City departments went 8 percent over budget in 2015 and a staff report says Guelph has to stop relying on positive variances in other areas to cover such shortfalls.
It is the fourth straight year city departments, which includes financing, have gone over budget, points out the 2015 Preliminary Year End Operating Variance Report, which will be delivered to the city's Corporate Services Committee on Monday.
The report shows where the city was under or over budget for the previous year.
Overall the city had a favourable tax-supported budget variance of $1.14 million, its highest in four years, but city departments were just over $2.4 million in the red.
Most of the positive overall variance stems from $2.89 million in savings from the city's outside boards and agencies, most notably the social services commitments the city has that are administered through the County of Wellington. The city saved $1.85 million on its social housing budget alone.
"The county administers these programs and is yet to publicly provide commentary on the variances," the report says.
But the report cautions that "there is always risk that the outside board and agencies will not achieve these significant favourable positions in the future and the city needs appropriate stabilization reserves to address this concern."
The report also says the city was $2.25 million in the black on its non-tax supported budget for last year, largely through increased customer base for its water and wastewater services.
At the other end of the spectrum, the city was a $2.4 million in the red when it comes to its departmental and general revenue/expenditures budget.
"The city has faced a number of challenges throughout the year with respect to expenditure and revenue pressures," the report says.
The city took several measures midway through last year to try and mitigate the budget overruns. They included reducing discretionary spending, delayed hirings and reducing and delaying purchases in US dollars.
The report points out some key budget overruns and their reasons. Most notably a negative $2.6 million in solid waste due primarily due to the falling price of recyclable materials and lower than expected recycling tonnage from contractors.
Other key shortfalls included:
- $528,000 in transit due in part to lower user fees, higher maintenance costs, more contracted work and overtime.
- $708,000 in operations due in part to overtime and overspending on loose leaf collection.
- $447,000 in recreation mostly for unbudgeted repairs and in part to a decrease in ice rentals.
- $177,000 in culture and tourism due in part to the cost of In Flanders Fields anniversary celebrations.
- $173,000 in parks due in part to overtime.
Several departments spent less than budgeted, most significant of which was the $1.29 million in general revenue and capital financing savings. That was attributed primarily to higher than expected investment earnings and $781,000 taken from the employee benefit stabilization reserve to offset the cost of employee terminations.
Other 2015 budget savings included $726,000 in the Guelph Police Service budget attributed to job vacancies that weren't filled.
The figures contained in the report are preliminary and could change in the final external year-end audit.
Following that, any surplus will be transferred into the city's reserves.
