HomeMy WebLinkAboutFIN 14-16 �L
00 is
Report to
Executive Committee
I KERIN
Report Number: FIN 14-16
Date: June 20, 2016
•
From: Paul Bigioni
Director, Corporate Services & City Solicitor
Subject: Development Charges Reserve Fund — Statement of the Treasurer for the
Year Ended December 31, 2015
Recommendation:
That Report FIN 14-16 of the Director, Corporate Services & City Solicitor respecting
the Development Charges Reserve Fund be received for information.
Executive Summary: Section 43 of the Development Charges Act, 1997 (the "Act")
requires that the Treasurer provides Council with a financial statement relating to the
development charges by-law and reserve fund established for each service as
established under Section 33 of the Act.
On December 3, 2015, the Province passed Bill 73 which amended the Act to add
additional reporting requirements. The Treasurer's Statement attached to this report
has been expanded to comply with the new reporting requirements.
Attachment 1 provides details of the activity of the Development Charges Reserve Fund
for the year ended December 31, 2015 in the manner prescribed by section 43(2)(a) of
the Act. Attachment 2 provides details on information related to assets funded by the
development charges by-law as stipulated by section 43(2)(b) of the amended Act.
The amended Act introduced a new section: 43(2.1), which now requires Council to
ensure that the Statement is made available to the public. The Statement will be posted
on the City's website to facilitate compliance with the amendment.
Financial Implications: Starting from 2011, and continuing into 2015, new
development in the Duffin Heights neighbourhood has resulted in a spike in
development charges revenues.
The Reserve Fund remains at a healthy balance of approximately $40.9 million pending
future use of funds for qualified projects. The funds are well managed with investment
returns consistently exceeding market indicators. Investment income is added to the
balance of each fund as such income is earned.
•
FIN 14-16 June 20, 2016
Subject: Development Charges Reserve Fund Statement of the Page 2
Treasurer for the Year Ended December 31, 2015
Discussion: Funds are not transferred out of the Development Charges Reserve
Fund for projects until the funds are actually needed, as required by applicable
accounting rules. This ensures that the Reserve Fund continues to earn interest
income on the unspent monies until such time as actual expenses are incurred.
The total Reserve Fund balance of $40.9 million represented in Attachment 1
represents the unspent monies as at December 31, 2015. Please note that there are
approximately $11.9 million of committed capital projects that have been approved in
prior years, but have not proceeded or are still ongoing as at December 31, 2015.
Taking into account these commitments, the net fund balance available for future
expenditures is approximately $29 million.
In order to meet the new requirement under section 43(2.1) of the amended Act, it is
recommended that the Statement be placed on the City's website upon approval by
Council.
Attachments:
1. 2015 Statement of the Treasurer -Development Charges Reserve Fund
2. Amount Transferred to Assets — Capital Fund Transactions
Prepared By: Approved/Endorsed By:
Caryn Kong, CPA, CGA Stan Karwowski, CPA, CMA, MBA
Senior Financial Analyst — Capital & Divi- • Head, Finance & Treasurer
Debt Management .d
Paul Biel:
Directo , ••rp•rate Services & City Solicitor
Recommended for the consideration
of Pickering City Council
Vez,id SO, ZD/
Tony Prevedel, P.Eng.
Chief Administrative Officer
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