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Request for Decision

2013 Water Wastewater Operating Budget Variance Report



Presented To: City Council
Presented: Tuesday, Oct 08, 2013
Report Date: Tuesday, Oct 01, 2013
Type: Routine Management Reports



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Decisions

Report dated October 1, 2013 from the Chief Financial Officer/City Treasurer regarding 2013 Water Wastewater Operating Budget Variance Report.

 

CC2013-308 Craig/Belli: THAT the City of Greater Sudbury accept the July 31, 2013 Water Wastewater Variance Report dated October 1, 2013 from the Chief Financial Officer/City Treasurer and the General Manager of Infrastructure Services outlining the projected year end position.  

 CARRIED

 


Signed By

Report Prepared By
Dion Dumontelle
Co-ordinator of Accounting
Digitally Signed Oct 1, 13

Division Review
Paddy Buchanan
Manager of Accounting
Digitally Signed Oct 1, 13

Recommended by the Department
Lorella Hayes
Chief Financial Officer/City Treasurer
Digitally Signed Oct 1, 13

Recommended by the C.A.O.
Doug Nadorozny
Chief Administrative Officer
Digitally Signed Oct 1, 13

Resolution

That the City of Greater Sudbury accept the July 31, 2013 Water Wastewater Variance Report dated October 1, 2013 from the Chief Financial Officer/City Treasurer and the General Manager of Infrastructure Services outlining the projected year end position.

YEAR END VARIANCE

The year end surplus for Water and Wastewater Services is projected to be $145,421 as outlined in Schedule A.  Water is projecting a deficit of $199,236 while Wastewater is trending to a surplus of $344,657.
The major contributors to this surplus are:

Category
Favourable/(Unfavourable)
Salaries and Benefits
$776,000
Materials
$464,000
Purchased Services
$(1,078,600)
Other net variances
$(15,979)
 
 
Total Projected Surplus
$145,421

VARIANCE EXPLANATIONS
User Fees
Actual user fee revenues are trending toward budgeted amounts.  For 2013 the estimated consumption has been budgeted at 14.3 million cubic metres. Based upon information provided by GSU, it is estimated that the consumption will be approximately 14.3 million cubic metres.  This is still an estimate as final consumption numbers will be known in early 2014.
Salaries and Benefits
Salaries and benefits are projected to be under budget by approximately $776,000. The division experienced staff turnover and in some cases were / are unable to successfully fill those specialized vacancies on a timely basis. Additional savings relate to the fact that the division was unsuccessful in recruiting a temporary staff position, which was subsequently contracted out. As well, overtime is being strictly managed and is being kept to a minimum by all sections within the division and the use of casual labour has been reduced where possible. 
Materials
Materials are projected to be under budget by $464,000.  This is a combination of savings in chemicals, break down repair related materials and other plant related maintenance savings.
Purchased Services 
Purchased service costs are projected to be over budget by $1,078,600. 
There have been 65 watermain breaks to the end of June. This compares to 2011 when there were 67 through the same period, but in contrast to 2012 when only 34 breaks had been repaired through the month of June. It is estimated that emergency repairs of both water and sewer related infrastructure will be over budget by $1,300,000. Contributing to this overage are repairs being performed by contractors in light of aforementioned staff vacancies.
Offsetting this are projected savings of $200,000 related to the road restoration contracts being tendered under budget.
Conclusion
The final year end water deficit will be funded by contributions from the Water Capital Financing Reserve Fund while the wastewater surplus will be contributed to the Waste Water Capital Financing Reserve Fund in accordance with the By-law.