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HomeMy WebLinkAboutCS 08-04PICKERING REPORT TO EXECUTIVE COMMMITTEE Report Number: CS 08-04 Date: May 13, 2004 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2003 Pre-Audit Balances of Reserves and Reserve Funds Recommendation: 1. It is recommended that Report CS 08-04 of the Director, Corporate Services & Treasurer be received; and that: 2. the appropriate officials of the City of Pickering be authorized to take the necessary actions to give effect thereto. Executive Summary: Based on the preliminary 2003 results, we can now report on the pre-audit actual activities within the Reserves and Reserve Funds for 2003. A summary is presented in Appendix A. The purpose and 2003 financial transactions for each Reserve and Reserve Fund are set out in Appendices B and C respectively. Financial Implications: Not applicable Background: As in previous reports filed over the last four years, this report provides specific information on each of the City's Reserves and Reserve Funds, including year-end balances. The 2003 pre-audit Reserves and Reserve Funds balance of $37,375,685 is one of the highest balances ever reported in Pickering. However, this balance is not fully available for use due to the outstanding commitment 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 regards to unspent commitments for capital projects, we are continuing the practice of not transferring funding for commitments until the expenses 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 PSAB for obligatory Reserve Funds. The combined unspent commitments for all reserve funds are $2,495,632. Report CS 08-04 Date: May 13, 2004 Subject: 2003 Pre-Audit Balances of Reserves and Reserve FundsPage 2 From 2001 to 2002, the City's share of collections from OPG related to properties under assessment appeal were $5,294,967 and in 2003 an additional amount of $1,260,511 was collected bringing a combined value of $6,555,478 provided in the Contingency Reserve pending final decision of this appeal. At this time, we are still unable to confirm the availability of these monies for corporate purposes. In the meantime, these funds are being used for the temporary financing of the Don Beer Arena expansion with the balance being invested. The newly created Third Party/Developer Contributions Reserve Fund represents funds received for specific purposes based on developer agreements or agreements with any third parties. Funds available in this reserve fund are obligatory in nature and should be treated as committed. The balance in this new reserve fund is $1,024,690. The City established two new reserve funds this year: Contributions Reserve Fund and Squash Courts Reserve Fund. reserve funds is discussed further in Appendix C. Third Party/Developer The purpose of these The combined total of the unspent commitments, OPG assessment appeal, and Third Party/Developer Contributions Reserve Fund of $10,075,801, brings the balance of Reserves and Reserve Funds not committed to $27,299,884 as at December 31, 2003. Other commitments such as legislative requirements and internal borrowings reduce the "discretionary" balance to approximately $5.8 million. Internal Borrowings from the Reserve Fund commenced in 2001, to assist in funding Capital Projects. Although the amount borrowed each year has declined, the outstanding principal balance at December 31, 2003 is approximately $7 million. 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. However, these Reserve Funds are at their maximum limit for providing funds to capital project financing. Interest earned on internal loans represents amounts earned on the 2001 and 2002 internal borrowings. Repayment for 2003 internal borrowings will commence in 2004 and interest earned will be reflected accordingly. Attachments: 1. Appendix A 2. Appendix B 3. Appendix C Summary of Reserves and Reserve Funds Description of Reserves Description of Reserve Funds Report CS 08-04 Date: Subject: 2003 Pre-Audit Balances of Reserves and Reserve Funds May 13, 2004 Page 3 Prepared By: Approved / Endorsed By: Caryn Kong Senior Financial Analyst Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachments Copy: Chief Administrative Officer Recommended for the consideration of Pickering City C.