The Budget Committee recommends to the Executive Committee that:

1.         City Council approve the budget and technical adjustments to its 2009 Approved Capital Budget as detailed in Appendix 2 attached to the report (March 22, 2010) from the Deputy City Manager and Chief Financial Officer.

2.         City Council approve carry forward funding for unspent 2009 capital projects totalling $180.326  million gross and funding sources as detailed in Appendix 3.1 to the report (March 22, 2010) from the Deputy City Manager and Chief Financial Officer, in order to continue work on 2009 approved capital projects, and that the 2010 Approved Capital Budget be increased accordingly with no incremental impact on debt funding.

3.         City Council approve carry forward funding for unspent 2008 and prior year capital projects totalling $17.445 million with no incremental increase to the 2010 Council approved debt funding as detailed in Appendix 3.2 to the report (March 22, 2010) from the Deputy City Manager and Chief Financial Officer, and that the 2010 Approved Capital Budget be adjusted accordingly.

4.         City Council approve the closure of completed capital projects detailed in Appendix 4 to the report (March 22, 2010) from the Deputy City Manager and Chief Financial Officer, and that uncommitted funds from under-spent completed projects be utilized to fund overspent completed projects with no incremental impact on debt, after which any remaining unspent funds be returned to the original funding source.

5.         City Council request the Deputy City Manager and Chief Financial Officer to report back to the Budget Committee on any changes to the City of Toronto’s 2009 year-end financial position after the external audit of the 2009 financial statements is finalized, if necessary.

The purpose of this report is to provide the City of Toronto 2009 Preliminary Capital Variance for the year-ended December 31, 2009 and to request Council’s approval for budget adjustments which reallocate funds between projects with no incremental impact on its 2009 Approved Capital Budget.  This report is provided in advance of concluding the external audit of the City’s accounting information, therefore, if necessary, a final report will be submitted to Council after the 2009 financial statements are finalized.

City of Toronto capital expenditures for the year-ended December 31, 2009 totalled $1.988 billion or 67.5% of the 2009 Approved Capital Budget of $2.943 billion.  The under-spending is primarily attributed to the inability to find and secure suitable sites in accordance with the planned timeframes; delays in securing funds from cost-sharing partners; unanticipated delays in construction start-up and deferral of work; and the impact of the labour disruption. In addition, several projects were completed under-budget. Unspent funds for incomplete projects will be carried forward to 2010 on an as required basis, in accordance with the City’s Carry Forward Policy

Tax Supported Programs spent $1.436 billion, representing 61.5% of their collective 2009 Approved Capital Budget of $2.334 billion (see Appendix 1).  City Operations spent $533.565 million or 53.1% of the 2009 Approved Capital Budget of $1.006 billion; while Agencies, Boards and Commissions (ABCs) spent $902.442 million or 68.0% of their collective 2009 Approved Capital Budget of $1.328 billion.  In total, Rate Supported Programs spent $551.688 million or 90.6% of their 2009 Approved Capital Budget of $609.025 million (see Chart 1 in the report). 

The Budget Committee recommends to the Executive Committee that:

1.         City Council discontinue the Committee briefings stage of the budget process;

2.         City Council request the City Manager to report to the first meeting of the new Executive Committee on a process for the 2011 budget which will ensure compliance with COTA and the Procedures By-law; and

3.         City Council request the City Manager in preparing his report, to also include some options in terms of the budget process, having canvassed interested Councillors.

Advising that City Council on February 22 and 23, 2010 adopted this Item as amended, and in so doing requested the Budget Committee to consider several options to remedy the deficiency found in the 2009 Operating Budget process, including:

a.         converting the committee briefings into open meetings held in compliance with COTA and the Procedures By-law;

b.         holding the committee briefings in a closed session of a meeting of the Budget Committee for the purpose of “education” in compliance with COTA and the Procedures By-law, including opening and closing the meeting in public, providing notice, with the presence of staff of the City Clerk to monitor and take minutes; or

c.         discontinuing the committee briefings stage of the budget process, and adopting some other process, ensuring that such a process complies with COTA and the Procedures By-law.

City Council also requested the Budget Committee to submit its recommendations on this matter to the May 11, 2010 meeting of City Council, through the Executive Committee.

The Budget Committee recommends to the Executive Committee that:

1.         City Council authorize the reallocation of funds in the Transportation Services’ 2010 Capital Budget and 2011-2019 Capital Plan in the amount of $13,000,000, with cash flows in the amount of $3,150,000  for 2010 and $9,850,000 for 2011 detailed in Table 1, Part A, attached to the report (February 26, 2010) from the General Manager, Transportation Services, with a zero gross and net impact.

2.         City Council authorize the decrease in project costs  and corresponding cash flow in 2010,  in the amount of $5,000,000 detailed in Table 1, Part B, attached to the report (February 26, 2010) from the General Manager, Transportation Services, resulting in a reduction of $5,000,000 gross, zero net of the 2010 Approved Budget for Transportation Services.

3.         City Council authorize and direct the appropriate City Officials to take the necessary action to give effect thereto.

The Transportation Services Division is recommending the reallocation of funds, within the 2010 Approved Capital Budget and 2011-2019 Capital Plan, in order to better align cash flows with program requirements. The impact on project costs resulting from the cash flow reallocations for this report is a decrease of $5,000,000 million essentially for third party work that will not be carried-out this year or next. This is the second such report for 2010 and involves the reallocation of 2010 and 2011 approved cash flows along with a corresponding acceleration and increase within other Transportation Services Capital Budget items that yield a zero net impact on the approved debt target for 2010.

The Budget Committee recommends to the Executive Committee that:

1.         City Council grant authority to reduce the 2009 fixed rent receivables for the properties noted in Appendix “A” of the report (March 3, 2010) from the General Manager, Parks, Forestry and Recreation for existing Lease and Licence Agreements within the Parks, Forestry and Recreation Business Services Unit to offset the financial loss incurred due to the 2009 labour disruption, for an overall reduction of $831,064.

2.         City Council grant authority to reduce the rent to those tenants listed in Appendix “A” of the report (March 3, 2010) from the General Manager, Parks, Forestry and Recreation after payment in full of any outstanding rent and related property tax.

The Budget Committee recommends to the Executive Committee that:

1.         City Council approve additional project commitments of $1.334 billion, as per the revised Attachment A to the letter (March 25, 2010) from the General Secretary, Toronto Transit Commission, for the Toronto-York Spadina Subway Extension project, bringing total commitments to $1.819 billion, to enable the Toronto Transit Commission to award contracts required to continue work on this fully-funded, stand-alone, project until March 2011.

2.         The Toronto Transit Commission request any additional commitments required for future work as part of the 2011-2020 Capital Budget and Plan and in future capital budgets as necessary.

3.         City Council request the Province to make a clear commitment to transit Operating and Capital funding in accordance with the City's 10-year Capital Plan.

The Budget Committee requested the Toronto Transit Commission to report to the Executive Committee, on April 19, 2010, with 10 year cash flows for the Toronto-York Spadina Subway Extension project, by project component.

Advising that the Toronto Transit Commission, at its meeting on Wednesday, March 24, 2010, considered the report, entitled “Toronto-York Spadina Subway Extension Project – Request for Full Project Commitment Approval”, and took the following action:

1.         Approved an increase of $2.149 billion in project approval for the Toronto-York Spadina Subway Extension (TYSSE) Project.

2.         Forwarded the report to the City of Toronto for City Council approval.