At the next Committee of the Whole Council meeting on December 7, Treasurer Ian Davey will present a report on operating budget performance up to the end of the third quarter – September 30. Since the budget is annual with no quarterly breakdown, Ian presents performance in terms of percent of the budget remaining. If there were no seasonal factors, then the remaining budgets for both revenue and expenditures should be 25%. There are of course seasonal factors so this measure is not much use. Instead, Ian also provides last year’s report at the same point. According to my analysis, there is a shortfall in revenue compared to 2019 of approx. $3.5M. But expenditures have been reduced and Ian’s numbers show that compared to 2019, spending has reduced by $1.4M. So the net problem up to the end of the third quarter is a deficit of $2.1M. That is, the Town will have to borrow $2.1M with a possible additional amount during Q4.
In the links below I have included Ian’s full report plus my summary Excel spreadsheet with the same numbers.
Q3 2020 YTD Budget Summary
|2020 Budget||YTD Actual||Remaining $||Remaining %||Differences to 2019|
|Revenue||$15M||$8.3M||$6.7M||44.9%||$3.5M less revenue|
|Expenditures||$39.7M||$26.3M||$13.4M||33.8%||$1.4M less spent|
- Revenue refers to income NOT raised from taxes (Levy) but instead from user fees, grants etc.
- Annual Budget Revenue plus Levy must equal budgeted Expenditures.
- Ian reports that “property tax collections remain strong” – that is, the budget for the tax levy should be met or at least close to 100%.
- Comparing to 2019 is not 100% accurate since the 2020 budget is not identical to the 2019 budget.
But there is still a shortfall of approx. $2.1M. When preparing the budget for 2021, it will have to be assumed that at least some of the revenue shortfall will be repeated – at least in the first three quarters of the year since Prime Minister Trudeau recently said it would be September before all who want it will be vaccinated. And that includes the peak summer revenue season. Together with the announced budget target of 0 to 1%, that means a reduction in spending compared to 2019 of several million. One unknown is quite how much the Federal and Provincial Governments are going to send the Town’s way. And how can the Town predict what’s coming next year?
Ian said that his report on Capital expenditure variances will be presented as part of 2021 budget deliberations which start on December 8.
- Third Quarter Operating Budget Variance report by Ian Davey
- Q3 Variance Report Summary – Excel spread sheet extracted from Ian’s report but including comparison to 2019.