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HomeMy WebLinkAboutCS 06/00..14 �,oFP,� t�� F p REPORT TO COUNCIL FROM: Gillis A. Paterson DATE: Aprii 17, 2000 Direc►or. Corporate Services & Trcusurcr REPORT NUIIDER: CS OG-00 SUBIECT: 1999 Prc-Audit Balunces of Reserves suid Reserve Funds RECOMMENDAT(ON: It is recommenJat that Repon CS OG-00 of the Dircctor, Corproatc Serviccs & Treasurer bc rcceivccl by Council for information. ORIGIN: Rrport submiticd annually lo Council. AUTHORITY: Municipal Act, R.S.O. 1990, as amcndcJ, Scclion repcalcJ and �53. Ontario Rcgulation 438/97 FINANCIAL IMPLICATIONS: Not applicable. EXECUTNE SUMMARY: This report provides specific information on cach of thc Town's reservcs and rcservc funds, including year end balances. Compared to prior ycars the curtent year end balunces prcsent a fuvournble trcnd of increaze rather than decline. The Finance Depa�tment will endcavour to continue this direction to improve the overall financial position of the Town. BACKGROUND: Based on the preliminary 1999 cesults, we can now rcport on tha pre-audit actual uctivities within the reserves and rese►e�� funds for 1999. Caution must be exercised in using this infomiation, as the Town Auditors have not yet finishcd their unnual review. T�e "purposd' and the "recommcnded muintenence Icvel" for euch rcscrvc end rcserve fund um set out in Appendices B and C rcspxtively. •Repott to Cow:cil CS 06-00 Date: April 17, 2000 � 5 Subjxt: 1999 Pre-Audit Halances of Ruerves and Reserve Funda Page 2 ATTACHMENTS: 1. Apprndix A Summary of Reserve and Reserve Funds 2. Appendix B Description of Reserves 3. Appendix C Description of Reserve Funds Prepared By. APProved / Endorsed By: _ � c�• '�� � /�� Jim Tomlinson, Gillis A. Paterson, — Deputy Trensurer Director, Co�porate Services & Treasurer GP:vw Attachments Recommended for the consideration of Pickering Ciry Council � ,� .� � ,,� 9 v o ias 1. uin , Chie Admin tivc OCf cr i ; ,, . .- -; '. t �kg'. t} ' . . S' �,v r �� � r � s �.s �- � �� �. r fr` � ' t � - .� r � S J -� � n � ,� J 1 �, '- r ` - t - i �� � �,; ft h G a �`n i'T, }� 1 1'� i�' � C i ti � ti i �� � x. ( 1 t r . - � -- �. .1c�,'.:E K��33....� ,._r�,.,^��,tir,�_'as.�Y�.�.ss.°. ��w r.-..�x ,..;;..... . .r�. i� ..a.i,i.�..,,�s.,_ z,.z'. . ...,s._= �6 _ � ., , ATTACHMENT #�TO REPART tt.[�y6 �� APPENDIX A SUMMARY TOWN OF PICKERING SUMMARY OF RESERVE AND RESERVE FUND PRE-AUDIT ACTUA.LS DECEMBER 31,1999 Pre-Audit Actuals Apoendl: B Summarv of Reserves 4610/4617 Working FundsNucation Pny 4GI1 ReplucementofCnpitnl Equipment 4612 Contingencies 4613/4614 Selflnsurunce/Inventories • 4618 ReskiUing 4619 Rnte Stablilimlion 1999 S 841,350 2,521,806 1,381,295 713,080 0 2 9. 81.233 8 4 8 64 ctuals 1998 1997 S 841,350 S 841,350 1,829,G10 175,914 786,319 2G4,319 579,123 452,207 0 83,900 9 81 0 G 0 0 2 9 1 81 G90 1996 S Sd1,350 1,453,I25 194,440 458,954 83,900 0 3 0 I 769 endix C Summarv of Reserve 1999 1998 1997 1996 Fuods 4225 Cammunity Facilitics S 219,209 5 773,483 S 447,280 $ 1,404,317 4227/4229 DcvelopmentCharges G,744,60J 5,874,293 G,145,G52 S,O1G,146 4228 Capitul Works 82G,082 G13,4G4 403,758 1,342,783 4230 Parkland 4,242,340 5,778,228 4,IG1,322 4,690,984 4232 Public Works 1.194.655 1.185.153 096 5 6 I.183.448 2J 3. 26.889 4 224 62 2 254 S I G3 678 Totai Reserve and Reserve Funds � �� S16•669•447 I � . ,.. , . � .. �� - �� �� 7 � . �,. ' ;. .; ; . ;: u:.i �'� '.' :r" ".' r 3 � � j� Pr�.4. �{ .,k ;�i'..0 .