HomeMy WebLinkAboutCS 20-07
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REPORT TO
EXECUTIVE COMMMITTEE
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050
Report Number: CS 20-07
Date: June 11,2007
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
.2006 Pre-Audit Balances of Reserves and Reserve Funds
Recommendation:
That Report CS 20-07 of the Director, Corporate Services & Treasurer be received for
information.
Executive Summary: Based on the preliminary 2006 results, we can now report on
the pre-audit actual activities within the Reserves and Reserve Funds for 2006. A
summary is plresented in Appendix A.
The purpose and 2006 financial transactions for each Reserve and Reserve Fund are
set out in Appendices Band C respectively.
Financial Implications: Not applicable
Sustainabilit~v ImplicaUons: Funds available under the Reserves and Reserve Funds
provide partial financial support towards the sustainability of Pickering in both capital
and operating expenditures.
Background: As in previous reports filed over the last four years, this report provides
specific information on each of the City's Reserves and Reserve Funds, including year-
end balances. The 2006 pre-audit Reserves and Reserve Funds balance of
$50,771,080 is one of the highest balances ever reported in Pickering. However, this
balance is not fully available for use due to the outstanding budget commitments of
funds not yet spent, thH obligations connected with the collection of funds or other
specific purposes approved by Councilor under Provincial Legislation.
With regard to unspent budget commitments for capital projects, we are continuing the
practice of not transferring funding for commitments until the expenditures are incurred.
This procedure allows the Reserve Funds to earn interest income as long as funds are
still in the reserve fund's custody and is in compliance with Public Sector Accounting
Report CS 20-07
Date: June 11, 2007
Subject: 2006 Pre-Audit Balances of Reserves and Reserve Funds
Page 2
051
Board (PSAB) for obligatory Reserve Funds. The combined unspent budget
commitments for all Reserve Funds are $5,969,368.
From 2001 to 2005, the City's share of collections from OPG related to properties under
assessment appeal was $9,336,829 in the Reserve for Contingency - OPG Assessment
pending final decision of this appeal. At this time, we are still unable to confirm the
availability of these monies for corporate purposes. In the meantime, these funds are
being used for the temporary financing of the Don Beer Arena expansion with the
balance being invested.
The Development Charges, Parkland, Third Party/Developer Contributions, Ontario
Transit Renewal, Provincial Dedicated Gas, Federal Gas Tax and Building Permit
Reserve Funds represent funds received for specific purposes subject to legislative
requirements and based on developer agreements or agreements with any third parties.
Funds available in these Reserve Funds are obligatory in nature and should be treated
as committed. The balance in these obligatory Reserve Funds is $28,844,560.The
combined total of the budget commitments, OPG assessment appeal, other restricted
balances and obligatory Reserve Funds of approximately $42 million reduced the
"discretionary" balance to approximately $8 million as at December 31,2006.
The City established a new reserve and reserve fund this year, namely: Move Ontario
Reserve and Building Permit Reserve Fund. The purposes of the reserves and reserve
funds are discussed further in Appendices Band C.
Internal borrowings from the Reserve Funds commenced in 2001 to assist in funding
capital projects. Although the amount borrowed each year has declined, the
outstanding principal balance at December 31, 2006 is approximately $4.8 million.
These loans are undertaken from the Development Charges and Parkland Reserve
Funds. This provided the Reserve Funds with an attractive rate of interest compared to
current market investment rates while at the same time providing a cheaper cost of
borrowing to the capital fund. Interest earned on internal loans represents amounts
earned on the 2001 to 2005 internal borrowings. Repayment for 2006 internal
borrowings will commence in 2007 and interest earned will be reflected accordingly.
Attachments:
1. Appendix A Summary of Reserves and Reserve Funds
2. Appendix B Description of Reserves
3. Appendix C Description of Reserve Funds
Report CS 20-07
Date: June 11, 2007
Subject: 2006 Pre-Audit Balances of Reserves and Reserve Funds
Page 3
1,1, ...05?
PrepareaBy:
Approved I Endorsed By:
~~~~-=o.
