Loading...
HomeMy WebLinkAboutFND-017-19Clarington Finance Department Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: General Government Committee Date of Meeting: June 17, 2019 Report Number: FND-017-19 Resolution: GG -409-19 File Number: By-law Number: Report Subject: Financial Update as at March 31, 2019 Recommendations: That Report FND-017-19 be received for information. Municipality of Clarington Page 2 Report FND-017-19 Report Overview The purpose of this report is to update Council on the overall budget variances as of March 31, 2019 as well as other financial indicators such as taxes receivable, reserve fund investments, debt and development charges collected. Starting in 2019 there will be a summary of Council's discretionary expenses (exclusive of salary and travel allowances). 1. Background 1.1 The financial update report has been designed to focus on overall budget variances. As per report FND-005-19 Council Expenses are now included in this report. 2. First Quarter of 2019 Financial Results 2.1 Attachment 1, Summary of Operating Expenditures and Revenues, compares the Municipality's budget to actual posted expenditures and revenues as of March 31, 2019. This statement reflects the Municipality's operating budget only and excludes the year to date expenditures of the library, museum, BIAs and consolidated hall boards. Year to date expenditures as of March 31, 2019 totalled $21,045,843 which represents 100.3% of the first quarter budget. Year to date revenues totalled $34,043,554 which represents 100.5% of the first quarter budget. 2.2 Attachment 1 is intended to provide an indication of the status of the Municipality's operating accounts compared to the approved budget as of March 31, 2019. Many of the operations of the Municipality are affected by seasonal trends such as ice rentals and winter control. The timing of other activities can fluctuate from year to year such as Legal and Planning revenues. To best capture the trends, the budget is allocated on a monthly basis based on the prior year's actual monthly distribution. In cases where there is no prior history, the monthly allocation is divided equally over the twelve months. However, there are still variations from quarter to quarter as well as year to year. Due to these timing differences and with only three months of activity, this statement cannot be used in isolation, nor can it be easily extrapolated to predict the whole year's activities. Each department is responsible for their budget. To assist with the management of the budget, monthly trial balances are sent to each department for regular review. Revenues and expenditures that have variance either above or below budget that are noteworthy are discussed in this report. 2.3 Legal net expenditures are at 79.7%. As noted, the timing of legal revenues and expenditures can vary greatly from year to year as there is no predictable trend for legal activities. Municipality of Clarington Resort FND-017-19 Page 3 2.4 The Clerks department net expenditures are at 85.8% of the first quarter budget. Revenues are higher than the quarterly budget at 167.6% due to increase snow clearing fines and parking revenues. There is a corresponding expense to the parking revenues which transfers the parking meter and fines to the parking reserve fund as an expense. 2.5 The net expenditures for Emergency Services are at 94% of the first quarter budget. Higher revenues due to the revenues from Ontario Power Generation contribute to the favourable results. As per the Memorandum of Understanding with Ontario Power Generation, the Municipality has received some additional revenues. Also, revenues from emergency calls for the Ministry of Transportation are unbudgeted. These revenues are transferred to the Fire Reserve Fund to assist with future fire capital purchases. 