Budget Timetables to Move Forward

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At the July 3rd Council meeting, a revised budget timetable for the 2018 budget was approved, allowing staff to begin the budget process a month earlier than previous years. Under the new schedule, Council will receive two draft presentations to Council for review and discussion. The first presentation will occur on November 6th, 2017, with the 2nd draft available for public comment on January 15, 2018. The final budget approval is scheduled for the February 5th, 2018 regular Council meeting.

The report presented by Director of Finance Kimberley Pope also included a request to establish a pre-approval base level funding for the Roads Network Capital prior to budget approval. Under existing regulations, capital project tenders cannot go to market until the final budget approval. This delay in tendering for capital expenditures has put the township at a financial disadvantage, as early tenders often attract more favourable terms. Later tenders and subsequent contract awards are subject to negative market forces and it is perceived that early market access will improve the terms of contractor bids, particularly for road network and bridge projects.

In the area of operating expenditures, staff may incur normal operating costs of up to 50% of the previous year’s operational budget prior to final budget approval and because of the potential cost-savings involved, staff wish to extend this concept to capital expenditures as well.   Ms. Pope requested that the purchasing by-law be amended to allow the pre-approval of the Roads Network Capital at a base funding level.

The report recommended that staff be authorized to proceed with capital expenditures for road network investments of up to 75% of the Asset Management Plan (AMP) annual funding required for sustainability. Concluded in 2012, the AMP assessed the annual expenditures required to sustain Cavan Monaghan’s paved road network as at $1,948,000 in 2012 dollars. With annual indexing, this expenditure translates to $2,079,911 in 2017 dollars.

Council agreed to allow staff to proceed with a maximum 75% pre-approval level $1,560,000 for Roads Network Capital projects in the upcoming budget year, allowing the municipality to tender their capital projects ahead of the traditional municipal tender rush in an effort to secure optimal pricing on these significant contracts. KG

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