Agenda

Consolidated



Budget Committee


Meeting No. 19   Contact Matthew Green, Committee Administrator
Meeting Date Monday, November 23, 2020
  Phone 416-392-4666
Start Time 9:30 AM
  E-mail buc@toronto.ca
Location Video Conference
  Chair   Councillor Gary Crawford  


Budget Committee

Councillor Gary Crawford (Chair)

Councillor Brad Bradford (Vice Chair)

Councillor Shelley Carroll

Councillor Mike Layton

Councillor Jennifer McKelvie

Councillor Frances Nunziata

 

This meeting of the Budget Committee will be held by electronic means and the proceedings of the Budget Committee will be conducted publicly. 

 

These measures are necessary to comply with physical distancing requirements and as civic buildings are closed to the public.

 

 

Members of Council and participating City Officials will be provided with the video conference details closer to the meeting date.

 

To provide comments or make a presentation to the Budget Committee

 

The public may submit written comments or register to speak to the Committee on any item on the agenda.

 

Written comments may be submitted by writing to buc@toronto.ca.

 

To speak to the Committee, please register by e-mail to buc@toronto.ca or by phone at 416-392-4666. Registered speakers will be provided with instructions on connecting to the meeting.

 

 

Special Assistance for Members of the Public: City staff can arrange for special assistance with some advance notice. If you need special assistance, please call 416-392-4666. TTY 416‑338-0889 or e-mail buc@toronto.ca.

 

Closed Meeting Requirements: If the Budget Committee wants to meet in closed session (privately), a member of the committee must make a motion to do so and give the reason why the Committee has to meet privately (City of Toronto Act, 2006).

 

Notice to people writing or making presentations to the Budget Committee: The City of Toronto Act, 2006 and the City of Toronto Municipal Code authorize the City of Toronto to collect any personal information in your communication or presentation to City Council or its committees. The City collects this information to enable it to make informed decisions on the relevant issue(s). If you are submitting letters, faxes, e‑mails, presentations or other communications to the City, you should be aware that your name and the fact that you communicated with the City will become part of the public record and will appear on the City’s website. The City will also make your communication and any personal information in it - such as your postal address, telephone number or e-mail address - available to the public, unless you expressly request the City to remove it.

 

Many Committee, Board, and Advisory Body meetings are broadcast live over the internet for the public to view. If you speak at the meeting you will appear in the video broadcast. Video broadcasts are archived and continue to be publicly available.

 

If you want to learn more about why and how the City collects your information, write to the City Clerk’s Office, City Hall, 100 Queen Street West, Toronto ON M5H 2N2 or by calling 416-392-4666.

 


 

toronto.ca/council

 

This agenda and any supplementary materials submitted to the City Clerk can be found online at www.toronto.ca/council. Visit the website for access to all agendas, reports, decisions and minutes of City Council and its committees. Items with original signatures are kept on file with the City Clerk's Office and are available for viewing.  

 

 

 

Declarations of Interest under the Municipal Conflict of Interest Act 

 

Confirmation of Minutes - October 8, 2020 and November 6, 2020

 

Speakers / Presentations - The speakers list will be posted online at 8:30 am on November 23, 2020 

 

Communications/Reports

BU19.1

ACTION 

 

 

Ward: All 

2021 Rate Supported Budget - 2021 Water and Wastewater Consumption Rates and Service Fees
Public Notice Given
Origin
(October 30, 2020) Report from the Chief Financial Officer and Treasurer and the General Manager, Toronto Water
Recommendations

Rates and Fees

 

The Chief Financial Officer and Treasurer and the General Manager, Toronto Water recommend that:

 

1. City Council adopt:

 

a. effective January 1, 2021, a 1.5 percent rate increase to the combined water and wastewater consumption rates (paid on or before the due date) charged to metered consumers as shown below and in Appendix B to the report (October 30, 2020) from the Chief Financial Officer and Treasurer and the General Manager, Toronto Water:

 

Table 1 - Rate Increase to Combined Water and Wastewater Consumption Rates Charged to Metered Consumers

 


Annual Consumption

Paid on or before the due date, $/m3

Paid after the due date, $/m3

Block 1 - All consumers of water, including the first 5,000 cubic metres per year consumed by Industrial users ("Block 1 rate")

4.1346

4.3522

Block 2 - Industrial process – use water consumption over 5,000 cubic metres per year, representing a 30 percent reduction from the Block 1 Rate ("Block 2 rate')

2.8941

3.0464

 

b. effective January 1, 2021, an increase of 1.5 percent to the water and wastewater consumption rates (paid on or before the due date) charged to flat rate consumers, as set out in Appendix B to the report (October 30, 2020) from the Chief Financial Officer and Treasurer and the General Manager, Toronto Water; and

 

c. effective January 1, 2021 the water and wastewater service fees, as set out in Appendix C to the report (October 30, 2020) from the Chief Financial Officer and Treasurer and the General Manager, Toronto Water.

 

2. With respect to assistance for low-income seniors and low-income disabled persons:

 

a. effective January 1, 2021, the water rebate for eligible low-income seniors and low-income disabled persons be set at a rate of $1.2404 /m3, representing a 30% reduction from the Block 1 rate (paid on or before the due date).

 

3. City Council authorize that the necessary amendments be made to Municipal Code Chapter 441 - Fees and Charges, Municipal Code, Chapter 849 - Water and Sewage Services and Utility Bill, Municipal Code Chapter 851 - Water Supply, and Municipal Code Chapter 681- Sewers, and any other necessary Municipal Code Chapters as may be required, to give effect to these Recommendations.

 

4. City Council authorize the City Solicitor to introduce any necessary Bills required to give effect to Council's decision and authorize the City Solicitor to make any necessary clarifications, refinements, including stylistic, format and organization, minor modifications, technical amendments or by-law amendments as may be identified by the City Solicitor, the Chief Financial Officer & Treasurer and the General Manager, Toronto Water.

 

Operating and Capital Budgets

 

The City Manager and Chief Financial Officer and Treasurer recommend that:

 

5.  City Council approve the 2021 Operating Budget for Toronto Water of $468.824 million gross, $1,415.336 million revenue and $946.512 million net capital from current contribution for the following services:

 

Service:

Gross ($000s)

Revenue ($000s)

Capital from Current Contribution

($000s)

Water Treatment & Supply

195,791.0

619,109.7

423,318.7

Wastewater Collection & Treatment

229,905.6

785,617.5

555,711.9

Stormwater Management

43,127.5

10,609.2

-32,518.3

Total Program Budget

468,824.0

1,415,336.3

946,512.3

 

6. City Council approve the 2021 staff complement for Toronto Water of 1,841.3 positions comprised of 116.0 capital position and 1,725.3 operating positions.

 

7. City Council approve 2021 Capital Budget for Toronto Water with cash flows and future year commitments totalling $7.597 billion as detailed by project in Appendix 6a to the 2021 Staff Recommended Capital and Operating Budget Notes - Toronto Water.

 

8. City Council approve the 2022-2030 Capital Plan for Toronto Water totalling $7.188 billion in project estimates as detailed by project in Appendix 6b to the 2021 Staff Recommended Capital and Operating Budget Notes - Toronto Water.

 

9. City Council request that all sub-projects with third party financing be approved conditionally, subject to the receipt of such financing in 2021 and if such funding is not forthcoming, their priority and funding be reassessed by City Council relative to other City-financed priorities and needs.

 

Service Levels

 

The General Manager, Toronto Water recommends that:

 

10. City Council approve the 2021 service levels for Toronto Water as outlined in Appendix 1 to the report (November 6, 2020) from the General Manager, Toronto Water, titled "Recommended 2021 Service Levels - Toronto Water".

Summary

This report presents the recommended 2021 water and wastewater consumption rates and service fees arising from the concurrent adoption by City Council of the 2021 Toronto Water Operating and Capital Budgets.

 

In order to support the recovery from the impact of COVID -19, this report recommends a 1.5 percent water and wastewater consumption rate increase, effective January 1, 2021, and inflationary fee increases for certain existing water and wastewater service fees, reflecting cost recovery for these services. 

 

The recommended 2021 water and wastewater consumption rates and service fees will allow the Toronto Water Program to remain fully self-funded and financially stable, with both operating and capital needs being met without excessive year-over-year fluctuations in pricing over the long term.

Financial Impact

Rates and Fees

 

The City of Toronto Water and Wastewater Program (the "Program") is currently fully funded on a 'pay-as-you-go' basis through a combined water and wastewater rate without any reliance on property taxes or borrowing/debenture financing. The property tax supported budget is not impacted by adoption of the recommendations contained in this report. 

 

In order to support the recovery from the impact of COVID -19, this report recommends a rate increase of 1.5 percent, effective January, 2021. The preliminary 10 year Capital Plan, approved by Council in 2015, was predicated on a 3 percent rate increase in 2021.

 

In response to the financial pressures from reducing the water rate increase in 2021, resulting in $19.1 million loss of forecasted revenue in 2021, adjustments were made to the operating budget through a combination of efficiencies and reductions with no impact or deferrals to the 2021 Capital Program as a result of the 1.5 percent rate increase.

 

The 1.5 percent rate increase ensures critical water, wastewater and stormwater infrastructure work carries on as planned and supports the need for ongoing economic activity in Toronto during COVID-19. The 1.5 percent rate increase will not impact service levels and Toronto Water will continue to provide services to protect public health, safety and property in a fiscally and environmentally responsible manner.