2.6 The Engineering Department has the most significant changes when compared to the same period in the previous year. At the end of the first quarter in 2018, building permit revenue was over 95% of the total annual budgeted amount. At the end of March 2019, building permit revenues are at 20.8% of the 2019 total budget, if one considers that building season starts in Q2 it would be expected that level of revenue should exceed 25%. Municipal consent permit revenues increased by $40,000. Engineering net expenditures are at 137.1 % of the first quarter budget. The change in the building permit revenue is the most significant impact on this figure. Expenditures are at 90% of the first quarter budget and are most likely due to timing differences from year to year. 2.7 The Operations net expenditures are at 115.8% as of the March 31, 2019 budget. There can be variations timing of revenue from year to year. These variances tend to smooth out over the year. The expenditures are higher than the first quarter budget at 115.2%. The higher operating expenditures can be attributed to the extended winter season and the response required under the Ontario Minimum Maintenance Standards. Compared to the same period in 2018, winter control costs are 19% higher. Also, the senior snow clearing costs are 13.5% higher than 2018 and already exceed the 2019 budgeted amount. These higher expenditures are mitigated by lower than budgets expenditures in other areas due to the focus on winter maintenance. Flooding continues to be a concern for the Municipality. Expenditures will increase in the second quarter due to the Municipality's response to flooding issues throughout the Municipality, which mainly occurred in the second quarter. 2.8 Attachment 2, Continuity of Taxes Receivable as of March 31, 2019, provides the status of the taxes billed and collected by the Municipality during the first quarter of 2019. A total of $43,869,193 in interim tax bills were issued to Clarington property owners in this period. Note that the current year taxes receivable are in a credit position as payments for the April 2019 installment have been received in March. Mortgage companies often pay the February and April installments together in February. The net balance ($3,574,272) is 1.85% higher than the same period in 2018. Municipality of Clarington Resort FND-017-19 Page 4 2.9 Attachment 3, Debenture Repayment Schedule provides the status of the Municipality's long term debt obligations as of January 1, 2019. In 2019, the debt repayment obligations are $2,841,958. The annual principal and interest payments required to service these liabilities remain well below the annual debt repayment limits prescribed by the Ministry of Municipal Affairs and Housing. 2.10 Attachment 4, Municipal Development Charges as of March 31, 2019, provides the municipal development charges collected separated into residential and non-residential categories. As of March 31, 2019 residential municipal development charges collected are $764,589. In the 2015 Development Charges Background Study, it was forecasted that the Municipality would be collecting approximately 805 in total for 2019 or about 201 units per quarter. At the end of March 2019 there was an 82.6% decrease in development charges collected and a 79.5% decrease in the number of units compared to the same timeframe in 2018. This is a significant decline in development charges collected with indications that this decline will continue into the second quarter. 2.11 As of March 31, 2019 there has been $28,752.38 in non-residential development charges collected for one property. Non-residential development charges are based on the area in square metres rather than per building unit cost. There are fluctuations quarter to quarter as well as year to year in non-residential development charges. 