Caryn Kong
Senior Financial Analyst
--~~~
Gillis A. Paterson
Director, Corporate Services & Treasurer
GAP:ck
Attachments
Copy: Chief AdministrativH Officer
Recommended for the consideration of
Pickering City Council..--
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APPENDIX A 053
CITY OF PICKERING
SUMMARY OF RESERVE AND RESERVE FUND PRE-AUDIT ACTUALS
DECEMBER 31, 2006
Pre Audit Audited Audited Audited
Appendix B Summary Reserves 2006 2005 2004 2003
4610 Working Funds $400,000 $400,000 $400,000 $400,000
4611/4623 Replacement Capital 685,715 722,844 758,175 730,713
4612 Contingencies-OPG, Election, Other 2 10,594,909 10,774,909 9,053,320 7,813,558
4613 Self-Insurance 2 951,391 915,514 940,514 940,514
4619 Rate Stabilization 4,450,981 3,388,965 2,619,565 2,177,209
4620 Develop.Charges-City's Share 2 809,654 484,204 1,921,332 2,685,297
4621 Region Transit 2 120,999 237,106 1,025,741 1,106,634
4622 Continuing Studies 2 474,484 342,533 233,159 141,884
4624 Vehicle Replacement 72,547 75,000 25,000
4625 Easement Settlement 1,095,129
4626 Library Eastern Branch 2 30,000 20,000
4627 Move Ontario _ New 833,243
Total Reserves $19,423,923 $18,456,204 $16,976,806 $15,995,809
Pre Audit Audited Audited Audited
Appendix C Summary of Reserve Funds 2006 2005 2004 2003
4225 Community Facilities $194,176 $265,492 $380,604 $386,726
4228 Capital Works 321,618 309,872 302,610 535,849
4229 Development Charges 1 & 2 22,736,472 21,135,306 19,496,777 15,804,668
4230 Parkland 1 & 2 1,993,928 2,103,061 2,166,696 1,959,087
4232 Public Works 1,072,893 1,038,206 1,152,444 1,465,425
4234 Workers Safety Insurance Brd 2 834,922 589,575 378,731 181,023
4235 Third PartylDev. Contributions 1 1,868,148 1,819,264 1,601,076 1,024,691
4236 Ontario Transit Renewal 1 19,166 19,166 14,035 14,957
4237 Squash Courts 2 78,989 66,087 33,713 7,450
4238 Provo Dedicated Gas Tax 1 771,076 722,039 161,515
4239 Federal Gas Tax Revenue 1 1,455,769 850,684
4240 Building Permit Stabilization Fees 1&2 New
Total Reserve Funds $31,347,157 $28,918,752 $25,688,201 $21,379,876
Total Reserves & Reserve Funds $50,771,080 $47,374,956 $42,665,007 $37,375,685
Notes
1 Obligatory 28,844,560 (Includes 4229 & 4230)
2 Restricted 13,895.348 (Excludes 4229 & 4230)
Total Obligatory 1 & Restricted ~ -2006 = $ 42,739,908
APPENDIX B
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RE:SERVE FOR WORKING FUNDS 4610
Actual Balance DI9cember 31, 2005
Transfe~rs into the Reserve
$
400,000
Transfe!rs out of th,e Reserve
$
400,000
Pre-Audit Actuall:lalance December 31, 2006
1. Purpose of this Reserve:
The reserve for working funds is used to provide operating cash to assist in
avoiding short term interest expenses incurred on operations, typically during the
first few months of the year prior to tax billing and at other times when cash
inflows and outflows do not match as occurs in any corporation.
The interest income on these funds form part of the annual Current Budget
General Government Revenue.
2. Recommended Maintenance levels of the Reserve:
It is recommended as a "rule-of-thumb" that this reserve be 2% to 3% of total City
revenW3S. Based on an average annual revenue of $45 million, at 2%, the
amount to maintain for this reserve should be $900,000.
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APPENDIX B
RESERVE FOR REPLACEMENT OF CAPITAL EQUIPMENT - G/l 4611/4623
Actual Balance December 31, 2005
Transfers into the Reserve
Revenue Fund Contribution
$
722,844
115,462
Transers out of the Reserve
Transfer to Capital Fund
(152,591 )
Pre-Audit Actual Balance December 31, 2006
$
685,715
1. Purpose of this Reserve:
The purpose of this reserve is to reduce the need to levy for the full cost of major
equipment in the year of acquisition. The reserve acts as a stabilization factor
and helps to avoid both tax rate fluctuations and the issuance of long-term debt
or other means of financing.
The interest income on these funds form part of the annual Current Budget
General Government Revenue.
2. Recommended Maintenance levels of this Reserve:
This reserve should be kept at a level that is equivalent to the replacement cost
of the assets for which they were established. Over the last couple of years, the
reserve balance has been kept at a minimum level.
Contributions to this Reserve are provided for annually in the Current Budget. In
2003, additional sub-categories were set up for accounting purposes to better
match the collection of funds to the application of these funds to particular
facilities as shown on the following page.
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APPENDIX B
The balances pertaining to these sub-categories are as follows:
Genl9ral Recreation Dunbarton Don Beer Rec Comp Rec Comp Rec Comp
Corp Use Prgrms Pool Arena Core Pool Arena Total
$ $ $ $ $ $ $ $
Dec 31/05 53,,860 148,260 34,734 92,500 89,893 151,312 152,285 722,844
Transfer in 0 18,500 4,962 30,000 27,000 15,000 20,000 115,462
Transfer out (50,.508) (7,080) (17,822) (35,120) (42,061 ) (152,591 )
Dec 31/06 53,,860 116,252 32,616 104,678 81,773 166,312 130,224 685,715
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APPENDIX B
RESERVE FOR CONTINGENCIES- G1L 4612
(OPG, Other Assessment Appeals, Election, Miscellaneous)
Actual Balance December 31, 2005
Transfers into the Reserve
Revenue re OPG Assmt. Appeal Properties
Transfer from Revenue Fund
$ 10,774,909
Transfers out of the Reserve:
Elections
Pre-Audit Actual Balance December 31, 2006
(180,000)
$ 10,594,909
1. Purpose of this Reserve:
Like the capital equipment replacement reserve, this reserve acts in a tax
stabilization capacity. It was established in anticipation of unknown, unusual or
extraordinary expenditures, which occur from time to time.
