March 2025 Board of Health Meeting - 2024 Q4 Report Information Report

PREPARED BY: Michael Horrobin, Director of Corporate Services & CFO

DATE: 2025-03-2025

Mandatory Programs Budget – Year Ending December 31, 2024

For the twelve months ending December 31, 2024, the total budget variance (amount under budget) is $1.2M or 5%.  Salaries and benefits from unexpected vacancies in multiple departments throughout the year accounted for $963K or 80% of the underbudget amount. Unspent budget amounts for the relocation project of $360K were mitigated by increased spending on Information Technology and Building Maintenance.  Unbudgeted interest revenue of $230K  also contributed to the underbudget amount at year end.

It is important to note that these are draft numbers as the year-end work for the annual audit does not commence until March and adjustments to the actual numbers could result in decreases/increases to the final annual actual amount spent.

Also, there is significant uncertainty in One-Time Funding submissions to the Ministry of Health (MOH). Initially, the MOH indicated that there would be no one-time funding for the period April 1, 2024 to March 31, 2025 except for voluntary mergers.  However, after June 2024 several initiatives were announced and the WECHU submitted budgets for KI pills, Infection Prevention and Control (IPAC) Hub, RSV/COVID, Practicum and Medical Officer of Health Compensation Initiative. Only the IPAC Hub submission has been approved.  The MOH has indicated that the remaining approvals (or denials) would be announced sometime in March.  If any or all of the one-time initiatives are not approved, the budget variance of $1.2M would decrease.  However, at this time, the WECHU is expecting most of the one-time funding submissions to receive at least partial approval from the MOH.

Ontario Seniors Dental Care Program (OSDCP) – Year Ending Dec. 31, 2024

For the twelve months ending December 31, 2024, the total budget variance (amount under budget) is $141K or 5%. This variance is primarily due to Salaries and Benefits being under budget due to unexpected vacancies within the department throughout the year. It is important to note that the Board approved budget (Nov. 2023) was $3,115K, however the MOH only approved $3,033K citing budget shortfalls for this program.

Detailed Financial Report for the Year Ending December 31, 2024 – Mandatory Programs Budget

Mandatory Programs Budget – For the Year Ended December 31, 2024

The budgeted net expenditures for the year ending December 31, 2024 were $24,957K versus the actual net expenditures(draft) of $23,756K resulting in a total of $1,201K or 5% underspent.

Analysis of Key Variances

1. Salaries - $739K or 5% Under Budget

• Vacancies due to unfilled or partially unfilled departures and mandatory leaves of absence account for just over 64% of the underbudget amount.  Each vacancy can take up to 3 months to fill.
• Another contributing factor, explaining approximately 14%, is that all roles were budgeted at the maximum rate. When departures or leaves are filled with either a full-time permanent position or a contract position, most do not begin at the maximum rate.
• Lastly, a certain amount of permanent full-time staff were directed to one-time programs as contract positions were not filled to support those programs.  This accounted for approximately 18% of the underbudget amount.

2. Employee Benefits - $223K or 5% Under Budget
   Employee benefits are below budget primarily due to the OMERS pension plan. OMERS was budgeted as a percentage of salaries.  Salaries were budgeted using maximum salary rates, there were several leaves through the year and contract replacement staff are not included in OMERS.  As a result, the actual pension costs were below the amounts budgeted.
3. Office and Administrative Expenses - $92K or 28% Over Budget
   The main reason for the over budget amount was professional development along with comprehensive media training for the Leadership and Management teams.
4. Professional Fees – Legal, Audit and Consulting - $234K or 48% Under Budget
   The main reason for the amount under budget is costs allocated toward the relocation project that were not incurred. A total of $271K for the relocation project was budgeted. This was partially offset by an increase in legal fees due to a number of one-time situations     that arose in the year.
5. Supplies – Programs and Corporate - $94K or 9% Under Budget
   The main reason for the underbudget amount was approximately $67K or 28% under spending in the Zoonotic and Vector Borne Disease Program.  Many other programs  were underspent due to staff vacancies in various departments.
6. Purchases Services – Programs and Corporate - $92K or 31% Under Budget
   The main reason for the variance is that an outsourced Project Manager was budgeted at $92K to lead the relocation project that did not proceed so this cost was not incurred.
7. Information Technology - $362K or 63% Over Budget
   A significant amount of IT spend for existing operations prior to 2024 was deferred due to the potential relocation project. That relocation did not occur, so expenditures were required to address the deferred projects. Significant expenditures were required and made in 2024 to upgrade the networks in both Leamington and Windsor, to enhance the cyber security program and to replace end-of-life hardware.
8. Building Maintenance - $287K or 165% Over Budget
   Similar to the situation with IT, many maintenance and repair items in the Windsor location were deferred.  During the year, there was significant spend to address lighting, plumbing and electrical issues.  Also, a large-scale painting project was commenced in 2024 as part of a major plan to renovate and optimize the existing location.  Also, a new corporate van was purchased replacing the fourteen-year-old existing van.
9. Property Taxes - $46K or 20% Over Budget
   The main reason for the overbudget situation was the lease for the SafePoint facility. The initial budget was less than the actual property taxes assessed and as part of the Lease Termination and Surrender Agreement six months of property taxes were paid in October.
10. Insurance - $200K or 79% Under Budget
    This expense is under budget as the premium for the annual renewal (renewed Jan. 1, 2024) for the commercial insurance policy was  inadvertently expensed in 2023.
11. Offset Revenue - $320K or 59% Over Budget
    Interest income was not included in the 2024 budget.  Due to the relatively high rates in 2024, interest income of $230K was generated for the year. Also, revenues for seasonal housing inspections and immunizations were over budget as budgets for these types of offset revenues are set very conservatively.

Detailed Financial Report for the Year Ending December 31, 2024 – Ontario Seniors Dental Care Program

OSDCP Budget – For the Year Ending December 31, 2024.

For the twelve months ending December 31, 2024, the total budget variance (amount under budget) is $142K or 5% based on the budget allocation approved by the MOH in the amount of 3,033K.

Analysis of Key Variances

1. Salaries - $278K or 18% Under Budget
   Salaries are under budget primarily due to unfilled vacancies and leaves of absence.  In addition, all roles are budgeted at the maximum rate. When these unexpected departures or leaves are filled with either a full-time permanent position or a contract position most do not begin with earning the maximum rate.
2. Benefits - $74K or 16% Under Budget
   The main reason for the benefits being under budget is the OMERS pension plan.  It is under budget as this cost is budgeted as a percentage of salary costs.
3. Professional Fees – Legal, Audit and Consulting $118K or 22% Over Budget
   Professional fees are over budget due to the increased use of outsourced dental services given staffing vacancies within the department.
4. Supplies – Programs and Corporate $88K or 30% Over Budget
   The main reason for the over budget amount is the replacement of significantly aged dental chairs and other equipment that were having frequent maintenance issues creating disrupted service to clients.
5. Rent - $81K or 38% Under Budget
   Charges for rent are under budget because the budget had contemplated higher occupancy costs with the relocation project that did not occur.

Proposed Motion

Whereas the Finance and Audit Committee reviewed the Q4 Financial Report at its meeting on March 6, 2025 and recommends the Q4 Financial Report for approval to the Board of Health 

Now therefore be it resolved that the Board of Health approve the Q4 Financial Report