2.12 In the 2015 Development Charges By-law 2015-035, there are a number of incentives to encourage development in Clarington, mainly relating to multi -residential, commercial and industrial development. There were no new incentives given in the first quarter of 2019. Since July 2015, there has been a total of $1,555,276.71 in development charge incentives given to 15 properties. Between residential and non-residential the split is approximately 37% and 63% respectively. 2.13 Attachment 5, Council Expenses as of March 31, 2019, summarizes Council expenses in the first quarter of 2019. Only discretionary expenses such as event tickets, conferences, education courses and external kilometre reimbursement are included in this report. This report only includes transactions posted in the first quarter. Future quarterly financial reports will report on the cumulative total of Council's expenses, including any credits and repayments. As of March 31, 2019 a total of $4,425.66 of expenses have been paid relating to Council discretionary expenses. Salary, tax free allowance, OMERS equivalent, severance pay and travel allowance as per By-law 2011-005 are not included in this total. 2.14 The quarterly financial update provides an overview of investments as of March 31, 2019. Note that as per the policy the operating cash account is not included in the following tables. Looking forward, Council has directed staff to pursue the prudent investor regime in conjunction with ONE Investment to establish the ONE Joint Investment Board. Prudent investor will provide the opportunity for greater flexibility, diversification and potential for greater returns on the Municipality's investments. Municipality of Clarington Resort FND-017-19 Page 5 2.15 As per the Investment Policy, the terms or length of investments have been set to ensure liquidity and to minimize interest rate risk. Table 1 shows the term of the investments as of March 31, 2019. Table 1 Term of Investments Total Funds % of Total Minimum Range Maximum Range 90 Days $ 57,424,527 46.6% 1 20% 100% 90 Days to 1 Year 8,566,030 6.9% 53.5% 30% 100% 1 to 5 Years 54,223,924 43.9% 0% 85% 5 to 10 Years 3,163,928 2.6% 0% 50% 10 to 20 Years - 0.0% 0% 30% Total $ 123,378,409 100.0% Municipality of Clarington Page 6 Report FND-017-19 2.16 The Investment Policy also sets out the types of investment to create a diversified portfolio. Table 2 shows the breakdown of the types of investments. Table 2 Type of Investments 2.17 As of March 31, 2019 the Municipality is compliant with its current Investment Policy. 3. Concurrence Not Applicable 4. Conclusion It is respectfully recommended that the first quarter of 2019 financial update report be received for information. Total Funds % of Total Minimum Range Maximum Range HISA $ 51,668,283 41.9% 0% 100% Federal Debt $ - 0.0% 0% 100% Provincial Debt $ 3,145,614 2.5% 0% 80% Municipal Debt $ - 0.0% 0% 35% Financial Institutions $ 63,939,753 51.9% 0% 60% Corporate Debt non-financial) $ - 0.0% 0% 10% ONE Investment Pools $ 4,624,759 3.7% 0% 25% Total $ 123,378,409 100.0% 2.17 As of March 31, 2019 the Municipality is compliant with its current Investment Policy. 3. Concurrence Not Applicable 4. Conclusion It is respectfully recommended that the first quarter of 2019 financial update report be received for information. Municipality of Clarington Resort FND-017-19 5. Strategic Plan Application Not applicable. Submitted by: revor Pinn, B. m, CPA, A, Director of Finance/Treasurer Page 7 Reviewe y: Andrew C. Allison, B. Comm, LLB CAO Staff Contact: Catherine Carr, Manager of Internal Audit, 905-623-3379 ext. 2606 or ccarr@clarington.net There are no interested parties to be notified of Council's decision. Attachment 1 - Summary of Operating Revenues and Expenses Attachment 2 - Continuity of Taxes Receivable Attachment 3 - Debenture Repayment Schedule Attachment 4 - Municipal Development Charges Attachment 5 - Council Expenses The Municipality of Clarington Attachment 1 Summary of Operating Expenditures and Revenues for the Three Months Ending March 31, 2019 to Report