 

The Toronto Water 2021 Operating and Capital Budget requires a combined water and wastewater expenditure level of $1.415 billion, which is fully funded from the recommended 2021 water and wastewater consumption rates and service fees.

 

As shown in Table 2 below, the recommended rate increase impact on an average home consuming 230 m3/year, billed at the Block 1 Rate, will be 1.5 percent or $14 over the calendar year (from $937 in 2020 to $951 in 2021). The impact of the 1.5 percent increase on a commercial consumer at the Block 1 rate and an industrial consumer at the Block 2 rate with annual consumption of 100,000 m3 will be $6,110  and $4,362 respectively, the latter reflecting a 30 percent discount over the Block 1 rate for eligible industrial consumers. The rate increase impact on a large industrial consumer of 1,000,000 m3 eligible for the Block 2 rate will be $42,792.

 

Table 2 - Impact of recommended water rates effective, January 1, 2021

 

Type of Property

Consumption

2020 Cost

2021 Projected Cost

2021 Rate Increase Impact

 

m3/y

$/y

$/y

$/y

Percent

Residential

230

$937

$951

$14

1.50 percent

Commercial

100,000

$407,350

$413,460

$6,110

1.50 percent

Industrial

100,000

$291,232

$295,594

$4,362

1.50 percent

Large Industrial

1,000,000

$2,857,312

$2,900,104

$42,792

1.50 percent

 

The recommended increases to certain water and wastewater service fees set out in Appendix C are expected to generate additional revenue of approximately $751,107 which is intended to offset the cost increases associated with delivering these services.

 

Service Levels

 

The service levels recommended in the report (November 6, 2020) from the General Manager, Toronto Water titled "Recommended 2021 Service Levels – Toronto Water" are fully funded by the 2021 Recommended Operating and Capital Budgets for Toronto Water.

Background Information
(October 30, 2020) Report from the Chief Financial Officer and Treasurer and the General Manager, Toronto Water on 2021 Water and Wastewater Consumption Rates and Service Fees
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158193.pdf)

Appendix A - Summary of 2021 Operating and Capital Budget and Forecast, Corresponding Rate Increase and Capital Financing
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158194.pdf)

Appendix B - 2021 Water and Wastewater Consumption Rates
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158195.pdf)

Appendix C - 2021 Water and Wastewater Service Fees
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158196.pdf)

2021 Staff Recommended Capital and Operating Budget Notes - Toronto Water
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158355.pdf)

2021 Report 7C - Toronto Water
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158362.pdf)

2021 Report 7C - Toronto Wastewater
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158760.pdf)

(November 6, 2020) Report and Appendix 1 from the General Manager, Toronto Water on Recommended 2020 Service Levels - Toronto Water
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158406.pdf)

(November 6, 2020) Notice of Public Meeting - Proposed Amendments to the City of Toronto Municipal Code for Increases to the Water and Wastewater Consumption Rates and Certain Water and Wastewater Service Fees
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158364.pdf)

Notice of Public Meeting - Appendix A - 2021 Water and Wastewater Consumption Rates
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158366.pdf)

Notice of Public Meeting - Appendix B - Water Services
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158367.pdf)

(October 15, 2020) Briefing Note 1 - 2021 Capital Budget Briefing Note - Basement Flooding Protection Program - Program Status Update and Project List - 2021 to 2025
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158561.pdf)

(October 15, 2020) Attachment 1 to Briefing Note 1 - 2021 Capital Budget Briefing Note - Basement Flooding Protection Program - Program Status Update and Project List - 2021 to 2025
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158562.pdf)

(October 15, 2020) Attachment 2 to Briefing Note 1 - 2021 Capital Budget Briefing Note - Basement Flooding Protection Program - Program Status Update and Project List - 2021 to 2025
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158563.pdf)

Communications
(November 7, 2020) E-mail from Rick McMulkin (BU.Supp.BU19.1.1)

BU19.2

ACTION 

 

 

Ward: All 

2021 Rate Supported Budgets - Solid Waste Management Services and Recommended 2021 Solid Waste Rates and Fees
Public Notice Given
Origin
(November 6, 2020) Report from the Chief Financial Officer and Treasurer and the General Manager, Solid Waste Management Services
Recommendations

Rates and Fees

 

The Chief Financial Officer and Treasurer and the General Manager, Solid Waste Management Services recommend that:

 

1. City Council adopt effective January 1, 2021, the Solid Waste Management Services Rates and Fees as set out in Appendix A to the report (November 6, 2020) from the Chief Financial Officer and Treasurer and the General Manager, Solid Waste Management Services.

 
2. City Council authorize that the necessary amendments be made to the Municipal Code Chapter 441 – Fees and Charges, and any other necessary Municipal Code Chapters as may be required to give effect to these Recommendations.
 

3. City Council authorize the City Solicitor to introduce any necessary Bills required to give effect to Council's decision and authorize the City Solicitor to make  any necessary refinements, including stylistic, format and organization, as may be identified by the City Solicitor, the Chief Financial Officer and Treasurer, and General Manager Solid Waste Management Services.
 

4. City Council direct the General Manager of Solid Waste Management Services to develop and submit the 2022 and 2023 budgets as outlined in Appendix B to the report (November 6, 2020) from the Chief Financial Officer and Treasurer and the General Manager, Solid Waste Management Services, representing a 3 percent increase in 2022 and a 3 percent increase in 2023 to be applicable to all Solid Waste Management Services Rates and Fees in order to support the Divisions long term capital plan.
 

5. City Council direct the General Manager, Solid Waste Management Services to review, as part of the work of the Province's transition to extended producer responsibility programs and the amended Food and Organic Waste Policy Statement, the currently accepted items in the City's existing diversion programs with a primary focus on materials in the Green Bin stream and report back to Council with recommendations on items to remain or exclude from the list of accepted items using a triple bottom line approach which considers financial, environmental and social considerations.

 
6. City Council direct the General Manager, Solid Waste Management Services to review the current installment of waste collection bins in Parks and open spaces and as a pilot project determine how the quality of recyclable materials generated in Blue Bin recycling can be improved and the quantities of litter disposed of in landfill can be reduced through the expansion of Green Bin organics and the adjustment of waste bin types, quantities and placement within in Parks.

 
7. City Council request financial support from the Province of Ontario to fully-recover transition costs the City may incur as a result of the Province's anticipated adoption and implementation of measures under the Resource Recovery and Circular Economy Act, 2016 that will implement a new Extended Producer Responsibility model for Ontario, including but not limited to increased service contract costs, specialized professional services support, additional communications, promotion and education support.

 
8. City Council authorize the General Manager, Solid Waste Management Services, to establish and manage a First Nations Engagement Grant Fund for the Green Lane Landfill Renewable Energy Study Project funded through the capital program for qualifying local First Nations to retain, on a verified basis, technical services such as energy, environmental and/or similar consultants to assist with the engagement process. 


9. City Council authorize the General Manager, Solid Waste Management Services, and/or designate, to negotiate and enter into an amending agreement with the City's current mattress recycling contractor for a term up to December 31, 2026, with specific requirements that allow for increased mattress recycling volumes and maintain or exceed existing capture rates for recoverable materials, and on any other terms satisfactory to the General Manager, Solid Waste Management Services, and each in a form satisfactory to the City Solicitor, in support of efforts to increase diversion of these materials from landfill.

 
10. City Council direct that all the rates, fees and charges set out in Appendix A to the report (November 6, 2020) from the Chief Financial Officer and Treasurer and the General Manager, Solid Waste Management Services, adopted by Council in Recommendation 1 and 2 above, continue in full force and effect until such time as they are amended or repealed by City Council.

 

Operating and Capital Budgets

 

The City Manager and Chief Financial Officer and Treasurer recommend that:

 

11. City Council approve the 2021 Operating Budget for Solid Waste Management Services of $361.973 million gross, $379.110 million revenue and $17.137 million net for the following services:

 

Service:

Gross ($000s)

 Revenue ($000s)

Capital from Current Contribution

($000s)

City Beautification

37,288.4

6,498.9

-30,789.5

Residual Management

39,954.9

10,566.9

-29,388.0

Solid Waste Collection & Transfer

126,552.3

331,810.2

205,257.9

Solid Waste Education & Enforcement

3,854.1

0.3

-3,853.8

Solid Waste Processing & Transport

154,323.6

30,234.0

-124,089.6

Total Program Budget

361,973.3

           379,110.3

17,137.0

 

12. City Council approve the 2021 staff complement for Solid Waste Management Services of 1,125.3 positions comprised of 47.6 capital position and 1,077.7 operating positions.

 

13. City Council approve the 2021 technical adjustments to user fees, market rate user fee changes, and other fee changes above the inflationary adjusted rate Solid Waste Management Services identified in Appendix 9 to the 2021 Staff Recommended Capital and Operating Budget Notes - Solid Waste Management Services, for inclusion in the Municipal Code Chapter 441 “Fees and Charges”.

 

14. City Council approve 2021 Capital Budget for Solid Waste Management Services with cash flows and future year commitments totaling $549.159 million as detailed by project in Appendix 6a to the 2021 Staff Recommended Capital and Operating Budget Notes - Solid Waste Management Services.

 

15. City Council approve the 2022-2030 Capital Plan for Solid Waste Management Services totalling $188.295 million in project estimates as detailed by project in Appendix 6b to the 2021 Staff Recommended Capital and Operating Budget Notes - Solid Waste Management Services.

