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HomeMy WebLinkAboutJune 9, 2008 Executive Committee Meeting Agenda Monday, June 9, 2008 7:30 pm Council Chambers Chair: Councillor Pickles 7:15 PM Main Committee Room (I) CONFIDENTIAL MATTERS 1. Director, Corporate Services & Treasurer, Report CS 30-08 Audit Matters - Update Under Separate Cover (II) PRESENTATIONS [At the January 21, 2008 meeting of Council, the matter of traffic calming issues was referred to the Executive Committee, Director, Operations & Emergency Services to report] 1. Sarah Baliski Re: Fairport Road Citizens for Traffic Calming Presentation of Traffic Calminq Plan 2. Gayle Clow Re: Fairport Road Citizens for Traffic Calming Presentation of Traffic Calming Plan (III) MATTERS FOR CONSIDERATION PAGES 1. Director, Corporate Services & Treasurer, Report CS 27-08 2007 Year End Audit 1-59 RECOMMENDATION 1. That Report CS 27-08 of the Director, Corporate Services & Treasurer be received; 2. That the Audit Results Report as submitted by Deloitte & Touche LLP be received for information; and, 3. That the 2007 draft Audited Consolidated Financial Statements for the City of Pickering be forwarded to Council for approval. Executive Committee Meeting Agenda Monday, June 9,2008 7:30 pm Council Chambers Chair: Councillor Pickles 2. Director, Corporate Services & Treasurer, Report CS 20-08 60-62 Hiring of Consultant to Implement Public Sector Accounting Board (PSAB) 3150 Reportinq Requirements RECOMMENDA TION 1. That Report CS 20-08 of the Director, Corporate Services & Treasurer be received; 2. That the Director, Corporate Services & Treasurer be authorized to engage the firm of TCA Consulting Limited to assist the municipality in implementing the reporting requirements of Public Sector Accounting Board (PSAB) 3150 as provided in the 2008 Current Budget; and, 3. That the appropriate officials of the City of Pickering be authorized to take the necessary action to give effect thereto. 3. Director, Corporate Services & Treasurer, Report CS 24-08 2007 Pre-Audit Balances of Reserves and Reserve Funds 63-94 RECOMMENDATION That Report CS 24-08 of the Director, Corporate Services & Treasurer be received for information. 4. Director, Corporate Services & Treasurer, Report CS 26-08 Investment Portfolio Activity for the Year Ended December 31 , 2007 95-102 RECOMMENDATION That Report CS 26-08 of the Director, Corporate Services & Treasurer be received for information. 5. Director, Corporate Services & Treasurer, Report CS 28-08 Development Charqes - Annuallndexinq 103-106 RECOMMENDATION Executive Committee Meeting Agenda Monday, June 9, 2008 7:30 pm Council Chambers Chair: Councillor Pickles 1. That Report CS 28-08 of the Director, Corporate Services & Treasurer be received; 2. That effective July 1, 2008 as provided for in Section 16 of By-law 6349/04, the Development Charges referred to in Sections 6 and 11 of that By-law be increased by 7.2 percent being the annual increase in the Construction Price Statistics for the Non-residential Building Construction Price Index as reported by Statistics Canada for the year ended March 31,2008; and, 3. That the appropriate officials of the City of Pickering be given authority to give effect thereto. 6. Director, Corporate Services & Treasurer, Report CS 29-08 2008/2009 Property and Liability Insurance Renewal 107-137 RECOMMENDATION 1. That Report CS 29-08 of the Director, Corporate Services & Treasurer be received; 2. That the City of Pickering renew effective June 16, 2008, its property, liability and other coverages through the Frank Cowan Company for the period July 1, 2008 to June 30, 2009 inclusive on terms and conditions acceptable to the Director, Corporate Services & Treasurer; 3. That the Director, Corporate Services & Treasurer, as part of the Risk Management Program, be authorized to continue the Reimbursable Deductible Program through the Insurance Adjuster and the Frank Cowan Company and further, that the Director be authorized to settle any claims including any adjusting and legal fees where it is in the City's interest to do so; 4. That the Director, Corporate Services & Treasurer be authorized to purchase additional insurance, make changes to deductibles and existing coverages, and alter terms and conditions as becomes desirable or necessary in order to limit potential liability exposure and to protect the assets of the City and it's elected officials and staff; and, Executive Committee Meeting Agenda Monday, June 9,2008 7:30 pm Council Chambers Chair: Councillor Pickles 5. That the appropriate officials be authorized to take the necessary actions to give effect thereto. 7. Director, Corporate Services & Treasurer, Report CS 31-08 2008 Assessment Appeals 138-147 RECOMMENDATION 1. That Report CS 31-08 of the Director, Corporate Services & Treasurer regarding 2008 assessment appeals update be received; 2. That Council approve the filing of the assessment appeals by Municipal Tax Equity for 2008 for the following roll numbers: 18-01-020-016-146-00,18-01- 030-020-189-35,18-01-030-020-189-90 and 18-01-030-020-202-00; 3. That the attached By-law providing for the confirmation of the filing of assessment appeals be enacted; 4. That Council authorize the Director, Corporate Services & Treasurer to engage the firm of Municipal Tax Equity and or Walker Poole Nixon LLP to represent the City for the assessment appeals filed above; and, 5. That the appropriate officials of the City of Pickering be authorized to take the necessary actions to give effect thereto. 8. Director, Corporate Services & Treasurer, Report CS 32-08 Leash Free Area Within the City of Pickerinq 148-153 RECOMMENDATION 1. That Report CS 32-08 of the Director, Corporate Services & Treasurer be received; 2. That the City of Pickering establishe a leash free area on Valley Farm Road Hydro Lands, included with Report CS 32-08 as Attachment No.1, for a six month trial period; 3. That a volunteer Leash Free Working Group be officially formed and work with City staff during the six month trial period to monitor the leash free area; Executive Committee Meeting Agenda Monday, June 9,2008 7:30 pm Council Chambers Chair: Councillor Pickles 4. That By-law 5495/99 Parks and By-law 6811/07 Responsible Pet Ownership be amended to allow dogs to be off leash in City designated Leash Free Areas; and 5. That the appropriate officials of the City of Pickering be given authority to give effect thereto. 9. Director, Operations & Emergency Services, Report OES 18-08 Single Sourcing the Purchase of a Vehicle Exhaust Extractor System Apparatus 1 54-1 56 RECOMMENDATION 1 . That Report OES 18-08 of the Director, Operations & Emergency Services regarding single sourcing the acquisition of a vehicle exhaust extractor system be received; 2. That the use of the single sourcing process for the procurement of a fixed mounted vehicle exhaust extraction system for Fire Station #6 (Finch Ave.) City of Pickering Fire Services be approved and that Nederman Canada being the sole provider for this specific system be identified as the single source provider of the unit; and, 3. That the appropriate officials of the City of Pickering be given authority to give effect thereto. (IV) OTHER BUSINESS (V) ADJOURNMENT REPORT TO EXECUTIVE COMMITTEE Report Number: CS 27-08 Date: June 9, 2008 I t I I () '1 I.) i From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2007 Year End Audit Recommendations: 1. That Report CS 27-08 of the Director, Corporate Services & Treasurer be received; 2. That the Audit Results Report as submitted by Deloitte & Touche LLP be received for information; and, 3. That the 2007 draft Audited Consolidated Financial Statements for the City of Pickering be forwarded to Council for approval. Executive Summary: This report provides the auditor's Audit Results report, independence letter and the draft Audited Consolidated Financial Statements for the year ended December 31, 2007. I am pleased to advise that the auditor did not find it necessary to issue a Management Letter for 2007. However, staff in a separate confidential report will be providing an update on those ongoing matters identified in 2006. Financial Implications: The 2007 year financial results were once again very favourable and contributed significantly to the City's much lower 2008 property tax increase. A combination of under expenditures due to expenditure control and staffing vacancies and increased revenues mainly in the areas of investment income and penalties and interest on taxes contributed significantly to the City's positive financial position. Additional contributing factors included increased building permits, lower than expected benefits renewal costs and higher supplementary taxes. Sustainability Implications: implications. This report does not contain any sustainability Report CS 27-08 Date: June 9, 2008 2007 Year-End Audit Page 2 u2 Background: The audit of the consolidated financial statements for the year ended December 31, 2007 has been completed. The auditor's Report to the Executive Committee - Audit Results is included as Attachment 1 and also includes the auditor's independencelette~ This report, prepared by De/oitte & Touche LLP, summarizes the results of the December 31, 2007 audit and comments on significant matters regarding the audit or other matters they may believe to be of interest to you. Nothing of significance was noted. On an annual basis the auditor is required to communicate all relationships between the City and the Firm that may impact on their independence in addition to confirming their independence with respect to the City. The Independence Letter in Appendix 1 of the attachment confirms that Deloitte & Touche LLP is independent with respect to the City. The draft Audited Consolidated Financial Statements are included as Attachment 2. They are the responsibility of management and have been prepared by City accounting staff under the direction of the Director, Corporate Services & Treasurer. Deloitte & Touche LLP are responsible to express an opinion on these Consolidated Financial Statements based on their audit. An unqualified opinion has been provided. I am pleased to advise the Committee there were no problems or questionable items I have to report to you at this time. However I would like to summarize some financial highlights. The Consolidated Financial Statements also includes the activities of the City of Pickering Public Library Board. The City's investment in Veridian Corporation is accounted for on a modified equity basis which means the City includes its share of Veridian's income or loss in the Consolidated Financial Statements. Overall net assets increased over prior year by approximately $4.7 million as a result of a decrease in liabilities of approximately $4.6 million. Financial Assets The change in financial assets from prior year was very minimal. Although the investment balance significantly declined by approximately $4.2 million, this decrease was offset by increases in taxes receivable, accounts receivable and the investment in Veridian Corporation. The investment portfolio balance under management declined over prior year primarily as a result of the refund to OPG for the settlement of the outstanding assessment appeals for the years 2003 to 2006. The City's share of this refund amounted to approximately $4.2 million. Report CS 27-08 Date: June 9, 2008 2007 Year-End Audit Page 3 "I" ,I ,_, The taxes receivable increase of approximately $800,000 over the prior year is reasonable since total taxes billed increased over the prior year. The outstanding receivable balance at DI3cember 31, 2007 represents 8,3% (2006 - 8.2%) of total tax revenue which is comparable to the prior year. The increase in the investment in Veridian Corporation arises due to the City's share of Veridian's net income offset by the dividends received from Veridian during the course of the year. Liabilities The decrease in liabilities of approximately $4.6 million is primarily due to the decrease in the accounts payable and accrued liabilities balance of approximately $6.5 million in addition to a decrease in long-term liabilities offset by an increase in deferred revenue. The prior year accounts payable and accrued liabilities balance included an accrual for the settlement of the OPG assessment appeal in the amount of approximately $6.6 million which included both the City and Region shares. This amount was paid to OPG in December 2007. The Region has paid the City its share which represents approximately $2.4 million. Deferred revenue increased by approximately $3.0 million which arises from the increase in the obligatory Reserve Funds and two Provincial grants received in 2007 but earmarked to be used in the 2008 Capital Budget. The Obligatory Reserve funds are made up of the following: Development Charges, Parkland, Third Party/Developer's Contribution and Federal Gas Tax. In compliance with generally accepted accounting principles, these restricted funds are to be reported as deferred revenue. The Development Charges Fieserve Fund and Federal Gas Tax fund balances increased because of the timing of receipt of funds and occurrence of related capital expenditures. The decrease in long-term liabilities of approximately $1.1 million represents the annual principal repayment of the outstanding debentures. The City's requirement for debt did not coincide with the Re!Jion's timing therefore there was no debt issued on the City's behalf during 2007. Revenues & Expenditures Consolidated revenues and expenditures are comparable with the budget with the exception of government grants and fees, investment Income, general government expenditures and planning and development which are discussed below. The budget for government grants and fees includes provincial and federal grant monies, such as COMRI F and federal gas tax, identified in the 2007 capital budget to fund various capital projects. Because of the timing of capital expenditures, revenue is recognized once the expenditures are incurred. Particularly COMRIF funding is not received by the municipality until an expenditure claim is submitted. Therefore Report CS 27-08 Date: June 9, 2008 2007 Year-End Audit Page 4 " ' ,\ I1f \, \ L approximately $1.0 million of the revenue reported in 2007 relates to expenditures for projects approved in previous budgets and thus the grant revenue is not included in the budget figure. The budget for investmE!nt income is usually a conservative estimate as it is difficult to predict interest rates and timing of cash on hand. The variance from budget of approximately $750,000 arose due to the unexpected interest rate increase over the course of the year and excess cash on hand from timing of receipts (i.e. Provincial Grants) and payments (i.e. OPG tax refund from appeal). For these reasons and a declining interest rate environment, the budget estimate for 2008 was only increased by $50,000 to $1,050,000. It is expected that the investment income will be more in line with the budget estimate for 2008 due to changes in the market conditions and that interest rates began to drop in December 2007. General government expenditures, which includes purchased services, insurance, tax write-ofts, contingency and Administration and Corporate Services departments was underbudget by approximately $950,000. There is not one specific factor driving this under expenditure but multiple underages in the cost centres within the Departments and the contingency account. Planning and developmemt expenditures are underbudget by approximately $970,000. This is primarily a result of an under expenditure in the Planning consulting account of $750,000 which arose from some studies not proceeding/commencing during 2007. For example Duffin Heights and Seaton Neighbourhood Servicing Plans, to be funded 100% from landowners, had no expenditures as funds were not received from the external parties. As you are aware capital expenditures for projects may be incurred over multiple years therefore comparisons of actual to budget are not meaningful. Capital expenditures incurred are slightly higher than the budget amount reported but only approximately $3.7 million of the total capital expenditures of $10.7 million were for 2007 approved projects. The balance of the expenditures was for projects budgeted and approved in earlier years. Attachments: 1. Auditor's Report to the Executive Committee - Audit Results 2. 2007 Draft Audited Consolidated Financial Statements Report CS 27-08 Date: June 9, 2008 2007 Year-End Audit Page 5 '. ( . I i) :) Prepared By: / Approved I Endorsed By: ~~....~ '--""" Gillis A. Paterson Director, Corporate Services & Treasurer '/ , ('. / . \ {!' . A/;lCt.J ~ ."\./{ {,H ristine Senior Manager, Accounting Services GAP/vw Copy: Chief Administrative Officer ,~ Recommended for the l::onsideration of Pickering City COU.r\ \' I // D6 ATTACHM[! __ L_ f; __~<) -)7':') 'S Deloitt_! The C~orporation of the City of Pickering Report to the Executive Committee - Audit Results Year ended December 31, 2007 Audit. Tax .Consulting. Financial Advisory. I] '1- ~ i Deloitte Deloitte & Touche LLP 5140 Y onge Street Suite 1700 Toronto, ON M2N 6L7 Canada Tel: (416) 601 6150 Fax: (416) 601 6151 www.deloitte.ca May 20, 2008 The Members of the Executive Committee The Corporation of the City of Pickering I The Esplanade Pickering ON L I V 6K7 Dear Executive Committee Members: We are pleased to submit this report on the results of our audit of the consolidated financial statements of The Corporation of the City of Pickering (the "City") for the year ended December 31, 2007. Our audit was completed in accordance with the audit plan presented to you on November 12,2007. Our professional standards require that we communicate with you certain matters that may be of interest to you in fulfilling your obligation to oversee the financial reporting and disclosure process for which management of the City is responsible. This report is designed to summarize certain aspects of the 2007 audit of the consolidated financial statements, comment on significant matters regarding the audit and other matters which we believe will be of interest to the Executive Committee (the "Committee"). This report has been provided to the Committee on a confidential basis. It is intended solely for the use of the Committee and we disclaim any responsibility or obligation to any third party who may rely on this report. The matters addressed in this report are a by-product of the financial statement audit and may not necessarily identify all matters that may be of interest to the Committee in fulfilling its responsibilities. We wish to express our appreciation for the co-operation we received from senior management, finance staff and the many employees of the City with whom we work in the discharge of our various responsibilities. Yours sincerely, ;j)J.cdiL ~ f~t, LLI' Chartered Accountants Licensed Public Accountants Member of Oeloitte Touche Tohmatsu [j B Table of contents Status of the audit, audit scope and related representations Matters to report to the Executive Committee Audit findings - Management judgments and accounting estimates - Adjusted differences - Unadjusted differences Areas of audit focus Internal controls Significant upcoming changes in accounting standards Appendices Appendix: Independence letter @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 3 4 5 5 7 7 8 10 11 2 t~ ,~ U ~1 Status of the audit, audit scope and related representations · The audit of the December 31, 2007 consolidated financial statements is substantially complete. · Our auditors' report on the 2007 consolidated financial statements will: - be signed following approval by Council; - be dated April 4, 2008; and - state that the consolidated financial statements present fairly, in all material respects, the financial position of the City as at December 31, 2007 and the results of its operations and the changes in its financial position for the year then ended in accordance with Canadian generally accepted accounting principles. · The audit approach was consistent with the audit plan we provided to you on November 12, 2007. · Our audit was conducted in accordance with Canadian Generally Accepted Auditing Standards ("GAAS") and our firm standards. · We examined, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, therefore, we would not necessarily detect all weaknesses, errors or other irregularities that might have occurred. · We assessed the accounting principles used and significant estimates made by management. · We evaluated the overall financial statement presentation. · Tests and procedures that we considered necessary were used to form an opinion on the consolidated financial statements. · We relied on the work of the City's actuaries in the calculation of employee future benefits. · We did not rely on the work of the City's internal auditor in determining the nature, extent and timing of our work. · We are independent of the City as is required to provide an independent audit opinion. A copy of our independence letter to the Committee is included in Appendix 1 of this report. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 3 , ,\ I. 1 r"\ IU Matters to report to the Executive Committee Reportable matter 1. Significant weaknesses in internal No significant weaknesses in internal controls relating to the financial controls relating to the financial reporting reporti ng process. process were identified. 2. Illegal acts. None noted. 3. Significant transactions inconsistent None noted. with the ordinary course of business, including fraud or possible fraud. 4. Unusual related party transactions. None noted. 5. New significant accounting principles None in the current year. See page 11 or policies. for significant upcoming changes in accounting standards. 