FND-017-19 2019 Qtr 1 Budget YTD 2019 Qtr 1 Actual YTD 2019 Qtr 1 Unexpended ($) 2019 Qtr 1 % Expended 2018 Qtr 1 Budgeted YTD 2018 Qtr 1 Actual YTD 2018 Qtr 1 Unexpendend ($) 2019 Total Budget 2019 % of budget spent 05 Non -departmental Accounts (29,336,014) (80,890) 0 (29,317,181) (305,592) (415,309) (18,833) 224,702 415,309 (65,750,542) (2,081,763) (4,846,301) _ _ 46.9% _ 14.8% 0.7% Municipal Taxation (30,771,611) (30,853,527) 81,916 100.3% (218,502) (308,478) 89,976 141.2% 0 (32,150) 32,150 Other Revenue Contributions Revenue/Taxation/Contributions (30,990,113) (31,194,155) 204,042 100.7% (29,416,904) (30,038,082) 621,178 (72,678,606) 42.9% 0 0 0 0 211,820 0 211,820 0 0 (215,200) 215,200 _ 0.0% 100.0% 59 BIA Taxation BIA Taxes BIA Payments 215,200 215,200 0 100.0% Net Expenditures 215,200 215,200 0 100.0% 211,820 211,820 0 0 10 Mayor and Council Net Expenditures 238,618 233,479 5,139 97.8% 227,340 219,977 7,363 944,482 24.7% (96,766) 747,345 (52,689) 730,072 (44,077) 17,273 (159,000) 2,296,416 _ _ 25.1% 33.1% 13 Administrator's Office Revenues/Recoveries (39,750) (39,916) 166 100.4% Expenditures 747,090 760,514 (13,424) 101.8% Net Expenditures 707,340 720,598 (13,258) 101.9% 650,579 677,383 (26,804) 2,137,416 33.7% (21,252) 120,062 (21,993) 60,088 741 59,974 (160,000) 543,261 _ _ 7.7% 19.0% 14 Legal Administration Revenues/Recoveries (17,107) (12,317) (4,790) 72.0% Expenditures 130,809 102,974 27,835 1 78.7% Net Expenditures 113,702 90,657 23,045 79.7% 98,810 38,095 60,715 383,261 23.7% 0 1,096,947 (201) 1,095,490 201 1,457 99.9% 0 1,024,373 (151) 1,015,474 151 8,899 (12,000) 4,499,739 _ 1.7% 24.3% 16 Corporate Services Revenues/Recoveries Expenditures Net Expenditures 1,096,947 1,095,289 1,658 99.8% 1,024,373 1,015,323 9,050 4,487,739 24.4% (150,450) 774,928 (206,561) 729,217 56,111 45,711 (680,900) 3,573,894 _ 34.5% 21.5% 19 Clerk's Revenues/Recoveries (140,275) (235,111) 94,836 167.6% 763,605 770,022 (6,417) 100.8% Expenditures Net Expenditures 623,330 534,911 88,419 85.8% 624,478 522,656 101,822 2,892,994 18.5% (320,235) 619,308 183,317 (329,302) 575,103 191,027 9,067 44,205 (7,710) (1,390,000) 2,695,275 2,873,032 L 25.0% _ 20.3% 3.2% 21 Finance & Unclassified Administration Revenues/Recoveries (286,915) (347,190) 60,275 121.0% 637,170 545,931 91,239 85.7% Operating Expenditures Unclassified Admintration 94,074 93,268 806 99.1% Expenditures 731,244 639,199 92,045 87.4% 802,625 766,130 36,495 5,568,307 11.5% Net Expenditures 444,329 292,009 152,320 65.7% 482,390 436,828 45,562 4,178,307 7.0% The Municipality of Clarington Attachment 1 Summary of Operating Expenditures and Revenues for the Three Months Ending March 31, 2019 to Report FND-017-19 2019 Qtr 1 Budget YTD 2019 Qtr 1 Actual YTD 2019 Qtr 1 Unexpended ($) 2019 Qtr 1 % Expended 2018 Qtr 1 Budgeted YTD 2018 Qtr 1 Actual YTD 2018 Qtr 1 Unexpendend ($) 2019 Total Budget 2019 % of budget spent (82,214) 2,765,668 (146,966) 2,711,737 64,752 53,931 (110,000) 12,699,344 _ _ 142.9% 21.4% 28 Emergency Services - Fire Revenues/Recoveries (86,481) (157,177) 70,696 181.7% Expenditures 2,811,194 2,718,355 92,839 96.7% Net Expenditures 2,724,713 2,561,178 163,535 94.0% 2,683,454 2,564,771 118,683 12,589,344 20.3% (763,017) (414,095) (348,922) 54.3% (244,892) 458,726 886,741 (1,704,686) 459,110 1,006,968 1,459,794 (384) (120,227) (1,605,532) 541,802 7,895,669 _ 25.8% 86.1% 11.1% 32 Engineering Services Revenues/Recoveries Debenture Payment 465,993 466,423 (430) 100.1% 974,894 877,112 97,782 90.0% Operating Expenditures Expenditures 1,440,887 1,343,535 97,352 93.2% 1,345,467 1,466,078 (120,611) 8,437,471 15.9% Net Expenditures 677,870 929,440 251,570 137.1% 1,100,575 238,608 1,339,183 6,831,939 13.6% (59,585) (45,453) (14,132) 76.3% (57,193) 3,490,885 973,384 (62,118) 4,012,220 730,646 4,925 (521,335) 242,738 (653,300) 19,573,784 1,033,674 7.0% 23.2% 12.1% 36 Operations Revenues/Recoveries Operating Expenditures 