Unanticipated cost overruns of $495,000 in 2019 will be covered by unspent one-time projects, including CAO & Council Initiatives, Legal Matters, Dow Drive Property Developments, and the Off-site Levy Bylaw.
Coun. JoAnn Race mentioned that it was unclear where the $300,000 coming from ‘legal matters’ was found in the budget, during the regular council meeting on Oct. 1.
“There is $300,000 set aside in a couple different areas, that’s in case we have any matters that come forward. We have two outstanding [legal] cases that could [come forward], but look like they will likely not happen in this calendar year,” said CAO Martin Taylor.
Redirecting unused funds from projects that won’t be completed in 2019 towards the 2019 cost overruns avoids otherwise required amendments to the 2019 budget.
According to the report brought to council it is anticipated that additional funds will be required in 2020 to address unsettled legal matters of approximately $300,000, which are now put on hold.
Additionally, $330,000 would be required to meet a worst-case scenario as estimated by Legal Council, stated the report.
After Coun. Race and Coun. Tyler Waugh both asked if that means they will need a potential $630,000 set aside in 2020 for legal matters, CAO Taylor responded, “that appears to be the intent of those particular sentences.”
Unforeseen circumstances lead to several unplanned expenditures that could not be absorbed in current operations.
The unplanned expenditures were caused by a $72,477 increase to resources for the remainder of 2019, $109,259 in legal costs overages due to required legal consultation and representation for employment litigation, harassment, and human rights complaints, plus an estimated $47,500 of additional legal costs in 2019, $365,267 in wage cost overages due to litigation and due process, plus an estimated $118,550 required for 2019, and other unplanned recruitment cost overages due to high turnover rate of approximately $9,000.
Many of the costs from legal matters resulted from past issues, some originating in 2016, according to the report on Sept. 17.
Administration will cover $227,053 of the cost overruns within current budget savings, while the remaining $495,000 is now covered by unspent dollars from one-time projects.