6. Disagreements with management. None. 7. Management consultation with other None noted. accountants about any significant auditing or accounting matters. 8. Unusual transactions that None noted. significantly increase risk of loss. 9. Actions that, if they became public, None noted. might cause embarrassment. 10. Non-compliance with regulatory None noted. requirements. 11. Major issues discussed with None noted. management that influence audit appointment. 12. Management's judgments and Reasonable (see Pages 5 and 6). accounting estimates. 13. Misstatements, including unadjusted See audit findings (Page 7). audit differences. 14. Difficulties encountered during the None. audit. 15. Limitations placed on the scope of None. our audit. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 4 '1 Audit findings Management judgments and accounting estimates The preparation of the consolidated financial statements requires management to exercise judgment and utilize assumptions to make estimates. The key areas where management estimates are required are as follows: · Post employment benefit liability and WSIB benefit liabilities; · Allowance for significant property tax appeals; · Allowance for doubtful accounts receivable; · Accrued liabilities; and · Contingent liabilities. Post employment benefit liability and WSIB benefit liabilities Management uses the assistance of an actuary in determining the post-employment benefits liability. The extrapolation to December 31, 2007 was based on the January 1, 2004 valuation. As reported by the actuary, this is not in accordance with accepted actuarial practice as extrapolations should not be performed for a period longer than three years. We understand that a new valuation will be performed next year once the results of collective bargaining is known. The results of any collective bargaining undertaken by the City during 2008 have not been reflected in the post-employment benefits liability at December 31, 2007. The WSIB benefit liabilities are calculated by WSIB using management's best estimates and assumptions. This approach is consistent with other municipalities and these estimates appear to be reasonable. Property tax appeals and doubtful accounts receivable Management makes estimates for significant property tax appeals and the provision for doubtful accounts receivable. Management makes these estimates based on the information available, at a point in time, when preparing the financial statements. The liability for the significant property tax appeal outstanding at December 31, 2006 was settled during fiscal 2007 and any amounts remaining in the Contingency Reserve relating to this matter were transferred to the Rate Stabilization Reserve in accordance with Council approval. Accrued liabilities Management is required to make estimates, mainly for capital work performed to December 31, where invoices for such work have not been received prior to when the books are closed. Also included in accruals at December 31, 2007 are amounts relating to salaries under negotiation and a compensation review. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 5 12 Audit findings (continued) Management judgments and accounting estimates (continued) Contingent liabilities - litigation When preparing the consolidated financial statements, management makes estimates relating to litigation based on the information available, at a point in time. As disclosed in Note 17 to the financial statements, the City recognizes liabilities in the financial statements related to litigation when management and legal counsel have assessed the outcome of the legal claim as likely and the amount can be reasonably estimated. Management has determined that the outcome of any legal actions outstanding as at the reporting date is not determinable and accordingly, no provision has been made in the consolidated financial statements. Overall, we believe the accounting policies selected and the application thereof to be appropriate for the City. Estimates and assumptions used have been assessed against standard practice and appear to be reasonable. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 6 Audit findings (continued) 13 Adjusted differences The following differences were discussed with City management and were adjusted: · An adjustment of $249,725 to the general ledger clearing account for the Class System, which is grouped with cash, to correct the accounting of prior years' (pre 2003) recreation revenues as the systems moved from a manual accounting system to the automated Class system. · Recording of $31,150 of investment income earned on an interest bearing investment. · Reversal of operating fund revenues and recording of deferred revenue in the amount of $59,340 relating to 2008 bingo licenses. Unadjusted difference The following difference was discussed with City management but not adjusted: · The understatement of 2007 capital fund revenues and accounts receivable in the amount of $25,729 relating to a capital project to be funded by a third party for work completed to December 31, 2007 but not yet billed. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 7 14 Areas of audit focus On November 12, 2007 we reported to you our planned key areas of audit focus. The following summarizes our findings in respect of these areas: Area I Issue I Response I Conclusion Year end · Determine if cut-off · Focused substantive testing on · Satisfactory cut-off of revenues and accounts payable, accrued (see audit expenditures is liabilities, deferred revenue and findings). appropriate. accounts receivable. · Test disbursements and cash receipts subsequent to year end. · Test supporting assumptions for accrued liabilities, deferred revenue and accounts receivable. Actuarial . Accuracy and · Review actuarial report including . Satisfactory determined completeness of related assumptions. (see audit liabilities certain liabilities findings). such as Workplace · Determine that appropriate Safety and accounting treatment has been Insurance ("WSIB") applied. and Post . Review related financial employment statement note disclosure. benefits. · Communicate with actuary on our reliance on their report for audit purposes. Reserves, . Approval of · Focused testing on the continuity . Satisfactory. reserve transfers to and and material transactions to funds and from reserve and determine if transfers are in capital fund reserve funds. accordance with council approvals and/or legislative requirements. Investment . Compliance with PS . Review accounting for Investment . Satisfactory in Veridian 3070 "Government in Veridian Corporation and (see Note 4 in Corporation Business related disclosures. consolidated Enterprises". · Review financial statements of financial Veridian Corporation. statements). . Communication with Veridian Corporation's auditor on our reliance on their auditor's report for purposes of the City's audit. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 8 Areas of audit focus (continued) (- ,) Area I Issue I Response I Conclusion Management · Requires · Focused review of calculations · Satisfactory (see estimates management and support. audit findings). judgment (i.e. allowance for · Discussion with management. assessment appeals, · Analytic review of related contingent accounts. liabilities, etc.). Capital Fund . Revenue · Focused testing to determine · Satisfactory (see Recognition whether restricted contributions audit findings). (i .e. development charges, gas tax, conditional grants) have been recognized as revenue in the appropriate period. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 9 6 Internal controls Our audit was designed to provide a basis for formulating an opinion as to whether the consolidated financial statements present fairly in all material respects, in accordance with generally accepted accounting principles, the financial position, results of operations and changes in financial position of the City. As part of our examination we reviewed and evaluated the design and implementation of certain entity level controls and business cycle controls in order to assess audit risk in accordance with Canadian generally accepted auditing standards. The main purpose of our review of controls was to assist in determining the nature, extent and timing of our audit tests and to establish the degree of reliance, which we could place on selected controls; it was not to determine whether internal controls were adequate for the City's purposes. The scope of such a review of internal controls is not sufficient to express an opinion as to the effectiveness or efficiency of the City's internal controls. While the audit did not include an in-depth evaluation of all systems of internal controls or all aspects of any individual system and should not therefore be relied upon to identify all significant internal control weaknesses, or all errors, irregularities or inefficiencies that might occur, we undertake to report such matters to you when they come to our attention. We did not identify any significant internal control weaknesses during the audit. We understand that management will provide the committee with an update on the status of any outstanding comments from our prior year's management letter. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 10 Significant upcoming changes in accounting standards Most municipal governments in Canada prepare their financial statements in accordance with generally accepted accounting principles (GAAP) as established by the Canadian Institute of Chartered Accountants (CICA) Public Sector Accounting Board (PSAB). Effective with the fiscal year commencing January 1, 2009, there will no longer be a separate reporting model specific to local governments. All governments in Canada, including municipalities, will follow a single reporting model. This reporting model, which among other things will require municipalities to capitalize and amortize tangible capital assets, will have a significant impact on the financial reporting, budgeting, systems and processes that are currently in place at the City. Municipalities currently manage a variety of significant tangible capital assets and have various sub-systems and processes to manage different asset classes. We encourage Council and management to use this accounting change to engage the entire municipality into providing more integrated information about tangible capital assets for decision making purposes. This can include decisions related to resource allocations, affordability, sustainability, setting rates and fees, full cost accounting, life cycle costing etc. There will be a significant one-time effort required to gather and compile the necessary information needed to record tangible capital assets on the statement of financial position for the year ending December 31, 2009 (with comparative restated figures for 2008). There will also be a need to ensure that the CAD, finance staff, department managers, Council