3,692,506 4,531,595 (839,090) 122.7% Fleet & Debenture Payments Expenditures 350,379 125,197 1 225,182 35.7% 4,042,885 4,656,792 (613,908) 115.2% 4,464,269 4,742,866 (278,597) 20,607,458 22.6% Net Expenditures 3,983,300 4,611,339 (628,0421 115.8% 4,407,076 4,680,748 273,672 19,954,158 23.1% (2,075,641) 2,708,328 2,016,355 15,820 (1,461,752) 2,444,792 2,004,560 15,820 (613,889) 263,536 11,795 0 (4,810,400) 12,446,691 2,111,799 95,000 _ 29.7% _ 20.3% _ 96.2% 11.6% 42 Community Services Revenues/Recoveries (1,356,884) (1,426,339) 69,455 105.1% Operating Expenditures 2,750,117 2,531,242 218,875 92.0% Debenture Payments 2,029,089 2,031,328 (2,239) 100.1% Annual Grants & Sponsorships 11,000 11,000 0 100.0% Expenditures 4,790,206 4,573,570 216,636 95.5% 4,740,503 4,465,172 275,331 14,653,490 31.2% Net Expenditures 3,433,322 3,147,231 286,091 91.7% 2,664,862 3,003,420 338,558 9,843,090 32.0% (173,901) 829,482 (152,597) 773,757 (21,304) 55,725 (814,400) 4,714,839 i _ 21.1% 17.3% 50 Planning Services Revenues/Recoveries (142,424) (171,600)1 29,176 120.5% 848,455 815,659 32,796 96.1% Expenditures Net Expenditures 706,031 644,059 61,972 91.2% 655,581 621,160 34,421 3,900,439 16.5% Boards & Agencies 3,121,0541 3,121,054 0 100.0% 2,964,095 2,964,095 0 4,535,437 68.8% Total Operating: (32,639,448) 21,017,977 (34,176,897) 20,856,483 1,537,449 161,494 (83,289,338) 83,289,338 _ 40.9% 25.3% Revenue/Recoveries (33,882,551) (34,043,554) 161,003 100.5% Expenditures 20,978,194 21,045,843 67,650 100.3% Net Difference (12,904,358) (12,997,711) 93,354 100.7% 11,621,472 13,320,414 1,698,943 0 CORPORATION OF THE MUNICIPALITY OF CLARINGTON Attachment 2 to Continuity of Taxes Receivable Report FND-017-19 for the First Quarter of the Year 2019 Beginning Balance Interest Payments & Receivable Added Taxes Billed Adjustments ** March 2019 March 2018 December 31, 2018 Current Year Taxes 5,988,710 43,869,193 (59,122,400) (9,264,497) (9,123,223) Penalty and Interest 238,301 119,663 (334,028) 23,936 20,962 First Prior Year Taxes 1,571,193 - 2,343,957 3,915,150 3,730,506 Penalty and Interest 153,338 136,941 (59,264) 231,015 197,958 Second Prior Year Taxes 428,711 - 589,681 1,018,392 1,094,427 Penalty and Interest 58,770 36,301 23,652 118,723 106,465 Third and Prior Years Taxes 180,752 - 125,517 306,269 286,301 Penalty and Interest 45,456 11,502 19,782 76,740 45,098 Sub -total 8,665,231 304,407 43,869,193 1 (56,413,103) (3,574,272) (3,641,505) Prepaid Taxes (5,627,528) 5,627,528 - - Total 3,037,703 304,407 43,869,193 (50,785,575) (3,574,272) (3,641,505) ** These figures include refunds, write-off, 357's etc. Also included is the opening year transaction to roll the years forward. For example, current year receivables in December 2018 are now prior year receivables as of March 2019. Note 1: 2019 Interim Instalment months: February and April. Note 2: Prepaid taxes inculed property tax monthly pre -authorized payment (PAP). Clarington's PAP program collects monthly payments December 2018 to November 2019 for 2019 taxes. The PAP amount at the end of 2018 is applied to 2019 property taxes in the first quarter of 2019. Muncipality of Clarington Attachment 3 of Report FND-017-19 Debenture Repayment Schedule As of January 1, 2019 Diane Hamre Indoor Soccer RRC MAC Green Road Recreation Year Lacrosse RRC CCD space Improvements Improvements Grade Separation Courtice Library Complex Total 2019 165,174.58 107,074.68 84,141.23 107,967.35 541,802.38 78,146.32 1,757,651.34 2,841,957.88 2020 164,755.07 107,074.68 84,010.16 107,799.19 544,416.38 78,341.53 1,604,355.98 2,690,752.99 2021 163,863.49 107,074.68 83,946.43 107,717.40 546,559.49 78,465.50 1,054,141.30 2,141,768.29 2022 163,542.75 83,964.94 107,741.15 546,559.49 78,488.31 1,006,711.96 1,987,008.60 2023 162,800.11 83,859.28 107,605.57 546,276.36 78,425.64 978,966.96 2024 160,675.42 83,823.08 107,559.13 553,240.30 78,249.84 983,547.77 2025+ 668,982.03 