 

Service Levels

 

The General Manager of Solid Waste Management Services recommends that

 

16. City Council approve the 2021 service levels for Solid Waste Management Services as outlined in Appendix 1 to the report (November 6, 2020) from the General Manager, Solid Waste Management Services, titled "Recommended 2021 Service Levels - Solid Waste Management Services".

Summary

This report outlines the recommended 2021 Solid Waste Management Services Rates and Fees arising from the adoption of the 2021 Solid Waste Management Services Operating and Capital Budgets. The recommended rate and fee increases will vary based on customer group and are highlighted in Table 1. 

 

Table 1 highlights the recommended key Solid Waste Management Services Rates and Fees effective January 1, 2021.

 

Table 1 - 2021 Recommended Rates and Fees Increases (Effective January 1, 2021)

 

Customer Group

Percent Rate Increase

Comments

Multi-Residential

1.50 percent

Mitigate impact in response to COVID-19

Single Family and Residential Units Above Commercial (RUAC)

1.50 percent

Mitigate impact in response to COVID-19

Bag Tags, Bin Purchase

1.50 percent

Mitigate impact in response to COVID-19

Commercial, Divisions, Agencies and Corporations, Schools

1.50 percent

Mitigate impact in response to COVID-19

Blended Rate

1.50 percent

 

 

The recommended blended 1.5 percent increase in Solid Waste Management Services Rates will continue to provide and maintain Council Approved service levels unchanged from the prior year and fund the 2021 Capital Budget and 10-Year Capital Plan. This is in line with the City's Economic Support and Recovery plan to assist residence and business in the City of Toronto recover from the impact of Covid-19. 

 

The 1.5 percent utility rate increase for 2021 is recommended to maintain the contribution to Waste Management Reserve fund to finance future capital investments, and to address affordability concerns resulting from the pandemic , which results in a loss of approximately $3.334 million (gross) in previously anticipated revenues when compared to the planned 2.7 percent blended rate increase for 2021.

 

The 2021 Operating Budget is $361.973 million, representing an increase of $1.236 million or 0.3 percent over the 2020 Operating Budget as well as a $17.137 million contribution to the Waste Management Reserve Fund, all of which are offset by total revenues of $379.110 million. The marginal increase in operating expenditures is attributable to contractual inflation increases and an increase in debt principal and interest payments to fund the 10-year Capital Budget and Plan as well as other balancing action taken by staff.  

 

The 2021 Capital Budget is $69.079 million including carry-forwards, which is comprised of $51.374 million in new 2021 funding and $17.705 million in funding carried forward from 2020 into 2021. The 2021 Capital Budget and Plan remains generally unchanged from last year focusing on the following key capital objectives and priorities for Solid Waste Management Services:

 

- To safely and efficiently collect materials from 875,000 homes, business and public spaces by implementing Council's direction on health and safety by installing telematics solutions on vehicles in support of Vision Zero 2.0;

 
- To manage 900,000 plus tonnes of material in an environmentally and fiscally sustainable manner by accelerating the development of the 3rd Anaerobic Digester;

 
- To continue investigating long-term disposal options including landfill capacity development and energy from waste as well as site contract renegotiations and strategically using alternate landfill sites; and

 
- To continue to develop and invest in renewable energy such as Renewable Natural Gas facilities.

Financial Impact

Rates and Fees

 

Solid Waste Management Services is a utility funded program that recovers program costs from a combination of service rates and fees, recoverable debt, other charges, the sale of recyclables and industry stewardship funding. The 2021 Budget provides funding to support Solid Waste Management Services operations and capital projects, and diversion by reducing materials entering the waste stream and overall waste sent to landfill.

 

Revenues total $379.110 million in the recommended 2021 Operating Budget as outlined in the table below.

 

Table 2 - 2021 Operating Budget Revenues

 

Revenue Source

Revenue Total

Percent of Total

Service Rates and Fees

$327.680M

86 percent

Industry Stewardship funding

$25.062M

7 percent

Sale of Recyclables

$8.628M

2 percent

Interdivisional Recoveries

$7.201M

2 percent

Capital Recoveries

$5.040M

1 percent

Other Recoveries

$5.499M

2 percent

Total

$379.110M

100 percent

 

Service Rates and Fees of $327.608 million represent 86 percent of total revenues which consists of a 1.5 percent rate increase on all customer classification except for the following:

 

Table 3 - User Fee Adjustments to Reflect Full Cost Recovery

 

User Fee Adjustments

Comments

Rate Increase / Decrease

 

Oversized and Metal Item Fee - All Customers

Full cost recovery

$3.85 annual increase

 

Waste Loading Services - Transfer Station

Encourage use of service

$5.30 per tonne decrease

 

 

The 2021 Solid Waste Management Services Operating Budget includes an increase to the Oversized and Metal Item fee to reflect full cost recovery for the service inclusive of recycling mattresses city-wide.  The oversize and metal item fee rate increasing from $15.90 to $19.75 per household.  

 

The 2021 Recommended Rates and Fees associated with the various customers and services are outlined in Appendix A.

 

The 2021-2030 Capital Budget and 10-Year Plan totals $737.454 million, which includes 2020 capital carryovers to 2021 of $17.705 million financed by reserve funding of $359.163 million (49 percent) and recoverable debt of $378.291 million (51 percent). 

 

The City issues debt on behalf of Solid Waste Management Services and debt servicing costs are repaid to the City by Solid Waste Management Services through the Debt Reserve Fund financed by operating fee revenues.  Capital projects are funded by the Program’s operating contributions to the Waste Management Reserve Fund, Fleet Reserve, Green Lane Reserve Fund and Perpetual Care Reserve Fund.

 

The Solid Waste Management Services 2021 Operating Budget also includes $33.973 million to repay debt issued to fund capital infrastructure needs ($15.946 million) and to pay for the Green Lane Landfill acquisition ($18.027 million).

 

Recommended Rate and Fee Multi-Year Sustainability Plan

 

At its meeting of March 7, 2019 City Council adopted the recommendations in the Executive Committee Report EX2.3 "2019 Rate Supported Budgets – Solid Waste Management Services and Recommended 2019 Solid Waste Rates and Fees" and directed the General Manager, Solid Waste Management Services and the Executive Director, Financial Planning to develop a Multi-Year Financial Strategy and rate structure for the Solid Waste Management Services Division which was reported back in the 2020 budget submission to Budget Committee.

 

KPMG Consulting is working with Solid Waste Management Services to assist with this review to maintain a sustainable multi-year financial plan under the following scenarios:

 

- Develop a baseline scenario that trues-up the rates to equal the cost of providing existing services. 

 
- Assess the potential impact of full Extended Producer Responsibility starting in 2023 that identifies the impact of the City's reduced recycling responsibilities when recycling collection, processing and recycling disposal responsibilities are transferred from the City of Toronto to producers of printed paper and packaging. 
 

- Review Solid Waste Management Services 10-Year Capital Budget and Plan funding to ensure capital reserve contributions and recoverable debt adequately fund current and future infrastructure requirements.

 

The 2021 Operating Budget is recommending a 1.5 percent rate increase and has been adjusted downwards from 2.7 percent projected in last year's budget to mitigate impacts on Solid Waste Management Services customers in response to the ongoing COVID-19 pandemic. In addition, as a result of the recommended 1.5 percent increase for 2021 the 2021 Operating Budget is seeking approval for a 3.0 percent annual rate increase for the 2022 and 2023 outlook years to ensure future program and rate stability. The 2024 to 2030 Operating Budget is projecting a 3.0 percent year over year rate increase over the remaining seven years to ensure sufficient contributions to reserves are maintained to fund the capital budget and plan. This was the projected rate increase that was presented to Council for the development of the 2020 budget.

 

The introduction of Extended Producer Responsibility resulting in a net reduction in expenditures of $15 million beginning in 2024 has been incorporated in the outlook years to help stabilize the rate. If Extended Producer Responsibility is not implemented by 2024 and $15 million from Extended Producer Responsibility efficiencies is not recovered, Solid Waste Management Services will need to increase the rate over the following few years. 

 

Operating Budget recommends the following user fees:

 

Table 4 - 2021 Recommended 2021 and 2022 to 2030 Proposed User Fee Increase

 

Customer type

Approved

Recommended for 2021 Approval

Projected Rate Increases

 

 

 

 

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Multi Residential

1.50%

1.50%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

Single Family & RUAC

2.50%

1.50%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

Commercial and others

6.00%

1.50%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

Blended (Excluding Oversized)

2.45%

1.50%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

3.00%

 

Forecasted future rates and fee increases by customer group are as described in Appendix B.

 

Extended Producer Responsibility Scenarios

 

The Consultant Study ran a number of Extended Producer Responsibility scenarios assuming that in 2024 the City's recycling responsibilities will be transferred to producers.  There are a number of unknowns as the regulatory landscape and planned transition to full Extended Producer Responsibility under current transition plans by the Province is between 2023 and 2025.  The Study indicated that if the City of Toronto is no longer responsible for managing the blue box system and the responsibilities are transferred to Producers, certain efficiencies are estimated between $15.000 and $20.000 million could be realized annually. 