~o~ncil ___---.. ~, ~,.~- ~ -- T,h~r~a'~ J:euir~, Chief(~dministrat~c. er/ ,~TTACHMENI~# I TOKEPORT#¢-~c,~'P't/- APPENDIX A CITY OF PICKERING SUMMARY OF RESERVE AND RESERVE FUND PRE-AUDIT ACTUALS DECEMBER 3J, 2003 Pre Audit Audited Audited Audited Appendix B Summary Reserves 2003 2002 2001 2000 4610 Working Funds 400,000 400,000 400,000 841,350 4611/4623 Replacement Capital 730,713 615,800 1,083,837 2,153,816 4612 Contingencies (2) 7,813,558 6,791,047 5,277,795 1,371,295 4613 Self-Insurance (2) 940,514 949,106 972,489 776,410 4619 Rate Stabilization 2,177,209 2,421,909 2,104,410 249,139 4620 Develop. Charges-City's Share (2) 2,685,297 2,812,214 2,765,000 1,889,000 4621 Region Transit (2) 1,106,634 1,242,507 4622 Continuing Studies (2) 141,884 67,400 Total Reserves 15,995,809 15,299,983 12,603,531 7,281,010 Appendix C Summary of Reserve Funds Pre Audit Audited Audited Audited 2003 2002 2001 2000 4225 Community Facilities 386,726 352,423 69,102 4227/9 Development Charges (1)(2) 15,804,668 12,866,749 10,393,615 4228 Capital Works 535,849 516,013 499,540 4230 Parkland (1)(2) 1,959,087 2,017,875 2,622,150 4232 Public Works 1,465,425 1,400,169 1,365,285 4233 Pickering Baseball Assoc (closed) 1,228 4234 Workers Safety Insurance Brd (2) 181,023 176,974 7,232 4235 Third Party/Dev. Contributions (1)(new) 1,024,691 4236 Ontario Transit Renewal (1) 14,957 402,939 4237 Squash Courts (2)(new) 7,450 Total Reserve Funds Total Reserves & Reserve Funds 282,569 7,586,550 850,630 3,875,813 1,304,410 60,789 21,379,876 17,733,142 14,958,152 13,960,761 37,375,685 33,033,125 27,561,683 21,241,771 Notes (1) Obligatory (2) Committed i~, ~. 1 ^CHMEN7 APPENDIX B RESERVE FOR WORKING FUNDS 4610 TO REPORT Actual Balance December 31, 2002 Transfers into the Reserve Transfers out of the Reserve Pre Audit Actual Balance December 31, 2003 $ 400,000 $ 400,000 Purpose of this Reserve: The reserve for working funds is used to provide operating cash to assist in avoiding shod term interest expenses incurred on operations, typically during the first 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 these funds form pad of the annual Current Budget General Government Revenue. w 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. APPENDIX B RESERVE FOR REPLACEMENT OF CAPITAL EQUIPMENT - G/L 4611/4623 Actual Balance December 31, 2002 Transfers into the Reserve Revenue Fund Contribution Transers out of the Reserve Transfer to Capital Fund - Parks, Comm. Ctr, Corp. Efficiency, Fire, Print/Mail Room Pre-Audit Actual Balance December 31, 2003 $ 615,800 211,260 (96,347) $ 730,713 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 these funds form part of the annual Current Budget General Government Revenue. 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. APPENDIX B The balances pertaining to these sub-categories are as follows: REPLACEMENT OF CAPITAL EQUIPMENT - SUB CATEGORIES General Recreation Dunbarton Don Beer Rec Comp Rec Comp Rec Comp Corp Use Prgrms Pool Arena Core Pool Arena $ $ $ $ $ $ $ Total $ Dec 31/02 269,000 24,810 2,500 10,893 106,312 202,285 615,800 Transfer in 111,260 - 30,000 25,000 15,000 30,000 211,260 Transfer out (96,347) - - (96,347) Dec 3'1103 172,653 111,260 24,810 32,500 35,893 121,312 232,285 730,713 APPENDIX B RESERVE FOR CONTINGENCIES - G/L 4612 Actual Balance December 31, 2002 Transfers into the Reserve Revenue re OPG Assmt. Appeal Properties Transfers out of the Reserve Transfer to Revenue Fund - Assessment Appeals Transfer to Revenue Fund - Election Pre-Audit Actual Balance December 31, 2003 (95,000) (143,000) $ 6,791,047 1,260,511 (238,000) $ 7,813,558 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 these funds form part of the annual Current Budget General Government Revenue. Recommended Maintenance Levels of this Reserve: In 2003, the large contributions 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. The transfer regarding Ontario Power Generation (OPG) in the amount of $1,260,511 for the current year is the City's revenue for properties currently under assessment appeal. This amount plus the last two years' contributions of $5,294,967 result in a combined total of $6,555,478. The availability of these funds is undeterminable as the appeal is still outstanding and is