The interest income on these funds form part of the annual Current Budget
General Government Revenue.
2. Recommended Maintenance Levels of this Reserve:
In 2003, the large balances in this Reserve were reviewed and grouped into sub-
categories in the General Ledger, for accounting purposes only, to better
distinguish those amounts that are committed and those amounts available for
general corporate use. The sub-categories are as follows: OPG Assessment
Appeal, Elections, Other Assessment Appeals and Miscellaneous.
The majority of the funds (88%) are related to Contingency-Ontario Power
Generation (OPG) Assessment. Fund balance as at December 31, 2006 is
$9,336,829. These funds were collected from 2001 to 2005. The availability of
these funds is undeterminable as the appeal is still outstanding and is considered
committed in the event repayment must be made.
The amounts pertaining to the other sub-categories are as follows: Election - $0,
Other Assessment Appeals - $682,594 and Miscellaneous - $575,486.
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APPENDIX B
RESERVE FOR SELF INSURANCE - G/L 4613
Actual Balance December 31, 2005
Transfers into the Reserve
$ 915,514
49,620
Transfers out of the Reserve:
Transfer to Capital -Fire vehicle
(13,743)
Pre-Audit Actual Balance December 31, 2006
$ 951,391
1. Purpose of this Reserve:
This re!serve was established as a necessary form of asset protection.
Specifically, it is to cover insurance claims resulting from the increase in
deductible levels, costs of uninsured claims and other claim related costs. The
higher deductible reduced insurance premiums. Significant savings can be
realized through reduced premium costs and staff analyzes the costs/benefits of
such actions on an annual basis.
The interest income on these funds form part of the annual Current Budget
Generall Government Revenue.
2. Recommended Maintenance Levels of this Reserve:
This reserve should be maintained at a level to ensure that the funding is
adequate to meet future liabilities. This situation is analyzed by staff on a regular
basis. The $13,743 draw in the current year was necessary to partially pay for
the replacement vehicle for the Fire division resulted from accident.
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APPENDIX B
RESERVE FOR RATE STABILIZATION - G/L 4619
Actual Balance December 31,2005 $ 3,388,965
Transfers into the Reserve
Excess Surplus Contribution 2,382,016
Transfers out of the Reserve
2006 Current Budget Provision (1,320,000)
Pre-Audit Actual Balance December 31, 2006 $ 4,450,981
1. Purpose of this Reserve:
The purpose of this reserve is to act as a tax rate stabilization factor for annual
current budget funding.
The interest income on these funds form part of the annual Current Budget
General Government Revenue.
2. Recommended Maintenance levels of this Reserve:
The fund balance should be maintained at a level of 3 to 5 per cent of tax
revenues to provide tax rate stabilization for annual current budgeting purposes.
The 2006 Current Budget provided for a transfer in the amount of $1,320,000
from this Reserve to fund current expenditures.
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APPENDIX B
RESIERVE FOR DEVELOPMENT CHARGES - CITY SHARE G/l 4620
Actuall~alance December 31, 2005 $ 484,204
Transfers into the Reserve
2006 Current Budget Provision 590,000
Transfers out of the Reserve
Transfer to Capital Fund
-External Subdivision Works (264,550)
Pre-Audit Actual Balance December 31, 2006 $ 809,654
1. Purpos.e of this Reserve:
This reserve has been established to set aside funds for projected growth in the
City. IFrom the 1999 and the 2004 Development Charges Studies it was
approvE~d that a Reserve be established for the City's share (Le. the non-
development charge portion) of the costs of services included in the
Development Charges Study and that contributions be included in the annual
Current Budget for consideration by Council. For the City to meet its obligations
for the various capital projects an annual contribution of $2.4 million is required.
The interest income on these funds form part of the annual Current Budget
General Government Revenue.
2. Recommended Maintenance levels of this Reserve:
Funds continue to be budgeted in the Current Budget to build up this reserve to
fund future capital growth of the City. The draws in the current year were to
finance external subdivision works. This reserve should be maintained at a level
to ensure that the funding is adequate to meet future capital growth in the City.
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APPENDIX B
REGION TRANSIT RESERVE - G/L 4621
Actual Balance December 31, 2005 $ 237,106
Transfers into the Reserve
GO Transit Funding from Region
Transfers out of the Reserve
APT A Expenditures-Buses (116,107)
Pre-Audit Actual Balance December 31, 2006 $ 120,999
1. Purpose of this Reserve:
This reserve fund was established in 2002 to capture funds raised by the Region
for transit purposes and not immediately required.
The interest income on these funds form part of the annual Current Budget General
Government Revenue.
2. Recommended Maintenance Levels of this Reserve:
The Ajax Pickering Transit Authority (APT A) has been officially transferred to the
Regional Municipality of Durham (Region) effective January 1,2006, thus there is
no longer any revenue from the Region for this Reserve.
