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RFD- 4147 Business Items   Item #   11. a.    
Regular Council Meeting Agenda   
Meeting Date: 04/12/2021  
Title:    2021 Spring Budget Adjustment - Frostad
Department: Corporate Services  
Strategic Vision Element: This topic relates to all three of the City’s strategic vision elements contained in Council’s Strategic Plan Related Goal: n/a

Information
Request for Decision Summary
This request for decision will review and seek approval for necessary budget changes prior to setting the property tax rate for 2021.  Proposed changes to the budget result from growth in assessment, planning and engineering costs for studies and consulting, a re-design of the Columbus Park portion of the City Centre Area Redevelopment Plan (CCARP) project, a re-evaluation of construction plans for the Transit Permanent Park and Ride Hub, costs to construct  the new Spruce Grove - Stony Plain Trail, updated costs for a new fire truck, and fleet and facilities lifecycle plan changes.

Proposed Motion
That the 2021 Final Operating Budget with Operating Revenues of $87,954,292 and Operating Expenses of $86,037,357 be approved, as compared to the budget approved at the November 25, 2019 Council meeting.
 
That the 2021 Final Capital Budget with Capital Revenues of $25,600,394 and Capital Expenses of $35,005,709 be approved, as compared to the budget approved at the November 25, 2019 Council meeting.
 
That the 2021 Final Net Transfer from Reserves of $7,488,380 be approved, as compared to the budget approved at the November 25, 2019 Council meeting.

Background/Analysis
The City first implemented a spring budget adjustment process in fiscal 2020.  Each year the spring budget adjustment process provides an opportunity to finalize the operating and capital budget prior to setting the property tax rate for the year.  Amendments to finalize are typically related to changes in growth projections, and significant changes to the timing of major capital projects (new and lifecycle), and operating budget items.  

Council is being presented with amendments to finalize the budget for 2021.  The amendments will deal with growth in assessment revenue, planning and engineering costs for studies and consulting, a re-design of the Columbus Park portion of the CCARP capital project, a re-evaluation of construction plans for the Transit Park and Ride Hub, costs to construct the new Spruce Grove - Stony Plain Trail, updated costs for a new fire truck, and fleet and facilities lifecycle plan changes as outlined below:

Growth in Assessment Revenue:
Total estimated growth related to revenue at the time of the 2021 budget was $513,646, or 1.25%.  After assessment data was received, actual growth was found to be higher than the original estimate at $598,938, or 1.46%.  This yielded $85,292 in additional revenue from property tax due to growth.  

Engineering Operating Costs:
$75,000 was requested in 2021 to perform pavement assessments to support the condition assessment of annexed roadways for input into Cartegraph, the new asset management system.  $96,000 was requested to complete project work on Century Road under the CN Crossing maintenance program, and an additional $41,292 is being included to supplement the Engineering Studies budget due to items carried forward from 2020.  These projects will be funded through the Municipal operating budget.

Planning & Development Operating Costs:
A request of $50,000 was put forward to perform an efficiency and effectiveness review in this area.  This project will be funded through the Municipal operating budget.

City Centre ARP re-design:
The Columbus Park portion of the CCARP project was re-designed and updated to include site servicing for future washrooms and the installation of a water fountain.  $450,698 has been added to project costs to bring the total park budget to $1.763 million.  The project was previously funded through MSI grants and is proposed to continue being funded in this manner.

Transit Park and Ride Hub re-evaluation:
The construction of the Transit Park and Ride Hub was re-evaluated and updated to include the acquisition of land in 2021 and construction of above ground structures in 2022.  This resulted in a decrease of $412,500 to 2021 capital costs; the funding impact is an increase in the use of MSI grants by $226,405, and a decrease in the use of Green Trip and ICIP grants by $241,672 and $397,233 respectively.

New Spruce Grove - Stony Plain Trail:
$300,000 was added to the 2021 budget to construct the first phase of the new Spruce Grove - Stony Plain trail connection.  An additional $50,000 was also requested to be set aside in 2021 to design the next phase of the trail to be constructed in 2024.  This project is funded entirely from MSI grants.