 

The 2021 Operating Budget outlook includes a $15.000 million in efficiencies starting in 2024 going forwards. These savings have been included as a funding source for the 10-Year Capital budget and Plan starting in 2024.  If Extended Producer Responsibility does not materialize, user fee rates will need to increase beyond the proposed changes in 2024 in lieu of realizing the anticipated $15.000 million in efficiencies.

 

Solid Waste Management Services 10-Year Capital Budget and Plan funding

 

This report recommends that the user fees be increased to 1.50 percent in 2021 below last years projected increase of 2.70 percent to mitigate impact to Solid Waste Management customers in response to ongoing COVID-19 pandemic, and in subsequent 9 years be increased by 3.00 percent annually starting 2022 as indicated in Table 4 above. 

 

In addition, Extended Producer Responsibility funding of $15.000 million is included in budget starting in 2024, annual revenues generated from the sale of Renewable Natural Gas of $3.305 million and annual revenue from Carbon Tax Credit of $0.300 million are included in budget beginning in 2021.  The Extended Producer Responsibility funding contributes to keeping user fee increases to the rate of inflation over the 10-year Capital Budget and Plan.  However, if Extended Producer Responsibility is not implemented or City of Toronto is transitioned to Extended Producer Responsibility in later years (2025 or 2026), a future additional rate increase of approximately 2 percent per year starting in 2024 will be required.

 

Given the recommended rate increase, as well as Extended Producer Responsibility and Renewable Natural Gas funding the Capital or Waste Management Reserve balance will change from $59.812 million in 2021 to $39.618 million in 2023 and to $132.913 million in 2030 which is adequate to fund the recommended 10-Year Capital Budget and Plan and provides a reserve balance base for future year requirements beyond 2030 such as a new or expanded land fill site or other Council approved diversion facility as shown below in Chart 1.

 

Chart 1 – Capital Funding and Waste Management Reserve Balance

 

(See Chart 1 titled "- Capital Funding and Waste Management Reserve Balance",

in the Financial Impact section of the report dated

November 6, 2020 from the Chief Financial Officer and Treasurer and General Manager, Solid Waste Management Services)

 

Table 5 provides a summary of anticipated major capital investments required in the 10-Year period beyond the 10-Year Capital Plan (2031-2040) which aligns to the implementation of longer term disposal options including future landfill options once Green Lane is to capacity, completion of Energy from Waste as well as a new Waste Management facility.

 

Table 5 - Capital Investments for the period 2031 to 2040 is $1,000.000 million

 

 

Capital Investment

2031 - 2035

2036 - 2040

Total

Future Landfill

$250.000M

 

$250.000M

Future Energy from Waste *

$225.000M

$225.000M

$450.00M

Future Mixed Waste Processing Facility*

$100.000M

$200.000M

$300.000M

Totals

$575.000M

$425.000M

$1,000.000M

 

Note: * Pending Council Direction

 

Two projects have been accelerated from future periods beyond the 10-Year Capital Budget and Plan which includes the Organics Processing Facility or the 3rd Anaerobic Digester ($129.800 million) and the Landfill Capacity Development / Energy from Waste Project of which $50.000 million has been moved into 2030.

 

Pending initiatives and actions, in addition to Extended Producer Responsibility uncertainties, that may impact Solid Waste Management Services future operating costs and revenues opportunities are as follows:

 

Expiry and renewal of following major operating contracts valued at $657.237million over the next 3 years, which include:

 

- Operation and maintenance of the Green Lane Landfill Site, current term expires March 31, 2021, with two (2) option years remaining ($79.453 million); contract extension negotiations that would also replace the option years are in progress;

 
- Processing and Haulage of Source Separated Organics waste contacts (3 service providers) expiring on May 31, 2021 ($31.487 million), new RFP in development;

 
- District 1 Collection contract expiring June 30, 2021 with two (2) option years remaining ($63.996 million);

 
- District 2 Collection contract expiring August 2, 2021 ($162.243 million); negotiated extension agreement signed with vendor;  
 

- Processing services for Leaf & Yard Waste expiring December 31, 2022, with 2 option years remaining ($64.559 million)

 
- Contingency landfill disposal capacity contracts (3 service providers) expiring August 31, 2022 ($94.785 million);

 
- Supply, delivery and maintenance of recycling and garbage bins expiring November 30, 2022 ($47.149 million); and

 
- Single Stream Recovery Material Processing Contract expiring January 31, 2023, with up to four (4) option years remaining ($113.565 million).

 

The extent to which these initiatives and contract changes will impact future expenditures and revenues is not fully known; however, estimates have been included in the outer years.

 

Service Levels

 

The service levels recommended in the report (November 6, 2020) from the General Manager, Solid Waste Management Services, titled "Recommended 2021 Service Levels - Solid Waste Management Services" are fully funded by the 2021 Recommended Operating and Capital Budgets for Solid Waste Management Services.

Background Information
(November 4, 2020) Report and Attachments 1-2 from the Chief Financial Officer and Treasurer and General Manager, Solid Waste Management Services on 2021 Rate Supported Budgets - Solid Waste Management Services and Recommended 2021 Solid Waste Rates and Fees
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158189.pdf)

2021 Staff Recommended Capital and Operating Budget Notes - Solid Waste Management Services
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158358.pdf)

2021 Report 7C - Solid Waste Management Services
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158359.pdf)

(November 6, 2020) Report and Appendix 1 from the General Manager, Solid Waste Management Services on Recommended 2021 Service Levels - Solid Waste Management Services
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158407.pdf)

(November 6, 2020) Notice of Public Meeting - 2021 Rate Supported Budgets - Solid Waste Management Services and Recommended 2021 Solid Waste Rates and Fees
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158360.pdf)


BU19.3

ACTION 

 

 

Ward: All 

2021 Rate Supported Budgets - Toronto Parking Authority
Public Notice Given
Confidential Attachment - The security of the property of the municipality or local board, and labour and employee negotiations
Recommendations

Operating and Capital Budgets

 

The City Manager and Chief Financial Officer and Treasurer recommend that:

 

1. City Council approve the 2021 Operating Budget for Toronto Parking Authority of $95.7 million gross, $93.5 million revenue and $2.2 million net for the following services:

 

Service:

 Gross ($000s)

Revenue ($000s)

Net ($000s)

On-Street Parking

10,636.4

30,832.0

(20,195.6)

Off-Street Parking

75,441.2

55,245.6

20,195.6

Bike Share Program

9,646.5

7,409.5

2,237.0

Total Program Budget

95,724.1

93,487.1

2,237.0

 

2. Absent of any federal and provincial support for 2021, that the Toronto Parking Authority draw from prior year retained earnings to offset any 2021 net pressure.

 

3. City Council approve the 2021 staff complement for Toronto Parking Authority of 326.5 operating positions.

 

4. City Council approve 2021 Capital Budget for Toronto Parking Authority with cash flows and future year commitments totaling $172.1 million as detailed by project in Appendix 6a to the 2021 Staff Recommended Capital and Operating Budget Notes - Toronto Parking Authority.

 

5. City Council approve the 2022-2030 Capital Plan for Toronto Parking Authority totaling $62.3 million in project estimates as detailed by project in Appendix 6b to the 2021 Staff Recommended Capital and Operating Budget Notes - Toronto Parking Authority.

 

6. City Council direct the Chief Financial Officer and Treasurer, in consultation with the President of the Toronto Parking Authority to report to the Budget Committee on an updated Income Sharing Renewal Agreement no later than December 31, 2021.

 

Service Levels

 

The Acting President, Toronto Parking Authority recommends that:

 

7. City Council approve the 2021 service levels for Toronto Parking Authority as outlined in Appendix 1 to the report (November 6, 2020) from the Acting President, Toronto Parking Authority, titled "Recommended 2021 Service Levels - Toronto Parking Authority".

 

8. City Council direct that Confidential Attachments 1 and 2 to the report (October 19, 2020) from the Acting President, Toronto Parking Authority, remain confidential in their entirety as they pertain to personal matters about identifiable individuals, including municipal or local board employees, and labour relations or employee negotiations, and the security of property belonging to the City or one of its agencies or corporations.

Summary

The City Manager and the Chief Financial Officer and Treasurer have submitted recommendations for the 2020 Recommended Operating Budget and 2021-2030 Recommended Capital Budget and Plan for Toronto Parking Authority.

Financial Impact

Service Levels

 

The service levels recommended in the report (November 6, 2020) from the Acting President, Toronto Parking Authority, titled "Recommended 2021 Service Levels - Toronto Parking Authority" are fully funded by the 2020 Recommended Operating and Capital Budgets for Toronto Parking Authority.

Background Information
2021 Staff Recommended Capital and Operating Budget Notes - Toronto Parking Authority
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158231.pdf)

2021 Report 7C - Toronto Parking Authority
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158405.pdf)

(November 6, 2020) Report and Appendix 1 from the Acting President, Toronto Parking Authority on Recommended 2020 Service Levels - Toronto Parking Authority
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158416.pdf)

(November 6, 2020) Notice of Public Meeting - Toronto Parking Authority - 2021 Recommended Operating Budget, 2021 Recommended Capital Budget and 2022-2030 Recommended Capital Plan
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158232.pdf)


3a 2021 Operating Budget and 2021-2030 Capital Budget - Toronto Parking Authority
Origin
(November 3, 2020) Letter from the Board of Directors of the Toronto Parking Authority
Summary

At its meeting on November 3, 2020, the Board of Directors of the Toronto Parking Authority:

 

1. Approved the 2021 Operating Budget and 2021-2030 Capital Budget for Toronto Parking Authority, as outlined in the report (October 19, 2020) from the Acting President, Toronto Parking Authority.

