Preparing A Budget for an Economic Development Project

Dan Rochon, CA Controller

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Agenda

• Background • Importance of Budgeting for a business plan • Feasibility and Planning Stage • Construction Stage • Operations and Maintenance Stage • Post Completion Review

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ATCO Group Overview

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ATCO’s Aboriginal Partnerships

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About Us

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ATCO Designs for Aboriginal Communities

Educational Facilities Classroom additions

Daycares Schools

Residential Solutions Multi-family apartments Single family housing

Elders centres

Commercial Spaces Office complexes

Retail facilities Gas stations Motel/hotel

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ATCO Designs for Aboriginal Communities

Health Care Diagnostic centres

Medical clinics Hospitals

Recreational Complexes Indoor soccer facilities

Hockey arenas Gymnasiums

Community Infrastructure Civil works (roads, sidewalks)

Water/sewer Power/Gas

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What is a Business Plan?

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Answers Questions

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Importance of Budgeting for a Business Plan

• Backbone of a business plan • Plan what you want to do • Use limited resources wisely • Allows you to monitor results • Take corrective action

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Feasibility and Planning Stage

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Feasibility and Planning Stage

• Will take time • Cost • Financing

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• Consult with community • Provide industry background • Best design and location • Provides credibility

Use of Consultants

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Grocery Store

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Project Development

• Mission • Objective • Goals • Timetable • Products

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Project Development

• Preferences • Where you need help

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Feasibility Study - Grocery Store

• Customers • Local and regional competition • Location within community • Size and departments

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Feasibility Study - Grocery Store

• Marketing plan and promotions • Suppliers • Management and staffing

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Construction Stage

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Capital Costs

• Materials and supplies • Labour

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Construction Stage

• Labour availability • Construction timeline • Coordinate work • Timing of payments • Financing • “Murphy was an optimist”

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Gas Stations

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Construction Budget - Gas Station

• Entrance road • Fuel pumps • Display signage • Storage tanks • Convenience store

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Apartments with Elders Lodges

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Construction Budget - Elders Lodge

• Number of units • Size of units • Accommodate wheelchairs or walkers • Flexible communal amenity space • Monitoring station for staff • Automatic door opener

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Project Accounting and Reporting

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Operations Stage

• Purpose of facility • Monthly budget • Short and long term forecast • Financial Statements

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Other Considerations

• Management team • Method of operation • Annual budget • Monthly reporting

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Operations Stage - Revenue

• Usage fees • Competition • Government grants

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Operations Stage – Operating Costs

• Materials and supplies • Salaries and benefits • Utilities • Travel • General and administrative

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Operations Stage – Operating Costs

• Fixed Vs. Variable Cost • Costs in local area • Inflation • Seasonality

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Operations Stage – Other Costs

• Depreciation • Interest expense • Debt repayment

– Debt covenants • Capital replacement reserve • Operating cost reserve • Income taxes

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Grocery Store

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Recreation Center

• Arenas • Gymnasiums • Community center

Hockey Arena, Fort McKay First Nation Gymnasium, Halalt First Nation

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Post Completion Review

• Compare actual costs to budget • Schedule compared to budget • Facility functionality • Suppliers’ performance • Day-to-day operations • Lessons learned

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Celebrate Success!!

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Conclusions • Budgeting is important for planning and reviewing

performance • 3 stages of a project

– Feasibility study – Design and construction – Operations and maintenance

• Need different entity to help on each stage – Consultant for feasibility study – Design and build construction company – Internal staff or outsource for O&M

• Should complete a post completion review

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Thank you for your time and attention !

Questions ?

• Dan Rochon, CA dan.rochon@atcosc.com • Controller (403) 292-7799