Item - 2020.EX16.10

The Executive Committee recommends that:

1. City Council approve in-year budget adjustments to the Approved 2020-2029 Capital Budget and Plan as detailed in Appendix 4 to the report (September 9, 2020) from the Chief Financial Officer and Treasurer that result in no incremental impact on debt financing.

The purpose of this report is to provide City Council with the City of Toronto capital spending for the six month period ended June 30, 2020, as well as projected expenditures to December 31, 2020. Furthermore, this report seeks Council's approval for in-year budget adjustments to the 2020 Approved Capital Budget and Plan that have no impact on 2020 approved debt.

As illustrated in Table 1 below, City's 2020 capital expenditure was $1.340 billion or 28.9% of the 2020 capital budget of $4.637 billion for the period ended June 30, 2020 and is projecting to expend $3.934 billion or 84.8% by December 31, 2020.

Table 1: Capital Variance Summary

*Note: Includes 2019 carry forward funding and 2020 in-year adjustments

The Capital spending pattern for the first six month typically ranges between 15% and 22% of the total Council Approved Capital Budget, with the 2020 experience of 28.9% comparing favourably to past experience. Total City projected spend of 84.8% by year-end is comprised of a Tax Supported Programs spending rate of 84.5% and a Rate Supported Programs spending rate of 85.7%.

Projected underspending by year-end totals $703 million or 15.2% of the 2020 Capital Budget.  Approximately half of the projected year-end variance reflects underspending attributed to COVID-19 impacts.

- At the onset of COVID-19, due to the uncertainty of the financial impact and the amount of financial assistance from other levels of government, capital projects funded by Capital from Current (CFC) were slowed to enable potential offsets to COVID-19 financial impacts.

- Given the continued uncertainty regarding the allocation that Toronto will receive of future phase Safe Restart Agreement funding, CFC funded capital projects will continued to be slowed to the end of the year.  Impacted capital projects will be reassessed as part of the 2021 budget process.
 

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.