The balance of this Reserve is expected to be used for any unpaid commitments
or obligations related to APTA. The current year's expenditures of $116,108 are
related to a prior commitment for the acquisition of buses for the amalgamated
Durham Region Transit. This Reserve will eventually be closed-out upon settling
all our commitments and obligations.
062.
APPENDIX B
RESERVE FOR CONTINUING STUDIES & CONSULTING - G/L 4622
Actuall Balance December 31, 2005 $ 342,533
Transfers into the Reserve
Continuing Consulting Work or Studies 201,450
Transfers out of the Reserve (69,499)
Pre-Audit Actual Balance December 31, 2006 $ 474,484
1. Purposie of this Reserve:
This reserve was established to capture any unspent annual Current Budget
provisions related to consulting, continuing studies, professional and legal fees.
Under Generally Accepted Accounting Principles, the approval to expend funds
for these efforts ceases at year-end, however work may continue beyond that
date. The establishment of this fund enables the transfer of unspent funds into
future year and accommodates this frequent timing difference between the
approval and the expenditure.
The intHrest incomB on these funds form part of the annual Current Budget General
Government Revenue.
2. Recommended Maintenance Levels of this Reserve:
There would be no recommended maintenance levels. Funds transferred to this
reserve will be used to fund the balance of the expenditures still to be incurred for
incomplete studies or consulting contracts.
Expenditures incurred in 2006 in the amount of $69,499 pertained to consulting
work that was transferred into the Reserve in the prior year. An additional
amount of $201 ,4EiO has been transferred-in for future work.
APPENDIX B
063
RESERVE FOR VEHICLE REPLACEMENT - G/L 4624
Actual Balance December 31, 2005
Transfers into the Reserve
$
75,000
50,000
Transfers out of the Reserve to Capital Fund
(52,453)
Pre-Audit Actual Balance December 31, 2006
$
72,547
1. Purpose of this Reserve:
This reserve was newly established in 2004 to begin building up funds to finance
the cost of replacing the City's aging fleet.
The interest income on these funds form part of the annual Current Budget General
Government Revenue.
2. Recommended Maintenance Levels of this Reserve:
There would be no recommended maintenance levels. Funds transferred to this
reserve will be committed to fund the purchase of new vehicles.
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APPENDIX B
EASEMENT SETTLEMENT RESERVE - G/l 4625
Actual Balance December 31,2005
Capital Fund Contribution-CS16-06
$ 1,095,129
185,000
Transfers out of the Reserve
2006 Current Budget Expenditures
(1,280,129)
Pre..Audit Actual Balance December 31, 2006'
$
1. Purpose of this Reserve:
This re!serve was newly established in 2005 due to funds received from
easemE!nt settlement in February 2005. The amount collected was $2.5 million.
These funds will be used to finance both the capital and operating expenditures
of the City.
The intE~rest income on these funds form part of the annual Current Budget General
Government Revenue.
2. Recommended Maintenance levels of this Reserve:
There would be no recommended maintenance levels. Whenever funds are
received due to easement settlement, this reserve will be credited accordingly.
Budgeted draws to fund City's expenditures will be dependent on the revenues
collected. Due to the budgeted draws in both 2005 and 2006, the funds originally
received in 2005 have been completely depleted as at the year ended December
31,2006. Breakdown of the cumulative expt3nditures are as follows:
2005 Current Exoenditures $ 435,337
2005 Capital Expenditures 784,534
2006 Current Expenditures 1,280,113
Total $2,499,984
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APPENDIX B
RESERVE - PROVISION FOR EASTERN BRANCH LIBRARY - G/l 4626
Actual Balance December 31, 2005
Transfers into the Reserve
$
20,000
10,000
Transfers out of the Reserve
$
30,000
Pre-Audit Actual Balance December 31, 2006
1. Purpose of this Reserve:
This reserve was newly established in 2005 to begin building up funds for a new
library at the eastern part of Pickering. This provision may be used to fund the
new facility, capital cost, resource materials and any other related costs.
The interest income on these funds form part of the annual Current Budget General
Government Revenue.
2. Recommended Maintenance levels of this Reserve:
There would be no recommended maintenance levels. In 2002, the Board of the
Library requested $10,000 under the Capital Budget for the "Provision for
Eastern Branch", A similar request was made in both 2005 and 2006. The
combined total of the three years provision is reflected in the year-end balance.
It is the intention of the Board of the Library to annually request for this provision
to continue building up funds for the proposed new facility. To reflect this
intention, effective 2006 Budget year, the provision will be done by a "Transfer to
Reserve for the Provision for Eastern Branch".
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APPENDIX B
RESERVE - MOVE ONTARIO - G/L 4627
Actual Balance December 31, 2005
Contribution from Province of Ontario
$
1,851,578
Transfers out of the Reserve
Capital Expenditures -Roads
(1,018,335)
833,243
Pre..Audit Actual Balance December 31, 2006
$
1. Purpose of this Reserve:
This reserve was newly established in 2006 to capture the one-time funding
received on March 20, 2006 from the Ontario government, the Ministry of
Transportation. The Ontario government is providing a one-time investment to
help municipalities primarily outside the GT A, with specifiC emphasis on rural and
northern municipalities and to invest in municipal roads and bridges.
