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HomeMy WebLinkAboutCS 18-09 Call 00 REPORT TO EXECUTIVE COMMITTEE T 1CKE 11~1 V G Report Number: CS 18-09 126 Date: June 8, 2009 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2008 Pre-Audit Balances of Reserves and Reserve Funds Recommendation: 1. That Report CS 18-09 of the Director, Corporate Services & Treasurer be received for information; 2. That the Ontario Transit Renewal Reserve Fund be closed and the attached By- law to repeal By-law 6029/02 be enacted; 3. That the Dedicated Gas Tax Reserve Fund be closed and the attached By-law to repeal By-law 6418/04 be enacted; and, 4. That the appropriate staff of the City of Pickering be given authority to give effect thereto. Executive Summary: Based on the preliminary 2008 results, we can now report on the pre-audit actual activities within the Reserves and Reserve Funds for 2008. A summary is presented in Appendix A. The purpose and 2008 financial transactions for each Reserve and Reserve Fund are set out in Appendices B and C respectively. The Ontario Transit Renewal Reserve Fund and Dedicated Gas Tax Reserve Fund are recommended to be closed as they have served their intended purposes. The purpose and 2008 financial transaction for each Reserve and Reserve Fund are set out in Appendices B and C respectively. Financial Implications: Not applicable Report CS 18-09 Date: June 8, 2009 Subject: 2008 Pre-Audit Balances of Reserves and Reserve Funds Page 2 127 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 2008 pre-audit Reserves and Reserve Funds balance of $60,081,565 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 Council or 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 Board (PSAB) for obligatory Reserve Funds. The combined unspent budget commitments for all Reserve Funds are $6,310,155. With the transfer of transit services to the Regional Municipality of Durham (Region), the Region Transit Reserve, Ontario Transit Renewal Reserve Fund and Dedicated Gas Tax Reserve Fund are officially closed as at the year-end ended December 31, 2008. Funds remaining have been transferred to the Region. The by-laws to repeal both the reserve funds are included in this report. The Transit Region Reserve being a reserve account was created by council resolution in the year 2002 when the budget was approved and was not established by by-law, therefore there is no by-law to repeal. This Reserve will expire on its own as at December 31, 2008 based on reason indicated above. The Development Charges, Parkland, Third Party/Developer Contributions, 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 $33,526,370 (See Appendix A). The combined total of the budget commitments, other restricted balances and obligatory Reserve Funds of approximately $39 million reduced the "discretionary" balance to approximately $20 million as at December 31, 2008. The City established a new reserve this year, namely: Capital Maintenance Management System Reserve which will provide funds to assist in meeting mandatory Public Sector Accounting Board (PSAB) requirements. Furthermore, it will assist in providing funding towards future capital asset management initiatives. The purposes of the Reserves and Reserve Funds are discussed further in Appendices B and C. Report CS 18-09 Date: June 8, 2009 Subject: 2008 Pre-Audit Balances of Reserves and Reserve Funds Page 3 Internal borrowings from the Reserve Funds commenced in 2001 to assist in funding capital projects. The outstanding principal balance as at December 31, 2008 is approximately $3 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 $2.82 million and $198,000 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 2007 internal borrowings. There was no internal loan in 2008. Attachments: 1. Appendix A Summary of Reserves and Reserve Funds 2. Appendix B Description of Reserves 3. Appendix C Description of Reserve Funds 4. By-law to repeal By-law 6028/02 5. By-law to repeal By-law 6418/04 Prepared By: Approved / Endorsed By: Caryn Kong Gillis A. Paterson Senior Financial Analyst Director, Corporate Services & Treasurer GAP:ck Copy: Chief Administrative Officer Recommended for the consideration of Pickering City Council Thoma J. uinn, R R., C III Chief Administrative Officer ATTACHMENT #.