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Home My WebLink AboutFIN 13-18PJCKE RiNG Report to Executive Committee Report Number: FIN 13-18 Date: June 18, 2018 From: Stan Karwowski Director, Finance & Treasurer Subject: Development Charges Reserve Fund — Statement of the Treasurer for the Year Ended December 31, 2017 Recommendation: That Report FIN 13-18 of the Director, Finance & Treasurer respecting the Development Charges Reserve Fund be received for information. Executive Summary: Section 43 of the Development Charges Act, 1997 (the "Act") requires that the Treasurer provides Council with a financial statement relating to the development charges by-law and reserve fund established for each service as established under Section 33 of the Act. On December 3, 2015, the Province passed Bill 73 which amended the Act to add additional reporting requirements. The Treasurer's Statement attached to this report has been expanded to comply with the new reporting requirements. Attachment 1 provides details of the activity of the Development Charges Reserve Fund for the year ended December 31, 2017 in the manner prescribed by section 43(2)(a) of the Act. Attachment 2 provides details on information related to assets funded by the development charges by-law as stipulated by section 43(2) (b) of the amended Act. The amended Act introduced a new section: 43(2.1), which now requires Council to ensure that the Statement is made available to the public. The Statement will be posted on the City's website to facilitate compliance with the amendment. Financial Implications: Starting from 2011, and continuing into 2017, new development in the Duffin Heights neighbourhood has resulted in a spike in development charges revenues. The new development in the Seaton lands has also contributed to the increase in development charges collected in 2017. The Reserve Fund remains at a healthy balance of approximately $48.1 million pending future use of funds for qualified projects. The funds are well managed with investment returns consistently exceeding market indicators. Investment income is added to the balance of each fund as such income is earned. FIN 13-18 June 18, 2018 Subject: Development Charges Reserve Fund -- Statement of the Page 2 Treasurer for the Year Ended December 31, 2017 Discussion: Funds are not transferred out of the Development Charges Reserve Fund for projects until the funds are actually needed, as required by applicable accounting rules. This ensures that the Reserve Fund continues to earn interest income on the unspent monies until such time as actual expenses are incurred. The total Reserve Fund balance of $48.1 million represented in Attachment 1 represents the unspent monies as at December 31, 2017. Please note that there are approximately $18.3 million of committed capital projects that have been approved in prior years, but have not proceeded or are still ongoing as at December 31, 2017. Taking into account these commitments, the net fund balance available for future expenditures is approximately $29.7 million. The construction of the new Operations Centre (approved in 2017) represents 50% of committed capital projects amount of $18.3 million. In order to meet the new requirement under section 43(2.1) of the amended Act, it is recommended that the Statement be placed on the City's website upon approval by Council. Attachments: 1. 2017 Statement of the Treasurer — Development Charges Reserve Fund 2. Amount Transferred to Assets — Capital & Current Funds Transactions Prepared By: Caryn Kong, CPA, CGA Senior Financial Analyst — Capital & Debt Management Approved/Endorsed By: Stan Karwowski, CPA, CMA, MBA Director, Finance & Treasurer Recommended for the consideration of Pickering City Council Tony Prevedel, P.Eng. Chief Administrative Officer 1141 .4, tote) City of Pickering 2017 Statement of the Treasurer - Development Charges Reserve Fund DC Act S 43 (2)(a) Description Services to which the Developemnt Charges Relates 100% Recovery (Non -Discounted) 10% Statutory Deduction (Discounted) Fire Services (Deficit)* Roads & Related Operations Services (Deficit) Storm Water Mgmt Studies (Deficit) Parkland Dev Recreation & Trail Facilities Library: Facilities & Materials Total $ $ $ $ $ $ $ $ $ Opening Balance, January 1, 2017 1,057,624 21,939,539 210,797 2,670,648 (29,873) 5,419,851 9,566,196 2,483,323 43,318,105 Plus: Development Charges Collections 296,648 1,623,161 273,499 191,310 89,727 791,755 1,649,054 396,590 5,311,744 Interest Income -Internal Investments 1,971 40,888 393 4,977 (56) 10,101 17,828 4,628 80,730 Interest Income -External Investments 14,682 304,566 2,926 37,074 (415) 75,239 132,798 34,474 601,344 Less Admin Fee (1,147) (23,801) (229) (2,897) 32 (5,880) (10,378) (2,694) (46,994) Sub -Total 312,154 1,944,814 276,589 230,464 89,288 871,215 1,789,302 432,998 5,946,824 Less: Amount Transferred to Capital Funds 1 (199,275) (481,435) (119,442) (77,697) - (552) (28,595) - (906,996) Amount Transferred to Current Funds 1 -- - - (257,348) - - - (257,348) Sub -Total (199,275) (481,435) (119,442) (77,697) (257,348) (552) (28,595) - (1,164,344) Closing Balance, December 31, 2017 before Budget Commitments 1,170,503 23,402,918 367,944 2,823,415 (197,933) 6,290,514 11,326,903 2,916,321 48,100,585 Less Budget Commitments 2 (1,342,616) (4,748,061) (9,907,000) . (1,449,972) (397,524) (432,725) (114,543) - (18,392,441) Closing Balance, December 31, 2017 after Budget Commitments (172,113) 18,654,857 (9,539,056) 1,373,443 (595,457) 5,857,789 11,212,360 2,916,321 29,708,144 1, See Attachment 2 for details 2. Budget commitments include capital projects previously approved, but have not proceeded or still ongoing. The Information contained in the 2016 Development Charges Reserve Fund Statement is in compliance with Section 59.1(1) of the Development Charges Act, 1997, as amended. * The deficit position in the Fire Services, Roads & Related, and Admin Studies service categories will be addressed in the next DC Study. r') m #fliOd U0.1� City of Pickering Amount Transferred to Assets - Capital & Current Fund Transactions For the Year Ended December 31, 2017 DC Act S 43 (2)(b) Project ongoing. Future funding for incomplete component. DC RF will be drawn when expenses are incurred. 'Debt undertaken by the City on behalf of the Pickering Soccer Club. #!N3WHDV #flJOd3 01 DC Recoverable Cost Share Non - DC Recoverable Cost Share Description Project Code Gross Capital Costs DC RF: Funded in prior year DC RF: Funded in 2017 DC RF: Future Funding 1 Other Reserves/ Reserve Funds Type of Funds (R=Reserve, RF=Reserve Fund) Property Taxes Other Sources Type Total Funding Development Related Studies Development Charges Study 2017 1920.2127. 86,468 0 86,468 0 - - 86,468 Phase 2 South Pickering Intensificatiot 1920.2611. 223,399 0 17,700 145,381 60,318 223,399 Integrated Transportation Master Plan 1920.2290. 348,925 0 62,856 251,176 34,892 348,925 Facility Asset Management Plan 1920.2711. 97,947 66,591 6,870 0 24,487 97,947 Recreation Services Master Plan 1920.2711. 124,127 9,642 83,453 0 31,032 124,127 Fire Protection New Fire Hall Seaton -Site Preparation 5340.1601. 430,000 74,946 1,836 342,468 10,750 R -City's Share 430,000 New Fire Hal Seaton - Design 5340.1602. 356,500 0 197,440 150,147 8,913 R -City's Share 356,500 Transportation ES 2000 RO-10 Sidewalk & Streetlight 5321.0016. 21,282 0 5,763 0 15,520 Loan 10 -Yr 21,282 5321.1002+10 DH -7 and DH -8 Zents Drive Oversizinc 03+1704 286,150 165,077 92,457 0 28,616 R -City's Share 286,150 DH -11 Duffin Heights - North Collector 5321.1201. 125,600 0 29,460 83,580 12,560 R -City's Share 125,600 Park Crescent (Sandcastle Court to CI 5321.1303. 1,000,900 358,750 31,991 109,709 500,450 R -City's Share 1,000,900 BI -15 Squires Beach Road - Intersectio 5321.1607. 607,369 265,835 84,562 105,130 151,842 R -City's Share 607,369 RU -13 Salem Road - Road Reconstruc 5321.1608. 2,200,000 7,563 2,384 1,090,053 1,100,000 Debt 10 -Yr 2,200,000 B-29 Sandy Beach Road - EA, Design 5321.1609. 675,000 0 53,892 283,608 37,500 R-AIP 300,000 Loan 10- Yr 675,000 Kingston Rd. & Brock Rd. Streetlights .5321.1603. 979,500 0 162,060 312,690 354,750 R -City's Share 150,000 Prov Budget Gra 979,500 Walnut Lane Extension Study & EA an 5321.1703. 461,226 0 18,867 327,052 115,307 R -City's Share 461,226 Stormwater Management B-15 Krosno Creek - Erosion Control 0 5321.1205. 310,345 27,427 27,841 31,859 223,218 R -City's Share 310,345 Browning Avenue Storm Sewer Replac 5410.1102. 244,079 0 4,939 0 74,644 RF-FGT 164,497 Debt 5 -Yr 244,080 York SEC & Pine Creek Outfall & Channel - Recon; 5410.1501. 1,046,534 0 44,918 48,117 396,624 R -City's Share 556,875 Prov IOA Grant 1,046,534 Operations Facility & Vehicles Sidewalk Plow with Attachments 5311.1703. 132,713 0 119,442 0 13,271 R -City's Share 132,713 Parks Dev & Indoor Facilities Duffin Heights - Village Green (West) ( 5780.1419. 197,261 173,038 552 0 23,671 RF -Parkland 197,261 Indoor Soccer Facility and Land - Design & Construction 5719.1401. 7,296,605 3,340,991 28,595 114,543 78,375 R-DCs City's Sha 101 3,734,000 Debt 15-Yr2 7,296,605 Grand Total - 17,251,931 4,489,860 1,164,344 3,395,514 2,030,491 150,829 6,020,891 17,251,931 Project ongoing. Future funding for incomplete component. DC RF will be drawn when expenses are incurred. 'Debt undertaken by the City on behalf of the Pickering Soccer Club. #!N3WHDV #flJOd3 01