and others understand the changes and their impact on the financial statements and the budgets. We have noted that municipalities are at various stages in the process of preparing for this significant change, including a few throughout the country that have already implemented the new reporting model. Most municipalities have limited in-house resources to undertake the incremental preparation work required to ensure that the necessary changes have been implemented on time. As the conversion period is fast approaching, this process will require a focused effort in order to ensure that the impact on future budgets is assessed and that there is no delay in issuing financial statements for the 2009 fiscal year. It is important that this not be viewed simply as an accounting exercise for purposes of financial reporting. In order to be able to sustain the ongoing requirements of reporting under this new reporting model it is necessary for all departments to understand the requirements for maintaining information related to tangible capital assets such as additions, disposals, useful lives and residual values. We encourage the Executive Committee, as part of your responsibility for the oversight of the financial reporting process, to monitor the progress of the implementation plan relating to the new reporting requirements. @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 7 11 IH ,-" Appendix Appendix - Independence letter 9 Deloitte Deloitte & Touche LLP 5140 Y onge Street Suite 1700 Toronto, ON M2N 6L7 Canada Tel: (416) 601 6150 Fax: (416) 601 6151 www.deloitte.ca May15,2008 The Members of the Executive Committee The Corporation of the City of Pickering I The Esplanade Pickering ON L I V 6K7 Dear Executive Committee Members: We have been engaged to audit the consolidated financial statements of the Corporation of the City of Pickering (the "City") for the year ended December 31,2007, which includes: · The Corporation of the City of Pickering; and · Pickering Public Library Board. In addition, we have been engaged to audit the City of Pickering Trust Funds. Canadian generally accepted auditing standards (GAAS) require that we communicate at least annually with you regarding all relationships between the City and our Firm that, in our professional judgment, may reasonably be thought to bear on our independence. In determining which relationships to report, these standards require us to consider relevant rules and related interpretations prescribed by the appropriate provincial institute / ordre and applicable legislation, covering such matters as: (a) holding a financial interest, either directly or indirectly, in a client; (b) holding a position, either directly or indirectly, that gives the right or responsibility to exert significant influence over the financial or accounting policies of a client; (c) personal or business relationships of immediate family, close relatives, partners or retired partners, either directly or indirectly, with a client; (d) economic dependence on a client; and (e) provision of services in addition to the audit engagement. Member of Oeloitte Touche Tohmatsu @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 13 ) ('1 .:..- \..,) Appendix 1 - Independence letter ( continued) The Corporation of the City of Pickering May15,2008 Page 2 We have prepared the following comments to facilitate our discussion with you regarding independence matters arising since July 6,2007, the date of our last independence letter. We are not aware of any relationships between the City and our Firm that, in our professional judgment, may reasonably be thought to bear on independence that have occurred from July 6,2007 to May IS, 2008. The fees (exclusive of GST) billed from July 6,2007 (the date of our last independence letter) to May 15,2008 are as follows: City of Pickering · Balance of audit related fees for the year ended December 31, 2006 · Audit for the year ended December 31, 2007- interim billings $10,250 $55,000 · Auditors' report dated June 15, 2007 for the Transfer of Federal Gas Tax Revenues for the year ended December 31, 2006 $ 3,500 City of Pickering Public Library Board · Audit for the year ended December 31,2007- interim billing $ 3,500 GAAS requires that we confirm our independence to the Executive Committee in the context of the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario. Accordingly, we hereby confirm that we are independent with respect to the City within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario as of May 15, 2008. This report is intended solely for the use of the Executive Committee and others within the City and should not be used for any other purposes. Yours truly, 'dJ~ 0/- tiw.de.. ILfJ Chartered Accountants Licensed Public Accountants @ Deloitte & Touche LLP and affiliated entities. The Corporation of the City of Pickering - 2007 Report to the Executive Committee 14 ') 1 Deloille @ Deloitte & Touche LLP and affiliated entities. Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services through more than 7,600 people in 56 offices. Deloitte operates in Quebec as Samson Belair/Deloitte & Touche s.e.n.c.r.1. The firm is dedicated to helping its clients and its people excel. Deloitte is the Canadian member firm of Deloitte Touche Tohmatsu. Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms have any liability for each other's acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names "Deloitte," "Deloitte & Touche," "Deloitte Touche Tohmatsu," or other related names. Services are provided by the member firms or their subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu Verein. JOEST EMPlOYElUi IN CA:>IAOA .z007 !f'iiii 1II11JS1lE5S 22 ATTACHMENT #....1- TOREPORT#~ ~ 7-0'1 December 31, 2007 VM T Document in City of Pickering Notes (.' 5/21/08: 10:40 AM FOR DISCUSSION PURPOSES ONLY The Corporation of the City of Pickering December 31, 2007 {')"Z /_ "J Table of contents Auditors' Report ............................................................. ............................. ....................... ....1 Consolidated schedule of capital fund financial ac vities and fund Consolidated statement of financial position............................................. ....................... ...........2 Consolidated statement of ft nancial activities no................................ ... ~...... ................... 3 Consolidated statement of changes in financial position .............. ....................... ..........................4 ~~ V. Document in City of Pickering Notes (; 5/21/08; 10:40 AM FOR DISCUSSION PURPOSES ONLY 24 Deloltte & To he LLP 5140 Yonge treet Suite 170 Toronto N M2N 6L7 Canad Auditors' Report To the Members of Council, Inhabitants and Ratepayers of the Corporation of the City of Pickering We have audited the consolidated statement of fmancial position f the Corporatio of the City of Pickering as at December 31, 2007 and the consolidated state nts of financial tivities and of changes in financial position for the year then ended. These financial ta ents are th responsibility of the City's management. Our responsibility is to express an opinion 0 th cia! atements based on our audit. Chartered Accountant Licensed Public Acc untants April 4, 2008 Document in City of Pickering Notes (." 5/21/08: 10:40 AM FOR DISCUSSION PURPOSES ONLY The Corporation of the City of Pickering Consolidated statement of financial position December 31, 2007 Financial assets Cash Investments (Note 4) Taxes receivable Accounts receivable Other current assets Investment in Veridian Corporation (Note 5(b)) Promisso notes receivable Note 6 Liabilities Accounts payable and accrued liabilities Other current liabilities Deferred revenue (Note 7) Long-term liabilities (Note 10) Post-employment benefit liability (Note 9(a)) WSIB benefit liabilities Note 9 b Net financial assets Non-financial assets Invento Net assets Municipal position Operating fund (Note 12(a)) Capital fund (Note 12(b)) Reserves and reserve fund (Not E ui in Veridian Cor or tion Note t in City of Pickering FS (#3921): 5/21/2008: 10:41 AM FOR DISCUSSION PURPOSES ONLY :2 ~:) 2007 $ 3,445/5 2,969, 1 46/714/ 60 50,867,,722 12,13 ,647 11,3 7,986 5,1 4,265 4, 92,024 ~ 530,363 6, 634 34,768,015 25 69 25 069 000 130 488 293 130 464 291 11/16 ,320 17,625,266 1,469 61,168 32 24,941 29,434,292 ' /796,011 9,929,000 2,343,250 2,316,950 643 045 690,331 55 457 036 60 057 007 75,031,257 70,407,284 246 361 209 760 75,277,618 70,617,044 (51,077) (50,232) 2,294,298 5,209,345 23/927,149 20,148,226 64 894 654 62 880 035 91/065,024 88,187,374 Page 2 26 The Corporation of the City of Pickering Consolidated statement of financial activities year ended December 31, 2007 Revenues Residential and farm taxation Commercial and Industrial taxation Taxation from other governments User charges Government grants and fees Other contributions and donations Development charges and developer contributions earned Investment income Penalties and Interests on taxes Fines Interest on promiSSOry notes Other Total revenues Expenditures (Note 15) Current General government Protection to persons and property Transportation services Environmental services Social and family services Recreational and cultural services Plannln and develo ment Capital General government Protection to persons and prope Transportation services Environmental services Social and Family Service Recreation and cultural ervices Pianning and develo ent Budget (Unaudited) $ (Note 19) 28,816,719 7,168,712 6,813,101 7,983,905 1,350,627 213,500 1,180,360 623,436 4,756,100 510,000 33,000 2,602,410 9 705,306 63,763,276 ( 4,534,307) (1,132,989) (1,101,847) 2,696,700 803,000 1,264,864 (3,269,443) FOR DISCUSSION PURPOSES ONLY 26 74,748 ,683,041 6,937,311 7,194,785 2,806,426 549,778 1,552,588 1,498,759 1,698,253 590,341 1,905,244 602,157 58,493,431 11,813,917 15,302,981 14,330,659 13,513,808 6,109,154 5,308,877 119,365 46,718 385,401 333,056 16,529,901 16,047,858 1,774,748 1,928,424 51063,145 52,481 722 1,014,811 1,280,176 1,342,124 1,739,315 5,978,241 3,570,541 132,408 91,493 25,029 14,945 2,186,944 1,993,404 782 10 679 557 8,690,656 61 742 702 61,172,378 3,654,619 3,669,588 4,623,973 990,641 (1,132,989) (847,000) (1,225,949) (1,095,381) 2,792,000 352,000 10,700 262,567 949,752 229,227) 1,711,166 Page 3 The Corporation of the City of Pickering Consolidated statement of changes in financial position year ended December 31, 2007 2007 $ Operating activities Net revenue E uit share of net income of Veridian Cor oration Uses Increase in taxes receivable Increase in accounts receivable Increase in other current assets Decrease in accounts payable and accrued liabilities Decrease in other current liabilities Decrease in WSIB benefit liabilities (1,042,887) (359,252) (108,288) Sources Increase in accounts payable and accrued Iiabili Increase in other current liabilities Increase in deferred revenue Increase in ost-em 10 ment benefit Iiab" t ~ 6,290,978 1,775,987 10 700 8 077 665 3 432 860 Investing activities Increase (decrease) in investme Dividends received from Veridi 4,152,862 1 640 000 5 792 862 476,418 2 969 181 3,445,599 258,025 2 711 156 2,969,181 t in City of Pickering FS (#3921): 5/21/2008: 10:41 AM Page 4 FOR DISCUSSION PURPOSES ONLY ')8 The Corporation of the City of Pickering Notes to the consolidated fmancial statements December 31, 2007 1. Significant accounting policies The consolidated financial statements of The Corporation of the City of Pickeri g (the "City") ar the representations of management prepared in accordance with generally cepted accounti g principles for local governments as established by the Public Sector Accou ing Board ("PSA ") of the Canadian Institute of Chartered Accountants. Significant accounti g policies adopt by the City are as follows: (a) Reporting entity Consolidated statements I d The consolidated financial statements reflect the set0~s, r, venues and expenditures of the operating fund, capital fund, eserve funds a reserves. The reporting entity is comprised of the activit' s of all committ es of Council and the City of Pickering Public Library Board whi is controlled b the City. All material inter-fund transactions and b nces are elimin ed on consolidation. Investment in Veridian Corporation ~ The City's investment in Veridian Co ora" "acco ted for on a modified equity basis, consistent with generally ac pted acc in principles as recommended by PSAB for investments in govern nt business ent rprises. Under the modified equity basis, Veridian Corporat' n's accounting Iicies are not adjusted to conform to those of the City and inter- rganizational tr sactions and balances are not eliminated. The City recog "zes its equity in rest in the annual net income or loss of Veridian Corporation in " 5 lidated atement of financial activities with a corresponding increase r de s "nvestment asset account. Dividends that the City may receive f m Veri Cor ration and other capital transactions are reflected as adjustm nts in the i est ent asset account. Operations of Sch 01 Boards and t Region of Durham The taxation, 0 er revenues, e enditures, assets and liabilities with respect to the operation of school b rds and the Region of Durham are not reflected in these cons Id ~ ancial atements. Trust fu s V; (i) (ii) (iii) (iv) Docvment in City of Pickering Notes (.' 5/21/08: 10'40 AM FOR DISCUSSION PURPOSES ONLY Page 5 The Corporation of the City of Pickering Notes to the consolidated [mancial statements December 31, 2007 1. Significant accounting policies (continued) (b) Basis of accounting (i) Investments Investments are recorded at the lower of cost plus accrued' terest and mar t value. Any premium or discount at purchase of an invest ent is amortized over the life of the investment. (ii) Tangible capital assets The net impact in property taxes as a res t of the applicat" n of the capping provisions does not affect the Consolida ~atement of inancial Activities as the full amounts of the property taxes wer. Ie . d owe v , the capping adjustments are reported on the consolidated St eme Financ' I Position as a receivable from the Region. Deferred revenue Deferred revenues represent ser charges and ees which have been collected but for which the related servic s have yet to be erformed. These amounts will be recognized as revenues i h,~r t services are performed. In addition, any contributions receiv d Wit:\wmal r, strictions are deferred until the related expenditures are mad . Post employment b nefits The present valu of the cost of p viding employees with future benefits programs is recognized a employees ear hese entitlements through service. Actuarial gains and 105 es amortize over the average remaining service period ("ARSP"). e t ter. ined ARSP to be 16 years. (iii) (iv) (v) (vi) t e lower of cost and net realizable value. Cost is ted-average basis. (vii) ment tra sfers are recognized in the financial statements in the period in eve ts giving rise to the transfer occur, eligibility criteria are met, and Ie timates of the amount can be made. The pr paration of financial statements in conformity with Canadian generally acce ed accounting principles requires management to make estimates and ass mptions that affect the reported amounts in the financial statements and a companying notes. Actual results could differ from these estimates. Document in City of Pickering Notes (: 5/21/08: 10:40 AM FOR DISCUSSION PURPOSES ONLY Page 6 ~ i) ,'H The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 2. Ajax Pickering Transit Authority Effective September 4, 2001, a joint Board of Management was established b Pickering and the Town of Ajax by way of a Merger Agreement for operating transit system across Pickering and Ajax. Operations, under the control of the joint boar , commenced effective January 1, 2002. In January 2005, the Councils of the City of Pickering and the Town of jax passed a r olution agreeing to the transfer of the responsibilities for transit services to e Regional Mu . ipality of Durham (the "Region"). On January 1, 2006 the Ajax Pickering Tr nsyuthority (\\ TA") transferred its operations to the Region as part of the Durham R i9?'Z~sit Co ission in accordance with Regional By-law #85-2004. v "'0 Negotiations between the City of Pickering, Town of Ajax an the Region are ngoing as to the ultimate realization of assets and assumption of liabilities the Durham R ion Transit Commission and are expected to be finalized during 200 . Any remainin und balance will be settled once negotiations with the Region are complet . Operalions of school boards and lhe Region f D If /} Further to Note 1 (a) (Hi) requisitions are mad by the~~ 0 Durham and School Boards requiring the City to collect property taxes a payments in Ii of property taxes on their behalf. The amounts collected and remitte are summarize as follows: 3. 41,472,114 495 004 41,967,118 School board $ $ Taxation Pa ments in lieu of taxes 73,818,524 4 888 255 78,706,779 4. Investments ~ The investments ha e a mar alu of $47,043,975 (2006 - $51,091,578) at the end of the year. Investments re comprise 0 ankers acceptances, medium term notes, discount notes and bonds. Document in City of Pickering Notes t. 5/21/08: 10:40 AM Page 7 FOR DISCUSSION PURPOSES ONLY The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 ;( "1 \..) ! 5. Investment in Veridian Corporation (a) Veridian Corporation is owned by the City of Pickering, Town of Ajax, M icipalityof Clarington and the City of Belleville. The City has a 41 per cent inter t in Veridian Corporation. Veridian Corporation, as a government business enter ise, is accounte for on the modified equity basis in these financial statements. Veridi Corporation set; es as the electrical distribution utility for a number of communities incl ding the four no ed above and conducts non-regulated utility service ventures thro gh its subsidiari . The following table provides condensed supplementary cons id formation for the corporation and its subsidiaries for the year ended ec Financial position: Assets Current Capital and intangibles other Total assets Liabilities Current Long-term debt other Tota/liabilities V. Document in City of Pickering Notes (: 5/21/08: 10:40 AM FOR DISCUSSION PURPOSES ONLY 53,948,442 60,794,000 18 293 223 133 035 665 67,285,173 24,910 22 403 660 89 713 743 222,749,408 235,271,455 6,878,200 233 235 950 8,913,705 2006 $ 69,512,995 138,225,079 946 571 208,684,645 42,961,459 60,794,000 20 129 148 123 884 607 67,285,173 24,910 17489 955 84 800 038 208,684,645 223,302,423 6,823,343 221 175 551 8,950,215 Page 8 i ') ,-J_." The Corporation of the City of Pickering Notes to the consolidated [mandaI statements December 31, 2007 5. Investment in Veridian Corporation (continued) (b) City of Pickering's equity represented by: Promisso Investments in Veridian Corporation Initial investment in shares of the Corporation Accumulated income Accumulated dividends received Increase in value of investments Total investment 30,496,196 8,256,018 (5,093,020) 1 108 821 34,768,015 (c) Equity in Veridian Corporation 2007 $ 2006 $ Balance, beginning of year Equity share of net income for t year Dividend received from Veridi Co Balance, end of year (d) (i) membe of the Municipal Electric Association Reciprocal " IE") which was created on January 1, 1987. A exch nge may be defined as a group of persons formed for the purpo of exchan . g eciprocal contracts of indemnity or inter-insurance with eac other. MEARIE ovides general liability insurance to member electric utilities. charged to each member utility consist of a levy per $1,000 of ervice revenue bject to a credit or surcharge based on each electric utility's e. Insurance limits of up to $30 million per occurrence are covered An ac io has been brought under the Class Proceedings Act: 1992. The plaintiff class eks $500 million in restitution for amounts paid to Toronto Hydro and to othe Ontario municipal electric utilities ("LDCs") who received late payment pe alties which constitute interest at an effective rate in excess of 60% per year, ntrary to Section 347 of the Criminal Code. Pleadings have closed in this action. he action has not yet been certified as a class action and no discoveries have been held, as the parties were awaiting the outcome of a similar proceeding brought against Enbridge Gas Distribution Inc. (formerly Consumers Gas). V, Document in City of Pickering Notes (.' 5/21/08; 10:40 AM Page 9 FOR DISCUSSION PURPOSES ONLY The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 5. Investment in Veridian Corporation (continued) (d) (ii) (iii) of corporate taxes Mar 2, 2007, the Province of Ontario released the 2007 Ontario Budget. The b ,a ounced that new rules would be put in place to limit tax deductibility for inter st aid by municipal electric utilities ("MEUs") to municipalities. Interest eligibl for deductibility for the Corporation and other Ontario MEUs would be cons' tent with OEB cost-of-capital rules. Regulations for these new rules have not ye een released by the Minister of Finance. In the absence of the new regulation, t e amount of additional tax liability related to excess interest cannot be etermined. The Corporation and subsidiary, VCI, paid interest to municipalities of $4,620,344 during 2007 that may be subject to the new tax regulations. V. Document in City of Pickering Notes C' 5/21/08: 10:40 AM Page 10 FOR DISCUSSION PURPOSES ONLY 2008 2009 2010 2011 2012 Thereafter 31,212 697,325 688,836 616,914 149,580 76 000 2,959,867 7 ~ f, if ,,) . The Corporation of the City of Pickering Notes to the consolidated [mancial statements December 31, 2007 5. Investment in Veridian Corporation (continued) (e) Lease commitments Future minimum lease payment obligations under operating leases aJ; 6. Promissory notes receivable If /) Promissory notes are payable by Veridian Cor ration ~ri an Connections Inc. in the amount of $7,095,000 and $17,974,000 res ectively, with an nterest rate of 7.6% and maturity dates of November 1, 2009. The promissory no s are convertible into common shares at the option of the holder at the te of 1 comma share for every $1,000 of principal :::e:::t:::~:u~ or before the mat it~ 7. 