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HomeMy WebLinkAboutCS 24-08 CiUI o~ REPORT TO EXECUTIVE COMMMITTEE Report Number: CS 24-08 Date: June 9, 2008 !),~ From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2007 Pre-Audit Balances of Reserves and Reserve Funds Recommendation: That Report CS 24-08 of the Director, Corporate Services & Treasurer be received for information. Executive Summary: Based on the preliminary 2007 results, we can now report on the pre-audit actual activities within the Reserves and Reserve Funds for 2007. A summary is presented in Appendix A. The purpose and 2007 financial transactions for each Reserve and Reserve Fund are set out in Appendices Band C respectively. Financial Implications: Not applicable Sustainability Implications: 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 years, this report provides specific information on each of the City's Reserves and Reserve Funds, including year-end balances. The 2007 pre-audit Reserves and Reserve Funds balance of $53,809,076 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, the 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 24-08 Date: June 9,2008 Subject: 2007 Pre-Audit Balances of Reserves and Reserve Funds Page 2 6 <'I Board (PSAB) for obligatory Reserve Funds. The combined unspent budget commitments for all Reserve Funds are $6,298,370. The City's share of collections from OPG related to properties under assessment appeal for the period of 2003-2006 in the amount of $5.098 million has been settled. The City has officially recognized this amount and these funds have been transferred to the Rate Stabilization Reserve. These funds can now be used for future budgeting years for both the capital and current expenditures. 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 $29,881,927 (See Appendix A). The combined total of the budget commitments, other restricted balances and obligatory Reserve Funds of approximately $35 million reduced the "discretionary" balance to approximately $18 million as at December 31 , 2007. The City established two new Reserve Funds this year, namely: Animal Shelter Reserve Fund and Pickering Men's Slow Pitch League 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. The outstanding principal balance as at December 31, 2007 is approximately $4.18 million. These loans are undertaken from the Development Charges and Parkland Reserve Funds. The breakdown of the principal balance for both the Reserve Funds is $3.89 million and $292,000 respectively. 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 2006 internal borrowings. Repayment for 2007 internal borrowings will commence in 2008 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 24-08 Date: June 9, 2008 Subject: 2007 Pre-Audit Balances of Reserves and Reserve Funds Page 3 h L) Prepared By: ~V-o~ Senior Financial Analyst GAP:ck Copy: Chief Administrative Officer Recommended for the consideration of Pickering CityA;;ouncil 1/ Approved I Endorsed By: ~@~_::~~:~L=::'~_, .. . . .~-_.' ..-.' .." <.... _._..~,.<3'."-"-'::~-"'" '11.._ -----.....- ..."" ,_.' ::;:;=:::=--;-- Gillis A. Paterson Director, Corporate Services & Treasurer '/' ..... '" -L TO REPORT # e ~ .:2.Lf - D f / 1-) f) APPENDIX A CITY OF PICKERING SUMMARY OF RESERVES AND RESERVE FUNDS PRE-AUDIT ACTUALS DECEMBER 31, 2007 Pre Audit Audited Audited Audited Appendix B Summary Reserves 2007 2006 2005 2004 4610 Working Funds 400,000 $400,000 $400,000 $400,000 4611/4623 Replacement Capital 683,214 685,715 722,844 758,175 4612 Contingencies-OPG, Election, Other 2 1,328,080 6,356,615 10,774,909 9,053,320 4613 Self-Insurance 2 951,391 951,391 915,514 940,514 4619 Rate Stabilization 15,491,176 6,910,981 3,388,965 2,619,565 4620 Develop.Charges-City's Share 2 745,244 809,654 484,204 1,921,332 4621 Region Transit 2 120,999 120,999 237,106 1,025,741 4622 Continuing Studies 2 713,821 474,484 342,533 233,159 4624 Vehicle Replacement 122,547 72,547 75,000 25,000 4625 Easement'Settlement 1,095,129 4626 Library Eastern Branch 2 55,000 30,000 20,000 4627 Move Ontario 308,243 833,243 Total Reserves 20,919,715 $17,645,629 $18,456,204 $16,976,806 Pre Audit Audited Audited Audited Appendix C Summary of Reserve Funds 2007 2006 2005 2004 4225 Community Facilities 180,880 $194,175 $265,492 $380,604 4228 Capital Works 335,486 321,618 309,872 302,610 4229 Development Charges 1 & 2 23,528,009 