HomeMy WebLinkAboutCS 32-07
Citq (1~
REPORT TO
COUNCIL
Report Number: CS 32-07
Date: July 23, 2007
133
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
COMRIF Asset Management Program Funding
Recommendation:
1. That Report CS 32-07 of the Director, Corporate Services & Treasurer be
received;
2. That the Mayor and Chief Administrative Officer be authorized to execute the
Funding Agreement for Asset Management Program (AMP) Project under the
Canada - Ontario Municipal Rural Infrastructure Fund (COMRIF) program in
order to obtain funding in the amount of $32,440, and
3. That the appropriate officials of the City of Pickering be authorized to take the
necessary actions to give effect thereto.
Executive Summary: Starting January 1, 2009, Public Sector Accounting Board
(PSAB) standards will require Canadian municipalities to record tangible capital assets
in their accounting systems rather than expensing the costs as is currently done. The
implementation of these standards will require changes to accounting and budgeting
systems and processes to be able to capture and record tangible capital assets,
account for their depreciation and account for their improvements, replacements,
disposals or impairments. Corporate Services' staff were successful in obtaining
COMRIF funding to assist in the implementation of these asset management
requirements. These funds can be used for consulting, software, hardware, training
and staff costs related to the implementation of the asset management program.
Financial Implications: The City is to receive $32,440 to assist in the
implementation of the asset management program. Under the COMRIF program rules,
the City has to provide 1/3 matching funds of the total project cost of $48,660, to be
eligible for the program. The City's contribution of $16,220 was provided for in the 2007
Current Budget for Finance.
Report CS 32-07
July 23,2007
S.ubject: COMRIF Asset Management Program Funding
-+-3-4
Page 2
Sustainability Implications: As the existing capital asset base ages and with an
increased demand for new capital assets, the ability of local government to sustain
these services will become more challenging. Information about the existing capital
asset base such as cost, need for replacement will assist the City in making critical
decisions to ensure the financial sustainability of the City and its asset base.
Background: The City of Pickering is responsible for the management of a
diverse range of capital assets. In addition to significant land holdings, the City also
owns buildings, fleet vehicles, equipment, storm sewers, library books, etc. to support
basic municipal services. There is prima facie evidence that municipal governments
are facing major challenges financing the maintenance, renewal and replacement of
aging capital assets. There appears to be an existing information gap regarding the
"status or condition" of the City's tangible capital assets and the reporting of this
information on the financial statements. In other words, municipal financial statements,
currently do not provide any information regarding the value of the City's assets.
Reporting of asset information on the financial statements can bridge the "information
gap" by bringing capital asset information to the attention of the public and other users.
Bridqinq the Information Gap
Starting, January 1, 2009, Canadian municipalities will be required to report on their
tangible capital assets on an accrual basis (depreciation). This decision was made by
the Public Sector Accounting Board (PSAB) at its meeting of June 12, 2006. The
Ontario Ministry of Municipal Affairs and Housing (MMAH) prescribes that all Ontario
municipalities must follow PSAB directives and guidelines for accounting and financial
reporting. The PSAB decision means that the City will have to start recording tangible
capital assets in the City's accounting records, charging depreciation expense and
report these assets in the City's Financial Statements.
The impact of these changes is significant and will affect all departments of the City.
Major impacts include the following:
. Develop a comprehensive inventory and valuation of capital assets including: land,
roads, bridges, buildings, storm water systems, park play structures, library books
and reference materials, information technology hardware & software, vehicles and
equipment.
. Develop new budgeting and accounting systems and or processes.
. Determine the historical costs of all capital assets (regardless of age) including
development of valuation models where historical data is not available.
. Determine the useful/economic life of all capital assets beyond the information
currently available for the City's major assets.
Report CS 32-07
July 23, 2007 .
135
Subject: COMRIF Asset Management Program Funding
Page 3
Use of COMRIF Funds
Under the COMRIF AMP program, the gross funding for the project is $48,660 of which
COMRIF will provide a grant or financial assistance in the amount of $32,440 with the
City's matching contribution of $16,220. Staff plan to use these funds by addressing
the issues mentioned above. These activities include but are not limited to conducting
an inventory of existing assets, determining their remaining useful life, determining their
fair market value and depreciation policy and or schedules.
A report outlining the impact of the tangible capital reporting requirements and providing
the implementation plan is expected to be presented to Council this Fall.
Attachments:
1. Schedule "B~' - AMP Project Overview
Prepared By:
Approved I Endorsed By:
~ ~
Stan Karwowski - ------
Manager, Finance & Taxation
Iff ill is . Paterson
"TJ " Director, Corporate Services & Treasurer
GAP:vw
Attachment
Recommended for the consideration of
Pickering City Council
?
ATTACHMENT#-L- TO REPORT # (!.s ~.J..-o7
Asset Management Program Funding Agreement
136
SCHEDULE "B"
AMP PROJECT OVERVIEW
AMP PROJECT DESCRIPTION
AMP FILE #18223
THE CORPORATION OF THE CITY OF PICKERING
WORK DESCRIPTION:
The City of Pickering will use its allocated Asset Management Program (AMP) funding to
address all five stages of asset management. The project commits to: determining the systems
and technology needed to manage infrastructure assets, conducting an inventory of all asset
conditions, assessing the remaining useful life for each asset and determining future investment
needs with life cycle analysis and replacement schedules. In addition, AMP funding will be used
to develop policies regarding asset replacement to aid in the development of short and long
term infrastructure sustainability plans.
FINANCIAL ASSISTANCE I PROJECT BUDGET
Federal Maximum Financial Assistance:
$48,660.00
$16,220.00
$16,220.00
$32,440.00
Total Eligible Costs:
Ontario Maximum Financial Assistance:
Maximum Financial Assistance:
The Ministry will release all federal and provincial AMP funding once a Final Claim Report has
been submitted to the COMRIF Joint Secretariat as set out in Section 6.1 of Schedule "A" of this
Agreement. The Ministry is not obligated to pay interest on any costs incurred prior to the
submission, review and reimbursement of all eligible AMP project costs.