2007 2006 $ $ 23,528,009 22,341,331 1,557,607 1,993,928 19,166 523,014 771,076 2,144,075 1,455,769 2 129 222 1 868 148 29,881,927 28,449,418 2 543 014 984 874 32,424,941 29,434,292 V. Document ill City of Pickerillg Notes C- 5/21/08; 10:40 AM Page 11 FOR DISCUSSION PURPOSES ONLY 7 C- ,) ,) The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 7. Deferred revenue (continued) Continuity of deferred revenue is as follows: Restricted funds received General funds received Interest earned 8. Interfund loans V. Document in City of Pickering Notes (; 5/21/08; 10:40 AM FOR DISCUSSION PURPOSES ONLY 1 108 004 4 196 153 2007 2006 $ $ 1,903,668 2,470,785 1,732,892 1,867,264 442,584 392,319 66,956 82,681 38 000 4,184,100 4 813,049 Page 12 1 / :) b 9. Post-employment benefit liability (a) Post-employment benefit liability The City makes available to qualifying employees who retire before t e age of 65, the opportunity to continue their coverage for such benefits as extende health and dru . Coverage ceases at the age of 65. Dependent on eligibility, healt coverage may a shared financial responsibility between the City and the retired mployees, The Ity also provides full time and permanent part-time employees a sick 'me entitlement nd any unused entitlement is accumulated year to year. This accu I (j entitleme t is not vested and therefore does not get paid out at the time of r: tir nt or ter /nation. The most recent actuarial valuation of the post-employment en erf rmed at January 1, 2004. Information about the City's benefits liability is as fo ows: The Corporation of the City of Pickering Notes to the consolidated [mandaI statements December 31, 2007 2006 $ 2,050,400 292 850 2 343,250 1,999,100 317850 2,316,950 yed in the actuarial valuations are as follows: (i) (Ii) were assumed to increase at 10% in 2005 and decrease by 1% per year to an ultimate rate of 5% per year in 2010 and thereafter. V, Document in City of Pickering Notes (: 5/21/08: 10:40 AM Page 13 FOR DISCUSSION PURPOSES ONLY The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 7- 'j ,,/ ' 9. Post-employment benefit liability (continued) (b) Workplace Safety and Insurance Board (WSIB) benefit liabilities Effective January 1, 2001, the City became a Schedule II employer u der the Workpla e Safety & Insurance Act and follows a policy of self insurance for all . s employees. Information about the City's WSIB liability is as follows: 10. Long-term liabilities (a) The balance of I ng is made up of the following: 8,796,011 Document in City of Pickering Notes (.. 5/21/08; 10:40 AM FOR DISCUSSION PURPOSES ONLY 2006 $ 2007 $ 2006 $ 9,929,000 page 14 1 (~ ,J C The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 10. Long-term liabilities (continued) (b) The above long-term liabilities have maturity dates of July 15, 2009, D ember 23, 2009 July 12, 2011, 2016 and 2021, November 1, 2012, July 15, 2014 and ecember 23, 20 with various interest rates ranging from 3.6% to 5.6%. Principal re yments are summarized as follows: 2008 2009 2010 2011 2012 Thereafter 1,190,648 1,248,393 1,026,228 1,077,159 2,094,189 2 159 394 8796,011 (c) Long-term liabilities include a principal su which may be raised by the issuance of d 10 years. The above long-term liabilities have een approved b't; Council by-law. The annual principal and interest payments re ired to service ese liabilities are within the annual debt repayment limit prescribed the Ministry of unicipal Affairs and Housing. Interest expense recorded in t e ye~ t these long-term liabilities is $474,451 (2006 - $440,813). \S / (d) (e) 11. Amounts to be recovered 2007 2006 $ $ 2,164,250 2,137,950 4,184,100 4,813,049 8,796,011 9,929,000 643 045 690 331 15,787,406 17 570 330 12. The City's fund alances are comprised of the following: (a) Opera ng Fund balance 2007 $ 2006 $ For general reduction of taxation (51,077) (50,232) V, Document in City of Pickering Notes (: 5/21/08: 10:40 AM FOR DISCUSSION PURPOSES ONLY $ page 15 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 12. Municipal fund balances at the end of the year (continued) (b) Capital Fund balance Funds available for acquisition of tangible capital assets Acquisition of tangible capital assets expected to be Financed by long-term liabilities Financed by taxation or user charges Financed by grants Financed b donations and contributions (c) Reserves and Reserve Funds V, Document in City of Pickering Notes C' 5/21/08: 10:59 AM FOR DISCUSSION PURPOSES ONLY 5&,356 (~2~7. (50,8 0) 2007 $ 400,000 951,391 683,214 1,328,080 15,491,176 745,244 120,999 713,821 122,547 55,000 308 243 20 919 715 180,880 1,458,193 119,057 1,103,109 146 195 3007434 23,927,149 2006 $ 400,000 951,391 685,715 6,356,615 6,910,981 809,654 120,999 474,484 72,547 30,000 833 243 17645629 194,175 1,394,511 78,989 834,922 2 502 597 20,148,226 Page 16 ", 4 f I . ,.J The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 13. Pension agreements The municipality makes contributions to the Ontario Municipal Employees Reti ment Fund (OMERS), which is a multi-employer plan, on behalf of the members of its s ff. The plan is defined benefit plan which specifies the amount of the retirement benefit t be received by employees based on the length of service and rates of pay. Contributions on account of current service for 2007 were $1,828,005 2006 - $1,705, 14. Trust Funds I d Trust funds administered by the municipality amounting to $ 7,27f(~ $ 68,567) have not been included in the Consolidated Statement of Financi Position nor hall their operations been included in the Consolidated Statement of Financial ctivities. Classification of expenditures by object ~ The Consolidated Statement of Financial Activitie pre . he ex nditures by function; the following classifies those same expenditures by bject: 15. 16. 1: ansactions Revenues Interest 0 promissory notes Propert taxes levied Expens Ele rical energy and services Balan es A ounts payable romissory notes receivable Document in City of Pickering Notes (.' 5/21/08; 10:40 AM FOR DISCUSSION PURPOSES ONLY 2007 $ 35,963,876 11,881,810 2,054,598 961,143 201,718 10 679 557 61 742 702 2007 $ 1,905,244 42,093 1,919,134 393,505 25,069,000 2006 $ 32,114,799 17,386,515 1,721,394 1,097,144 161,870 8 690 656 61172 378 2006 $ 1,905,244 40,366 1,931,707 175,508 25,069,000 Page 17 17. Guarantees In the normal course of business, the City enters into agreements which cant The City's primary guarantees are as follows: (i) The City has provided indemnities under lease agreements for the e of various fac' Ities or land. Under the terms of these agreements the City agrees to 'ndemnify the counterparties for various items including, but not limited to, al iabilities, loss, s its, and damages arising during, on or after the term of the agreemen . The maximum mount of any potential future payment cannot be reasonably estimat ~ (Ii) The City indemnifies employees and elected officials for v rio s incl ing, but not limited to, all costs to settle suits or actions due to asso iation with . y, subject to certain restrictions, The City has purchased liability i urance to mitig e the cost of any potential future suits or actions. The term of the in mnification is n explicitly defined, but is limited to the period over which the indemn' led party served s an employee or elected official of the City. The maximum amou of any potentia future payment cannot be reasonably estimated. ~ (Iii) The City has entered into agreements that ay' I inde ities in favour of third parties, such as purchase and sale agree nts, c entia' y agreements, engagement letters with advisors and consultants, ou ourcing ag nts, leasing contracts, information technology agreements an service agreem nts. These indemnification agreements may require the City to mpensate coun rparties for losses incurred by the counterparties as a result of breac s in representa ' n and regulations or as a result of litigation claims or statutory sanc ons that may b suffered by the counterparty as a conseq. uence of the transaction Th!:2f th se indemnities are not explicitly defined and the maximum amount of ny po i ursement cannot be reasonably estimated. . The nature of these inde nification agr e ents prevents the City from making a reasonable estimate of e maximum ex osure due to the difficulties in assessing the amount of liability wh' h stems from t unpredictability of future events and the unlimited coverage er to counte arties. Historically, the City has not made any . significant payme s such or imilar indemnification agreements and therefore no amount has bee a lance sheet with respect to these agreements. 41 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2007 18. named as defendant in certain legal actions In which damages have been of th se actions is not determinable as at the date of reporting and o prov ion as been made in these financial statements for any liabilities which 19. udget figures The approved erating and capital budgets for 2007 are reflected on the Consolidated Schedule of erating Fund Financial Activities and Fund Balance, Consolidated Schedule of Capital Fun Financial Activities and Fund Balance, and the Consolidated Statement of Financial Activities. The budgets established for the capital fund operations are on a project-oriented basis, t costs of which may be carried out over one or more years and, therefore, may not be comp able with the current year actual amounts. As well, the municipality does not have a bud t for activity within Reserves and Reserve Funds, with the exception being those tr sactions which flow through either the operating or capital fund budgets. Budget figures ve been reclassified for the purposes of these statements to comply with PSAB reporting principles. Document in City of Pickering Notes (; 5/21/08; 10:40 AM Page 18 FOR DISCUSSION PURPOSES ONLY 20. Tangible capital assets For fiscal years commencing after January 1, 2009, the City will be required t report tangible capital assets in its consolidated financial statements in accordance with Th ublic Sector Accounting Handbook of the Canadian Institute of Chartered Accountants ction PS3150 - Tangible Capital Assets. The City is currently working toward obtaining e necessary information in order to comply with PS 3150. For 2007, Public Sector ideline 7 requir s the disclosure of tangible capital asset information in the notes to the fin cial statements 0 the extent that reliable information is available. The City is currently w rki on a plan implement PS3150 but as at December 31, 2007 the City does no h detailed t gible capital asset information to disclose. For the year ended December 31 0 ible c ital expenditures incurred during the year are recorded as capital xpenaitur . t e consolidated statement of financial activities. 