters. Section 42 of the Planning Act allows municipalities to require that land be conveyed for parkland as a condition of development or redevelopment. If Council deems lands to be unsuitable for parks, municipalities may accept cash-in-lieu of parkland equal to the value of the land that would otherwise be conveyed. Cash-in-lieu is received[1] and held in reserve funds for the purpose of parkland acquisition or development. Cash-in-lieu of parkland dedication is a fundamental funding tool for the City. On average, it accounts for roughly 30 per cent of Parks, Forestry and Recreation's annual capital budget and is the predominant source of funding for the City's parkland acquisition program. Bill 108 (More Homes, More Choice Act), introduced by the Province in May 2019, created uncertainty around the status of the parkland dedication provisions in the Planning Act. With the enactment of the COVID-19 Recovery Act, 2020 (Bill 197) on July 21 2020, the Province confirmed that the authorities granted through Section 42, including the ability to collect cash-in-lieu of parkland dedication, will continue to be available to municipalities. Since 2016, the Planning Act has required municipalities to report on the status of Section 42 reserve funds. On September 18, 2020, Ontario Regulation 509/20 came into force, establishing an ongoing requirement for annual public reporting on Planning Act reserve fund activity. Staff will report on the status of Section 42 reserve funds for 2020 and 2021, and will then report annually according to the requirements of the new regulation, in consideration of annual reserve fund reporting processes. [1] "Funds received" refers to funds that are available to be spent by the City. It does not include collections under protest, which are held in a separate account and are not spent by the City until the matters are resolved.
The Budget Committee recommends that: 1. City Council receive the report (June 1, 2021) from the General Manager, Parks, Forestry and Recreation for information.
Staff recommendation as filed
The General Manager, Parks, Forestry and Recreation recommends that: 1. City Council receive this report for information.
BU32.6adopted
Planning Act (Section 37 and Section 45) Reserve Funds Statement, 2019
This report provides a financial statement of the Planning Act (Section 37 and Section 45) reserve funds for the 2019 fiscal year. The report details the contributions received from developers; interest earned; and transfers for capital expenditures for the period of January 1, 2019 to December 31, 2019. In addition, the report summarizes the Section 37 community benefits secured through site-specific zoning by-laws and Section 45 community benefits secured through Committee of Adjustment decisions during this time period. The attachments to the report provide additional transaction details and reserve fund balances by ward as of December 31, 2019. With the enactment of the Bills 108 and 197, the Province enacted provisions to replace Section 37 Density Bonusing with a new Community Benefits Charge. On September 18, 2020 the province enacted a new regulation, Ontario Regulation 509/20, which prescribes reporting requirements with respect to the new Community Benefits Charge with amended reporting requirements. Staff will continue to report on the status of Section 37 reserve funds annually according to the requirements of the new regulation, in consideration of annual reserve fund reporting processes.
The Budget Committee recommends that: 1. City Council receive the report (June 3, 2021) from the Chief Planner and Executive Director, City Planning for information.
Staff recommendation as filed
The Chief Planner and Executive Director, City Planning recommends that: 1. City Council receive this report for information.