 

2. Forwarded the 2021 Operating Budget and 2021-2030 Capital Budget for Toronto Parking Authority as outlined in the report (October 19, 2020) from the Acting President, Toronto Parking Authority, to City Council.

 

3. Directed that Confidential Attachments 1 and 2 to the report (October 19, 2020) from the Acting President, Toronto Parking Authority, remain confidential in their entirety as they pertain to personal matters about identifiable individuals, including municipal or local board employees, and labour relations or employee negotiations, and the security of property belonging to the City or one of its agencies or corporations.

Background Information
(November 3, 2020) Letter from the Board of Directors for the Toronto Parking Authority on the 2021 Operating Budget and 2021-2030 Capital Budget
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158271.pdf)

(October 19, 2020) Report from the Acting President, Toronto Parking Authority on the 2021 Operating Budget and 2021-2030 Capital Budget
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158272.pdf)

Confidential Attachment 1
Confidential Attachment 2
Attachment 3 - Budget TO 2020 Administrative Review - Toronto Parking Authority 2021 Operating Budget and 2020-2029 Capital Budget & Plan Submission
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158275.pdf)


3b Proposed Increase - Parking Violation Notice Penalty Amount
Origin
(November 3, 2020) Letter from the Board of Directors of the Toronto Parking Authority
Summary

At its meeting on November 3, 2020, the Board of Directors of the Toronto Parking Authority:

 

1. Referred the report (October 20, 2020) from the Acting President, Toronto Parking Authority to City Council for consideration through the Budget Committee.

 

2. Recommended that City Council increase the penalty amount from $30.00 to $75.00 for the offences in Sections 950-601C(1), 950-601C(2), 950-601C(3), 950-601F(1), 950-601G(1), 950-601G(2) and 950-601O of City of Toronto Municipal Code Chapter 950, Traffic and Parking, with an implementation date of June 1, 2021.

 

3. Recommended that City Council amend City of Toronto Municipal Code Chapter 610, Penalties, Administration of, generally as set out in Attachment 2 to the report (October 20, 2020) from the Acting President, Toronto Parking Authority.

Background Information
(November 3, 2020) Letter from the Board of Directors of the Toronto Parking Authority on Proposed Increase - Parking Violation Notice Penalty Amount
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158356.pdf)

(October 20, 2020) Report and Attachments 1-4 from the Acting President, Toronto Parking Authority on Proposed Increase - Parking Violation Notice Penalty Amount
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158357.pdf)


BU19.4

ACTION 

 

 

Ward: All 

Municipal Land Transfer Tax Rebate for First-Time Home Buyers
Origin
(June 30, 2020) Letter from City Council
Recommendations

The Executive Committee recommends that:

 

1. City Council receive the report (June 8, 2020) from the Chief Financial Officer and Treasurer for information.

Summary

City Council on June 29 and 30, 2020, referred Item EX14.5 to the November 17, 2020 meeting of the Budget Committee for further consideration.

  

City Council directed the Chief Financial Officer and Treasurer to report to the April 1, 2020 City Council Meeting on opportunities to provide First-Time Home Buyer with greater relief from the Municipal Land Transfer Tax. This includes the maximum price eligibility threshold of $400,000 to reflect increased home prices in Toronto. The rebate offsets the tax on up to $400,000 of the purchase price.

Background Information
(June 30, 2020) Letter from City Council referring Item EX14.5 to the November 17, 2020 meeting of the Budget Committee for further consideration.
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-157021.pdf)


BU19.5

ACTION 

 

 

Ward: All 

Project Cost Adjustments and Deferrals - Accelerations to the Parks, Forestry and Recreation's 2020 Capital Budget and 2021-2029 Capital Plan
Origin
(October 29, 2020) Report from the General Manager, Parks, Forestry and Recreation
Recommendations

The General Manager, Parks, Forestry and Recreation recommends that:  

 

1. City Council authorize the reallocation of cash flows in the Parks, Forestry and Recreation's 2020 Council Approved Capital Budget and 2021-2029 Capital Plan, for the deferral and acceleration of cash flow in the amount of $4.571 million, as included in Appendix 1 to the report (October 29, 2020) from the General Manager, Parks, Forestry and Recreation.

2. City Council authorize amendments to increase project costs and cash flows within the Parks, Forestry and Recreation's 2020 Council Approved Capital Budget and future year commitments in the amount of $1.619 million, as included in Appendix 2 to the report (October 29, 2020) from the General Manager, Parks, Forestry and Recreation, with no debt impact.

 

3. City Council authorize amendments to create five (5) new sub-projects with a total project cost of $1.633 million and cash flow commitments of $0.113 million in 2020, $0.820 million in 2021 and $0.700 million in 2022, within the Parks, Forestry and Recreation's 2020 Council Approved Capital Budget and 2021-2029 Capital Plan, as included in Appendix 3 to report (October 29, 2020) from the General Manager, Parks, Forestry and Recreation, with no debt impact.

 

4. City Council approve an increase in project cost to Parks, Forestry and Recreation's 2020 Council Approved Capital Budget and 2021-2029 Capital Plan for the North East Scarborough New Community Centre sub-project, as part of the Community Centre project, in the amount of $20.200 million, from $37.000 million to $57.200 million, with future year cash flow commitments of $13.400 million in 2023 and $6.800 million in 2024, with $18.800 million funded by Development Charges (XR2114), $0.700 million from the City-Wide Parkland Development Cash-in-lieu Reserve Fund (XR2211), and $0.700 million from the East District Parkland Development Cash-in-lieu Reserve Fund (XR2205), to meet the increased scope and implementation of Net Zero for City buildings.

Summary

This report requests authority from City Council to amend the Parks, Forestry and Recreation's 2020 Council Approved Capital Budget and 2021-2029 Capital Plan by adjusting project costs and future year cash flow commitments contained within the 10-Year Capital Plan.  These adjustments will align cash flows with capital project delivery schedules, multi-year contracts, and program requirements.  Amendments to cash flows and project costs are also requested to reflect the expanded scope of work resulting from the design process; to achieve net zero for a new building as directed through Council; to initiate design work; for projects that are experiencing unforeseen site conditions; or alternatively to advance projects into 2020 that are ready to proceed.

 

The recommended in-year adjustments, as presented in this report, will have no incremental debt impact on the Parks, Forestry and Recreation's 2020-2029 Council Approved Capital Budget and Plan.

Financial Impact

Approval of the recommendations of this report will amend the 2020-2029 Council Approved Capital Budget and Plan for Parks, Forestry and Recreation.  The total change includes an overall net increase in project costs of $23.452 million with associated cash flow funding of $0.306 million in 2020, $2.246 million in 2021, $0.700 million in 2022, $13.400 million in 2023, and $6.800 million in 2024, with no incremental debt impact.

 

The 2020 Council Approved Capital Budget and future year cash flow commitments will be revised by deferring and accelerating a total of $4.571 million in cash flow over 2020 to 2021 as detailed in Appendix 1.  A number of multi-year projects are projected to proceed ahead of the forecast.  The accelerated spending of cash flow for these projects is off-set by delays within other projects where works are delayed due to phasing of work, the protracted process for acquiring land, and coordination with other projects as outlined in Appendix 1.  These adjustments do not change the total project costs, the scope of the projects, or approved debt requirements over the 10-year period.

 

The approval of Appendix 2 and 3 to this report will authorize in-year budget adjustments to the 2020-2029 Council Approved Capital Budget and Plan that results in a net increase in project costs of $3.252 million and cash flow commitments of $0.306 million in 2020 and $2.246 million in 2021, and $0.700 million in 2022, fully funded by Development Charges, Section 37 and 42 Planning Act revenues, and a contribution from the University of Toronto for a joint project.  These adjustments are required to initiate design work; to address the expanded scope of work resulting from the design process; and for unforeseen site conditions for various neighbourhood improvement projects.    

 

In addition, Recommendation 4 requests authority from City Council to approve an increase in project cost to the 2020 Council Approved Capital Budget and 2021-2029 Capital Plan for the North East Scarborough New Community Centre sub-project, in the amount of $20.200 million, from $37.000 million to $57.200 million, with future year cash flow commitments of $13.400 million in 2023 and $6.800 million in 2024.  The increase is required to meet the increased scope as a result of the design strategy and implementation of Net Zero for City buildings and is fully funded by Development Charges and Parkland Development Cash-in-lieu Reserve Funds.

 

Any operating impacts resulting from these capital projects upon completion will be submitted in future Operating Budget Submissions for consideration. 

 

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial impact information.

Background Information
(October 29, 2020) Report from the General Manager, Parks, Forestry and Recreation on Project Cost Adjustments and Deferrals / Accelerations to the Parks, Forestry and Recreation's 2020 Capital Budget and 2021-2029 Capital Plan
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158261.pdf)

Appendices 1-3
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158262.pdf)

Communications
(August 31, 2020) E-mail from Andrea Gutierrez (BU.Supp.BU19.5.1)

BU19.6

ACTION 

 

 

Ward: All 

Capital Variance Report for the Twelve Months Ended December 31, 2019
Origin
(November 10, 2020) Report from the Chief Financial Officer and Treasurer
Recommendations

The Chief Financial Officer and Treasurer recommends that:

 

1. City Council receive this report and attached Appendices for information

 

2. City Council approve in-year budget adjustments to the 2019-2028 Approved Capital Budget and Plan as detailed in Appendix 5 to the report (November 10, 2020) from the Chief Financial Officer and Treasurer that result in no incremental impact on debt financing.