22,341,331 21,135,306 19,496,777 4230 Parkland 1 &2 1,557,607 1,993,928 2,103,061 2,166,696 4232 Public Works 1,122,707 1,072,893 1,038,206 1,152,444 4234 Workers Safety Insurance Brd 2 1,103,109 834,922 589,575 378,731 4235 Third PartylDev. Contributions 1 2,129,221 1,868,148 1,819,264 1,601,076 4236 Ontario Transit Renewal 1 19,166 19,166 14,035 4237 Squash Courts 2 119,057 78,989 66,087 33,713 4238 Provo Dedicated Gas Tax 1 523,014 771,076 722,039 161,515 4239 Federal Gas Ta~ Revenue 1 2,144,076 1,455,769 850,684 4240 Building Permit Stabilization Fees 1&2 4241 Animal Shelter New 2 146,195 4242 Pickering Mens' Slow Pitch New 2 Total Reserve Funds $32,889,361 $30,952,015 $28,918,752 $25,688,201 Total Reserves & Reserve Funds $53,809,076 $48,597,644 $47,374,956 $42,665,007 Notes 1 Obligatory 2 Restricted Total Obligatory 1 & Restricted ~ -2007 = 29,881,927 (Includes 4229 & 4230) 5,136,701 (Excludes 4229 & 4230) 35,018,628 ">.-cti i'-i":'i '1 -.:.1\ ~ '-~''''\RT# ;'), J" ;\(/ :,.;.i(JI ~ . . '1 - U ~ APPENDIX B ... '7 l) "' RESERVE FOR WORKING FUNDS 4610 Actual Balance December 31,2006 Transfers into the Reserve $ 400,000 Transfers out of the Reserve Pre-Audit Actual Balance December 31,2007 $ 400,000 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 this account forms 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 revenues. Based on an average annual revenue of $45 million, at 2%, the amount to maintain for this reserve should be $900,000. 6 F'. APPENDIX B RESERVE FOR REPLACEMENT OF CAPITAL EQUIPMENT - G/L 4611/4623 Actual Balance December 31, 2006 Transfers into the Reserve Revenue Fund Contribution $ 685,715 115,462 Transers out of the Reserve Transfers to Capital Fund (117,963) Pre-Audit Actual Balance December 31,2007 $ 683,214 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 this account forms 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. APPENDIX B ~ , "' h l) The balances pertaining to these sub-categories are as follows: General Recreation Dunbarton Don Beer Rec Camp Rec Camp Rec Camp Corp Use Prgrms Pool Arena Core Pool Arena Total $ $ $ $ $ $ $ $ Dec 31/06 53,859 11 6,252 32,616 104,678 8 1 ,773 166,312 130,225 685,715 Transfers in 0 1 8,500 4,962 30,000 27,000 15,000 20,000 115,462 Transfers out (51,376) (66,587) (117,963) Dec 31/07 2,483 134,752 37,578 68,091 108,773 181,312 150,225 683,214 --1 /'^i I ' ; APPENDIX B RESERVE FOR CONTINGENOES- G/L 4612 (OPG, Other Assessment Appeals, Election, Miscellaneous) Actual Balance December 31,2006 Transfers into the Reserve Transfers from Revenue Fund $ 6,356,615 70,000 Transfers out of the Reserve: Transfers to Rate Stabilization Reserve Pre-Audit Actual Balance December 31, 2007 (5,098,535) $ 1,328,080 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 this account forms 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 funds related to Contingency-Ontario Power Generation (OPG) Assessment in the amount of $5,098,535 for assessment appeals related to the taxation years 2003-2006 have been reached and this amount was transferred to the Rate Stabilization Reserve in 2007. Report to Council CS 47-07 provides detailed information on OPG Assessment Appeals. The amounts pertaining to the other sub-categories are as follows: Election- $70,000 Other Assessment Appeals - $682,594 and Miscellaneous - $575,486. APPENDIX B RESERVE FOR SELF INSURANCE - G/L 4613 Actual Balance December 31,2006 Transfers into the Reserve $ 951,391 Transfers out of the Reserve: Transfer to Capital Pre-Audit Actual Balance December 31,2007 $ 951,391 1. Purpose of this Reserve: This reserve 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 this account forms part of the annual Current Budget General 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. r) .I APPENDIX B RESERVE FOR RATE STABILIZATION - G/L 4619 Actual Balance December 31,2006 Transfers into the Reserve Excess Surplus Contribution Transfer from OPG Assessment Appeal Reserve Dividend from Veridian $ 6,910,981 3,500,660 5,098,535 1,640,000 10,239,195 17,150,176 Transfers out of the Reserve 2007 Current Budget Provision (1,659,000) $ 15,491,176 Pre-Audit Actual Balance December 31,2007 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 this account forms 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 2007 Current Budget provided for a transfer in the amount of $1,659,000 from this reserve to fund current expenditures. With the settlement of OPG assessment appeal, dividends from Veridian and surplus in the year ended 2007; there is sufficient build-up of funds to draw from this reserve for future budgeting years. In 2008, there is a budgeted draw of $2,486,182 and further draws anticipated in 2009 and after. f/ .