� „i.� ,_ .. ,�.. �.. .: �r �.( .. . J] .. i .4..,_ i�.L,._.�.� ..i? . ,. . ,. . . , . ,. . t�..%.r _ _ . . . . AT���%_°iTOREPQRTlt S�p APPENDIX B RESERVE FOR WORKING FUNDSNACATION PAY G/L 4610/4617 Actual Balonce December 31,1998 S841,350 1999TrAnsacNons Trrnsfers into the Resrne Working Funds 0 Vacation Pay � TrnnsCers out of the Resme � Pre-Audit Actual Balance December 31,1999 Working Funds 5400,000 Vacation Pny 4 35� S 1�.15� 1. Puroose of the Reserves: Thc reserve for workine funds is used to provide operating cash to nssisi in avoiding short term interest cxpcnses incurred on operntions during the first months of the yeaz prior to tux billing. Thc re`,crvc for vacation � has becn established to cnsurc thnt thc cost of vacation pay eam�.�, but not taken, is correctly aliocated to Ihe taxpayers of that yeaz and the Council of that period. 2. Recommended Maintenance Levels of t6e Re�erves: Reserve for Working Funds - it is recommended as a"rule-uf-thumb" that this rescrve not excced I% of total revenues. The prescnt balance approximntes that amount. Reserve for Vacntion Pav - This reserve should bc equal to the vacation pay enmed, but not taken in any given year. My difference would be taken into consideration in the next year's budget. ,' . z _ , ,' 3 , , �� } � ,;; t' 1 � t t .xr ' A � f ' �� - F �� �' .f 1 3 �"i .T t� � ' l rr.?.�,,ar vf��. +v a�S�la..lki J Fir � k.�,' .: tiR.i.('..� f� Y�a+.}i-d���}f e� ta ` W.-� .e� S�.' �. �,.,� ....��,1 �.... A... ., w. �.,.. .... , ... �� 18 APPENDIX B (Page 2) RESERVE FOR REPLACEMENT OF CAPITAL EQUIPMENT G/L 4611 Actupl Balaace December 31,1998 1999 TrAnsactions TransCe�s into the Reserve • 1999 Budget General Govemmrnt Provisions Vnrious Recreation Revonues Sub-towl Trunsfers out of lhe Reserve 1999 Cont. to Genernl Fund - Provincial Tmnsit Capitel Assisinnce Pre�Audit Actual Balance - December 31,1999 S I,829,610 a�,ia�,000 0 962 _1•245•9G2 53,075,572 5 G6 S 8➢ 1. Puroose oi thls Re�erve: The purpose of this reserve is to eliminntc the nced to Icvy for the full cost of major equipmcnt in the ycar of ncquisition. Thc rescrvc acts as a stabilization factor and helps to avoid both mill rnte tluctuntions and thc issuance of long tertn debt or other means of finuncing. 2. Recommended M1isintenance Levels of thts Reserve: 7'his reserve should bc kcpt at n Icvel which is equivalent to the replacemcnt cost of the susets far which thcy were cstablished. 'fhe reserve has Ouctuated from the low as at December 3t, 1997 of S175,914 to a high of $2.52 million at thc end of 1999 No additional provision hns been provided for in the curtent budget but this account continues to be underfunded. Major additional contributions will be required in future j�G7I3. . . . -� _ � .. ' . . . . � . �, . . . . . . . . ; . . _ , :i , ' . �j`I. . . : . �� i r { s.t r t� i � '.. F -. , . i . . y` � s � z ._. ,� ,� : K�..ti:..�,�;..t..t;_€�xra:,r�,_r;t r,...,, ..,',. -.. u`ni s.... . 3u.�.. �'.., .-ws ..n... .,.. . . ... _- .!��~ . ,. . 