42 The Corporation of the City of Pickering Notes to the consolidated fmancial statements December 31, 2007 21. Comparative figures Certain comparative figures have been reclassified statement presentation. current year financial Document in City of Pickering Notes (.' 5/21/08: 10:40 AM page 19 FOR DISCUSSION PURPOSES ONLY .",.~.~"",,,---~-~ ,1 7 '-& .") , ~, The Corporation of the City of Pickering Consolidated schedule of operating fund financial activities and fund b ance year ended December 31, 2007 Sc edule I Revenues Residential and farm taxation Commercial and industrial taxation Taxation from other governments User charges Government grants and fees Other contributions and donations Investment income Penalties and interest on taxes Fines Interest on promissory notes Other Total revenues Expenditures General government Protection to persons and property Transportation services Environmental services Social and family services Recreational and cultural services Plannin and develo ment Total ex enditures Net revenues Budget (UnaUdited) $ (Note 19) 11,813,917 14,330,659 6,109,154 119,365 385,401 16,529,901 1 774 748 51 063 145 7,401,024 ,474,748 6,683,041 6,937,311 7,194J85 352,672 98A43 lA04,505 1,698,253 590,341 1,905,244 591,612 53,930 955 15,302,981 13,513,808 5,308,877 46,718 333,056 16,047,858 1 928 424 52481,722 1 449,233 1,000,000 1,640,000 2A60,000 (2,343,239) (2,242,532) (2,668,858) 1,053,001 (4,456,014) 1,131,597 (1,132,989) (1,132,989) (1,101,847) (1,225,949) (47,286) 26,300 36,601 (2,525,074) (7,401,869 (110,000) (845) (51,503) 110,000 1,271 (51,077) (50,232) FOR DISCUSSION PURPOSES ONLY Page 20 '14 it The Corporation of the City of Pickering Consolidated schedule of capital fund financial activities and fund bal ce year ended December 31, 2007 Scl dule II Revenues Grants Other contributions and donations Development charges and developer contributions earned Other Total revenues Expenditures General government Protection to persons and property Transportation services Environmental services Social and family services Recreation and cultural services Plannin and develo ment Total ex enditures Net ex enditures Budget Unaudited $ (Note 19) 969,750 192,500 ,014,811 1,342,124 5,978,241 132,408 25,029 2,186,944 10 679 557 1,552,588 10 545 4441 727 1,280,176 1,739,315 3,570,541 91,493 14,945 1,993,404 782 8 690 656 2,283,556 2,242,532 2,668,858 1,166,125 978,374 (433,637) 2,696,700 2,792,000 803 000 597000 352000 6 949 381 3 817 906 5,379 221 (2,915,047) 1,130,292 5 209 345 4 079 053 2,294,298 5,209,345 FOR DISCUSSION PURPOSES ONLY Page 21 ~ The Corporation of the City of Pickering Consolidated schedule of reserves and reserve funds financial activities and fund balance year ended December 31, 2007 Revenues Other contributions and donations Investment income Net transfers from (to) other funds Operating Fund Ca ital Fund Total net transfers Change in reserves and reserve fund balance Reserves and reserve funds, be innin of ear Reserves and reserve funds, end of year (577,211) 20 148 226 20 725 437 23,927,149 20,148,226 Page 22 FOR DISCUSSION PURPOSES ONLY LJ Financial Statements of CITY OF PICKERI G ill PUBLIC LIBRAR BOA~ December 31,2007 DS Document in 2211 Pickering-City-Public-Library-Board-127 (; 5/27/08: 8:13 AM FOR DISCUSSION PURPOSES ONLY Auditors' Report /~1 '7 Deloitte & To he LLP 5140 Yonge treet Suite 170 Toronto N M2N 6L7 Canad We conducted our audit in accordance th Canadian nerally accepted auditing standards. Those standards require that we plan and p Ol~'t t obtain reasonable assurance whether the financial statements are free of material I Isstate . A audit includes examining, on a test basis, evidence supporting the amounts and d' closures the mancial statements. An audit also includes assessing the accounting principles u d and signi ca t estimates made by management, as well as evaluating the overall financial state nt presentation. In our opinion, these financial s tel the City of Pickering Public L' r the changes in its financial ositt accepted accounting princi es. s present airly, in all material respects, the financial position of B a ecember 31, 2007 and the results of its operations and r the y, ar then ended in accordance with the Canadian generally FOR DISCUSSION PURPOSES ONLY /1 e CITY OF PICKERING PUBLIC LIBRARY BOARD Table of Contents December 31, 2007 Statement of Financial Position Statement of Financial Activities and Change in Fund Balance 2 Notes to the Financial Statements 3-6 D Document in 2211 Picke,.ing-City-Public-Librory-Board-127 C 5/27/08: 8:13 AM FOR DISCUSSION PURPOSES ONLY Cash Accounts receivable Due from City of Pickerin o CITY OF PICKERING PUBLIC LIBRARY BOARD Statement of Financial Position December 31, 2007 2007 FINANCIAL ASSETS $ LIAB~ITIES CURRENT Accounts payable and accrued liabilities $ 155,502 Deferred Revenue Due to the Government of Canada 409 Post-employment benefits obli ation (Note 3) 123,000 278,911 NET FINANCIAL LIABILITIES (169,482) (196,364) NON-FINANCIAL ASSETS Prepaid ex ense $ 52,182 $ 73,364 NET LIABILITIES $ (117,300) $ (123,000) BOARD POSITION AMOUNTS TO BE RE $ (117,300) $ (123,000) tin 2210 Pickering-City-Public-Library-Boord-127(#7044)' 5/27/2008; 8:13 AM Page 1 of6 FOR DISCUSSION PURPOSES ONLY \) CITY OF PICKERING PUBLIC LIBRARY BOARD Statement of Financial Activities and Change in Fund Balanc Year ended December 31, 2007 2007 Budget (unaudited) (Note 7) Actual REVENUES City of Pickering grants - operating City of Pickering grants - capital Federal grants Province of Ontario grants Fines and other recei ts $ 4,052,450 186,750 $ $ 3,9 4,325 40,930 19,114 109,725 196,910 4,421,004 EXPENDITURES Operating Salaries Salaries and wages Fringe benefits Material, supplies and utilities Books Utilities Other supplies 2,582,430 531,921 3,114,351 502,541 526,327 192,249 205,422 53,315 49,125 748,105 780,874 223,235 227,773 189,704 43,898 42,013 40,131 13,600 10,397 11,817 12,600 17,880 10,103 12,750 10,562 11,885 8,295 7,457 4,183 4,706 6,248 5,509 38,759 52,501 58,509 8,000 6,873 14,806 1,763 15,763 16,679 15,228 381,606 400,146 361,875 4,374,057 4,324,986 4,257,100 186,750 197,880 140,930 4,560,807 4,522,866 4,398,030 26,882 22,974 (5,700) (5,800) (21,182) (17,174) $ $ $ in 2210 P;ckering-City-Public-Library-Board-127(#7044): 5/27/2008: 8:13 AM Page 2 of6 FOR DISCUSSION PURPOSES ONLY -'..f ,.-....i.~_~__;;.~.~__"-__.~....""',.."'"e<'''';-; The financial statements of the City of Pickering Public Library Board (the' ibrary Board") re the representations of management prepared in accordance with Can ian generally ccepted accounting principles for local government established by the Publ" Sector Accoun ng Board (PSAB) of the Canadian Institute ofChm1ered Accountants. . I d Significant accounting policies adopted by the Library Board are s fo1l6~ '1 I CITY OF PICKERING PUBLIC LIBRARY BOARD Notes to the Financial Statements December 31, 2007 1. SIGNIFICANT ACCOUNTING POLICIES Basis of accounting (b) Tangible capital assets n r tangible capital assets are not recorded , al as ets acquired during the year are rep0l1ed on ng in fund balance as capital expenditures in the (c) (d) of fi ancial statements in confonnity with Canadian generally accepted pIe requires management to make estimates and assumptions that affect the assets, liabilities and the disclosure of contingent assets and liabilities at the date of t le nancial statements and the rep0l1ed amounts of revenues and expenditures during the per' d. Actual results could differ from those estimates. Capital ex nditures were incurred to acquire furniture and equipment in the amount of $197,880 (2006 - $ ilO,930). D Document in 2211 Pickering-City-Public-Library-Boord-127 (.- 5/27/08: 8:13 AM Page30f6 FOR DISCUSSION PURPOSES ONLY r~, .</ The Library Board makes available to qualifying employees who retire b ore the age of opportunity to continue their coverage for such benefits as extended he th and drugs. overage ceases at the age of 65. Dependent on eligibility, health coverage ay be a share financial responsibility between the Library Board and the retired employ s. >rhe LibratJ5 Board also provides full time and permanent patt-time employees a sick th e 'tlement aJ any unused entitlement is accumulated year to year. This accumulated entit m i ves d and therefore does not get paid out at the time of retirement or termination. T e most recen c arial valuation of the post-employment benefits was performed at Januaty 1,20 21-. CITY OF PICKERING PUBLIC LIBRARY BOARD Notes to the Financial Statements December 31, 2007 3. POST EMPLOYMENT BENEFITS OBLIGATION Information about the Library Board's post employment b nefits liabilities' as follows: Post-employment benefits liability, beginning of~ ar Current service costs AmOltization of actuarial losses Interest expense Benefits aid during the year Post-employment benefits liability, en 2006 123,000 $ 128,800 15,800 14,900 800 800 8,000 8,400 (30,300) (29,900) $ 117,300 $ 123,000 2007 2006 $ 126,200 (8,900) $ 117,300 $ 132,700 (9,700) $ 123,000 loyed in the actuarial valuations are as follows: (a) The current ental cost trend cost at January 1, 2004, the date of the most recent actuarial valuation, as 4.5% per annum. H Ith costs were assumed to increase at 10% in 2005 and decrease by 1 % increments per year an ultimate rate of 5% per year in 2010 and thereafter. D Document in 2211 Pickering-City-Public-Library-Boord-127 (: 5/27/08: 8:13 AM Page 4 of6 FOR DISCUSSION PURPOSES ONLY The Library Board makes contributions to the Ontario Municipal Emp yees Retiremen Fund (OMERS), which is a multi-employer plan, on behalf of eligible member of its staff. The Ian is a defined benefit plan that specifies the amount of the retirement be efit to be recei ed by the employees based on the length of service and rates of pay. I ;( Contributions in the amount of $149,696 (2006 - $143,143) wer paM/t~R on behalf of its members during the year. /~J CITY OF PICKERING PUBLIC LIBRARY BOARD Notes to the Financial Statements December 31, 2007 4. PENSION AGREEMENTS 5. STATEMENT OF CHANGES IN FINANCIAL POSI the related information is A statement of changes in financial position has not ~h>sented, readily determinable from the financial statements P' sel~ GUARANTEES 6. In the normal course of business, the brary Board el ers into agreements, which contain guarantees. The Library Board's primary, ouarantees are as ollows: (i) The Library Board indemnifies mplo~o I'd members for various items including, but not limited to, all costs to s Ie sui~~~~ti~s due to association with the Library Board, subject to certain restrictiOl . The Library Bard has purchased liability insurance to mitigate the cost of any potentia future suits or ctions. The term of the indemnification is not explicitly defined, but' limited to the riod over which the indemnified party served as an employee or board 1 e of the Li rary Board. The maximum amount of any potential future payment ca ot IX stimated. (ii) i 0 agreements that may include indemnities in favour of third pm1ies, such s purchase and Ie agreements, confidentiality agreements, engagement letters rs and consul nts, outsourcing agreements, leasing contracts, information agreements a a service agreements. These indemnification agreements may ibrm}' Bard to compensate counterparties for losses incurred by the a r ult of breaches in representation and regulations or as a result of o statutory sanctions that may be suffered by the counterpmiy as a t transaction. The tenns of these indemnities are not explicitly defined and aunt of any potential reimbursement cannot be reasonably estimated. he nature of t se indemnification agreements prevents the Librm}' Board from making a reasonable esti ate of the maximum exposure due to the difficulties in assessing the amount of liability, whi stems from the unpredictability of future events and the unlimited coverage offered to counterp ties. Historically, the Library Board has not made any significant payments under such or simila mdemnification agreements and therefore no amount has been accrued in the Statement of Financ' 1 Position with respect to these agreements. D Document in 2211 Pickering-City-Public-Library-Boord-127 {.. 