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HomeMy WebLinkAboutCS 30-06 1', 8 ~-) - REPORT TO EXECUTIVE COMMMITTEE Report Number: CS 30-06 Date: June 12, 2006 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2005 Pre-Audit Balances of Reserves and Reserve Funds Recommendation: 1. It is recommended that Report CS 30-06 of the Director, Corporate Services & Treasurer be received and forwarded to Council for information. Executive Summary: Based on the preliminary 2005 results, we can now report on the pre-audit actual activities within the Reserves and Reserve Funds for 2005. A summary is presented in Appendix A. - The purpose and 2005 financial transactions for each Reserve and Reserve Fund are set out in Appendices Band 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 2005 pre-audit Reserves and Reserve Funds balance of $47,374,956 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 Councilor under Provincial Legislation. With regard to unspent 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 commitments for all _ Reserve Funds are $3,939,289. From 2001 to 2004, the City's share of collections from OPG related to properties under assessment appeal was $7,705,240. In 2005 an additional amount of $1,631,589 was 086 Report CS 30-06 Date: June 12, 2006 - Subject: 2005 Pre-Audit Balances of Reserves and Reserve Funds Page 2 collected, bringing the December 31, 2005 value to $9,336,829 in the Reserve for Contingency - OPG 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 Development Charges, Parkland, Third Party/Developer Contributions, Ontario Transit Renewal, Provincial Dedicated Gas and Federal Gas Tax 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 $26,649,520. The combined total of the unspent commitments, OPG assessment appeal, other restricted balances and obligatory Reserve Funds of approximately $40 million reduced the "discretionary" balance to approximately $7.3 million as at December 31,2005. - The City established two new reserves and a reserve fund this year, namely: Easement Settlement Reserve, Provision for Eastern Branch Library Reserve and Federal Gas Tax Reserve Fund. The Building Permit Stabilization Reserve Fund is included in this Report for background information only, the official by-law to set-up this account is to be made effective 2006. The purposes of the reserves and reserve funds are discussed further in Appendices Band C. Internal borrowings from the Reserve Funds commenced in 2001 to assist in funding capital projects. Although the amount borrowed each year has declined, the outstanding principal balance at December 31, 2005 is approximately $5.5 million. These loans are undertaken from the Development Charges and Parkland Reserve Funds. 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 2004 internal borrowings. Repayment for 2005 internal borrowings will commence in 2006 and interest earned will be reflected accordingly. Attachments: 1. Appendix A Summary of Reserves and Reserve Funds 2. Appendix B Description of Reserves 3. Appendix C Description of Reserve Funds - u87 Report CS 30-06 Date: June 12, 2006 - Subject: 2005 Pre-Audit Balances of Reserves and Reserve Funds Page 3 Prepared By: Approved I Endorsed By: ~~ Caryn Kong Senior Financial Analyst ~~b~,--- Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachments Copy: Chief Administrative Officer Recommended for the consideration of Pickering City . ouncil ,; ,- ,- - APPENDIX A . U88 ATTACHMENT #-1- TO REPORT # C5 50-<)<.0 CITY OF PICKERING SUMMARY OF RESERVE AND RESERVE FUND PRE-AUDIT ACTUALS DECEMBER 31, 2005 Appendix B Summary Reserves 4610 4611/4623 4612 4613 4619 4620 4621 4622 4624 4625 4626 Working Funds Replacement Capital Contingencies-OPG, Election, Other 2 Self-Insurance 2 Rate Stabilization Develop.Charges-City's Share 2 Region Transit 2 Continuing Studies 2 Vehicle Replacement Easement Settlement _ New Library Eastern Branch _ New 2 Total Reserves ,- Appendix C Summary of Reserve Funds 4225 4229 4228 4230 4232 4234 4235 4236 4237 4238 4239 4240 Community Facilities Development Charges 1 & 2 Capital Works Parkland 1 & 2 Public Works Workers Safety Insurance Brd 2 Third Party/Dev. Contributions 1 Ontario Transit Renewal 1 Squash Courts 2 Provo Dedicated Gas Tax 1 Federal Gas Tax Revenue- New 1 Building Permit Stabilization Fees New Total Reserve Funds Total Reserves & Reserve Funds Notes 1 Obligatory 2 Restricted - Total Obligatory 1 & Restricted 2 -2005 = CS30ck Appendix A Pre Audit 2005 $400,000 722,844 10,774,909 915,514 3,388,965 484,204 237,106 342,533 75,000 1,095,129 20,000 $18,456,204 