~ APPENDIX B RESERVE FOR DEVELOPMENT CHARGES - CITY SHARE G1L 4620 Actual Balance December 31,2006 $ 809,654 Transfers into the Reserve 2007 Current Budget Provision 250,000 Transfers out of the Reserve Transfer to Capital Fund -External Subdivision Works (277,725) -Pa rks (36,685) Pre-Audit Actual Balance December 31,2007 $ 745,244 1. Purpose of this Reserve: This reserve has been established to set aside funds for projected growth in the City. From the 1999 and the 2004 Development Charges Studies it was approved that a Reserve be established for the City's share (i.e. 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 incomes on this account forms 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 Parks and 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. '7 11 i Lf- APPENDIX B REGION TRANSIT RESERVE - G/l 4621 Actual Balance December 31,2006 Transfers into the Reserve GO Transit Funding from Region $ 120,999 Transfers out of the Reserve Pre-Audit Actual Balance December 31,2007 $ 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 this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: The Ajax Pickering Transit Authority (APTA) has been officially transferred to the Reg,ional 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. This Reserve will eventually be closed-out upon settling all our commitments and obligations. i 1 / ~-'j APPENDIX B RESERVE FOR CONTINUING STUDIES & CONSULTING - G/l 4622 Actual Balance December 31,2006 $ 474,484 Transfers into the Reserve Continuing Consulting Work or Studies 251,345 Transfers out of the Reserve (12,008) Pre-Audit Actual Balance December 31, 2007 $ 713,821 1. Purpose 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 interest income on this account forms 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 2007 in the amount of $12,008 pertained to consulting work that was transferred into the Reserve in the prior year. An additional amount of $251 ,345 has been transferred-in for future work. ,} / I t) APPENDIX B RESERVE FOR VEHICLE REPLACEMENT - G/l 4624 Actual Balance December 31,2006 Transfers into the Reserve $ 72,547 50,000 Transfers out of the Reserve to Capital Fund Pre-Audit Actual Balance December 31,2007 $ 122,547 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 this account forms 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. ./ C/ APPENDIX B RESERVE - PROVISION FOR EASTERN BRANCH LIBRARY - G/l 4626 Actual Balance December 31, 2006 Transfers into the Reserve $ 30,000 25,000 Transfers out of the Reserve Pre-Audit Actual Balance December 31,2007 $ 55,000 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 this account forms 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 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 has been done by a "Transfer to Reserve for the Provision for Eastern Branch". In 2007, the annual provision has been increased to $25,000. , ...~ / L APPENDIX B RESERVE - MOVE ONTARIO - G1l 4627 Actual Balance December 31, 2006 Contribution from Province of Ontario $ 833,243 Transfers out of the ReseNe Capital Expenditures -Roads (525,000) Pre-Audit Actual Balance December 31,2007 $ 308,243 1. Purpose of this Reserve: This reseNe 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 GTA, 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 this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: There would be no recommended maintenance levels. ; ACHMENTI~ TO REPC:~ $. r- ,. f C .,j.