Advance Approval for Capital Projects and Community Investment Allocation

FINANCE AND ADMINISTRATION COMMITTEE – DECEMBER 6, 2016

The Committee adopted a resolution to concur in the recommendation contained in the report.

Recommendation #4 does not require City Council approval.

Councillors:  Barbara Young (Chair), John Findura, Bob Hawkins and Jason Mancinelli were present during consideration of this report by the Finance and Administration Committee.

The Finance and Administration Committee, at its meeting held on December 6, 2016, considered the following report from the Administration:

RECOMMENDATION

That advance approval be provided for the following items:

1. $49.4 million be provided for the 2017 General Capital Projects identified in Appendix A to provide sufficient time within each project to meet certain deadlines and completion dates.

2. $20.2 million be provided for the 2017 Utility Capital identified in Appendix A to provide sufficient time within each project to meet certain deadlines and completion dates.

3. $3.6 million be provided for the 2017 Community Investments allocation to the Community and Protective Services Committee to allow community investments to be provided to funded agencies without delay.

4. That this report be forwarded to the December 19, 2016 meeting of City Council for approval.

CONCLUSION

The 2017 General and Utility, Capital and Operating Budgets will be presented to City Council for discussion and approval in February 2017.  Administration is requesting advance approval for a portion of the Capital Program and the community investments program to allow deadlines with respect to the projects to be achieved. 

The request for General Capital projects is $49.4 million which represents approximately 40% of the total General Capital budget. The request for Utility Capital is $20.2 million which represents approximately 30% of the Utility Capital budget. Details of the projects are provided in Appendix A. The recommended amount for advance approval for Community Investments is $3.6 million, the same amount as was approved in 2016.

BACKGROUND

The 2017 General and Utility Operating budgets and the five year (2017-2021) General and Utility Capital budgets will be publicly released in January 2017 and considered by City Council in February 2017. Normally the upcoming year’s budget is approved by December of the current year, eliminating the need for advance approvals. The 2017 budget approval process is delayed to ensure that a newly elected Council has the time to review and reflect on Administration’s complete 2017 budget proposal.  As a result, advance approval for some projects is required.

Certain projects require advance approval in order to enable the project to be initiated prior to final Council approval of the capital program.  Advance approval is requested where lead-time is required to allow the project to be designed or tendered for construction early in the spring or summer, equipment or other supplies must be ordered to meet certain deadlines, or the timing of the project requires an early start to be completed by the end of the year.

Advance approval is also required for community investments so the City of Regina can distribute these funds to funded agencies without delay. The adjudication process for the Community Investment Grants Program takes place early in the year, in alignment with the processes of other funding agencies. Partner organizations have historically received a portion of their funding early in the year and the Community and Protective Services Committee requires advance approval of its 2017 funding from City Council in order to exercise its delegated authority.

DISCUSSION

Each year City Council approves a five-year capital program.  The recommended 2017 – 2021 General Capital and Utility Capital budgets will be discussed at a special city Council meeting in February 2017.

Through the 2017 Budget development process, the Administration has been working to prioritize the capital program in the context of City Council’s Vision.  Projects have been included in this advance approval request where early approval is required to meet seasonal construction or delivery demands and where:

-          a portion of the funding is from non-mill rate supported revenue sources such as the Utility Reserve, the Civic Fleet Reserve, Federal infrastructure grant programs, servicing agreement fees; or

-          the project has been determined to be in the highest priority of projects included in the draft 2017 Capital Program.

Appendix A details the specific capital projects where advance approval is requested. The specific projects within the General Capital Program where advance approval is requested total $49.4 million. This represents approximately 40% of the general capital program for 2017. The specific projects within the Utility Capital Program total $20.2 million. This represents approximately 30% of the Utility Capital Program for 2017.

The annual operating budget approved by Council includes funding to support the City of Regina’s partnerships with associations, individuals and organizations to build a sustainable community by investing in projects, programs, and services that make a measurable, meaningful, economic, social, or cultural impact within our community. The funding allocated to the Community and Protective Services Committee in 2016 totalled $3.6 million. The mandate of the community investment program is to fulfill a variety of community needs. This mandate is delivered through three separate committees of council each of which focuses on a different aspect of those community needs. Under the current committee structure:

1. The Finance and Administration Committee is delegated the authority from Council to approve of grants for economic purposes, in accordance with Council policy within a global sum approved each year by Council
2. The Executive Committee is delegated the authority from Council to allocate funding for strategic or community investments within the sum approved by Council;
3. The Community Planning & Development Division, through delegated authority from the Community and Protective Services Committee, provides financial support to community associations and organizations that provide arts, culture, sport, recreation and community services along with organizations that address social issues. The community investment funding allocated to the Community and Protective Services committee is made available to organizations either through a direct allocation or by application to a specific community investment program.

The prior approval recommended in this report is to provide the committee with the current level of funding (same as 2016) to begin the process of accepting and adjudicating application for grant funding.

The 2017 community investment allocations to the Finance and Administration Committee and Executive Committee are outside the scope of this report. The determination and approval of the amount of community investment to be allocated to these committees will be managed in the 2017 budget process.

RECOMMENDATION IMPLICATIONS

Financial Implications

A total of $73.2 million in advance approval is recommended:

-          $49.4 million for general capital projects;

-          $20.2 million for utility capital projects; and

-          $3.6 million for community investments grants.

Funding sources for the General Capital projects are as follows in millions: 

Current Contributions to Capital              $25.7

Federal Gas Tax Grant                              11.4

Reserves                                                           12.3

Utility Reserve                                            13.4

Federal grants                                                            6.8

General Operating Revenue                                3.6

Total                                                                      $73.2

This advance approval represents approximately 40% of the total 2017 General Capital Budget and approximately 30% of the 2017 Utility Capital Budget.

Environmental Implications

None related to this report.

Policy and/or Strategic Implications

Advance approval is requested where lead-time is required to allow the project to be designed or tendered for construction early in the spring or summer, equipment or other supplies must be ordered to meet certain deadlines, or the timing of the project requires an early start to be completed by the end of the year. Future funding allocation for community investments should align with and advance the strategic priorities of managing growth and community development.

Other Implications

None related to this report.

Accessibility Implications

None related to this report.

COMMUNICATIONS

Individual projects will be pursued with communication and in consultation as necessary.

DELEGATED AUTHORITY

The recommendations in this report require the approval of City Council.

Respectfully submitted,

FINANCE AND ADMINISTRATION COMMITTEE

Ashley Thompson, Secretary