Pre Audit 2005 $265,492 21,135,306 309,872 2,103,061 1,038,206 589,575 1,819,264 19,166 66,087 722,039 850,684 $28,918,752 Audited 2004 $400,000 758,175 9,053,320 940,514 2,619,565 1,921,332 1,025,741 233,159 25,000 Audited 2003 $400,000 730,713 7,813,558 940,514 2,177,209 2,685,297 1,106,634 141 ,884 $16,976,806 $15,995,809 Audited 2004 $380,604 19,496,777 302,610 2,166,696 1,152,444 378,731 1,601,076 14,035 33,713 161,515 Audited 2003 $386,726 15,804,668 535,849 1,959,087 1,465,425 181,023 1,024,691 14,957 7,450 $25,688,201 $21,379,876 Audited 2002 $400,000 615,800 6,791,047 949,106 2,421,909 2,812,214 1,242,507 67,400 $15,299,983 Audited 2002 $352,423 12,866,749 516,013 2,017,875 1,400,169 176,974 402,939 $47,374,956 $42,665,007 $37,375,685 $33,033,125 $17,733,142 $26,649,520 $ 40,079,448 e89 - 1"\ TTACHMENT #2- TO REPORT # Cs ;$Ü 'db APPENDIX B RESERVE FOR WORKING FUNDS 4610 Actual Balance December 31, 2004 Transfers into the Reserve $ 400,000 Transfers out of the Reserve Pre Audit Actual Balance December 31, 2005 $ 400,000 1. Purpose of this Reserve: - 2. - 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 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 part of the annual Current Budget General Government Revenue. 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 an average annual revenue of $45 million, at 2%, the amount to maintain for this reserve should be $900,000. egO - APPENDIX B RESERVE FOR REPLACEMENT OF CAPITAL EQUIPMENT - G/L 4611/4623 Actual Balance December 31, 2004 $ 758,175 Transfers into the Reserve Revenue Fund Contribution 155,669 Transers out of the Reserve Transfer to Capital Fund - Operation Centre (191,000) Pre-Audit Actual Balance December 31, 2005 $ 722,844 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 these funds form 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. <''''''''''' t\9l - APPENDIX B The balances pertaining to these sub-categories are as follows: General Recreation Dunbarton Don Beer Rec Camp Rec Comp Rec Comp Corp Use prgrms Pool Arena Core Pool Arena Total $ $ $ $ $ $ $ $ Dec 31/04 84,653 129,760 29,772 62,500 62,893 136,312 252,285 758,175 Transfer in 40,207 18,500 4,962 30,000 27,000 15,000 20,000 155,669 Transfer out (71,000) - (120,000) (191,000) Dec 31/05 53,860 148,260 34,734 92,500 89,893 151,312 152,285 722,844 - - 9~) t ..... ,- APPENDIX B RESERVE FOR CONTINGENCIES- GIL 4612 (OPG, Other Assessment Appeals, Election, Miscellaneous) Actual Balance December 31, 2004 Transfers into the Reserve Revenue re OPG Assmt. Appeal Properties Transfer from Revenue Fund $ 9,053,320 1,631,589 90,000 1,721,589 Transfers out of the Reserve Settlement OPG Assessment Appeals $ Pre-Audit Actual Balance December 31, 2005 $ 10,774,909 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 these funds form 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. The transfer regarding Ontario Power Generation (OPG) in the amount of $1,631,589 for the current year is the City's revenue for properties currently under assessment appeal. This amount plus the last four years' net contributions of $7,705,240 resulted in a combined total of $9,336,829. 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- $180,000, Other Assessment Appeals - $682,594 and Miscellaneous - $575,486. ~- u93 -. 1. - APPENDIX B RESERVE FOR SELF INSURANCE - G/L 4613 Actual Balance December 31, 2004 Transfers into the Reserve $ 940,514 Transfers out of the Reserve: Transfer to Capital (25,000) Pre-Audit Actual Balance December 31, 2005 $ 915,514 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. 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. The $25,000 draw in the current year was necessary to partially pay for the playground replacement costs resulted from vandalism. - - ,_. t.94 APPENDIX B RESERVE FOR RATE STABILIZATION - G/L 4619 Actual Balance December 31, 2004 $ 2,619,565 Transfers into the Reserve Excess Surplus Contribution 1 ,769,400 Transfers out of the Reserve 2005 Current Budget Provision (1,000,000) Pre-Audit Actual Balance December 31, 2005 $ 3,388,965 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 these funds form 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 2005 Current Budget provided for a transfer in the amount of $1,000,000 from this Reserve to fund current expenditures. r95 - 1. - APPENDIX B RESERVE FOR DEVELOPMENT CHARGES - CITY SHARE G/L 4620 Actual Balance December 31, 2004 Transfers into the Reserve 2005 Current Budget Provision Returned to source-completed project $ 1,921,332 590,000 712 Transfers out of the Reserve Transfer to Capital Fund -External Subdivision Works (2,027,840) $ 484,204 Pre-Audit Actual Balance December 31, 2005 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 income on these funds form 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. C96 - APPENDIX B REGION TRANSIT RESERVE - GIL 4621 Actual Balance December 31, 2004 Transfers into the Reserve GO Transit Funding from Region Transfer from Reserve Fund Returned to source-project no longer require $ 1,025,740 975,880 21,578 95,000 1,092,458 Transfers out of the Reserve APT A Expenditures (1,881,092) $ 237,106 Pre-Audit Actual Balance December 31, 2005 1. 