HomeMy WebLinkAboutTR 14/98��
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' ' � �: � � ` ' REPORT TO COUNCIL ` '
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FROM: (}. A. Paterson ' .
Director of Finenca .
DATE: Apri17,1998
REPORTNUMBER: 7Tt 14/98
SUBJEC'f: 1997 Pre-Audit Balances of Reserves and Resecve Funds
RECOMIvtE?NDATION:
It is rccammeaded tdat this Report No. TR 14/98 bc received by
- Council for infomiation.
ORI(iIN: Report submitted annually ro Council
• AU7'HOR[TY:
Sxdons 162 and 163 of the Municipal Act end Ontario Regulauon 438/97
FINANCIAL IMPLICATIONS:
Not appllcabla
EXECUTIVE SUMMARY:
This aport providp specific informadon on cach of the Town's mserves and
reserve funds, including year end balences, Most importent is the decline in total
balances of somc S4 mi1L'on, approximnt�ly 22 per ant, from Sl8 million in 1994
to S14 miUion in 1997.
$ACKOROUND:
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.;; Besed on tho preliminary 1997 �esults, wc can now repott on the pre-audit nctuel
aclivities witLtn iho reserves and iesecvc funds for 1997. Caudon must be
axercisod ia ustng thi� infomwtion, as the Town Auditors hnvo not yet finished
'their review. !'
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` The :'pwpose" and the :'mommendcd ma(ntenanco level" for each reservc and :
;� rcserya flwd era aet but in Appendiccs B end C tespectively,
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,� ; 3�bJxt 1997 Pro-Audit Balences of Reseives and Ites�vo Funds �Pege 2:
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, . ATTACHMENTS:
%. 1.' Appendix A. Summery of Reserve & Iteserve Ftwds
2. Appendix B i?escription of Reserves '
3, Appendix C Description uf Reserve Funds
�� Prepared BY: APProved / Eadorsed By;
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d�ll�s A. Paterson
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.� Attachmonts � � �
'' �PYi� Qeneral Menager
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•.i� � • �iPENDDCA � .. .
� r sUMMARY ,
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TOWN OF PYCKERINC
,SUMMARY OF RESERVE AND RESERVE FUND PRE-AU�IT ACTUALS
DECEMHER 31,1997
Pre-Audlt Aetoals • Acfna�
.�.. � Appendli H�� 3ammary of Rnervd 1997 1996 � 1995 1994
4610/4617 Working Funds/Vacallon Pey 5841,350 S&11,350 5630,000 5830,000
46U RcpincementofCapital 175,9t4 1,453,125 613,639 1,954,973
Equipment
' 4612 Contingencia 264,319 194,440 30,000 115,811
4613/4614 Self(nsurancdlnventories 452,207 458,954 464,206 443,197
4618 Reskilling 83,900 83,900 495.000 315,000
" 51,817,690 53,071,769 52,432,845 S3,658,981
Append►Y C 9nmmary of Raerve Fnnds 1497 1996 1995 1994
4225 Community Fecilities S 447,280 S 1,404,317 S 2,089,572 S 5,072,924
4227 DevclopmentCherges 6,145,652 5,016,146 2,927,179 2,599,642
, 4228 Capitel Works 403,756 1,342,783 1,494,642 1,421,174
4230 Perkiand 4,161,322 4,690,984 4,326,047 4,016,980
4232 Public Worka 1,096,536 I,I83,448 1,402,319 1,295,819
512,254,548 513,637,678 SI2,239,759 514.406,739
Total Raerve �nd Raerve Foodi 51�,072,238 516,669,447 514,672,604 SI8,065,720
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RE3ERVE FOR WORI�VG Yt[JND3NACATION PAY G/L 4610/4617
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. Actarl Balanee Decembcr 31,1996 5841,350
j. . l99? Transactlow .
Transfeis into U�� Reserve
Working 1'iwds p
Vecation Pay ; , p
Transfcrs out of tha Reurve p
PreAadit Actnal Balance Deeem6er 31,1997 .
Working Funds SqpO,ppp
Vecetion Pey 441,350 5841.350
1. Purpoee ot the Rpervea:
The rosrne for workinR Ponds is us�:d to provide opera6ng cash to assist in nvoiding short
tertn interest expenses (ncurrcd on opemtions during the first months of the year prior to
tnx biUing.