Summary

The purpose of this report is to provide City Council with the City of Toronto capital spending for the year ended December 30, 2019. Furthermore, this report seeks Council's approval for in-year budget adjustments to the 2019 Approved Capital Budget that have no impact on 2019 approved debt.

 

Actual capital expenditures for 2019 totalled $3.772 billion or 66.7 percent of 2019 approved Capital Budget of $5.655 billion. Tax Supported Programs and Agencies reported capital expenditures of $2.780 billion representing 61.4 percent of their collective 2019 approved Capital Budget of $4.526 billion. Rate Supported Programs reported capital expenditures of $991.8 million, representing 87.8 percent of their collective 2019 approved Capital Budget of $1.129 billion.

 

Table 1 - Capital Variance Summary

 

 

2019 Approved Budget

2019 Actual Expenditure

 

        ($M)

         ($M)

       Percent

City Operations

                 1,981

             1,285

         64.9 percent

Agencies

                 2,545

             1,495

         58.8 percent

Subtotal - Tax Supported

                 4,526

             2,780

         61.4 percent

Rate Supported

                 1,129

               992

         87.8  percent

TOTAL

                 5,655

             3,772

         66.7 percent

*2019 Approved Budget includes $1.909 billion 2018 Carry Forward Funding

 

The report also details the 233 completed capital projects that have a combined budget of $269.5 million that are ready to be closed. They have been completed under budget, realizing underspending of $17.8 million. The permanent underspending which has associated funding of $0.5 million in Federal Subsidy, $1.5 million in Capital from Current, $6.0 million in debt, $9.5 million in reserves/reserve funds and $0.3 million in Recoverable Debt will be returned to their original Council approved funding sources.

Financial Impact

Total capital expenditure in 2019 totalled $3.772 billion or 66.7 percent of the total 2019 Approved Capital budget of $5.655 billion. 11 of the 36 City Programs and Agencies have projected year-end spending rate in excess of 70 percent.

 

Appendix 1 summarizes the spending in the first nine months and year-end projected spending rate by City Program and Agency.

 

Projects to be Closed:

 

The City’s Financial Control By-Law stipulates that the Chief Financial Officer must “submit a report to Council on an annual basis detailing all capital projects closed during the year". The City reports quarterly on the disposition of closed projects.

 

A capital project is considered fully closed when all its subsidiary projects/subprojects are completed. 233 completed capital projects that have a combined budget of $269.5 million that are ready to be closed. They have been completed under budget, realizing underspending of $17.8 million. The permanent underspending has associated funding of $0.5 million in Federal Subsidy, $1.5 million in Capital from Current, $6.0 million in debt, $9.5 million in reserves/reserve funds and $0.3 million in Recoverable Debt.

Background Information
(November 10, 2020) Report from the Chief Financial Officer and Treasurer on Capital Variance Report for the Twelve Months Ended December 31, 2019
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158375.pdf)

Appendix 1 - 2019 Capital Variance and Projection Summary for the Twelve Months Ended December 31, 2019
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158396.pdf)

Appendix 2 - Capital Projects for Closure
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158397.pdf)

Appendix 3 - Major Capital Projects
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158398.pdf)

Appendix 4 - In-Year Adjustments for the Twelve Months Ended December 31, 2019
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158399.pdf)

Appendix 5 - Capital Variance Dashboard by Program and Agency
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158400.pdf)


BU19.7

ACTION 

 

 

Ward: All 

Operating Variance Report for the Year Ended December 31, 2019
Origin
(November 10, 2020) Report from the Chief Financial Officer and Treasurer
Recommendations

The Chief Financial Officer and Treasurer recommends that:

 

1. City Council approve a one-time amendment to the City's annual surplus allocation policy of contributing 75 percent of operating surplus to the Capital Financing Reserve to enable alternative surplus allocation requirements.

 
2. City Council approve the surplus allocation as detailed in Table 3 of this report including a $213.751 million allocation to the Tax Rate Stabilization Reserve to be used to offset COVID financial impacts in the event adequate Federal/Provincial funding support is not forthcoming.

 
3. City Council approve the withdrawal from the Sony Centre Stabilization Reserve Fund (XQ2031) of $0.167 million and Toronto Centre for the Arts Stabilization Reserve Fund (XQ1060) of $0.167 million to partially mitigate the 2019 year-end deficit of TO Live.

Summary

The purpose of this report is to provide Council with the City of Toronto's Operating Variance results for the year ended December 31, 2019 and the disposition of the 2019 year-end operating surplus.

 

As of December 31, 2019 the City experienced a favourable variance of $431.1 million net with $213.8 million in surplus ultimately available for allocation when accounting for the following:

 

- A significant one-time surplus of $106.0 million resulting from the merger of City pensions to be dedicated to the underfunded Employee Benefits Reserve Fund;


- $30.9 million in Toronto Building surplus that the city is obligated to contribute towards the Building Reserve;


- $40.4 million in planned contributions to underfunded liabilities and reserve funds as detailed in Table 3; and


- $40.0 million in Capital Financing Reserve commitments consistent with the capital financing strategy.

 

Table 1 summarizes the financial position of the City's Tax Supported Operations at year-end.

 

Table 1 - Tax Supported Operating Variance Summary ($ Millions)

 

Variance ($M)

Favourable / (Unfavourable)

2019 Year-End Results

Budget

Actual

Variance

City Operations

2,289.0

2,237.7

51.3

Agencies

2,099.2

2,089.0

10.2

Corporate Accounts

(75.2)

(444.8)

369.6

Total Variance

4,313.0

3,881.9

431.1

Less: Toronto Building

 

30.9

Less: Pension Merger

 

106.0

Less: Planned Contributions to Underfunded Liabilities / Reserves

 

40.4

Less: Capital Financing Reserve Commitments

 

40.0

Adjusted Variance

 

213.8

Percent of Gross Budget

 

1.8 percent

 

As noted in Table 1 above, for the year ended December 31, 2019 Tax Supported Operations experienced a favourable net variance of $431.1 million. The key factors contributing to the favourable year-end variance are:

 

- Favourable net expenditures in City Operations ($51.3 million) is primarily due to lower than planned salary and benefits while sustaining current service levels, which was partially offset by higher demand in the shelter system and overspending in winter maintenance as a result of this year's winter storms;

 

- Favourable net expenditures in Agencies ($10.2 million) driven by under expenditures in Toronto Public Health,  Toronto Transit Commission, and Toronto Police Service primarily due to lower than planned salary and benefits while sustaining current service levels and lower than anticipated expenses on automotive parts; and

 

- Favourable net expenditures in Corporate accounts ($369.6 million) from higher than budgeted revenues from the OMERS pension surplus, Interest/Investment Earnings and Municipal Land Transfer Tax, as well as lower than planned Debt Charges.

 

Rate Supported Programs:

 

Rate Supported Programs reported a favourable year-end variance of $111.4 million. The favourable variance is attributed to gross under expenditures in salary and benefits while maintaining service levels, underspending in contracted services, and timing of maintenance expenses. Revenues also experienced a favourable variance due to receipt of Ontario Stewardship Funding, and one-time capital gain from the sale of property and overall increase in new water and sewer service connections due to higher construction activity, and private water agreements.

 

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 2 - Rate Supported Net Variance Summary ($ Millions)

 

Variance ($M)

Favourable / (Unfavourable)

2019 Year-End

Budget

Actual

Variance

Solid Waste Management Services

(0.0)

(56.8)

56.8

Toronto Parking Authority

(66.5)

(76.3)

9.8

Toronto Water

0.0

(44.7)

44.7

Total Variance

(66.5)

(177.9)

111.4

 

Financial Impact

For the year ended December 31, 2019 Tax Supported Operations experienced a favourable net variance of $431.1 million.

 

The year-end surplus available for disposition is $213.8 million for Tax Supported Operations when accounting for the following:

 

- Council direction / legislative requirements pertaining to the Toronto Building surplus of $30.9 million;


- One-time surplus of $106.0 million from the pension merger be allocated to the City's Employee Benefits Reserve Fund (XR1002), improving the City's Consolidated Employee Benefits Reserve Fund balance to Employee Benefits Payments ratio from 1.2 as at December 31, 2019 to approximately 1.6 by year-end 2020.  This action moves towards the Council approved Employee Benefit Payments Ratio of 2.0;


- $40.4 million in planned contributions to underfunded liabilities and reserve funds as detailed in Table 3; and


- $40.0 million in Capital Financing Reserve commitments.

 

The 2019 year-end surplus available for disposition of $213.8 million represents 1.8 percent of the City's Gross Expenditure Tax Supported Operating Budget.

 

The 2019 year-end results are higher than the historical experience as summarized below:

 

Chart 1 - 2013 - 2019 Surplus Available for Distribution

 

(See Chart 1 titled "- 2013 - 2019 Surplus Available for Distribution"),

 

in the Financial Impact section of the report dated

 

November 10, 2020 from the Chief Financial Officer and Treasurer

 

Table 3 summarizes the 2019 recommended year-end surplus distribution after Council directions and legislative requirements; pension merger allocations; planned contributions to underfunded liabilities and reserves; and Capital Financing Reserve commitments are met. A total of $213.8 will be allocated towards the Tax Stabilization Reserve to help manage COVID-19 financial impacts.