~_.TO REPORT Jk- 01 APPENDIX A g CITY OF PICKERING SUMMARY OF RESERVES AND RESERVE FUNDS PRE-AUDIT ACTUALS DECEMBER 31, 2008 Pre Audit Audited Audited Audited Appendix B Summary Reserves 2008 2007 2006 2005 4610 Working Funds $400,000 $400,000 $400,000 $400,000 4611/4623 Replacement Capital 618,419 683,214 685,715 722,844 4612 Contingencies-OPG, Election, Other 2 1,401,340 1,328,080 6,356,615 10,774,909 4613 Self-Insurance 2 951,391 951,391 951,391 915,514 4619 Rate Stabilization 17,374,935 15,491,176 6,910,981 3,388,965 4620 Develop. Charges-City's Share 2 1,168,494 745,244 809,654 484,204 4621 Region Transit 2 - 120,999 120,999 237,106 4622 Continuing Studies 2 750,534 713,821 474,484 342,533 4624 Vehicle Replacement 172,547 122,547 72,547 75,000 4625 Easement Settlement 131,279 - - 1,095,129 4626 Library Eastern Branch 2 80,000 55,000 30,000 20,000 4627 Move Ontario 8,243 308,243 833,243 - 4628 Capital Maint Mgmt System New 75,000 Total Reserves $23,132,182 $20,919,715 $17,645,629 $18,456,204 Pre Audit Audited Audited Audited Appendix C Summary of Reserve Funds 2008 2007 2006 2005 4225 Community Facilities $192,845 $180,880 $194,175 $265,492 4228 Capital Works 348,583 335,486 321,618 309,872 4229 Development Charges 182 26,413,355 23,528,009 22,341,331 21,135,306 4230 Parkland 112 1,984,486 1,557,607 1,993,928 2,103,061 4232 Public Works 1,167,782 1,122,707 1,072,893 1,038,206 4234 Workers Safety Insurance Brd2 1,339,907 1,103,109 834,922 589,575 4235 Third Party/Dev. Contributions' 2,043,667 2,129,221 1,868,148 1,819,264 4236 Ontario Transit Renewal' - - 19,166 19,166 4237 Squash Courts 2 92,530 119,057 78,989 66,087 4238 Prov. Dedicated Gas Tax' - 523,014 771,076 722,039 4239 Federal Gas Tax Revenue' 3,084,862 2,144,076 1,455,769 850,684 4240 Building Permit Stabilization Fees 1&2 - - 4241 Animal Shelter2 152,896 146,195 4242 Pickering Mens' Slow Pitch 2 128,470 - - - Total Reserve Funds $36,949,383 $32,889,361 $30,952,015 $28,918,752 Total Reserves & Reserve Funds $60,081,565 $53,809,076 $48,597,644 $47,374,956 Notes ' Obligatory Reserve Funds $33,526,370 (Includes 4229 & 4230) 2 Restricted Reserves & Reserve Funds 6,065,562 (Excludes 4229 & 4230) Total Obligatory' & Restricted 2 -2008 = 39,591,932 Less Budget Committed Projects (6,310,155) Total Uncommitted Obligatory & Restricted R & RF $33,281,777 Total Reserves & Reserve Funds $60,081,565 Less Obligatory, Restricted Reserve & Reserve Funds (39,591,932) Net-Discretionary Reserves & Reserve Funds $20,489,633 3 0 ATTACHMENT# ~ TO REPORT#LLF- APPENDIX B RESERVE FOR WORKING FUNDS 4610 Actual Balance December 31, 2007 $ 400,000 Transfers into the Reserve - Transfers out of the Reserve - Pre-Audit Actual Balance December 31, 2008 $ 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 average annual revenue of $45 million, at 2%, the amount to maintain for this reserve should be $900,000. APPENDIX B 3 1 RESERVE FOR REPLACEMENT OF CAPITAL EQUIPMENT - G/L 4611/4623 Actual Balance December 31, 2007 $ 683,214 Transfers into the Reserve Revenue Fund Contribution 115,462 Transers out of the Reserve Transfers to Capital Fund (180,257) Pre-Audit Actual Balance December 31, 2008 $ 618,419 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. 132 APPENDIX B The balances pertaining to these sub-categories are as follows: Corp Use Prgrms Pool Arena Core Pool Arena Total Dec 31/07 2,483 134,752 37,578 68,091 108,773 181,312 150,225 683,214 Transfers in 0 18,500 4,962 30,000 27,000 15,000 20,000 115,462 Transfers out - - - - (61,663) (45,134) (73,460) (180,257) Dec 31/08 2,483 153,252 42,540 98,091 74,110 151,178 96,765 618,419 APPENDIX B 1 3 3 RESERVE FOR CONTINGENCIES- G/L 4612 (OPG, Other Assessment Appeals, Election, Miscellaneous) Actual Balance December 31, 2007 $ 1,328,080 Transfers into the Reserve Transfers from Revenue Fund 73,260 Transfers out of the Reserve: Pre-Audit Actual Balance December 31, 2008 $ 1,401,340 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. As at the year ended December 31, 2007, there are no longer any funds in the Contingency-Ontario Power Generation (OPG) Assessment Reserve as the assessment appeals related to the taxation years 2003-2006 have been reached and this amount was transferred to the Rate Stabilization Reserve in 2007. The amounts pertaining to the other sub-categories are as follows: Election - $140,000, Other Assessment Appeals - $682,594, True Sport City Share- $3,260 and Miscellaneous - $575,486. 