I have been intrigued by some of the community reaction to the media coverage of the projected year end variance that was identified at the end of June and reported on to a Council committee in September.
The penny (every pun intended) finally dropped for me when one constituent wrote – perhaps I don’t understand the difference between a “shortfall” (the paper headline) and a “projected year end variance”.
Council approves a budget each year. It is our staff’s best estimate at that precise moment in time – then real life takes over.
More snow storms than usual can throw a wrench into their best laid plans. This year, two unplanned and quite significant wind storms had to be contended with – remember all the trees that came down. The recession in 2009 saw interest rates plummet, consequently, so too did the City’s projected investment income for that year.
Lots of things happen during the year that help or hurt our ability to stay within budget.
Our managers monitor actual spending against their departmenl budgets on a weekly basis. Our Finance Department monitors all department budgets on a monthly basis and Council’s Corporate Administration, Finance and Enterprise Services Committee receives quarterly reports and these reports are made available to the public – consistent with open government.
The point of all this monitoring is to ensure we are on track for a balanced budget by the end of the year and, if not, to take corrective action.
At the end of June, our Finance Department identified the potential for a negative year-end variance – that is to say, we might spend more money than Council had budgeted – if no action was taken. And that is what our Executive Team has done – taken action – to ensure that by the end of the year the organization will not spend more than approved by Council.
From now until the end of the year, the Council committee has requested monthly reports to provide an extra level of oversight in fulfilling our responsibility to Council and the taxpayers.