considered committed in the event repayment must be made. The amounts pertaining to the other sub-categories are as follows: Election - nil; Other Assessment Appeals - $682,594 and Miscellaneous - $575,486. APPENDIX B RESERVE FOR SELF INSURANCE - G/L 4613 Actual Balance December 31, 2002 Transfers into the Reserve $ 949,106 Transfers out of the Reserve Transfer to Capital - Insurance Claim for Roads Pickup Truck Pre-Audit Actual Balance December 31, 2003 (8,592) $ 940,514 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 analyze the costs/benefits of such actions on an annual basis. The interest income on these funds form part of the annual Current Budget General Government Revenue. 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. In 2003, the actual cost incurred to replace a truck under the Roads division due to a fire incident exceeded the insurance proceeds by $8,592. A draw from this reserve was necessary to meet the over-expenditure. APPENDIX B RESERVE FOR RATE STABILIZATION - G/L 4619 Actual Balance December 31, 2002 Transfers into the Reserve Excess Surplus Contribution Transfers out of the Reserve 2003 Current Budget Provision Pre-Audit Actual Balance December 31, 2003 $ 2,421,909 674,300 (919,000) $ 2,177,209 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 these funds form part of the annual Current Budget General Government Revenue. m 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 2003 Current Budget provided for a transfer in the amount of $919,000 from this Reserve to fund current expenditures. The 2003 operating surplus of $674,300 has been transferred to this reserve, resulting in a pre-audit balance of $2,177,209. APPENDIX B RESERVE FOR DEVELOPMENT CHARGES - CITY SHARE GIL 4620 Actual Balance December 31, 2002 Transfers into the Reserve 2003 Current Budget Provision Transfers out of the Reserve Transfer to Capital Fund External Subdivision Works Pre-Audit Actual Balance December 31, 2003 $ 2,812,214 1,000,000 (1,126,917) $ 2,685,297 Purpose of this Reserve: This reserve has been established to set aside funds for projected growth in the City. From the 1999 Development Charges Study 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 income on these funds form part of the annual Current Budget General Government Revenue. 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. APPENDIX B TRANSIT RESERVE - G/L 4621 Actual Balance December 31, 2002 Transfers into the Reserve GO Transit Funding from Region Transfers out of the Reserve APTA Current Expenditures APTA Capital Expenditures Pre-Audit Actual Balance December 31, 2003 ,242,507 ,515,700 $ (383,902) (1,267,671) (1,651,573) $ 1,106,634 Purpose of this Reserve: This reserve fund was established in 2002 to capture funds raised by the Region for transit purposes and not immediately required. The interest income on these funds form part of the annual Current Budget General Government Revenue. Recommended Maintenance Levels of this Reserve: Transfer into the Reserve represents funding of $1,515,700 received from the Region of Durham. Funds were transferred out of this reserve to finance the 2003 Current & Capital operations of Ajax Pickering Transit Authority (APTA). This included $383,902 for maintenance and transitional expenses and $1,267,671 for capital purposes bringing the net funds available of $1,106,634 as at year-end December 31,2003. The amount of the unspent commitments at the end of 2003 is $290,957. Taking these unspent commitments into account, the uncommitted balance available at December 31, 2003 will be $815,677. The balance of this Reserve is expected to be used to finance APTA Capital Budget and City related transit costs in 2004. APPENDIX B RESERVE FOR CONTINUING STUDIES & CONSULTING - G/L 4622 Actual Balance December 31, 2002 Transfers into the Reserve Continuing Consulting Work or Studies Transfers out of the Reserve 67,4OO 74,484 Pre-Audit Actual Balance December 31, 2003 $ 141,884 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 these funds form part of the annual Current Budget General Government Revenue. 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. No expenditures were incurred in 2003 pertaining to amounts for consulting work or continuing studies that were transferred into the Reserve in the prior year. '~,]'T'ACH~EN'!