-< Y .' ) APPENDIX C \.j RESERVE FUND FOR COMMUNITY FACILITIES - GlL 4225 Actual Balance December 31, 2006 $ 194,175 Transfers into the Reserve Fund Interest Earned on External Investments 7,705 7,705 Transfers out of the Reserve Fund Transfer to Capital Fund - Senior Centre (17,500) Transfer to Capital Fund - Community Centre (3,500) (21,000) Pre-Audit Actual Balance December 31,2007 $ 180,880 1. Purpose of this Reserve Fund: 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 this reserve fund forms part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund: The balances in this fund have fluctuated from the high in 1998 of $773,483 to the low in 2001 of $69,102. Other than interest income earned, there has been no transfer to this reserve fund in the last six years. Expenditures are transferred out of reserve funds only when incurred. The value of the unspent budget commitments as at December 31, 2007 is $167,648. Taking these commitments into consideration, the uncommitted balance of funds available is $13,232. Additional amounts must be provided to this fund. () ;'1. () \) APPENDIX C RESERVE FUND FOR CAPITAL WORKS - G/L 4228 Actual Balance December 31,2006 Transfers into the Reserve Fund Interest Earned on External Investments $ 321,618 13,868 Transfers out of the ReseNe Fund Pre-Audit Actual Balance December 31,2007 $ 335,486 1. Purpose of this Reserve Fund: 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 this reseNe fund forms part of the reseNe fund as per the Municipal Act, 2001 section 417(3). 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 ReseNe Fund in the past seven years. The value of the unspent budget commitments at the end of 2007 is $13,822. Taking these unspent budget commitments into account, the uncommitted balance available as at December 31, 2007 will be reduced to $321,664. Major additional contributions will be required in future years. APPENDIX C i (~ I RESERVE FUND FOR DEVELOPMENT CHARGES - G/L 4229 Actual Balance December 31, 2006 $ 22,341,331 Transfers into tre Reserve Fund: Net Developer Contributions $ 1,457,284 Interest Earred on External Investments 801,546 Interest Earred on I nternal Loans 179,538 2,438,368 Transfers out of the Reserve Fund: Transfer Transit component to Region (10,200) Transfer to Current Fum-DC Study (967) Transfer to Capital Fund: Fire-Additim & Renovations to Station 5 $ (294,266) Parks (13,403) Ext. Subdiv- Roads & Related (815,028) Ext. Subdiv- Storm Water Management (115,700) . Sidewalk-401 Pedestrian Bridge to GO Station (2,126) (1,240,523) Pre-Audit Actual Balance December 31, 2007 $ 23,528,009 1. Purpose of this Reserve Fund: 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 and related background studies required for new growth. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: In accordance with development charge legislation, .ill! development charge revenues 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 the Development Charge Reserve Funds because they are tied to growth-related capital requirements. This reserve fund has an unspent budget commitment of $3,664,631. The pre- audit actual balance of $23,528,009 would be reduced by this amount to reflect an uncommitted balance of funds available for future expenditures of $19,863,378. ~2 ') ',,1 <.," APPENDIX C RESERVE FUND FOR PARKLAND - G/L 4230 Actual Balance December 31, 2006 Transfers into the Reserve Fund: Developers Contributions $ Interest Earned m External Investments Interest Earned m Internal Loans $ 1,993,928 218,207 72,983 15,790 306,980 Transfers out of the Reserve Fund: Transfer to Capital Fund-Parks: Asphalt Replacement-Amberlea Park (basket crt) Wata-frmt Trail-Park Crescent Park Signage Playground Reconstruction& Equipment Playground Equipment Replacement David Farr Park Case Tractor To-o W/2l'vbwers Purchase of Property-Waterfront Trail Pre-Audit Adual Balance December 31, 2007 1. Purpose of this Reserve Fund: $ (15,560) (34,814) (960) (93,454 ) (33,063) (231,416) (35,629) (83,160) (215,245) (743,301 ) $ 1,557,007 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 reserve 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 incomes on these funds form part of the res-erve fund as per the Municipal Act, 2001 section 417(3). 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 commitment as at the year ended 2007 is $429,148. The pre-audit balance of $1,557,607, after taking into account the unspent budget commitments, will provide an uncommitted balance available of $1,128,459 as at December 31,2007. APPENDIX C c~ :-~, RESERVE FUND FOR PUBLIC WORKS - G1L 4232 Actual Balance December 31, 2006 Transfers into the Reserve Fund Third Party Contributions Interest Eamed on Extemallnvestments $ 1,072,893 $ 3,444 46,370 49,814 Transfers out of the Reserve Fund Pre-Audit Actual Balance December 31,2007 $ 1,122,707 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 incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund: The "average" annual