Fire Pump Truck Updated Cost:
The quote for the new fire pump truck that was approved for purchase December 14, 2020 came in $205,979 higher than planned, resulting in an increase in 2021 costs of $21,191.  The remaining difference relates to costs that were planned for 2022.  The fire pump truck is being fully funded by MSI grants.

Fleet & Facilities Lifecycle Budget:
Updates were made to the fleet and facilities lifecycle budget in an effort to find an alternative source of funding for $354,446 in asset acquisition costs.  The costs were planned to be funded from MSI grants in the 2021 budget, but as the costs were for three different facilities MSI guidelines required them to be split out.  Once segregated, the costs no longer met the MSI threshold and were unable to be funded from that source.  To help with this funding issue and in light of the recent discussion between Parkland School Division and the Government of Alberta, $120,000 for Horizon Stage equipment purchases was deferred to 2022.  The balance of the unfunded items is proposed to be funded from the lifecycle reserves as previously laid out in the Long Term Capital Plan.  A portion of the $120,000 in costs being deferred to 2022 are covered by the Canadian Cultural Spaces grant where $55,939 remains in deferred revenue to be spent by March 31, 2022.  The City originally received $63,208 under this grant program.  A budgeting error revealed that an additional $120,000 in costs for Horizon Stage were duplicated in the budget and therefore are being removed permanently.  An additional $57,000 for Horizon Stage lighting has also been deferred at this time, again related to ongoing discussions between Parkland School Division and the Government of Alberta.

The overall budget impact is an increase of $289,389 in the capital budget.  The following tables summarize the operating and capital budget impacts:
 
Operating Budget Impacts Change Tax Impact MSI Grants ICP Grants Green Trip Grants Reserves
             
New revenue from growth in assessment -$85,292 -$85,292        
Engineering Studies $41,292 $41,292        
Engineering - CN crossing project $96,000 $96,000        
Engineering - Cartegraph Data $75,000 $75,000        
Planning & Development - Review $50,000 $50,000        
R&M Facilities and Fleet -$120,000 -$120,000        
R&M Lifecycle - Facilities - Horizon Stage -$57,000 -$57,000        
Total Budget Impacts $ - $ -        
 
  
Capital Budget Impacts Change Tax Impact MSI Grants ICIP Grants Green Trip Grants Reserves
             
Spruce Grove - Stony Plain Trail - Phase 1 $300,000   $300,000      
Spruce Grove - Stony Plain Trail - Phase 2 Design $50,000   $50,000      
Transit Infrastructure Park and Ride Hub -$412,500   $226,405 -$397,233 -$241,672  
CCARP Project $450,698   $450,698      
Fire Rescue Truck $21,191   $21,191      
Furniture & Facilities - RMR - Deferred* -$120,000   -$354,446     $234,446
Total Capital Budget Impacts $289,389   $693,848 -$397,233 -$241,672 $234,446
* RMR - Repair, Maintain, Replace            
  
Options/Alternatives
Council can choose to make changes to any of the items identified for spring budget adjustment, or add to the list of adjustments.  This would require further analysis and budget revision.
Consultation/Engagement
The review process for the recommended budget adjustment included the Corporate Leadership Team (CLT) and members of the Organizational Leadership Group (OLG).
Implementation/Communication
All recommended changes once approved by Council will become part of the spring budget adjustment for determination of the City's official 2021 budget for audit purposes and public communication.  Online communication of the 2021 - 2023 Corporate Plan will be updated to reflect the new Fiscal Plan on Council approval.  Corporate Communications will work with CLT and Finance to create messaging to advise the public of the revised budget. 
Impacts
The impacts of this decision will allow for the revision of the 2021 budget.

Fiscal Impact
Financial Implications:
There is no property tax impact to the financial changes proposed within the Spring Budget Adjustments.  The overall budget impact is an increase to the capital budget of $289,389 to be funded from the Municipal Sustainability Initiative grant in the amount of $693,848 and lifecycle reserves in the amount of $234,446, combined with the removal of grant funding from ICIP in the amount of $397,233 and Green Trip in the amount of $241,672.
Attachments
No file(s) attached.

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