Municipalities will determine their own roads and bridges priorities.
The interest income on these funds form part of the annual Current Budget General
Government Revenue.
2. Recommended Maintenance Levels of this Reserve:
There would be no recommended maintenance levels.
APPENDIX C
067
RESERVE FUND FOR COMMUNITY FACILITIES - G/L 4225
Actual Balance December 31, 2005 $ 265,492
Transfers into the Reserve Fund
Capital Fund - Returned to Source $
Interest Earned on External Investments 9,389 9,389
Transfers out of the Reserve Fund
Transfer to Capital Fund - Parks (14,351 )
Transfer to Capital Fund - Community Centre (66,354 ) (80,705)
Pre-Audit Actual Balance December 31, 2006 $ 194,176
1. Purpose of this Reserve:
This is a "discretionary" reserve fund established by Council to attempt to avoid
both tax rate fluctuations and the need for issuing long term debt for major
expenditures required for community facilities.
The interest income on these funds form part of the Reserve Fund as per the
Municipal Act, 2001.
2. Recommended Maintenance Levels of this Reserve:
The balances in this fund have fluctuated from the 2001 year low of $69,102 to
the high in 1998 of $773,483. Other than interest income earned, there was no
transfer to this reserve fund in 2006.
Expenditures are transferred out of Reserve Funds only when incurred. The
value of the unspent budget commitments as at December 31, 2006 is $70,649.
Taking these commitments into consideration, the uncommitted balance of funds
available is $123,527. Additional amounts must be provided to this fund.
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APPENDIX C
RESERVE FUND FOR CAPITAL WORKS - G/L 4228
ActuallBalance December 31, 2005
Transfers into the Reserve Fund
Interest Earned on External Investments
$ 309,872
11,746
Transfers out of the Reserve Fund
Pre-Audit Actual Balance December 31, 2006
$ 321,618
1. Purpose of this Reserve:
This Fund is a "discretionary" one and was established pursuant to section
417(1 )(2) of the Municipal Act, 2001 for specified purposes by Council related to
the acquisition of assets.
The interest income on these funds form part of the Reserve Fund as per the
Municipal Act, 2001.
2. Recommended Maintenance Levels of this Reserve Fund:
Between the years of 1998 to 2000, the balances have been maintained at
$600,000 to $800,000. There has been no major contribution to this Reserve
Fund in the past six years. The value of the unspent budget commitments at the
end of 2006 is $13,822. Taking these unspent budget commitments into
account, the uncommitted balance available as at December 31, 2006 will be
$307,7H6. Major additional contributions will be required in future years.
APPENDIX C
; 1
069
RESERVE FUND FOR DEVELOPMENT CHARGES - GlL 4229
Actual Balance December 31, 2005
Transfers into the Reserve Fund:
Net Developer Contributions
Returned to source
Interest Earned on External Investments
Interest Earned on Internal Loans
$ 21,135,306
$ 1,782,148
2,411
670,332
197,215 2,652,106
Transfers out of the Reserve Fund:
Transfer to Capital Fund:
Fire-Addition & Renovations to Station 5
Ext. Subdiv- Roads & Related
Ext. Subdiv- Storm Water Management
Sidewalk401 Pedestrian Bridge to GO Station
Pre-Audit Actual Balance December 31, 2006
$
(122,734)
(654,554)
(264,502)
(9,150)
(1,050,940)
$ 22,736,472
1. Purpose of this Reserve:
This is an "obligatory" reserve fund and as such is governed by Municipal Act
2001, Development Charges Act, 1997, Ontario Regulation 82/98, City By-law or
agreement and requires revenue received for the special purposes to be
segregated from the general revenues of the municipality. Obligatory Reserve
Funds must be created whenever a statute requires revenue received for a
special purpose to be segregated from the general revenues of the municipality
and the revenue is to be used solely for the purpose prescribed by statute, i.e. in
this case the monies charged to developers must be held and used to fund
capital services required for new growth.
The interest income on these funds form part of the Reserve Fund as per the
Municipal Act, 2001.
2. Recommended Maintenance Levels of this Reserve:
In accordance with development charge legislation, all development charge
revenue must be held within separate Reserve Funds and can only be used for
the financing of growth-related projects. As such, no reserve fund limits are
appropriate for Development Charge Reserve Funds because they are tied to
growth-related capital requirements.
This reserve fund has unspent budget commitments of $3,676,130. The pre-
audit actual balance of $22,736,472 would be reduced by this amount to reflect
an uncommitted balance of funds available for future expenditures of
$19,060,342.
