Item - 2024.EX19.13

The Executive Committee recommends that:

1. City Council approve the budget adjustments and any associated complement changes detailed in Appendix D to the report (November 26, 2024) from the Chief Financial Officer and Treasurer to amend the 2024 Approved Operating Budget, with no impact on the Net Operating Budget of the City, as well as recommended expenditure authority as detailed in Appendix E to the report (November 26, 2024) from the Chief Financial Officer and Treasurer.

2.  City Council increase the 2024 Operating Budget for Toronto Public Health by $2,600,246 gross, $0 net, fully funded by the Public Health Reserve Fund (XR1108) for the purpose of providing one-time funding to new school communities who applied for and met the eligibility criteria for Student Nutrition Programs but did not receive funding as the 2024 Student Nutrition Program budget was fully committed to pre-existing programs; this one-time funding will allow the new school communities to deliver a Student Nutrition Program from January to June 2025.

3.  City Council authorize the Medical Officer of Health to enter into agreements and other suitable arrangements, on behalf of the City of Toronto, for the transfer of funds to the Angel Foundation for Learning ($789,217) and the Toronto Foundation for Student Success ($1,811,029) for the purpose of administering the 2024 Student Nutrition Program municipal funds ($2,600,246) to eligible new school communities who applied for and met the eligibility criteria for Student Nutrition Programs but did not receive funding as the 2024 Student Nutrition Program budget was fully committed to pre-existing programs, on terms satisfactory to the Medical Officer of Health and in a form satisfactory to the City Solicitor.

The purpose of this report is to provide City Council with the Operating Variance for the nine months ended September 30, 2024, as well as projections to the year-end, December 31, 2024. This report also requests City Council's approval for amendments to the 2024 Approved Operating Budget that have no impact on the City's Net Budget.

The following table summarizes the year-to-date financial position and year-end projections for the City's Tax-Supported Operations as of September 30, 2024.

Table 1: Tax-Supported Operating Variance Summary 

As detailed in Table 1 above, for the nine-month period, Tax-Supported Operations experienced a favourable net variance of $511.6 million. A favourable net variance is projected at year-end of $107.5 million. These figures are adjusted for Toronto Building, City Planning, which have surplus allocated to reserves by legislation or reserve draws if a deficit is experienced. It is important to note that the financial information presented is as of September 30, which is a snapshot in time and the year-end projection is based on current and expected future activities as known and anticipated as at September 30, 2024.

The funding provided by the New Deal struck with the Province of Ontario makes significant contributions towards transit and shelter related services. To date, $300.0 million has been received for Subway and Transit Safety, Recovery and Sustainable Operations, $200.0 million for Shelters and Homelessness, and $6.9 million related to operating costs of the Gardner Expressway and Don Valley Parkway, which are all reflected in the City’s year-to-date results.

The City continues to advocate to the Federal government for ongoing funding for the refugee claimants in the City’s shelter system. Included in the 2024 Operating Budget, Toronto Shelter and Support Services has a budgeted recovery of $250 million in the Interim Housing Assistance Program (IHAP) funding. Projection to year-end indicates that the actual costs for refugee claimants in 2024 will increase above $250 million in 2024 due to ongoing refugee arrivals. The City has submitted claims for expenses incurred through September 30, 2024, and will submit reimbursement claims for the final year-end actuals costs. As of today, Immigration, Refugees and Citizenship Canada (IRCC) has provided the City with $47.6 million in reimbursements for expenses incurred in the first quarter of 2024.

Rate-Supported Programs:

Rate-Supported Programs reported a favourable year-to-date net variance of $29.7 million. At year-end, Rate-Supported Programs are projecting a favourable variance of $38.0 million.         

Table 2: Rate-Supported Operating Variance Summary 

The favourable year-to-date variance and year-end projection are driven by all three programs: Toronto Water, Toronto Parking Authority and Solid Waste.

Rate-Supported Programs are funded entirely by user fees that are used to pay for the services provided and the infrastructure to deliver them. Solid Waste Management Services and Toronto Water’s respective year-end surpluses, if any, must be transferred to the Waste Management Reserve Fund and the Wastewater and Water Stabilization Reserves respectively, to finance capital investments and ongoing capital repairs and maintenance.  Toronto Parking Authority surplus is split 75% to the City, with the remaining 25% reinvested in capital projects related to Toronto Parking Authority, consistent with the approved Income Sharing Agreement.