19 APPENDIX B (Page 3) RESERVE FOR CONTINCENCIES G/L 4612 Actuol Balance December 31,1998 5786,319 1999 TransacHoos Trensfers into the Reserve 1999 Budget - General Govemment - Election Provision 55,000 -AssessmentAppeals 321,386 - Westem Branch Books 50,000 -StormDumageGranl 31I•I67 737.553 Sub-towl 1,523,872 Transfers out of the Reserve 1999 Cont to Gencml Fund - Assessment Appeals (142,577) Pre-Audtt Actual Balaace- December 31,1999 � 1. Puroose of this Reserve: Like the cnpital equipmcnt rcplacement rcservc, this rescrve acls in n tax sinbilizntion capacity. It was cstablishcd in nnticipatio» of unknown, unusual or extreordinary expcnditures which occur from time to timc. 2. Recommended Malntenance Levels of this Reserve: Stuff continue to monitor the balance of this rescrve and thc need for long tertn contributions required.. • ', ', , ,y , t a -. �- C -.. � F .: y . � _ ..4,,. t' _ . ." ,' L :.,. � : 1 i?'' y P � ` � � � -: A _ ; . � t 1`p• L44:� t 5�C f��r ''.�+t -r� �S :dy : .t}•',�? ..ce...{,�.._ , .. . �t�.::ti} �r....,���?t1k. :z�. __.,..��-� S�rt�� ?,S.ie_�s�T .... ...a.:z s..n „t,-a� _. .. ,,.. . . . ,. . .. . . ,- , ,:; . : . .:- � ,-;:_ ,, , , _ _ , __ . _ �—��� � � :20 APPENDIX B (Page 4) � RESERVE FOR SELF INSURANCE/INVENTORY C/L 4613/4614 Actual Balance December31,1998 5 579,123 1999 TransacHons Transfers into the Reserve - Inventory Adjustment 42,294 - Insurnnce Premiums Under Budget Provisions 66 133'957 713,080 Tmnsfers out of the Reservc — Invrntory Adjustment p Pre-AuditActual Balance—Decem6er31,1999 S Qg (7'ransfers bazed o:i actuals at year rnJ) 1. Puroose of fhfs Reserve�: Rescrvc for self•insurancc This reservc was established as a fortn of assct protection. Specifically, it is to cover insurance claims resulting from the increaze in deductible levcls to reduce insurance premiums. Significant savings can be rcalized through reduced premium costs nnd stafC nnalyie the costslbenefits of such actions on an annual basis. Reserva for Invcntorv This rcserve has becn establishcd to ensurc that the cost of revolving inventories is corrcctly allocatcd to the taxpayers of that year and the Council of that period. 2. Recommended Matntenance I.evels of this Reserve• Reserve for self insurance This reserve should bc maintuined at a level to ensurc that the funding is ndequatc to mcet actuarinl liabilities. This situation is analyied by staffon a regular basis. Reserve for Inventorv The maintenance level required is explained in the Description of the putpose for this reserve. 5 � 1 t' `�. r . �, ` ' .. �., -. S .i 1' � t .. 5t , , _ y �# y t �'. i xiG��.t�; i_7i'�.[ .�e >: .x_��.. ,ca_..sixt. t�:e e?i.�"e ti , a3_..n...r�.,. . ..._ .,�,.t.�.-_. ..... . .! .. ...,.. .. i; ' ... . .. . . � . . � . l.��. � , APPENDIX B (Page 5) RESERVE FOR RATE STABILIZATION G/L 4619 Actual Balance December 31,1998 SI,786,233 1999 TransACdoos Transfers into the Reserve 1,195,000 -1999 Provision Transfers out of ihe Reserve 0 Prc-Audit Actuai Balance — December 31,1999 2�1 � 1. Puruose of this Reserve: The purpose of this reserve is to oct ns u mill rate stubilization factor for nnnual current budget funding. 2. Recommended M1taiotenance Levels of this Reserve: The ievel of this reserve will continue to be monitorcd. i { ,ia; i k:� i i �: i � s" � :. � 3 -• z .. C . ;� } i .�t f 4 { ; _ s :.3t - ';��?r - i�±t .. y k . � .� 3�. �'t Mf t. 1tk;r 1 .,?.s ��s .r..�. ,. ?:� _t,. �t._5,�: ,._ .s� _'� � e�� �: � } ....�, . �.... . _ . a. »_„ �� ._._, _.. . ' ' S .a4. , t:.. � 22 . . APP�IVDIX C A�TAdN4B�TM�_TO REPQRT #�'$' p6-.