858,416.52 2,693,604.53 546,030.80 4,767,033.88 980,811.42 321,224.04 1,172,727.15 1,504,806.31 5,972,458.93 1,016,147.94 5,422,860.58 16,391,036.37 Principal at 896,000.00 294,299.58 950,705.28 1,219,914.89 4,958,600.00 871,000.00 5,083,000.00 14,273,519.75 January 1, 2019 Principal at 755,000.00 201,115.35 893,002.36 1,145,872.34 4,573,600.00 811,000.00 3,500,000.00 11,879,590.05 January 1, 2020 Interest Rates 2.25% to 3.35% 5.12% 1.9% to 3.45% 1.9% to 3.45% 2.25% to 3.8% 1.32% to 2.8% 4.65% to 4.75% Municipality of Clarington RESIDENTIAL Single/Semi- Detached -New construction -Additions Townhouse Apartment TOTAL: Attachment 4 to Report FND-017-19 MUNICIPAL DEVELOPMENT CHARGES January to March YTD Change in DC paid from prior year: -82.6% Change in DC units from prior year: -79.5% NON-RESIDENTIAL Commercial Industrial Agricultural Government Institutional TOTAL: 2019 2019 Municipal Development Charges Municipal Development Charges Paid 2018 Municipal Development Number Municipal Development Number of Charges Paid of Units Charges Paid Units $ 239,149.00 14 $ 4,394,979.00 263 $ 525,440.00 40 $ - - $ - - 1 $ - - $ 764,589.00 54 $ 4,394,979.00 263 Change in DC paid from prior year: -82.6% Change in DC units from prior year: -79.5% NON-RESIDENTIAL Commercial Industrial Agricultural Government Institutional TOTAL: 2019 2018 Municipal Development Charges Municipal Development Charges Paid Paid $ 28,752.38 $ - $ - $ - $ 28,752.38 $ - Municipality of Clarington Municipal Development Charges Incentives As of March 31, 2019 Under By-law 2015-035 Date Residential Property Value Incentive Attachment 4 to Report FND-017-19 Jan -16 105 Queen Street, Bowmanville 413,822.26 Mid -Rise Residential Dec -17 109 King Avenue East, Newcastle 157,840.00 Revitalization Mixed Used Residential Incentives to Date $ 571,662.26 Non -Residential Jul -15 222 King Street East, Bowmanville 110,671.30 Medical Exemption Oct -15 21 King Avenue East, Newcastle 3,636.08 Revitalization Small Business Feb -16 222 Baseline Road East, Bowmanville 13,279.78 Existing Industrial Development Feb -16 28 King Avenue East, Newcastle 937.96 Revitalization Small Business Apr -16 70 Mearns Court, Bowmanville 1,470.67 Existing Industrial Development Oct -16 2323 Highway 2, Bowmanville 15,985.00 Conversion Residential to Commercial Oct -16 70 Mearns Court, Bowmanville 8,232.17 Existing Industrial Development Feb -17 48 Britton Court, Bowmanville 24,676.61 New Industrial Development May -17 5314 Main Street, Orono 974.18 Revitalization Small Business Jun -17 1726 Baseline Road, Courtice 10,190.86 New Industrial Development Oct -17 220 Lake Road, Bowmanville 67,850.25 New Industrial Development Dec -17 109 King Avenue East, Newcastle 72,886.25 Revitalization Mixed Use Apr -18 685 Lake Road, Bowmanville 38,980.87 New Industrial Development Oct -18 1050 Lambs Road, Bowmanville 613,842.47 New Industrial Development Non -Residential Incentives to Date $ 983,614.45 Total Value of Incentives to Date $ 1,555,276.71 Municipality of Clarington Mayor and Councillors' Discresionary Expenses January 1 to March 31, 2018 Attachment 5 to Report FND-017-19 Name Ward 2019 1st Quarter Mayor A. Foster Mayor 1,374.61 Councillor J. Neal Regional Wards 1 & 2 - Councillor G. Anderson Regional Wards 3 & 4 1,151.07 Councillor J. Jones Ward 1 73.62 Councillor R. Hooper Ward 2 798.82 Councillor C. Traill Ward 3 397.24 Councillor M. Zwart Ward 4 630.30 Total Per Quarter 4,425.66 1 These figures include only discretionary expenses and do not include remueration and travel allowancs. (for example - conferences, education courses, event tickets, external kilometre reimbursement) 2 Credits and repayments relating to these expenses will be included in the quarter in which they are received. 3 This report is not to be considered as the Annual Council Remuneration report by the Treasurer as required by the Municipal Act, S.O. 2001, c.25, Section 284.