Item - 2019.BU7.5

The Chief Financial Officer and Treasurer recommends that:

1.  Council approve in-year budget adjustments to the 2019-2028 Approved Capital Budget and Plan as detailed in Appendix 4 that result in no incremental impact on debt financing.

2.  Council approve additional 2018 carry forward funding for TTC and Go Transit as detailed in Appendix 6

3.  Council receive for information the list of 30 completed capital projects/sub-projects to be closed as detailed in Appendix 2 that results in a total combined project budget an underspending of $4.498 million.

The purpose of this report is to provide City Council with the City of Toronto capital spending for the four month period ended April 30, 2019, as well as projected actual expenditures to December 31, 2019. Furthermore, this report seeks Council's approval for in-year budget adjustments to the 2019 Approved Capital Budget and additional carry-forward from 2018 that have no impact on approved debt.

As illustrated in Table 1 below, 2019 the City's capital expenditure was $748.3 million or 13.1 percent of the 2019 capital budget of $5,793 billion and is projecting to expend $4,589 billion or 79.0 percent by December 31, 2019.

Table 1: Capital Variance Summary

The spending pattern for the first quarter is typically within 10 percent of the total Council Approved Capital Budget. Tax Supported Programs project a spending rate of 77.1 percent while Rate Supported Programs project a spending rate of 86.7 percent by year-end. 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.

The report also details the 46 completed capital projects that have a combined budget of $66.861 million that are ready to be closed. They have been completed under budget, realizing underspending of $6.501 million. The permanent underspending which has associated funding of $0.468 million in capital from current, $0.339 million in debt, $4.114 million in reserves/reserve funds, $0.264 million in Recoverable Debt, $0.115 million in Development Charges and $1.2 million in other Revenue will be returned to their original funding sources.

Total capital expenditure in the first four months of 2019 total $748.3 million and year-end expenditures are anticipated to increase to $4.589 billion or 79.0 percent of the total 2019 Approved Capital budget. 24 of the 32 City Programs and Agencies have projected year-end spending rate in excess of 70 percent.

Appendix 1 summarizes the spending in the first four 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. 46 capital projects were completed in the first four months of 2019 that have a combined budget of $66.861 million. They have been completed under budget, with permanent underspending of $6.501 million realized. The permanent underspending has associated funding of $0.468 million in capital from current, $0.339 million in debt, $4.114 million in reserves/reserve funds, $0.264 million in Recoverable Debt, $0.115 million in Development Charges and $1.2 million in other Revenue.