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. 2. Recommended Maintenance Levels of this Reserve: Transfer into the Reserve represents funding of $975,880 received from the Region of Durham. Funds were transferred out of this reserve to finance the 2005 current and capital operations of Ajax Pickering Transit Authority (APT A). The amount transferred-out in 2005 was $1,881,092 bringing the year-end December 31,2005 balance to $237,106. The balance of this Reserve is expected to be used for any unpaid commitments or obligations related to APT A. With the transfer of APT A to the Region effective January 1, 2006, this Reserve will eventually be closed-out upon settling all our commitments and obligations. ,~ t~97 - APPENDIX B RESERVE FOR CONTINUING STUDIES & CONSULTING - G/L 4622 Actual Balance December 31, 2004 $ 233,159 Transfers into the Reserve Continuing Consulting Work or Studies 250,599 Transfers out of the Reserve (141,225) Pre-Audit Actual Balance December 31, 2005 $ 342,533 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 these funds form 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 2005 in the amount of $141,225 pertained to consulting work that was transferred into the Reserve in the prior year. An additional amount of $250,599 has been transferred-in for future work. ,- e98 APPENDIX B ,-.......... RESERVE FOR VEHICLE REPLACEMENT - G/L 4624 Actual Balance December 31, 2004 Transfers into the Reserve $ 25,000 50,000 Transfers out of the Reserve $ 75,000 Pre-Audit Actual Balance December 31, 2005 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 these funds form 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. .- C 9~1 ~. APPENDIX B EASEMENT SETTLEMENT RESERVE - GIL 4625 Actual Balance December 31, 2004 Transfers into the Reserve $ 2,500,000 Transfers out of the Reserve: 2005 Capital Budget Expenditures 2005 Current Budget Expenditures (969,534) (435,337) (1,404,871) $ 1,095,129 Pre-Audit Actual Balance December 31, 2005 1. Purpose of this Reserve: ,- 2. - This reserve was newly 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 finance both the capital and operating expenditures of the City. The 2005 expenditures included a draw of $969,534 to fund capital expenditures and $435,337 to fund current expenditures, providing a year-end balance of $1,095,129. 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. 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. ,.--.... - - .< ;- n .L J '- APPENDIX B RESERVE - PROVISION FOR EASTERN BRANCH LIBRARY - G/L 4626 Actual Balance December 31, 2004 Transfers into the Reserve $ 20,000 Transfers out of the Reserve Pre-Audit Actual Balance December 31, 2005 $ 20,000 1. Purpose of this Reserve: This reserve was newly 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 these funds form 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 2005. The combined total of 2002 and 2005 is reflected in the year-end balance. 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 will be done by a "Transfer to Reserve for the Provision for Eastern Branch". ", ;") 1 -"- \. .- ATTACHMENT #-=L.. TO REPORT#CS. :39 "d~ APPENDIX C RESERVE FUND FOR COMMUNITY FACILITIES - G/L 4225 Actual Balance December 31, 2004 $ 380,604 Transfers into the Reserve Fund Capital Fund - Returned to Source $ 61 ,220 Interest Earned on External Investments 11 , 153 72,373 Transfers out of the Reserve Fund Transfer to Capital Fund - Museum (187,485) Pre-Audit Actual Balance December 31, 2005 $ 265,492 1. Purpose of this Reserve: - 2. - 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 low of $69,102 to the high in 1998 of $773,483. Other than interest income earned and funds returned from projects no longer required, there was no transfer to this reserve fund in 2005. Expenditures are transferred out of Reserve Funds only when incurred; therefore the amount committed but not incurred at end of 2005 is $25,000. Taking these commitments into consideration, the uncommitted balance of funds