134 APPENDIX B RESERVE FOR SELF INSURANCE - G/L 4613 Actual Balance December 31, 2007 $ 951,391 Transfers into the Reserve - Transfers out of the Reserve: Transfer to Capital - Pre-Audit Actual Balance December 31, 2008 $ 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. 1 3 APPENDIX B RESERVE FOR RATE STABILIZATION - G/L 4619 Actual Balance December 31, 2007 $ 15,491,176 Transfers into the Reserve Excess Surplus Contribution 2,647,941 Dividend from Veridian 1,722,000 4,369,941 19,861,117 Transfers out of the Reserve 2008 Current Budget Provision (2,486,182) Pre-Audit Actual Balance December 31, 2008 $ 17,374,935 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 2008 Current Budget provided for a transfer in the amount of $2,486,182 from this reserve to fund current expenditures. With the settlement of OPG assessment appeal in 2007, dividends from Veridian and surplus in 2008; there is sufficient build-up of funds to draw from this reserve for future budgeting years. In 2009, there is a budgeted draw of $2.9 million and further draws anticipated in 2010 and after. ' 3 6 APPENDIX B RESERVE FOR DEVELOPMENT CHARGES - CITY SHARE G/L 4620 Actual Balance December 31, 2007 $ 745,244 Transfers into the Reserve 2008 Current Budget Provision 480,000 Returned to source 120,200 1,345,444 Transfers out of the Reserve Transfer to Capital Fund -External Subdivision Works (176,950) Pre-Audit Actual Balance December 31, 2008 $ 1,168,494 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 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. 137 APPENDIX B REGION TRANSIT RESERVE - G/L 4621 Actual Balance December 31, 2007 $ 120,999 Transfers into the Reserve: GO Transit Funding from Region - Transfers out of the Reserve: Transferred to the Region (120,999) Pre-Audit Actual Balance December 31, 2008 $ - 1. Purpose of this Reserve: This Reserve account 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: With the transferred of the Ajax Pickering Transit Authority (APTA) to the Regional Municipality of Durham (Region) effective January 1, 2006, there is no longer any revenue from the Region for this Reserve. This Reserve is officially closed as at our year December 31, 2008 as we have settled all our commitments and obligations with APTA. 3 8 APPENDIX B RESERVE FOR CONTINUING STUDIES & CONSULTING - G/L 4622 Actual Balance December 31, 2007 $ 713,821 Transfers into the Reserve Continuing Consulting Work or Studies 190,570 Transfers out of the Reserve (153,857) Pre-Audit Actual Balance December 31, 2008 $ 750,534 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 2008 in the amount of $153,857 pertained to consulting work that was transferred into the Reserve. in the prior year. An additional amount of $190,570 has been transferred-in for future work. APPENDIX B 1 3 9 RESERVE FOR VEHICLE REPLACEMENT - G/L 4624 Actual Balance December 31, 2007 $ 122,547 Transfers into the Reserve 50,000 Transfers out of the Reserve to Capital Fund - Pre-Audit Actual Balance December 31, 2008 $ 172,547 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. 14 0 APPENDIX B RESERVE - EASEMENT SETTLEMENT - GIL 4625 Actual Balance December 31, 2007 $ - Transfers into the Reserve: - Projects returned to source 131,279 Transfers out of the Reserve - Pre-Audit Actual Balance December 31, 2008 $ 131,279 1. Purpose of this Reserve: This reserve was established in 2005 due to funds received from easement 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 interest income on these funds forms 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. The funds available as at the year ended December 31, 2008 are the results of under-ages from 2005 and 2006 completed projects. APPENDIX B RESERVE - PROVISION FOR EASTERN BRANCH LIBRARY - GIL 4626 Actual Balance December 31, 2007 $ 55,000 Transfers into the Reserve 25,000 Transfers out of the Reserve - Pre-Audit Actual Balance December 31, 2008 $ 80,000 1. Purpose of this Reserve: This reserve was 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. 