balance of this fund over the last four years has been approximately $1 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 2007 is $25,000. The pre-audit balance of $1,122,707 would be reduced by this amount to reflect an uncommitted balance of funds available of $1 ,097,707 as at December 31,2007. ",I /~ F) L~ APPENDIX C RESERVE FUND FOR VVCRKERS SAFETY I NSURJW;E BOARD - GIL 4234 Actual Balance December 31,2006 $ 834,922 Transfers into the REServe Furd Cmtribution from Current Fund $ 423,349 Interest Eamoo m Extemallnvestments 43,633 466,982 Transfers out of the REServe Fund Claims ard Oher Related Costs $ (63,005) Insurance O:>sts (115,790) Cmtribution to Health & Safety Training (20,000) (100,795) Pre-Audit Actual Balance December 31, 2007 $ 1,103,109 1. Purpose of this Reserve Fund: This reserve 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 incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 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, 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 $220,414 from 2003 to 2007 has resulted to the 2007 year-end balance of $1,103,109. APPENDIX C ~..~ .:'-,) THIRD PARTYIDEVELOPERS CONTRIBUTIONS RESERVE FUND - GIL 4235 Actual Balance December 31,2006 Transfers into the Reserve Fund Contributions from Developer&'Third Parties Interest Eamed on Extemallnvestments $ 1,868,148 $ 205,408 81,324 286,732 Transfers out of the Reserve Fund Capital Expenditures-Ext. Subdivision Works Transfer to own Reserve Fund Pre-Audit Actual Balance December 31, 2007 (24,696) (963) $ 2,129,221 1. Purpose of this Reserve Fund: This reserve fund was established by Council pursuant to Section 417(1) of the Municipal 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 incomes on these funds form part of the Reserve Fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund No reserve fund limits are appropriate for this fund as collection and commitment of funds are dependent upon development agreements or cost sharing arrangements. hI"'_~-""""""","~""",~_",,,,,,,,,_,,,,,,~- - ~ (-\ "- APPENDIX C ONTARIO TRANSIT REtaVAL RESERVE FUND.. G'L 4236 Actual Balance Decerrber 31, 2>06 $ 19,100 Transfers into the Reserve Fund Cmtribution from Mnistry of Transportation $ I nterest on External Investrrents-reversal Transfers out of the Reserve Fund QffiEKlut aocoLl1t-Reverue Fund (19,100) Pre-Audit Actual Balance Decerrber 31, 2007 $ 1. Purpose 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 incomes on these funds form part of the Reserve Fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund: No reserve 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 APTA to the Regional Municipality of Durham effective January 1,2006, this Reserve Fund was officially closed-out in 2007 with the remaining funds recognized as revenue in the Revenue Fund. Hi APPENDIX C SQUASH COlRTS RESERVE FUN::> - G1L 4237 Actual Balance Decerrber 31, 2006 $ 78,009 T ransfe-s into the Reserve Fun::! Surchcrge on Merrberslips 35,549 I nterest on Exte-nal Investrrents 4,519 40,008 Transfe-s out of the Reserve Fund Pre-Audit Actual Balance Decerrber 31, 2007 $ 119,057 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 incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: No reserve fund limits are appropriate for this fund. ;-' ~~ ,,! ,,> APPENDIX C PROVINCIAL DEDICATED GAS TAX RESERVE FUND - G'L 4238 Actual Balance December 31, 2006 Transfers into the Reserve Fund I nterest on External Investments $ 771,076 33,236 33,236 Transfers out of the Reserve Fund Cost-sharing APTA 2005'06 (281,298) $ 523,014 Pre-Audit Actual Balance December 31, 2007 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 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 incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended 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 increased 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. At the time of writing (May 2008), Corporate Services is preparing to transfer the remaining funds and interest earned to-date to the Region. ~'. .., ~) ~.f APPENDIX C FEDERAL DEDICATED GAS TAX RESERVE FLtJD - G'L 4239 Actual BaICllce December 31, 2006 $ 1,455,769 Transfers into tre Reserve Fund Provo of O1tario 1,132,644 I nterest on Extemall nvestrrents 74,296 1,206,940 Transfers out of the Reserve Fund Roads & MPE -Purchase of hybrid vehides (66,512) Sidewak-401 Pedestrian