� RESERVE FUND FOR COMM�JNITY FACILITdES G/L 4225 Actual Balnnce December 3/,1998 S 773,483 1999 TransacHons Transfers into the Reserve Interest Eamed 26,238 Contribution Gom General Fund 163.793 • S 963,514 Transfers out of the Resrne 1999 CapiwlBudgetFunding 2127 - Finance 2196 -Infortnatian Services 2321 - Extemul Subdivision 2731 - Rec Complax 2950 - Y2K Pre-Audll Actual Balance- December 31,1999 S(15,000) (388,183) ( 84,353) (80,000) (176.7691 75 ( 44•3051 S l�fl$ 1. Pur ose of this Reservs: ' This is a"discretionary" rescrve fund cstublishcd by Council to attempt to avoid both tnx rate Fluctuations and thc nccd for issuing long tertn dcbt for mujor expenditures required for community facilities. 2. Recommended M1tatntenaoce I.evels of this Reserve: As can bc seen Gom the summary provided in Appendix A- the balances of this fund hnve fluctuated Gom thc 1999 year low of 5219 thousand to the high in 1994 of SS.I million. Additional amounts must be allocated to this fund. � � t , p { �. ` �: .". , ' , i � .� � z�l� f. t i 3 r �. � i�� 4 ,: .i2 e r�_ �. �..,..-:�,._. ._ . �.:._._ -.,.._....'. �,. _,...!�-,_: t.,. 1. �.._.. 5.:, •. 3.�_-.t....4:� �. .. . ...." � . , ..�.., � t ���" � � �� � �; � 23 APPENDiX C (Page 2) RESERVE FUND FOR DEVELOPMENT CHARGES G/L 4227/4229 Actual Balance December 31,1998 55,874,293 1999 Traasactians Trnnsfers into the Rourve Intercst Eamcd 281,4G9 Net Developer Contributions 2_ ,552•009 8,707,771 TransCers out of the Reserve Trnnsfer to Grnerul Fund Trnnsfer to Copital Fund 2240 — Fire 2321— Roads - Extemai Subclivision 2350 — Trnnsit 2718 — Parks - Acquisitinn - Development 2410 — Storm Sewers 2745 — Libruries — Materials 2610 — Plnnning — Studics Pre-Audit Actual Balaoce - December 31,1999 (163,793) $(120,949) (19G,822) (48,261) (9,867) (1,161,737) (120,000) (130,000) 1739 (1,799,375) , iGI� _'�]CiiTc� 1. P_pr ose of this Reserve: This is a"obligatory" reserve fund and as such is govemed by Iegislation regulatian or agrcement und requires revenue rcceived for the special purposes to bc segreguted from the general revenues of the municipality. Obligatory reservc funds must be crcated whenevcr u statute requircs revcnuc reccivcd for a specinl purpose to be segregated from the general revenucs of the municipality and ►he rcvenue is to be used solely for the purposa prescribed by statute, i.c. in this casc the monies charged to developers must be held in trust and used to fund capital services required for new growth. 2. Recommended Matntenance Levels of this Reserve: In accordance with developmrnt chazge legislation, all development charge ravcnue must be hcld within separate reserve funds and can only be used for the financing of growth- relatcd projects. As such, no reserve fund limits are appropriate for development charge reserve funds because they are tied to growth-related capital requiroments. j; _ , ' - 3. � `' _ t � � 1 � i. � , t � t �{ � ` � .� � � C} 5�� _' # 4 h Jr i r. f'4. s�% q� z r�-r r�� � .'�� t> >} �' _ s � �ar_", .. . . . . .s. ..:=cr t..., ,�,_ `.,... �._ �v.._.., �. i..... r, �- -..h ... ..n..�. ._ i-.t• .. .. . _,. . . . . �.... ...:-.. . .. � . . .. . . . .. , . ..: .. . . . _ _ - 24 . APPENDIX C (Page 3) RESERVE FUND FOR CAPITAL WORKS G/L 4228 Actual Haiance December 31,1998 $GI3,4G4 1999 TransncNons Transfers inlo the Raserve [nterest Enmed 5 23,927 Develaper Contributions (rofund) S(13,990) Contribution from Grneral Fund $202.681 212,GI8 Trnnsfers out of thc Reserve 0 Pre-Audit Actual Balance - December 31,1999 S 5$� .4&2 1. Puroose of thi� Re�erve: This Fund is a"discretionar�' onc und is cstablished pursuant to subsection 163.(2) of the Municipal Act for specificd purposes by Council �eluteJ to the acquisiliun of nssets. 