The reserve for vecadon nny has been esteblished to ensure that ihe cost of vacaUon pay
eamed, but not takrn, is corrcxtly allocated ro she inxpayers of Uu1t yeaz end ihe Council
of ihut period.
2. Recommended Mainted�nce Levels ot fhe Raervea:
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Reserve for Working Funds - It is recommended es a"rule-of•ihumb" that thts reserve not i
exceed 1% of totel revenues. The present balance approximetes thet amounG i
Reserve for Vacation YcY •?his reserve should be equal w the vacation pay eamed, but �
not teken in any given year. My dit%reace would be teken into consideration in the next
year's budgo�
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j RE$ERVE F(1R REPLACEMEI�'fl' OF CAPITAL; EQUIPMENT G/L 4611
ActoalHataneeDecember31,1996 S1.453,126 -
'' 71997 Trvnaacdoai , ,
Trenstere tnto tha Reurve
' ' 1997 Hudget
, Varioue Rxreation Revenues 578,395 78,395
Subdotni S1,531,521
Trensfers out of the Reurve
19�7 Capitel Flnanoing
2132 - Town Property Maintenance SI8,287
2199 - Print/Mail Room 18,759
2240 - Firo 413,775
2259 - P.A.R.U. Rescuo Vessel 60,000
2290 - Public Worka 30,48R
2320 - Roeds I50, I03
2350 - Publ(c Transit 573,980
`` 2360 - Trensit • Spetieliud Servias 35,390
`� 2718 - C.S.& F. - Perks 54.825 1 3( , 55,607)
Pro-Andit Actasl Bslauce - Deambee31,1947 5173,914
.L Purpoee otth� Raervr.
The pwlwse of Uds resene is ro eliminate the nced W Icvy for ihe full cost of inejor
equipment in lhe yenr of acquisition. The merve acts es a stabili�Uon factor and helps
to avoid bolh mill tate tluctuations and the issiwnce of long term debt or other mr,uns oF
financing.
2. Rceommended Mafntenance LeveL+ of t61� Reaervr.
Ttus reserve should be kept et n levcl which is equivalent to thc repleccmcnt cost of the
asseta fo� which they wero esinblished, The reserve has fluctuated from the low as at
� December 31,1997 of 5176,002 to a high of 51.95 million at the end of 1994. Sta[f wiil
be determining the adequacy of the curtent� balence end the required long tertn
wntribution rcquirements.
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� : `RESERVF. FOR CONTII�IGENCIES G/L 4612.
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: ActualBaLneel)'ecemberJ1,199b .. SI94,440
,".: -;1997 Tranuctl�a�
Trensfeisinlo 1he R.escrve
" :14�7 Budget '
_ QencYal Govemment & W.C.B. Rebaro ` 126.879
Sub�Wtal
321,319
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Transfere out of lho Reservo
- Eleclian FYovisions from 1995 & 1996 5�000 57 000
Prr�Aadit Actual Belaaa • Uceember3i,1997 5264,319
` L Purpoae of tdLt Rteerve: _
Like the cnpital equipment rcplacement rcserve, this rcserve acts in n tnx stabilization
cupacity. It was utablisha�l in anticipation of unkn�wn, unusual ar extraordinary .
expcnJitures which occur from timc to tima
2. Recommended M�intenance Levels of thle Raerve:
Staff' will be rwssessing the enticipated need for such e reserve snd any long tem►
contribution requirements.
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�RESER'VE FOR SELF INSURANCE/IIVVENTORY C/L 4613/4614
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' Actaal Bwlaoee Daamber 31,1996 5456,954
' 1997Trawactiona
Transfers inlo the Reserve p�
Transfers out of iha Reserve - Imentory Adjustment . (6,747) '
Prr�Audit Actual Balance - Daem6er 31,1997
(Tronsfers baud on ectuals at year end)
Note:' Dasn't belenw to the doliaz because of rounding
1. Purpoae otthb Reaorva:
2.
Reservc for s�lf•insurance
5432,20g •
This reserve was established os a form af asset protection. Specifically, it is ro wver
insurance claims resulQng from the incroase in d�ductlble levels to reduce insurance
pmmiums, Significant savings can bc rcaliud through reduced premium costs and staff
analyze ihe cosislbenefits of such ections on an ennual bnsis.