available is $240,492. Additional amounts must be provided to this fund. 102 APPENDIX C RESERVE FUND FOR DEVELOPMENT CHARGES - G/L 4227/4229 Actual Balance December 31, 2004 Transfers into the Reserve Fund: Net Developer Contributions Returned to source Interest Earned on External Investments Interest Earned on Internal Loans $ 19,496,777 $ 1,672,209 17,266 420,714 215,648 2,325,837 Transfers out of the Reserve Fund: Transfer to Revenue Fund - Develop. Charge Study Transfer to Capital Fund: External Subdivision Works Sidewalks Senior Centre (3,979) $ (676,893) (2,814) (3,622) (687,308) Pre-Audit Actual Balance December 31, 2005 $ 21,135,306 - 1. Purpose of this Reserve: This is an "obligatory" reserve fund and as such is governed by Municipal Act 2001, Development Charges Act, 1997, Ontario Regulation 82/98, 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. 2. 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 $3,583,520. The pre-audit actual balance of $21,135,306 would be reduced by this amount to reflect an uncommitted balance of funds available of $17,551,786. "13 -'.,: , ,- APPENDIX C RESERVE FUND FOR CAPITAL WORKS - G/L 4228 Actual Balance December 31, 2004 Transfers into the Reserve Fund Interest Earned on External Investments $ 302,610 7,262 Transfers out of the Reserve Fund Pre-Audit Actual Balance December 31, 2005 $ 309,872 1. 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. 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 four years. The value of the unspent commitments at the end of 2005 is $13,822. Taking these unspent commitments into account, the uncommitted balance available at December 31, 2005 will be $296,050. Major additional contributions will be required in future years. - :~:.) 4 - APPENDIX C RESERVE FUND FOR PARKLAND - GIL 4230 Actual Balance December 31, 2004 Transfers into the Reserve Fund Developers Contributions Returned to source Interest Earned on External Investments Interest Earned on Internal Loans $ 2,166,696 $ 256,333 176,721 54,441 22,811 510,306 Transfers out of the Reserve Fund Transfer to Capital Fund Parks-Tennis Court Resurfacing Parks-Clubhouses Playground Equipment Parks-Purchase of land Pre-Audit Actual Balance December 31, 2005 $ (94,322) (20,156) (259,463) (200,000) (573,941 ) $ 2,103,061 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. 2. 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 2005 is $202,031. The pre-audit balance of $2,103,061, taking into account the unspent commitments, will provide an uncommitted balance available of $1,901,030 as at December 31, 2005. - ~t. ~J 5 - APPENDIX C RESERVE FUND FOR PUBLIC WORKS - G/L 4232 Actual Balance December 31, 2004 Transfers into the Reserve Fund Developer Contributions Interest Earned on External Investments $ 1,152,444 $ 8,297 31,607 39,904 Transfers out of the Reserve Fund Transfer to Capital Fund - Property Maintenance Roads (9,161 ) (144,981 ) (154,142) Pre-Audit Actual Balance December 31, 2005 $ 1 ,038,206 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. 2. 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 2005 is $114,916. The pre-audit balance of $1,038,206 after taking into account the unspent commitments will provide an uncommitted balance of funds available at $923,290 as at Dec. 31,2005. .- ,. ·)0 -~_: 0 - APPENDIX C RESERVE FUND FOR WORKERS SAFETY INSURANCE BOARD - G/L 4234 Actual Balance December 31, 2004 $ 378,731 Transfers into the Reserve Fund Contribution from Current Fund $ 365,296 Interest Earned on External Investments 18,602 383,898 Transfers out of the Reserve Fund Claims and Other Related Costs $ (61,400) Insurance Costs (106,082) Contribution to Health & Safety Program (5,572) (173,054) Pre-Audit Actual Balance December 31, 2005 $ 589,575 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 income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. 2. Recommended Maintenance Levels of this Reserve Fund: In both 2004 and 2005, the contributions were more than double the claims experience for the year, thus 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 $196,000 from 2003 to 2005 has resulted to the 2005 year-end balance of $589,575. - J_ ¡J7 - 1. - APPENDIX C THIRD PARTY/DEVELOPERS CONTRIBUTIONS RESERVE FUND - GIL 4235 Actual Balance December 31, 2004 Transfers into the Reserve Fund Contributions from Developers/Third Parties Interest Earned on External Investments $ 1,601,076 $ 176,291 41,897 218,188 Transfers out of the Reserve Fund Pre-Audit Actual Balance December 31, 2005 $ 1,819,264 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. Due to the externally restricted contributions, this Reserve Fund is treated as obligatory. 