~ # ,~ TO REPORT#~p- ~,~ APPENDIX C RESERVE FUND FOR COMMUNITY FACILITIES - G/L 4225 Actual Balance December 31, 2002 Transfers into the Reserve Fund Capital Fund - Return to Source Interest Earned on External Investments Transfers out of the Reserve Fund Transfer to Capital Fund - Community Ctres Pre-Audit Actual Balance December 31, 2003 $ 352,423 $ 23,139 13,503 36,642 (2,339) $ 386,726 Purpose of this Reserve: 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 these funds form part of the Reserve Fund as per the Municipal Act, 2001. Recommended Maintenance Levels of this Reserve: The balances in this fund have fluctuated from the 2001 year Iow of $69,102 to the high in 1998 of $773,483. Other than funds from cancelled capital projects being returned to source and interest income earned, there was no additional transfer to this reserve fund in 2003. Expenditures are transferred out of reserve funds only when incurred, therefore the amount committed but not incurred at end of 2003 is $20,883. Taking these commitments into consideration, the uncommitted balance of funds available is $365,843. Additional amounts must be provided to this fund. APPENDIX C RESERVE FUND FOR DEVELOPMENT CHARGES - G/L 4227~4229 Actual Balance December 31, 2002 Transfers into the Reserve Fund Net Developer Contributions Interest Earned on External Investments Interest Earned on Internal Loans Transfers out of the Reserve Fund Transfer to Revenue Fund - Develop. Charge Study Transfer to Capital Fund Roads Corp. Service - Master Financing Plan External Subdivision Works Pre-Audit Actual Balance December 31, 2003 $ 2,814,824 280,408 383,842 (145,499) (9,431) (376,198) $ 12,866,749 3,479,074 (10,027) (531,128) $ 15,804,668 m Purpose of this Reserve: This is an "obligatory" reserve fund and as such is governed by Provincial legislation, regulation, 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 required for new growth. The interest income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. Recommended Maintenance Levels of this Reserve: In accordance with development charge legislation, all development charge revenue 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 development charge reserve funds because they are tied to growth-related capital requirements. This reserve fund has unspent commitments of $2,137,590. The pre-audit actual balance of $15,804,668 would be reduced by this amount to reflect an uncommitted balance of funds available of $13,667,078. APPENDIX C RESERVE FUND FOR CAPITAL WORKS - G/L 4228 Actual Balance December 31, 2002 Transfers into the Reserve Fund Third Party Contributions Interest Earned on External Investments Transfers out of the Reserve Fund $ 516,013 $ 863 18,973 19,836 Pre-Audit Actual Balance December 3'1, 2003 $ 535,849 Purpose of this Reserve: 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 these funds form part of the Reserve Fund as per the Municipal Act, 2001. 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 three years. The value of the unspent commitments at the end of 2003 is $13,822. Taking these unspent commitments into account, the uncommitted balance available at December 31, 2003 will be $522,027. Major additional contributions will be required in future years. APPENDIX C RESERVE FUND FOR PARKLAND - G/L 4230 Actual Balance December 31, 2002 Transfers into the Reserve Fund Developers Contributions Interest Earned on External Investments Interest Earned on Internal Loans Transfers out of the Reserve Fund Transfer to Capital Fund Parks Development Playground Equipment Purchase of Land - 670 Front St. Pre-Audit Actual Balance December 31, 2003 $ 301,958 52,916 45,725 $ (14,980) (384,407) (60,000) $ 2,017,875 400,599 (459,387) $ 1,959,087 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 income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. Recommended Maintenance Levels of this Reserve Fund: Due to the obligatory nature of this fund, there are no limits on this fund. The value of the unspent commitments at end of 2003 is $263,610. The pre-audit balance of $1,959,087, taking into account the unspent commitments, will previde an uncommitted balance available of $1,695,477 as at December 31, 2003. APPENDIX C