070
APPENDIX C
RESERVE FUND FOR PARKLAND - Gll 4230
Actual Bialance December 31, 2005
Transfers into the Reserve Fund:
Developers Contributions $
Returned to source
Interest Eamed on Extemallnvestments
Interest Eamed on Intemal Loans
Transfers out of the Reserve Fund:
Transfer to Capital Fund-Parks:
Greenwood & Village E- Tennis Crts Resurfacin~J
Amberlea Park-Asphalt Replacement
Centennial Park-Washroom facility
Amberlea & Rosebank-Tennis Crts Resurfacing
Playground Equipment
David Farr Park
Pre-Audit Actual Balance December 31, 2006
1. Purpos.e of this. Res.erve Fund:
$
2,103,061
301,550
24,681
73,983
19,394
419,608
$
(79,290)
(8,611 )
(200,000)
(29,838)
(191,775)
(19,227)
$
(528,741)
1,993,928
This is an "obligatory" reserve fund and it was established pursuant to section
417(1)(2) of the Municipal Act, 2001 as required by subsections 42(1), (5), (6),
(7), (8) and (9) of the Planning Act. This fund is governed by legislation,
regulation or agreement and requires revenues received for the special purposes
to be segregated from the general revenues of the municipality. Obligatory
Reservl3 Funds must be created whenever a statute requires revenues for a
special purpose to be segregated from the general revenues of the municipality
and the revenue is to be used solely for the purpose prescribed by statute.
The interest income on these funds form part of the Reserve Fund as per the
Municipal Act, 2001.
2. Recommended Maintenance levels of this Reserve Fund:
Due to the obligatory nature of this fund, there are no limits on this fund. The
value of the unspent budget commitments as at the year ended 2006 is
$592,4!50. The pre-audit balance of $1,993,928, after taking into account the
unspent budget commitments, will provide an uncommitted balance available of
$1,401,,178 as at December 31,2006.
APPENDIX C
071
RESERVE FUND FOR PUBLIC WORKS - G/L 4232
Actual Balance December 31, 2005
Transfers into the Reserve Fund
Developer Contributions
Interest Earned on External Investments
$ 1 ,038,206
$
16,270
38,982 55,252
Transfers out of the Reserve Fund
Transfer to Capital Fund -
Property Maintenance-Masonary Walls
Pre-Audit Actual Balance December 31, 2006
(20,565)
$ 1 ,072,893
1. Purpose of this Reserve Fund:
This fund was established by Council pursuant to section 417(1 )(2) of the
Municipal Act, 2001. The purpose of the reserve fund is to acquire fixed assets,
to fund capital works related to public property, without the need to fund on a
long-term nature through the issue of debentures. The main purpose at this time
is to fund the City's share of the cost of subdivision works committed to under
various subdivision agreements.
The interest income on these funds form part of the Reserve Fund as per the
Municipal Act, 2001.
2. Recommended Maintenance Levels of this Reserve Fund:
The "average" annual balance of this fund over the last four years has been
approximately $1.18 million. This reserve fund should be kept at least at this
level in the future. Staff will periodically review the need for this level with the
requirements contained in the capital budget and four year program and report
any different findings to Council.
The value of unspent budget commitments for 2006 is $25,000. The pre-audit
balance of $1,072,893 after taking into account the unspent commitments will
provide an uncommitted balance of funds available of $1,047,893 as at
December 31,2006.
.072
APPENDIX C
RESERVE FUND FOR WORKERS SAFETY INSURANCE BOARD - G/L 4234
Actual Balance December 31, 2005 $ 589,575
Transfers into the Reserve Fund
Contribution from Current Fund $ 387,025
InterE~st Earned on External Investments 31 ,462 418,487
Transfers out of the Reserve Fund
Claims and Other Related Costs $ (54,073)
Insurance Costs (105,432)
Contribution to Health & Safety Training (13,635) (173,140)
Pre-Audit Actual Balance December 31, 2006 $ 834,922
1. Purpose of this Reserve Fund:
This Rl3serve Fund has been established to provide for the annual costs of
insurance coverage, contributions towards the health and safety program, and
the payment of claims and other related costs now that the City is a Schedule 2
employer. This Reserve Fund was created in 2001 further to the
recommendation passed in Council Resolution#127/01 and in compliance with
Workplace Safety & Insurance Act.
The interest income on these funds form part of the Reserve Fund as per the
Municipal Act, 2001.
2. Recommended Maintenance Levels of this Reserve Fund:
Starting from 2004 and continuing to 2006, the contributions were more than
double the claims experience for the year, thus resulting to a built-up in the
balanCE~ of the Reserve Fund.
As Schedule 2 operates on the self-insured principle, any anticipated savings
between contributions and claims experience will be transferred to this Reserve
Fund to build up the fund balance in the event of any catastrophic claim-related
costs, which may occur. The average annual built-up of approximately $208,000
from 2003 to 2006 has resulted to the 2006 year-end balance of $834,922.