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. The same amount was provided for in 2008. '14 2 APPENDIX B RESERVE - MOVE ONTARIO - G/L 4627 Actual Balance December 31, 2007 $ 308,243 Contribution from Province of Ontario - Transfers out of the Reserve Capital Expenditures -Roads (300,000) Pre-Audit Actual Balance December 31, 2008 $ 8,243 1. Purpose of this Reserve: This reserve was 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. 43 APPENDIX B RESERVE - CAPITAL MAINTENANCE MGMT SYSTEM - G/L 4628 NEW Actual Balance December 31, 2007 $ - Contribution from Province of Ontario 75,000 Transfers out of the Reserve Capital Expenditures - Pre-Audit Actual Balance December 31, 2008 $ 75,000 1. Purpose of this Reserve: This reserve was newly established in 2008 to start building-up funds for capital maintenance and management systems. 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 2008 there was a budgeted transfer of $75,000 from the Current Budget. ~ATTACHMENT#-,--2-TO REPORT #-LCff10q 144 APPENDIX C RESERVE FUND FOR COMMUNITY FACILITIES - G/L 4225 Actual Balance December 31, 2007 $ 180,880 Transfers into the Reserve Fund Returned to source 5,000 Interest Earned on External Investments 6,965 11,965 Transfers out of the Reserve Fund Transfer to Capital Fund - - Pre-Audit Actual Balance December 31, 2008 $ 192,845 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, 2008 is $167,648. Taking these commitments into consideration, the uncommitted balance of funds available is $25,197. Additional amounts must be provided to this fund. X45 APPENDIX C RESERVE FUND FOR CAPITAL WORKS - G/L 4228 Actual Balance December 31, 2007 $ 335,486 Transfers into the Reserve Fund Interest Earned on External Investments 13,097 Transfers out of the Reserve Fund - Pre-Audit Actual Balance December 31, 2008 $ 348,583 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 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: 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 eight years. The value of the unspent budget commitments at the end of 2008 is $13,822. Taking these unspent budget commitments into account, the uncommitted balance available as at December 31, 2008 will be reduced to $334,761. Major additional contributions will be required in future years. 146 APPENDIX C RESERVE FUND FOR DEVELOPMENT CHARGES - G/L 4229 Actual Balance December 31, 2007 $ 23,528,009 Transfers into the Reserve Fund: Net Developer Contributions $ 2,422,276 Returned to source 14,091 Interest Earned on External Investments 856,165 Interest Earned on Internal Loans 162,336 3,454,868 Transfers out of the Reserve Fund: Transfer to Current Fund-Studies (15,819) Transfer to Capital Fund: Parks (169,068) Ext. Subdiv- Roads & Related (384,635) (553,703) Pre-Audit Actual Balance December 31, 2008 $ 26,413,355 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 82198, 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, all 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 $3,259,915. The pre- audit actual balance of $26,413,355 would be reduced by this amount to reflect an uncommitted balance of funds available for future expenditures of $23,154,440. APPENDIX C 4 7 RESERVE FUND FOR PARKLAND - GIL 4230 Actual Balance December 31, 2007 $ 1,557,607 Transfers into the Reserve Fund: Developers Contributions $ 455,300 Interest Earned on External Investments 58,524 Interest Earned on Internal Loans 10,727 524,551 Transfers out of the Reserve Fund: Transfer to Capital Fund-Parks: David Farr Park (613) Playground Reconstruction& Equipment (57,059) Parks- Trees (40,000) (97,672) Pre-Audit Actual Balance December 31, 2008 $ 1,984,486 1. Purpose of this Reserve Fund: 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 reserve 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 unspent budget commitments as at the year ended 2008 are $276,437. The pre- audit balance of $1,984,486 after taking into account the unspent budget commitments will provide an uncommitted balance available of $1,709,049 as at December 31, 2008. 