Bridge-Design costs (13,109) Sidewak installation-Valley Farm/Diefenbaker (50,000) Storm Water fv1gmt-Toy Ave & Victoria St. (9,200) Civic Cmpx-Upgrade to Ughting System (100,684) Civic Cmpx-Humidification system, Air Handling Unit (15,655) Dunbarton Pool-2 Levels of Roof Replacement (14,255) Commurity Ctrs. -Fumace Replacement & Gym Top (28,075) Recreation Canplex- Vapour Barrier (54,293) Recreation Canplex-~Iine Hot Water Tanks (21,590) Rec Canplex Arena-ComprESsor & Electrical Food (49,260) (518,633) Pre-Audit Actual BaICllce December 31, 2007 $ 2,144,076 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 Reserve Fund under By-law 6609/05 and Resolution 219/05. This 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 incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(1). qi] r' \.~ . 2. Recommended Maintenance Levels of this Reserve Fund: No reserve fund limits are appropriate for this fund. Under the Municipal Funding Agreement, the schedule of funding payments is as follows: 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 ~.............e;;~ ')1 APPENDIX C ~UAL REPORT - WlLDlN3 PERMT FEES fer the YEBr erdEd CBcanoor 31, 2007 Buildng Permit ReJerue $ 933,519 Costs Direct Costs Indroct Costs (1,142,117) (201,244) (1,343,361) $ (400,842) Excessl(DEfldt) ReJfflue o\€r Ca;ts BULDlNG PERMT STAB UZAll GJ ~E FLND -GL 4240 Q:Ering Balmce, Jm. 1, 2007 $ 2007 Contribution Oosing Balmce, ~. 31, 2007 $ 1. Purpose of this Reserve Fund: This reseNe fund was officially established in 2006 based on By-Law 6651/06 and Report to Executive Committee PO 41-05. The need for the establishment of this reseNe 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 seNice 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 incomes on these funds form part of the reseNe fund as per the Municipal Act, 2001 section 417 (3). -', ('" ;, ! 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. As at the year ended 2007, this reserve fund remains at a zero balance. This is due to the costs exceeded the building permit fee revenues; therefore, there was no transfer to the Building Permit Stabilization Reserve Fund. The Building Code Act, section 7(4) requires an annual reporting of this Reserve Fund, on which Report to Council CS 12-08, Executive Council Meeting of March 17,2008 has provided the detailed information for the 2007 reporting year. 9< APPENDIX C ANIMAL SHELTER RESERVE FUND - G/L 4241 (New) Actual Balance December 31,2006 Transfers into the Reserve Fund Proceeds from PAW Donations from "Dogs in the Park" event Interest on External Investments $ 144,433 963 700 146,195 Transfers out of the Reserve Fund Pre-Audit Actual Balance December 31, 2007 $ 146,195 1. Purpose of this Reserve Fund: This reserve fund was established in 2007 under By-Law 6749/07, Report to Council CS 16-07, Recommendation 9. This reserve fund was established to record the City's share of the proceeds resulting from the dissolution and disposition of the assets of Pickering, Ajax, Whitby Animal Services (PAW). With the establishment of this reserve fund, financial resources received and provided can be used to construct a permanent animal shelter. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: No reserve fund limits are appropriate for this fund. In addition to the proceeds of $144,433 from PAW, $963 was received from donations related to "Dogs in the Park" event held in 2006. ,) 4 APPENDIX C PICKERING MEN'S SLOW PITCH RESERVE FUND - GIL 4242 (New) Actual Balance December 31, 2006 Transfers into the ReseNe Fund $ Transfers out of the ReseNe Fund Pre-Audit Actual Balance December 31, 2007 $ 1. Purpose of this Reserve Fund: This reseNe fund was established at the end of 2007 under By-Law 6822/07, Report to Council CS 58-07. This reserve fund was established to receive donations from the Pickering Men's Slow Pitch League, for safekeeping of donated funds and further application of funds towards a major softball facility. Report to Council OES 43-07 provides detailed information on the memorandum of understanding between the City and the Pickering Men's Slow Pitch League. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: No reserve fund limits are appropriate for this fund. As this reseNe fund was established at the end of the year, there is no activity to report on. The reporting of this reserve fund for the year ended 2007 is for information only.