RESERVE FOR PUBLIC WORKS - G/L 4232 Actual Balance December 31, 2002 Transfers into the Reserve Fund Developer Contributions Interest Earned on External Investments 29,068 51,447 $ 1,400,169 80,515 Transfers out of the Reserve Fund Transfer to Capital Fund - Property Maint. And External Subdivision Works Pre-Audit Actual Balance December 31, 2003 (15,259) $ 1,465,425 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, e.g. storm sewers, 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 income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. Recommended Maintenance Levels of this Reserve Fund: The "average" annual balance of this fund over the last four years has been approximately $1.38 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 commitments for 2003 is $59,726. The pre-audit balance of $1,465,425 after taking into account the unspent commitments will provide an uncommitted balance of funds available at $1,405,699 as of Dec. 31,2003. APPENDIX C RESERVE FUND FOR WORKERS SAFETY INSURANCE BOARD - G/L 4234 Actual Balance December 31, 2002 Transfers into the Reserve Fund Contribution from Current Fund Interest Earned on External Investments Transfers out of the Reserve Fund Claims and Other Related Costs Insurance Costs Contribution to Health & Safety Program Pre-Audit Actual Balance December 31, 2003 $ 285,902 7,555 $ (228,008) (57,728) (3,672) $ 176,974 293,457 (289,4O8) $ 181,023 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 income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. Recommended Maintenance Levels of this Reserve Fund: In 2003, claims experience approximates the contributions thereby severely limiting the increase in the balance of the Reserve Fund. As Schedule 2 operates on the self-insured principle, for 2004 the 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. Should that be insufficient, additional funding may have to be considered in the 2005 budget. APPENDIX C THIRD PARTY/DEVELOPERS CONTRIBUTIONS RESERVE FUND -GIL 4235 Actual Balance December 31, 2002 Transfers into the Reserve Fund Contributions from Developers/Third Parties Interest Earned on External Investments Transfers out of the Reserve Fund Pre-Audit Actual Balance December 3'1, 2003 $ Nil $ 1,015,807 8,884 1,024,691 $ 1,024,691 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 or cost sharing arrangements for future capital projects. This Reserve Fund is not obligatory however, the collections are committed for a specific purpose 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 income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. Recommended Maintenance Levels of this Reserve No reserve fund limits are appropriate for this fund as collection and commitment of funds are dependent upon development agreements or cost sharing arrangements. APPENDIX C ONTARIO TRANSIT RENEWAL RESERVE FUND - G/L 4236 Actual Balance December 31, 2002 Transfers into the Reserve Fund Contribution from Ministry of Transportation Interest on External Investments Transfers out of the Reserve Fund APTA Capital Expenditures Pre Audit Actual Balance December 31, 2003 $ 142,489 14,956 $ 402,939 157,445 (545,427) $ 14,957 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 income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. 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. $142,489 represents 50% of City of Pickering's share of the grant received from the Ministry of Transportation. The remaining 50% belongs to the Town of Ajax bringing a total funding of $284,977 under the Ontario Transit Renewal Program. Commencing the latter half of 2003, funds will be provided from the Ontario Transit Renewal Program as costs are incurred. As a result this Reserve Fund may no longer be needed and the balance is expected to be nil as of December 31,2004. APPENDIX C SQUASH COURTS RESERVE FUND - GIL 4237 Actual Balance December 31, 2002 Transfers into the Reserve Fund Surcharge on Memberships Transfers out of the Reserve Fund Pre Audit Actual Balance December 31, 2003 $ Nil 7,450 $ 7,450 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 income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. Recommended Maintenance Levels of this Reserve Fund: No reserve fund limits are appropriate for this fund.