1 4 8 APPENDIX C RESERVE FUND FOR PUBLIC WORKS - G/L 4232 Actual Balance December 31, 2007 $ 1,122,707 Transfers into the Reserve Fund Third Party Contributions $ 1,101 Returned to source 95 Interest Earned on External Investments 43,879 45,075 Transfers out of the Reserve Fund Pre-Audit Actual Balance December 31, 2008 $ 1,167,782 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 2008 is $25,000. The pre-audit balance of $1,339,907 would be reduced by this amount to reflect an uncommitted balance of funds available of $1,142,782 as at December 31, 2008. 49 APPENDIX C RESERVE FUND FOR WORKERS SAFETY INSURANCE BOARD - GIL 4234 Actual Balance December 31, 2007 $ 1,103,109 Transfers into the Reserve Fund Contribution from Current Fund $ 443,738 Interest Earned on External Investments 53,843 497,581 Transfers out of the Reserve Fund Claims and Other Related Costs $ (122,896) Funding Insurance Costs (121,262) Contribution to Health & Safety Training (16,625) (260,783) Pre-Audit Actual Balance December 31, 2008 $ 1,339,907 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 2008, 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 $223,317 from 2003 to 2008 has resulted to the 2008 year-end balance of $1,339,907. APPENDIX C THIRD PARTY/DEVELOPERS CONTRIBUTIONS RESERVE FUND - G/L 4235 Actual Balance December 31, 2007 $ 2,129,221 Transfers into the Reserve Fund Contributions from Developers/Third Parties $ 20,840 Interest Earned on External Investments 85,815 106,655 Transfers out of the Reserve Fund - Current Expenditures-Consulting fees (18,000) Capital Expenditures: Entrance Eastern Gateway (42,238) Ext Subdivision Works (656) Development Control- Helm St (3,315) Development Control-St Martins/ Bayly St (128,000) (174,209) Pre-Audit Actual Balance December 31, 2008 $ 2,043,667 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. 51 APPENDIX C ONTARIO TRANSIT RENEWAL RESERVE FUND - G/L 4236 Actual Balance December 31, 2007 $ - Transfers into the Reserve Fund Contribution from Ministry of Transportation $ - Interest on External Investments-reversal - - Transfers out of the Reserve Fund Close-out account-Revenue Fund - Pre-Audit Actual Balance December 31, 2008 $ - 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. The by-law to repeal this reserve fund is included in this report to council. 152 APPENDIX C SQUASH COURTS RESERVE FUND - G/L 4237 Actual Balance December 31, 2007 $ 119,057 Transfers into the Reserve Fund Surcharge on Memberships 10,432 Interest on External Investments 5,259 15,691 Transfers out of the Reserve Fund - Recreation Centre Expansion & Squash Courts (42,218) Pre-Audit Actual Balance December 31, 2008 $ 92,530 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, 2007 $ 523,014 Transfers into the Reserve Fund Interest on External Investments - - Transfers out of the Reserve Fund - Transferred to the Region (523,014) Pre-Audit Actual Balance December 31, 2008 $ - 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 (APTA). This reserve fund was created in 2004 further to the recommendation passed in Council Resolution #167104, 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 APTA to the Region effective January 1, 2006, the balance of this fund has been transferred to the Region in May 2008. This account is officially closed. The by-law to repeal this reserve fund is included in this report to council. 154 APPENDIX C FEDERAL DEDICATED GAS TAX RESERVE FUND - GIL 4239 Actual Balance December 31, 2007 $ 2,144,075 Transfers into the Reserve Fund Returned to source 86,892 Prov. of Ontario 1,415,710 Interest on External Investments 115,663 1,618,265 Transfers out of the Reserve Fund - Capital Expenditures in the following cost centres: Civic Complex (153,180) Dunbarton Pool (183,961) Community Centre (7,360) Recreation Complex (248,045) Rec Complex-Pool (6,267) Roads (30,380) Storm Water Mgmt (4,996) Development Control (37,049) Library (6,240) (677,478) Pre-Audit Actual Balance December 31, 2008 $ 3,084,862 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). 