Ce rapport est disponible en anglais seulement conformément aux exigences de la Politique sur les services en français de la Ville du Grand Sudbury.
ResolutionTHAT the City of Greater Sudbury accepts the December 31, 2015 Water Wastewater Variance Report dated June 2, 2016 from the Acting Chief Financial Officer/Treasurer and the General Manager of Infrastructure Services outlining the audited year end position.
YEAR END VARIANCE
The year end net under expenditure for Water and Wastewater Services is $11,694 as outlined in Schedule A. Water is recording an over expenditure of $2,146,008 while Wastewater is in an under expenditure of $2,157,702. In accordance with the By-law, the water over expenditure was funded by a contribution from the Water Capital Financing Reserve Fund and the wastewater under expenditure was contributed to the Waste Water Capital Financing Reserve Fund.
The major contributors to this over expenditure are:
Actual user fee revenues are below budgeted amounts. For 2015 the estimated consumption was budgeted at 14.2 million cubic metres while the actual consumption for 2015 was $13.7 million cubic metres. For 2016 the budgeted consumption has been set at 14.0 million cubic metres.
Contribution from Reserve Funds
During the spring of 2015, staff prepared a report requesting additional funds of $1.75 million to cover the higher than usual anticipated costs of repairing service cuts resulting from the severely cold winter. The actual costs of these repairs were $1.2 million less than anticipated and as such did not require the full draw from reserve funds.
Other revenues favourable variance of $269,000 is due to higher than anticipated volumes of hauled liquid waste from commercial customers as well as unbudgeted revenues from sludge received from other municipalities and hydro costs recovered from the biosolids operator.
Salaries and Benefits
Salaries and benefits are under budget by approximately $1,067,000. The division experienced staffing vacancies from a variety of factors such as short and long term employee illnesses, and turnover. For many of these specialized vacancies, the division has been unable to fill the vacancies on a timely basis. This problem is particularly acute for short term, temporary, or limited vacancies as candidates with the required certifications and other qualifications are not forthcoming for such transient opportunities. In addition, the use of overtime was significantly lower than budgeted contributing to the under expenditure.
Materials were under budget by $1,302,000. Inventory was counted and recorded for the first time since amalgamation. The value of this inventory resulted in a one-time favourable entry of $850,000. Chemicals were over budget by $100,000 while other materials related to break down repairs and plant maintenance were under budget by $550,000.
Purchased service costs were over budget by $1,832,000 and the contributing factors to this budget overrun are:
The budget overages occurred as follows:
The cumulative effect of the above four items is an over expenditure of $3,536,000.
Offsetting these overages were the following underages:
The cumulative effect of these overages and undergoes is a net overage of $1,832,000 in this line item.
Given the high demand on City staff time for regularly scheduled operations and maintenance activities, which in most cases have regulatory implications, more than half of the emergency watermain and sanitary sewer repairs are being performed by contractors. To minimize the disruption to citizens affected by the lack of water these are most frequently performed after hours when City crews are unavailable. Consequently purchased services are higher but are partially offset by savings in salaries and materials.
Debentures and insurance
The budget underage of $1,570,000 is due to the fact that the debt repayment related to the Biosolids plant was budgeted for the whole year but did not start until May when the plant commenced operations. Additionally, the actual principal borrowed and the interest rate on the external debt were both lower than budgeted which further contributed to the savings in this category
The underexpenditiure in this category is due primarily to internal direct charges from support departments such as engineering, and administrative services coming in at less than budgeted amounts.
In accordance with the By-law, the water over expenditure has been funded by a contribution from the Water Capital Financing Reserve Fund and the wastewater under expenditure was contributed to the Waste Water Capital Financing Reserve Fund.