Reserve for (nventory
This rosorvc, hes ban establishul :o ensure that the cost of revolving invenrories is
corucUy allocated to the taxpayers of that yenr and the Council of that period.
Recommeoded Matntenrnce Levc� o[th�i Raerve:
Reserve for self insurana
This resorve should be maintained at a level to ensurc thet the funding is adequate to mcet
achiarial liabiliQes. This sitaation is analyzed by steff on a regular basis. _
Reserve for (menwry .
The meintanence levet required.ls explained in t6e Description of the purpose for this
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�', r RE3ERVE FOR RESIQLLlNG AND REDEPLOYMEPjT G/L 4618
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� �' ; Actool HaLoce Dteember31,1996 `? 583,900
I . 19971'rwnuctlo6s _
' '1'ransfers inro the Reservo p
Transfers out of the Reurvo 0
r PralnditActualBatance-Deum6er31,(997 �_gLpp.
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L Purpoae ot lhb Raerve:
This reserve was established to set aside funds for seminers, educntion and redeployment
of stati:
2. Recommended M�Inten�nce I.eveV of thle Raervr.
Stefiassess the antldpnted needs for such a rcse�ve on an ongoing basis and et the same
time determine the long term wntribuUon requirements.
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" APPENDUC C
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': , '; RESiERVE FUND FOR COMMUNYTY FACILITIE3 G/L 4225
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�. Actna! B�lance December 31,1996 S I,404,317
' 1997 TraoucHow :
Transfers inW the Reserve
, Intcrest Eamed ' _ 53,363
' �: Contribution from drnera(Fund 304,542
Trensfero out of the Reserve .
1997 Cepitel Budget Funding
2124 -CivlcComplex S(26,864)
2196 - Infarmation Services . (474,819)
232I - Extemal Subdivision (285,392)
2731 - Ra. Compiex- Centrel (114,087)
2745 -Libmriw 41( 3,780) (1,314,942)
Pro-Aadlt Actatl Hol�nce - Ikam6er 31,199T 5447,280
1. Pumoae of thu Reeerve:
'[Lis is a"discretionary" ceserve fund established by Council to nttempt to nvoid both tax
rate fluctuations and the need for issuing long term debt for major expenditures required
for wmmuniry facil;8es.
2. . Recommeaded Maintenance Levela ott6ia Reacrve:
As can be san finm the summary provided in Appendix A- the balanas of this fund
have 1luctueted from ihe curtent fow year low of 5447 thousend to the high in 1994 of
55.1 million, Stafi will bo assessing the odequacy of the current bnlance in this fund in
reladon to the proposed tnajor applicable euprndihues in the 1998 capital budget and Cour
year forecest and repoK their findings to Council.
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APPENDIX C (Pago 2)
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�� RESERVE FUND FOR DEVELOPMENT CHARGES G/L 4227
Actnal Bnlance December 31,1996 55,016,146
1997 TrauwcUona
Transkrs into the Reserve
Interest Eamed 316,454
Net Developer Contributions 3,133,000
Transfers out of tho Reurve
Tronsfer ro Grnemt Fund (304,542)
Transfcr to Cepitel Fund
2321-Roads - Extemal Subdivision S(665,915)
2718 - Perks - Acquisition (83,606)
• Developmont (914,547)
2745 - Libraries • Metedele � (75,240)
- Facilit(a 276 097 (2,OI5,405)
Pro-Andlt Aetnd Bolaaa- Deeem6er31,199T 56,145,652 *
• Note: Doee not balanco to Ihe dolier because of rounding
1. Purpoae ot thie Racrve.
' This is a"abligetory" rcservc fund nnd av such is govemed by legislution regulntion or
agreement and requires rovenue received Cor the apeciel purposes to be segregeted from
the general rovenues of the municipality. OblignWry rcserva funds must be creuted
whenever a stetute requircs revenue rcceived for a speciel purpose to be segrcgated from
tha general revenues of the municipality nnd the revenue is to be used solely for tha
purpose prescribed by stawte, i.e. in this case thc monies charged to developers must be
held in wst and used to fund capitel services required for new growth.
2. Recommeoded Matnteeaoce I.evels of t6i� Reeervr.
In accordance with development cherge legislntion, all development cherge revenue must
; be held within separate reservc funds and can only be useJ for the financing of growth-
rolated projects. As such, no rcserve fund limits are appropriate for dcvelopment cherge
�serve funds becuuse they are tied ro giowth-related capital requirements.