155 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 fundin 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 $7,078,927.80 156 APPENDIX C ANNUAL REPORT - BUILDING PERMIT FEES for the year ended December 31, 2008 Building Permit Revenue $ 614,756 Costs Direct Costs (1,102,003) Indirect Costs (195,851) (1,297,854) Excess/(Deficit) Revenue over Costs $ (683,098) BUILDING PERMIT STABILIZATION RESERVE FUND -GL 4240 Opening Balance, Jan. 1, 2008 $ - 2008 Contribution Closing Balance, Dec. 31, 2008 $ - 1. Purpose of this Reserve Fund: This reserve fund was officially established in 2006 based on By-Law 6651/06 and Report to Executive Committee PD 41-05. 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 incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 157 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 2008, 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 Executive Committee (May 11, 2009) CS 09-09 has provided the detailed information for the 2008 reporting year. 153 APPENDIX C ANIMAL SHELTER RESERVE FUND - G/L 4241 Actual Balance December 31, 2007 $ 146,195 Transfers into the Reserve Fund Interest on External Investments 6,701 Transfers out of the Reserve Fund - Pre-Audit Actual Balance December 31, 2008 $ 152,896 1. Purpose of this Reserve Fund: This reserve fund was established in 2007 based on 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 and the remaining funds are from interest income earned. 159 APPENDIX C PICKERING MEN'S SLOW PITCH RESERVE FUND - G/L 4242 (New) Actual Balance December 31, 2007 $ - Transfers into the Reserve Fund Contribution from Men's Slow Pitch League 125,000 Interest Income 3,470 128,470 Transfers out of the Reserve Fund - Pre-Audit Actual Balance December 31, 2008 $ 128,470 1. Purpose of this Reserve Fund: This reserve fund was established at the end of 2007 based on 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. In 2008, the City received the financial contribution of $125,000 from the Pickering Men's Slow Pitch League. ATTACH NIEN°I` #A__...TO REPORT #_r_1_ "1 6 0 THE CORPORATION OF THE CITY OF PICKERING BY-LAW NO. Being a by-law to repeal By-law no. 6028/02 which was for the establishment of a Reserve Fund to be known as the Ontario Transit Renewal Reserve Fund. WHEREAS the City of Pickering passed By-Law 6028/02 to establish such a reserve fund for the purpose of receiving funding from the Ontario Transit Renewal Fund and for the paying of transit related expenses as defined in the Ontario Transit Renewal Agreement. WHEREAS with the transfer of transit services to the. Region effective January 1, 2006, this Reserve Fund has served its intended purpose and no longer required and can now be closed. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. That the Reserve Fund known as the Ontario Transit Renewal Reserve Fund be closed. 2. That By-law 6028/02 be repealed. 3. That this By-law shall come into effect upon the date of the final passing thereof. BY-LAW read a first, second and third time and finally passed the 15th day of June, 2009. David Ryan, Mayor Debi A. Wilcox, City Clerk TTr.. 7 W_ 5 T~7 I~, r?'tT # CS f'g' "I THE CORPORATION OF THE CITY OF PICKERING 161 BY-LAW NO. Being a by-law to repeal By-law no. 6418/04 which was for the establishment of a Reserve Fund to be known as the Dedicated Gas Tax Reserve Fund. WHEREAS the City of Pickering passed By-Law 6418/04 to establish such a reserve fund for the purpose of receiving funding from the Province for the paying of transit related expenses that are intended to increase ridership. WHEREAS with the transfer of transit services to the Region effective January 1, 2006, this Reserve Fund has served its intended purpose and no longer required and can now be closed. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. That the Reserve Fund known as the Dedicated Gas Tax Reserve Fund be closed. 2. That By-law 6418/04 be repealed. 3. That this By-law shall come into effect upon the date of the final passing thereof. BY-LAW read a first, second and third time and finally passed the 15th day of June, 2009. David Ryan, Mayor Debi A. Wilcox, City Clerk