 

(See Table 3 titled "- 2019 Year-End Operating Results – Tax Supported Programs

 

and Agencies (Millions)"), in the Financial Impact section of the report dated

 

November 10, 2020 from the Chief Financial Officer and Treasurer

 

Toronto Water and Solid Waste Management Services respective 2019 year-end surpluses will be transferred to the Wastewater and Water Stabilization Reserves and Waste Management Reserve Fund to finance capital investments and ongoing operations. The 2019 final year-end operating results for Rate Supported Operations, excluding Toronto Parking Authority, will be allocated based on the following:

 

(See Table 4 -  2019 Year-End Net Operating Results – Rate Supported Programs (Millions) "),

 

in the Financial Impact section of the report dated

 

November 10, 2020 from the Chief Financial Officer and Treasurer

Background Information
(November 10, 2020) Report and Appendices A to D from the Chief Financial Officer and Treasurer on Operating Variance Report for the Year Ended December 31, 2019
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158379.pdf)


BU19.8

ACTION 

 

 

Ward: All 

Capital Variance Report for the Nine Months Ended September 30, 2020
Origin
(November 10, 2020) Report from the Chief Financial Officer and Treasurer
Recommendations

The Chief Financial Officer and Treasurer recommends that:

 

1. City Council approve in-year budget adjustments to the 2020-2029 Approved Capital Budget and Plan as detailed in Appendix 4 to the report (November 10, 2020) from the Chief Financial Officer and Treasurer that result in no incremental impact on debt financing.

Summary

The purpose of this report is to provide City Council with the City of Toronto capital spending for the nine month period ended September 30, 2020, as well as projected expenditures to December 31, 2020. Furthermore, this report seeks Council's approval for in-year budget adjustments to the 2020 Approved Capital Budget and Plan that have no impact on 2020 approved debt.

 

As illustrated in Table 1 below, City's 2020 capital expenditure was $2.261 billion or 47.6 percent of the 2020 capital budget of $4.749 billion for the period ended September 30, 2020 and is projecting to expend $3.832 billion or 80.7 percent by December 31, 2020.

 

Table 1 - Capital Variance Summary

 

 

2020 Approved Budget*

Actual Expenditures -

January to September

Projected Expenditures - January to December

 

$M

$M

Percent

$M

Percent

City Operations

2,027

862

42.5 percent

1,509

74.4 percent

Agencies

1,354

705

52.1 percent

1,177

87.0 percent

Tax Supported

3,381

1,567

46.3 percent

2,686

79.4 percent

Rate Supported Programs:

1,368

694

50.8 percent

1,146

83.8 percent

TOTAL

4,749

2,261

47.6 percent

3,832

80.7 percent

*Note: Includes 2019 carry forward funding and 2020 in-year adjustments

 

The Capital spending pattern for the first nine month typically ranges between 32 percent and 37 percent of the total Council Approved Capital Budget, with the 2020 experience of 47.6 percent comparing favourably to past experience. Total City projected spend of 80.7 percent by year-end is comprised of a Tax Supported Programs spending rate of 79.4 percent and a Rate Supported Programs spending rate of 83.8 percent.

 

Projected underspending by year-end totals $917.2 million or 19.3 percent of the 2020 Capital Budget. Part of the reason is due to COVID-19 continues to have an impact on the 2020 capital budget spending.

 

- At the onset of COVID-19, due to the uncertainty of the financial impact and the amount of financial assistance from other levels of government, capital projects funded by Capital from Current were slowed to enable potential offsets to COVID-19 financial impacts.

 

- Given the continued uncertainty regarding the allocation that Toronto will receive of future phase Safe Restart Agreement funding, Capital from Current funded capital projects will continued to be slowed to the end of the year.  Impacted capital projects will be reassessed as part of the 2021 budget process.

 

The projected year-end spending rates presented in this report are based on the submissions from each Program and Agency, and as such, the preparation of this report has been based on this information.

Financial Impact

The capital expenditures in the first nine months of 2020 total $2.261 billion and year-end expenditures are anticipated to increase to $3.832 billion or 80.7 percent of the total 2020 Approved Capital budget. 15 of the 36 City Programs and Agencies have projected year-end spending rate in excess of 70 percent.

 

Appendix 1 summarizes the spending in the first nine months and year-end projected spending rate by City Program and Agency.

Background Information
(November 10, 2020) Report from the Chief Financial Officer and Treasurer on Capital Variance Report for the Nine Months Ended September 30, 2020
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158370.pdf)

Appendix 1 - 2020 Capital Variance and Projection Summary for the Nine Months Ended September 30, 2020
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158371.pdf)

Appendix 2 - Major Capital Projects
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158372.pdf)

Appendix 3 - In-Year Adjustments for the Nine Months Ended September 30, 2020
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158373.pdf)

Appendix 4 - Capital Variance Dashboard by Program and Agency
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158374.pdf)


BU19.9

ACTION 

 

 

Ward: All 

Operating Variance Report for the Nine Months Ended September 30, 2020
Origin
(November 10, 2020) Report from the Chief Financial Officer and Treasurer
Recommendations

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 the report (November 10, 2020) from the Chief Financial Officer and Treasurer, to amend the 2020 Approved Operating Budget, such adjustments to have no impact on the 2020 Approved Net Operating Budget of the City.

Summary

The purpose of this report is to provide City Council with the Operating Variance for the nine months ended September 30, 2020 as well as projections to year-end. This report also requests City Council's approval for amendments to the 2020 Approved Operating Budget that have no impact on the City's 2020 Approved Net Operating Budget.

 

Since mid-March, the City of Toronto, consistent with other major Canadian and Greater Toronto and Hamilton Area municipalities has been experiencing significant financial impacts, both in the form of added costs and revenue losses as a direct result of the COVID-19 pandemic.

 

COVID-19 related financial impacts are anticipated to total $1.716 billion by year-end for the City of Toronto, prior to offsets achieved through a series of implemented mitigation strategies that focus on spending and workforce restraints ($533.8 million); and phase 1 Safe Restart Agreement funding confirmed in August ($669 million), reducing the year-end shortfall to a projected $514.1 million.

 

- COVID-19 related financial impacts predominantly reflect revenue losses, which account for approximately 80% of total COVID-19 impacts;


- Mitigation strategies are expected to collectively generate $533.8 million in total offset by year-end, comprised of $499.7 million in savings from workforce restraints, spending constraints and cost avoidance; $34.1 million in added offsets available from budget variance; and included the elimination of inflationary general salary increases for Non-Union staff, Mayor and Council; and


- On August 12, 2020 Safe Restart Agreement funding allocations for the City of Toronto as part of the phase 1 funding were identified totalling $669 million as follows:

 

- Municipal Transit Funding Phase 1 - $404.1 million allocated to Toronto proportionately based on ridership;


- Social Services Relief Fund Phase 2 - $118.7 million allocated to Toronto in addition to the $39 million previously received as part of Phase 1 funding; and


- Municipal Operating Funding Phase 1 - $145.7 million allocated to Toronto proportionately based on households.

 

The table below details the anticipated 2020 City-wide COVID-19 related financial impacts; projected offset from mitigations strategies and phase 1 Safe Restart Funding; and the resulting financial position that is reflected in the year-end variance projections:

 

Table 1 - 2020 Projected COVID-19 Financial Impacts

 

Description

($Millions)

Year-End Projections

Comments

Impacts

Savings / Offset*

Phase 1 Safe Restart Funding

Net Impacts

City Tax Supported Programs

1,636.1

(533.8)

(668.5)

433.8

Reflected in Table 2

Toronto Parking Authority

66.8

 

 

66.8

Reflected in Table 3

Toronto Community Housing

13.5

 

 

13.5

Not Reflected in City Variance Reporting

Total Projected 2020 Year-End Shortfall

1,716.4

(533.8)

(668.5)

514.1

Prior to Safe Restart Phase 2 Funding

 

*Year-to-date savings of $13.0M (Toronto Parking Authority) and $1.3M (Toronto Community Housing Corporation) are reflected in impacts and factored in Year-End projections

 

Tax Supported Programs:

 

The following table summarizes the anticipated year-end COVID-19 financial Impacts; projected offset from mitigations strategies and phase 1 initial Safe Restart funding; and the resulting financial position of the City's Tax Supported Operations as of September 30, 2020 and the projection at year-end:

 

Toronto Parking Authority and Toronto Community Housing variance information is not reflected in table below, which details Tax Supported Programs only.