APPENDIX C
0.73
THIRD PARTY/DEVELOPERS CONTRIBUTIONS RESERVE FUND - G/l 4235
Actual Balance December 31, 2005
Transfers into the Reserve Fund
Contributions from DeveloperslThird Parties
Interest Eamed on Extemallnvestments
$ 1,819,264
$ 133,243
72,481 205,724
Transfers out of the Reserve Fund
Capital Expenditures-Ext. Subdivision Works
Pre-Audit Actual Balance December 31, 2006
(156,840)
$ 1,868,148
1. Purpose of this Reserve Fund:
This reserve fund was established by Council pursuant to Section 417(1) of the
Municipa/ Act, 2001. The purpose of this reserve fund is to capture contributions
from developers or third parties per development agreements and any cost
sharing arrangements for future capital projects.
Due to the externally restricted contributions, this Reserve Fund is treated as
obligatory. The collections are committed for specific purposes and not available
for general use. Unless specified, the City is under no obligation to pay interest
to any developers or third parties.
The interest income on these funds form part of the Reserve Fund as per the
Municipal Act, 2001.
2. Recommended Maintenance levels of this Reserve
No reserve fund limits are appropriate for this fund as collection and commitment
of funds are dependent upon development agreements or cost sharing
arrangements.
APPENDIX C
".
074
OtffARIO lRANSIT RENEWAL RESERVE FUND - GtL 4236
Actual Balance December 31, 2005 $ 19,166
Transfers into the Reserve Fund
Contribution from Ministry of Transportation $
Interest on Extemallnvestments-reversal
Transfers out of the Reserve Fund
APTA Capital Expenditures
Pre-Audit Actual Balance December 31, 2006 $ 19,166
1. Purposie of this Reserve Fund:
This is an "obligatory" Reserve Fund established to capture funding received
from Ministry of Transportation for the sole purpose of funding acquisition of
APTA vehicles or for any major vehicle refurbishment.
The interest income on these funds form part of the Reserve Fund as per the
Municipal Act, 2001.
2. Recommended Maintenance Levels of this Reserve Fund:
No resl3rve fund limits are appropriate for this fund as availability of funds is
dependent on the amount of grant received"
Funds are provided from the Ontario Transit Renewal Program as expenditures
are incurred. With the transfer of APT A to the Regional Municipality of Durham
effective January 1 , 2006, this reserve fund will eventually be closed-out upon
resolving all outstanding matters. Fund balance for the year ended 2006 remains
the same as 2005 in the amount $19,166.
0.75
APPENDIX C
SQUASH COURTS RESERVE FUND - G'L 4237
Actual Balance December 31, 2005 $ 66,087
Transfers into the Reserve Fund
Surcharge on I\Aemberships 10,225
Interest on Extemallnvestments 2,677 12,902
Transfers out of the Reserve Fund
Pre-Audit Actual Balance December 31, 2006 $ 78,989
1. Purpose of this Reserve Fund:
This Reserve Fund was established to capture funds from Pickering
Squash Club memberships' surcharges, corporate sponsorships, third
party contribution and any such funds as the Council may approve. This
Reserve Fund shall be used for the purpose of paying expenses related to
the provision of double squash courts. This Reserve Fund was newly
created in 2003 further to the recommendation passed in Council
Resolution #79/03, Item 5 per Report to Council CS 40-03.
The interest income on these funds form part of the Reserve Fund as per
the Municipal Act, 2001.
2. Recommended Maintenance levels of this Reserve Fund:
No reserve fund limits are appropriate for this fund.
,. 0.76.
APPENDIX C
PROVINCIAL DEDICATED GAS TAX RESERVE FUND - G/L 4238
Actual Balance December 31, 2005
Transfers into the Reserve Fund
Provo of Ontario
InterHst on External Investments
$ 722,039
21,630
27,407 49,037
Transfers out of the Reserve Fund
(Pending Provincial Government Approval)
$ 771,076
Pre-Audit Actual Balance December 31, 2006
1. Purpose of this Reserve Fund:
This Reserve Fund was established to capture funds from the Province of
Ontario for the new provincial gas tax revenue program. This Reserve
Fund shall be used for the purpose of paying eligible public transportation
expenditures, to offset Pickering's share of the costs for funding the Ajax
Pickering Transit Authority (APT A). This Reserve Fund was newly created
in 2004 further to the recommendation passed in Council Resolution
#167/04, Item 3 at the Council Meeting of December 20,2004 per Report
to Council CS 56-04.
The interest income on these funds form part of the Reserve Fund as per
the Municipal Act, 2001.
2. Rec:ommended Maintenance levels of this Reserve Fund:
No reserve fund limits are appropriate for this fund. Under this program,
the provincial government will provide one cent a litre of the provincial gas
tax funding in 2004. This rate has been increased to 1.5 cents in 2005 and
incneased to two cents in 2006.
As the purpose for providing this Fund is for the public transportation
services, with the transfer of APT A to the Region effective January 1,
2006, the balance of this Fund will be transferred to the Region once all
matters are resolved.