2. Recommended Mafntenance Leveis of thfs Reserve Fund: 1'his rescrvc fund has its lowcst bnlnnce nt thc end of 1997 of $404 thousand, with the highest balnnce in thc last 4 years being $1.495 million nt the end of 1995. The level of this mservc will continuc to be monitoreJ. - ; ,t t � id ` ' � � � t ' � �. � ti � i�+ r ; � � z r � � �' ,, r � ` E — � :. s �"` 'f j j�� ' t �� '_, . . . I. :.�-. 1 .., 3 .�_'i .,. . . ., t. .::_' ..,... . ,.�. , .o,. � -,:.: ... ".i , ,. . "� , . ..,�i� . . � Y , � ., . .. , � ,x_ , .:,, .,�... ._� __ r . ... �. .,.. . :,, -.. - . _ . _ . � 25 APPENDIX C (Page 4) RESERVE FUND FOR PARKLAND G/L 4230 Actual Balance December 31,1998 1999 Transactions Trnns&rs into the Resrne Interest Eamed Recreational L,cnd (cash-in-lieu) Trnnskrs out of the Reservo Tronsfer to Cepiwl Fund 2132 —Town Property — Trackless Tmctor 2718 —Purks — Purchase Bcnchpoint Promennde — Woodsmer : Purk — Wutcrfront Trail — Front Street Pazk — Millennium Trail — Purohase — Abe Property — Buckhce — Gang Mower — Pluyground Equipment & Misc Park Devclopmcnt 2744 —Muscum — Schoolhouse Rcstoration Pr�Audit Actual Halancc - December 31,1999 55,778,228 260,904 148.803 6,187,935 $(72,458) (247,500) (80,750) (600,000) (100,000) (400,000) (127,733) (85,176) (90,978) (9ti,000) 45 000 (1.945.5951 �i�L[ij 1. Puraose of this Reserve Fund: This is an "obligator�' rescrve fund and it has been established pursuant to subscction 163.(2) of the Municipal Act as required by subsections 42.(1), (5), (G), (7), (8) and (9) of the Planning Act. This fund is govemed by legislation, regulation or agreement and requires revenues received for the special purposes to be segregated from the general revenues of the municipality. Obligalory reserve funds must be created whenever n statute requirea revenues for a special purpose to be scgregated from tha general revenues of the municipality and the revem�e is to be uscd solely forthe purpose prescribed by statute. � 2. Recommended Matnteaance Levels of this Reserve Fund: Due to the obligatory neture of this fund, lhere are no limits on lhis fund. { ;,. > r ��'t Y Y � � f � } 1 k. i i k � F t '� � 1 * �` D � � s � � t . ,_'. ? c,.. � , _ .,,Ss..u:�.�fi W_ ,. ..�. ., .:k r. .._. .`�_JF�af s8 �_.i . .. .r_ . _a 1 r.-_.. _._ __ ?a ,. � c.. _,. . . . .,� , ° r 't _ ;� 26 APPENDIX C (Page 5) RESERVE FUND FOR PUBLIC WORKS G/L 4232 Actual Balance December 31,1998 51,185,153 1999 Transaclions Trnnsfers into the Reserve � �Z Interesl Eumcd � Z g Developer Contri�utions $1,242,636 Tcansfers out of the Reserve TransCer to Capitel Fund �47 981� 2321— Extemall Subdivision Worls — Woodview Pre-Audit Actual Balance - December 31,1999 $1.194.655 1, Puroose of this Reserve Fund: This fund has been estnblished by Council pursunnt to subsection 1G3.(2) of the Municipal Act and is n"discrctionary" reserve fund. The pu�posc of the reserve funds is to acquire 6xcd assets, e.g. stortn sewers, without thc need to Cund on a long tertn nnture through the issue of debcntures. 2. Recommended Mainteoance Levels of this Reserve Fund: The "averoge" annual balancc of this fund ovcr the last four years has been approximately $t.25 million. This reserve should be kept at least at this level in the future. Staff will periodically rcvicw the necd for this level with thc requirements contained in the capital budgets nnd four yeaz progam and report eny different findings to Council. r_� t i � r � .. . f.. ..,.� . .i�,! .'�.4 �. ... .e..... ,.. . ._ � . �... ,t ... ..a .. a .tw . . ....