 

Table 2 - Tax Supported Operating Variance Summary

 

 

Variance ($M)

Favourable / (Unfavourable)

2020 9M YTD

2020 Year-End Projection

Budget

Actual

Var

Budget

Actual

Var

Forecast COVID-19 Financial Impacts

4,440.6

6,076.7

(1,636.1)

Implemented Mitigation Strategies reflected in Year-End Projection

N/A

(533.8)

533.8

Tax Supported Operating Variance Summary Including Mitigation Savings

City Operations

1,730.7

1,718.6

12.1

2,458.4

2,450.4

8.0

Agencies

1,410.8

1,687.0

(276.2)

2,166.6

2,829.5

(662.9)

Corporate Accounts

(425.5)

(255.5)

(170.0)

(200.6)

98.9

(299.5)

Total Variance

2,716.0

3,150.2

(434.2)

4,424.5

5,378.9

(954.4)

Toronto Building

(11.0)

(17.2)

6.2

(16.1)

(45.3)

29.2

Total Variance-Excluding Toronto Building

2,727.0

3,167.4

(440.3)

4,440.6

5,424.2

(983.6)

Safe Restart Funding – Transit Operations

 

404.1 

404.1

Safe Restart Funding – Municipal Operations

 

145.7 

145.7

Safe Restart Funding - Social Services Relief Fund (Reflected in City Operations above as part of SSHA's Year-End Projection)

 

$118.7 million in Funding Reflected in City Operations

Adjusted Variance

 

 

 

4,440.6

4,874.4

(433.8)

Percent of Gross Budget

 

 

-5.8 Percent

 

 

-3.7 Percent

 

Year-to-Date and Year-End Spending Results:

 

As noted in Table 2 above, for the nine months ended September 30, 2020 Tax Supported Operations experienced an unfavourable net variance of $440.3 million or 5.8 percent of planned expenditures. This is mainly driven by COVID-19 related cost and revenue impacts experienced beginning from mid-March onwards. The impact on the year-to-date results are reflected in the following areas:

 

- Toronto Transit Commission - Conventional Service ($272.9 million unfavourable) primarily due to significant loss of ridership revenue from the impact of COVID-19. Ridership losses peaked at 86 percent below budget in late April and are currently projected to be 55 percent below budget through the fall. This was partially offset by the implementation of cost containment strategies and matching service capacity to demand.


- Shelter Support and Housing Administration ($22.7 million unfavourable) primarily due to unplanned COVID-19 related expenditures related to new physical distancing measures implemented in the City's shelter system offset by Safe Restart funding; as well as underachieved revenues in Hostels and the Social Housing Service.

 

- Transportation Services ($14.7 million unfavourable) due to lower capital recoveries, right-of-way permit & inspection fees; utility cut revenue linked to COVID-19 related contract delays.

 

For year-end, the City is projecting $1.636 billion in COVID-19 related financial impacts, reduced by $533.8 million in savings and offsets ($499.7 million in mitigation strategies/cost avoidance and $34.1 million in offsets from budget variance) and $668.5 million in phase 1 Safe Restart funding for a net unfavourable variance of $433.8 million or 3.7 percent of the 2020 Gross Operating Budget, adjusted for Toronto Building and excluding impacts to Rate supported programs and Toronto Community Housing Corporation impacts.

 

- The unfavourable variance is primarily driven by COVID-19 financial impacts, resulting in increased emergency social support costs such as Shelter, Seniors Services and Long Term Care, as well as lost revenue in City Services such as TTC, Zoo, Exhibition Place, and Corporate revenues such as Municipal Land Transfer Tax and Municipal Accommodation Tax.

 

As noted, the projected year-end pressure resulting from COVID-19 related financial impacts has been lessened through a series of mitigation strategies and other offsets, these include:

 

$499.7 million in projected savings generated through mitigation strategies and cost avoidance as detailed below:

 

- 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.

 

An additional $34.1 million in offsets are available from budget variance experienced within MLTT revenues from January 1 to March 31 that will be used to reduce COVID-19 related MLTT financial impacts.

 

Based on these initiatives, the City has achieved $415.5 million in offsets within its Tax-Supported programs as of October 25, 2020 and expects to generate a total of $533.8 million in offset by year-end.

 

Rate Supported Programs:

 

Rate Supported Programs reported a favourable year-to-date variance of $0.8 million. The favourable variance is attributed to lower than budgeted expenditures from Toronto Water and Solid Waste Management Services which is mostly offset from lower than planned revenue in Toronto Parking Authority. At year-end, an unfavourable projected variance is anticipated to be $42.1 million, again primarily driven by significantly lower revenues from Toronto Parking Authority which is reflected in the City-wide COVID-19 financial impacts that are projected to total $514.1 million in 2020, when adjusting for savings and initial Safe Restart funding.

 

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 2 - Rate Supported Operating Variance Summary

 

Variance ($M)

Favourable / (Unfavourable)

2020 9M YTD

2020 Year-End Projection

Budget

Actual

Var

Budget

Actual

Var

Solid Waste Management Services

(14.6)

(29.6)

15.1

0.0

(3.8)

3.8

Toronto Parking Authority

(53.6)

(7.5)

(46.1)

(70.1)

(3.3)

(66.8)

Toronto Water

(11.2)

(43.0)

31.8

0.0

(21.0)

21.0

Total Variance

(79.4)

(80.1)

0.8

(70.1)

(28.0)

(42.1)

 

Additional COVID-19 Related Impacts:

 

In addition to COVID-19 impacts to the City's Tax and Rate supported programs that are reflected in City variance report, further impacts have been experienced with the Toronto Community Housing Corporation (TCHC).

 

City and TCHC finance staff have been working collaboratively to track and project COVID-19 financial impacts.  The TCHC is estimating that impacts will total $13.5 million by year-end.

 

In total, it is projected that the City will experience $1.716 billion in COVID-19 financial impacts ($1.636 billion – Tax Supported Programs; $66.8 million – Toronto Parking Authority; and $13.5 million – Toronto Community Housing Corporation) prior to savings and offsets that collectively total $533.8 million; and phase 1 Safe Restart Funding of $668.5, reducing the year-end shortfall to a projected $514.1 million.

 

Safe Restart Agreement:

 

On July 27, 2020 the Ontario government in partnership with the federal government announced $4 billion in financial support for Ontario's 444 municipalities as part of the Safe Restart Agreement and on August 12, 2020 the City of Toronto was provided with initial phase funding allocations under the agreement totalling $668.5 million as follows:

 

- Municipal Transit Funding Phase 1 - $404.1 million allocated to Toronto proportionately based on ridership.

 

- Social Services Relief Fund Phase 2 - $118.7 million allocated to Toronto in addition to the $39 million previously received as part of Phase 1 funding.

 

- Municipal Operating Funding Phase 1 - $145.7 million allocated to Toronto proportionately based on households.
 

$668.5 million in new funding will be applied to projected 2020 year-end funding shortfall.

 

- It is estimated that the remaining 2020 funding shortfall for the City following phase 1 Safe Restart funding will be $514.1 million.

 

- Future phase funding of up to $2.129 billion will be allocated to municipalities by the Province on a needs basis between municipal transit needs ($1.334 billion), municipal operating needs ($695.0 million) and Public Health ($100.0 million).

 

- Needs based applications have/will be submitted under the Safe Restart Program to obtain further funding to offset remaining COVID-19 financial impacts within Transit Operations, Public Health and Municipal Operations.

Financial Impact

As of September 30, 2020 the City experienced an unfavourable variance of net revenues and expenses of $440.3 million for Tax Supported Programs. The City is projecting for December 31, 2020 an unfavourable variance of net revenues and expenditures of $433.8 million (Tax Supported Programs, adjusted for Toronto Building and including initial Safe Restart Funding).

 

Appendices A, B and C provide detailed summary of gross expenditures, revenue and net expenditures for the six month results and projections to year-end by Program and Agency, respectively. Appendix D details the recommended in-year budget adjustments that are fiscally neutral to the 2020 Approved Operating Budget.

Background Information
(November 10, 2020) Report and Appendices A to E from the Chief Financial Officer and Treasurer on Operating Variance Report for the Nine Months Ended September 30, 2020
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158404.pdf)


BU19.10

ACTION 

 

 

Ward: All 

Obligatory Reserve Funds (Deferred Revenues), Reserves, and Council-directed Reserve Funds Report - September 30, 2020
Origin
(November 2, 2020) Report from the Chief Financial Officer and Treasurer
Recommendations

The Chief Financial Officer and Treasurer recommends that: 

 

1. Budget Committee receive this report for information.

Summary

This report summarizes the changes impacting the City of Toronto (the City)'s obligatory reserve funds (deferred revenues), reserves, and Council-directed reserve funds as at September 30, 2020.

 

The City's deferred revenues (obligatory reserve funds), reserves, and Council-directed reserve funds are subject to annual changes based on funding contributions, transfers, and drawdowns, which are authorized by legislation, third-party agreements, and Council's approvals. The tables and appendices reflect information by major category.

 

As at September 30, 2020, the City recognized $7,239.9 million of deferred revenues (obligatory reserve funds), reserves, and Council-directed reserve funds, which consist of the following balances:

 

- Committed funds for legislated, contractually bound or Council-directed activities ($6,166.7 million);


- Committed funds to offset capital costs and pressures on rate-based activities ($751.3 million); and


- Uncommitted and available funds for the City to respond to various unanticipated costs and to stabilize various funding sources, including the tax base ($321.9 million).

 

The reported balances include Council approved reserve and reserve fund loans that were granted to various agencies, City programs, and external parties, which must be repaid to the respective deferred revenues (obligatory reserve funds), reserves, and Council-directed reserve funds.

Financial Impact

There are no financial implications contained in this report.

Background Information
(November 2, 2020) Report from the Chief Financial Officer and Treasurer on Obligatory Reserve Funds (Deferred Revenues), Reserves, and Council-directed Reserve Funds Report - September 30, 2020
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158259.pdf)

Appendices A1 - C2
(http://www.toronto.ca/legdocs/mmis/2020/bu/bgrd/backgroundfile-158260.pdf)