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' ' ' APPENDIX C (PaQe 3j :
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> az RESERVE FUNb FOR CAPITAL WORKS G/L:4228 -
Aclnal Balance Decem6er 31,1996 51,342,783
1997 TrantacQons
Trensfere into tha Reserve .
• IntercstFamed . 533,228
Devcloper Contributlons (rofund) ' S 7 000 26,228
. Trensfers out of Um Reserva
Transfer to Capital Fund
' 2320 - Roeds (107,179)
2718 • Community Centre§ 858 074 (965,253)
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PreAudit Actnal BaLnee - Daember 31,1997 5/03,759
7. Purnoee of Ihi� Resen•e:
: This Fund is a"discrotionery" one end is esmblished pursuant to subsection 163.(2) of the
MunIcipal Act for specified purposes by Cauncil rcleted to the acquisition of assets.
2. Recommendcil Mdnteoance Lcvcb of thG Raerve Fund:
'fhis reserve fund hes its lowcst bnlence et thc end of 1997 of 5404 thousand, with the
highest balence in ihe last 4 years being SI.495 miliion at the end of 1995.
Staff will be assessing the adequncy of the currcnt balance in this fund in relntion to the
;.,�,
propovd major npplicable capital expenditures in ihe 1998 Capilal Budget and Four Year
Forecast and rcport thcir findings ro CounciL
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` '� .{�RESERVE FUND FUR PARKLAND G/L 4230
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Actnal Balance Decembtr31;1996 54,690,984
1997 TramaNiooi .
Transfers 1nW the Reserve :
Intercst Eamed - 335,472
Rxreational I.and (cash-in-lieu) 282,265
Tre�ufas out aftho Rcserve
Tran�fer lo Cepitel Fund
2718 •Pe.-ks - Porchaco McKean
Prop�' S(954,612) (1,147,399)
• Miscellenrnus Park
Developmrnt 192 781
PraAudit Ac1ual Haunce - Daember 31,1997 Sq l_, 61,322
1. Purnoae of this Reurve Fnnd:
This is an "oblfgatory" reserve fund end it has been estnblished pursuont to subsection
- 163.(2) ofthe Municipal Act as rcquircd by subsecdons 42.(1), (5), (6), (7), (8) nnd (9) of
the Planning AcG This fund is govemed by Iegislation, regulntion or agreement and
requires revenues cecoived for the speciel purposes to be segregated from tha general
revenues of the mwlcipaliry. Obligatory reserve funds must be crented whenever n
statute rcquircs revenues far n speciel purpose to be segregnted from the generel revenues
of the municipaliry and the revenue is to be used solely for the purpose pmscribed by
statuta
2.. .. Recommcndcd Maintenmce Levc� of thi� Raerve Fcnd:
Duc to the obligatory nature of Utis fund, thcre erc no limils on this fund.
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; , ��� ATTACHMENTII._1iDAE1ORf��
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, ' APPENDIX C (Paga �. . '
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;RESERVEFUNDFOAPUBLIC.WORKS G/L'4232
' ActnalBalanceDecember31,1996 SI,►83,448
1997 TnwacHone
` . ' Trens&rs inw the Reserve
Interost Eemed 72,570
Developer Convl6utions I 19,232
Trensfers out of the Reurvo '
Transfer to Capital Fund '
2320 - Raads (278,714)
Pre-Andlt Actnel Halance - Dcecm6er 31,1997 5109, 6,536
L Purpoae of t6W Reserve Fuud:
This fund hns been estnblished by Councii pursuant to subscction 163.(2) of tha
Munlcipal Act and is a"discrctionary" rcserve fund. Tbe purpose of thc reserve funds is
to acquire fixed assets, e,g, storm sowers, without thc need to fund on a long tertn nnture
ihrough the issuc of debentures.
2. Rceommended Maintenance I.eveW o[thb Reaerve Fund:
The "average" onnua' balance of this fund over the last fow years hav been npproximately
51.25 million, This,reserve should be kept at ihis level in thc future. Staff will
periodically revicw ihe: need for this level with the rcquimments contained in the capital
budgets pnd four year progrum end report eny dif%reot Findings to CounciL
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