APPENDIX C
0.77
FEDERAL DEDICATED GAS TAX RESERVE FUND - G'L 4239
Actual Balance DeceniJer 31, 2005
Transfers into the Reserve Fund
Prov. of O1tario
Interest on Extemallnvestments
$ 850,684
849,578
47,191 896,769
Transfers out of the Reserve Fund
Sidevvalk-401 Pedestrian Bridge-Design rosts
Asphalt Resurfadng & Repairs-Oion,BeIinda,Bonita
Sidewalk installation-ad Brock Rd
Ovic OrpIx-Upgrade to Ughting System
Green\l\OOCf Corrm Qr-Replaced wndO\tVS
(73,783)
(118,356)
(55,836)
(20,786)
(22,923)
(291,684)
Pre-Audit Actual Balance DeceniJer 31, 2006
$ 1,455,769
1. Purpose of this Reserve Fund:
This Reserve Fund was established in 2005 to capture the transfer of gas
tax revenues from the Government of Canada through the Association of
Municipalities of Ontario under the New Deal for Cities and Communities.
The Council had approved under Report to Council CS 92-05, the
establishment of this new Reserve Fund under By-law 6609/05 and
Resolution 219/05. This new program is not application based and does
not require matching funding. Municipalities are allowed to invest in
environmental sustainable infrastructure in programs such as public
transit, storm water system, local roads and bridges.
The interest income on these funds form part of the Reserve Fund as per
the Municipal Act, 2001.
2. Recommended Maintenance levels of this Reserve Fund:
No reserve fund limits are appropriate for this fund. Under the Municipal
Fu d' A t th h d Iff d' t . as follows:
n Ing \greemen, e sc e u e 0 un Ing paymen s IS
Year July November
2005 $ 849,577.58
2006 $424,788.79 424,788.79
2007 566,321.81 566,321.82
2008 707,854.83 707,854.84
2009 1,415,709.67 1,415,709.67
Total $7,078,927.80
('. 078
APPENDIX C
ANNUAL. REPORT - BUILDING PERIVIT FEES
for the year ended DecerrtJer 31, 2006
Building Permt Revenue
$ 599,324
Costs
Drect Costs
Indirect Costs
Exo9SSl(Defidt) Revenue over Costs
(1,003,102)
(182,235) (1,185,337)
$ (586,013)
BUILDING PERIVIT STABlUZAllON RESERVE FUND -Gl. 4240
QJening Balance, Jan. 1, 2006
$
2003 Contribution
$
Oosing Balance, D3c. 31, 2006
1. Purpose of this Reserve Fund:
This Reserve Fund was officially established in 2006 based on By-Law
665'1/06 and Report to Executive Committee PD 41-05. The By-law was
made effective January 1, 2006. This Reserve Fund has a zero balance in
20015 due to the fact this is the first year of operation and funds have not
been built-up.
The need for the establishment of this Reserve Fund arises as a result of
the significant changes to the building regulatory system in Ontario with
the introduction of the Building Code Statute Law Amendment Act, 2002
(known as Bill 124) and associated amendments to the Ontario Building
Code. The purpose of this fund is to secure funding to provide for service
delivery stabilization during an economic downturn. The source of funds
will be the annual portion of building code permit fees after related direct
and indirect costs are netted.
The interest income on these funds form part of the Reserve Fund as per
the Municipal Act, 2001.
k' 0 .7 9
2. Recommended Maintenance levels of this Reserve Fund:
Given the rationale for creating a fee stabilization reserve fund, the
targeted reserve fund balance should reflect the reduction in permits
witnessed during the last recession when compared to the long-run
development average - acknowledging the City's responsibility to manage
a portion of the costs associated with an economic downturn. Based on
the modeled activity based direct costs conducted by CN Watson; the
appropriate balance to maintain is proposed at $1.16 million, expected to
be achievable within a target of seven accumulated years.
REPORT TO
EXECUTIVE COMMITTEE
Report Number: CS 21-07
Date: June 11, 2007
l>
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
Development Charges - Annual Indexing
Recommendation:
1. That Report CS 21-07 of the Director, Corporate Services & Treasurer be
received;
2. That effective July 1, 2007 as provided for in Section 16 of By-law 6349/04, the
Development Charges referred to in Sections 6 and 11 of that By-law be
increased by 6.9 percent being the annual increase in the Construction Price
Statistics for the Non-Residential Building Construction Price Index as reported
by Statistics Canada for the year ended March 31,2007; and,
3. That thl~ appropriate officials of the City of Pickering be given authority to give
effect thereto.
Executive Summary: Adoption of the Recommendations of this report will put into
effect for the period July 1, 2007 to June 30, 2008 increases that are provided for in the
Development Charges Act 1997 and Ontario Regulation 82/98 and By-law 6349/04 and
are needed to finance construction costs under the City's Development Charge
Background Study adopted by Council in July 2004. This is an annual adjustment
needed to keep revenues current with costs.
Financial Implications: Increasing the Development Charges by 6.9 percent will
assist in keeping the revenues generated thereunder in line with current costs. The
residential development charges for single and semi detached units will increase by
approximately $635, other residential charges will increase similarly and the
commerciallindustrial charge will increase by approximately $0.17 per square foot or
$1.85 per square metre.
Sustainability Implications: This annual increase is necessary to ensure that the
financing of the costs of construction is sustainable.