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. 2. Recommended Maintenance Levels of this Reserve _c No reserve fund limits are appropriate for this fund as collection and commitment of funds are dependent upon development agreements or cost sharing arrangements. J08 - APPENDIX C ONTARIO TRANSIT RENEWAL RESERVE FUND - GIL 4236 Actual Balance December 31, 2004 $ 14,035 Transfers into the Reserve Fund Contribution from Ministry of Transportation $ 162,279 Interest on External Investments-reversal 5,130 167,409 Transfers out of the Reserve Fund APT A Capital Expenditures (140,700) Transfer to Region Transit Reserve (21,578) (162,278) Pre Audit Actual Balance December 31, 2005 $ 19,166 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 APT A 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. The amount of $162,279 received from the Ministry of Transportation represents City of Pickering's share of the grant under the Ontario Transit Renewal Program. Funds are provided from the Ontario Transit Renewal Program as expenditures are incurred. With the transfer of APT A to the Region of Durham effective January 1, 2006, this reserve fund will eventually be closed-out upon resolving all outstanding matters. Note that the balance of $19,166 is a pre-audit amount pending journal entries from year-end audit and thus, not the official 2005 year- end balance. Jr)ft .- - APPENDIX C SQUASH COURTS RESERVE FUND - G'L 4237 Actual Balance December 31, 2004 $ 33,713 Transfers into the Reserve Fund Surcharge on rv1emberships 30,150 I nterest on Extemallnvestments 2,224 32,374 Transfers out of the Reserve Fund Pre Audit Actual Balance December 31, 2004 $ 66,087 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 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. i -' P _ J , ,.~ APPENDIX C PROVINCIAL DEDICATED GAS TAX RESERVE FUND - GIL 4238 Actual Balance December 31, 2004 $ 161,515 Transfers into the Reserve Fund Provo of Ontario 705,264 Interest on External Investments 16,774 722,038 Transfers out of the Reserve Fund (161,515) Pre Audit Actual Balance December 31, 2005 $ 722,038 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 (APT A). This Reserve Fund was newly created in 2004 further to the recommendation passed in Council Resolution #167/04, Item 3 at the Council Meeting of December 20, 2004 per Report to Council CS 56-04. The interest income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. 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 will be 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 2006, the balance of this Fund will be transferred to the Region once all matters are resolved. - ; 1 1 __ L ,- - APPENDIX C FEDERAL DEDICATED GAS TAX RESERVE FUND - GlL 4239 Actual Balance December 31, 2004 Transfers into the Reserve Fund Provo of Ontario Interest on External Investments $ 849,577 1 ,107 850,684 Transfers out of the Reserve Fund Pre Audit Actual Balance December 31, 2005 $ 850,684 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 new Reserve Fund under By-law 6609/05 and Resolution 219/05. This new 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 income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. 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 funding 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 ~- - c,_ , lq 1_ t... APPENDIX C BlJLDlNG PERMT STABlUZAllON RESERVE RJND (Ißveloprrent Appliætions Approvals Prcœss (OAAP) Fees) Actual Balance DecenDer 31, 2004 Transfers into the ReseNe Fund Building Code pemit Fees Interest on Externallnvestrrents $ Transfers out of the ReseNe Fund Pre Audit Actual Balance DecenDer 31, 2005 $ 1. Purpose of this Reserve Fund: This Reserve Fund will be officially established in 2006 based on By-Law 6651/06. However, the Report to Executive Committee PD 41-05 was forwarded to Council on December 1, 2005 such that the by-law will be made effective January 1,2006. Thus, this Reserve Fund will have a zero balance as at year-end 2005. This reports provides the background information for this new Reserve Fund. 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 an annual portion of building code permit fees after related direct and indirect costs are netted as defined and or adjusted by the Treasurer. The interest income on these funds form part of the Reserve Fund as per the Municipal Act, 2001. 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; this translates into a target balance of approximately $1.16 million (1.13 years of direct operating cost).