5/27/08; 8:13 AM Page50f6 FOR DISCUSSION PURPOSES ONLY /t CITY OF PICKERING PUBLIC LIBRARY BOARD Notes to the Financial Statements December 31, 2007 7. BUDGET FIGURES Budgets established for capital expenditures are set on a project-oriented sis, the costs of hich may be carried out over one or more fiscal years and may not be compa ble with the cur ent year actual amounts. 8. TANGIBLE CAPITAL ASSETS For fiscal years commencing after January 1, 2009, the Libr ry Board will b required to repOlt tangible capital assets in its financial statements in accorda ce with The Pub c Sector Accounting Handbook of the Canadian Institute of Chartered AccoUl nts section PS 50 - Tangible Capital Assets. The Library Board is currently working toward t' ing the nec sary information in order to comply with PS 3150. For 2007, Public Sector id 'ne requir the disclosure of tangible capital asset infonnation in the notes to the fi nc' tement to the extent that reliable infonnation is available. The Library Board is c rrently 'ng n a plan to implement PS3150 but as at December 3 1, 2007 the Library B rd does not e detailed tangible capital asset infonnation to disclose. For the year end December 3 I, 007 tangible capital expenditures incurred during the year are recorded as cag' al expenditures 1 the statement of financial activities. COMPARATIVE FIGURES ~ Certain of the prior year's comp ative figu~ha~ been reclassified to confonn to the current year's financial statement presen tion. 9. ~ D Document in 2211 Pickering-City-Public-Librory-Boord-127 (.' 5/27/08: 8:13 AM FOR DISCUSSION PURPOSES ONLY Page 6 of6 Financial Statements of THE CORPORATIO THE CITY OF PIC TRUST FUNDS DS Doa.unent in 2210 2007 Trust Notes (: 5/27/08: 8:00 AM FOR DISCUSSION PURPOSES ONLY '-) b Deloitte & T che LLP 5140 Yong Street Suite 17 Torant Cana Auditors' Report To the Members of Council, Inhabitants and Ratepayers of The Corporation of the City of Pickering We have audited the statement of financial position of the T st unds of the orporation of the City of Pickering as at December 31, 2007 and the statement of fin ci ac' vities a fund balances of the Trust Funds for the year then ended. These financial st em re th responsibility of the City's management. Our responsibility is to express an opinio on these statements based on our audit. We conducted our audit in accordance with Those standards require that we plan and perfo financial statements are free of material mis ate ent. An a it includes examining, on a test basis, evidence suppOlting the amounts and disci sure i 111 cial statements. An audit also includes assessing the accounting principles used and sig cant stimates made by management, as well as evaluating the overall financial statemen presentatio' FOR DISCUSSION PURPOSES ONLY THE CORPORATION OF THE CITY OF PICKERING TRUST FUNDS Statement of Financial Position December 31, 2007 FINANCIAL ASSETS Investments Interest receivable Loans receivable TRUST FUND POSITION OHRP 2007 Dorothy Card Estate 2006 $ $ 256,674 256,674 18,360 8,222 2,240 3,671 $ 2,240 $ 268,567 $ 2,240 $ 268,567 tin 22112007 Trust FS (#7043); 5/27/2008: 7:59 AM Page 1 of3 FOR DISCUSSION PURPOSES ONLY ) >{ " \.' THE CORPORATION OF THE CITY OF PICKERING TRUST FUNDS Statement of Financial Activities and Fund Balances Year ended December 31, 2007 REVENUES Interest 2007 Dorothy Card OHRP Estate $ 314 $ 1,658 87 1,745 (1,431) EXPENDITURES Provincial payments Administration charges NET REVENUES (EXPENDITURES) FUND BALANCE, BEGINNING OF YEAR FUND BALANCE, END OF YEAR FOR DISCUSSION PURPOSES ONLY 9,641 1,766 93 1,859 7,782 268,567 $ 277,274 260,785 $ 268,567 Page 2 of3 THE CORPORATION OF THE CITY OF PICKERING TRUST FUNDS Notes to the Financial Statements December 31, 2007 1. ACCOUNTING POLICY The financial statements of the Trust Funds of the Corporation of the ty of Pickering re the representations of management prepared in accordance with Ca aian generally accounting principles. Significant accounting policies adopted include: Basis of accounting Investments Investments are recorded at cost. roximates their fair value. 2. ONTARIO HOME RENEWAL P 'vable at ecember 31, 2007 are comprised entirely of repayable loans of ). the event of the sale or lease of the home or in the event of the o upy the home, the balances of the repayable loan immediately become e omeowner. 3. The City of p' ering has established a trust fund for the Dorothy Card Estate for the care and upkeep of t destitute elderly. The fund balance is comprised of investments and accumulated interest am unting to $275,034 (2006 - $264,896). A atement of cash flows has not been presented as the information is readily determinable from e financial statements presented. D Document in 22102007 Trust Notes t. 5127/08; 8;00 AM Page 3 of3 FOR DISCUSSION PURPOSES ONLY Cifl{ o~ REPORT TO EXECUTIVE COMMITTEE Report Number: CS 20-08 Date: June 9, 2008 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Hiring of Consultant to Implement Public Sector Accounting Board (PSAB) 3150 Reporting Requirements Recommendations: 1. That Report CS 20-08 of the Director, Corporate Services & Treasurer be received; 2. That the Director, Corporate Services & Treasurer be authorized to engage the firm of TCA Consulting Limited to assist the municipality in implementing the reporting requirements of Public Sector Accounting Board (PSAB) 3150 as provided in the 2008 Current Budget; and, 3. That the appropriate officials of the City of Pickering be authorized to take the necessary action to give effect hereto. Executive Summary: There is a Provincial requirement for municipalities to significantly change their financial reporting by incorporating tangible capital assets within their financial statements by 2009. This requirement has been legislated by the Public Sector Accounting Board (PSAB), the body which sets the standards for reporting for municipalities. This will require the inventorying, valuation and conditional assessment of all tangible capital assets owned by the municipality. The City needs to hire a consultant to assist staff in meeting the December 31 st deadline and to comply with the requirements of the City's external auditors. The consultant selected has prior work experience specifically in implementing PSAB 3150 and the City would benefit from his knowledge and experience in meeting the deadline. If the City does not meet the external auditor requirements, the City will not be able to issue "clean" financial statements that in-turn would impede the City's ability to borrow funds for future years' capital projects. Financial Implications: Financing for the consultant is provided through the 2008 Current budget as approved by Council. The total estimated cost for the consultant is approximately $35,000 for the balance of 2008. We anticipate the work carrying on into 2009 to assist in meeting the December 31,2009 deadline. Report CS 20-08 Date: June 9, 2008 Subject: Hiring of Consultant to Implement PSAB 3150 Page 2 4~~. '. ,i Sustainability Implications: Without the use of the consultant, the City may not be able to meet the December 31 st deadline and therefore put at risk the financial sustainable of this corporation. Background: City staff are recommending that staff engage the consulting services of TCA Consulting Limited and their principal consultant is Mr. Calvin Hawke a chartered accountant with over thirty years of municipal accounting experience. Staff have selected TCA Consulting Limited for the following reasons: 1. Relevant Project Work Experience . Mr. Calvin Hawke participated in the Ontario Municipal CAO's Benchmarking initiative (OMBI), Tangible Capital Assets pilot site manager - County of Brant. (In other words, he has implement or completed the reporting requirements of the project). 2. Knowledge & Training . AMCTO has offered several different training sessions throughout the Province to assist municipal staff in implementing TCA reporting requirements. One of their major speakers and or trainers is Mr. Calvin Hawke. The consultant will be required throughout the project to do the following tasks: review and analyze gathered information, provide guidance and advice on various capital asset issues, meet with external auditors and provide guidance and assistance to the project team to best meet the project deadline. The City has considered other consultants however, the consultants did not have the practical work experience and or background to assist the City. In other words, the City is trying to maximize its resource dollars by selecting a competent consultant who can assist the City to meet the quickly approaching deadline. TCA consulting has been used by the following municipalities: City of Oshawa, Toronto, Waterloo Region, Town of Perth and City of Fredericton (New Brunswick). Recommendation 2 is seeking Council authority and or approval to basically single source the hiring of TCA Consulting for this part of the project. Consulting resources may be required for other phases of the project such as building valuation or other technical valuation issues. By using TCA Consulting's knowledge and expertise, the City will be in a better position to meet the December 31 st reporting deadline. Report CS 20-08 Date: June 9, 2008 Subject: Hiring of Consultant to Implement PSAB 3150 t~ ') ." . Page 3 Attachments: None Prepared By: Prepared I Approved By: ~;;? ...... .---- ..-......... ~{:' ~~-:-? ."'" < ~.~=-l-..::.:~. _~ __c Gillis A. Paterson Director, Corporate Services & Treasurer ;/ ---- ;/ ,... ,;:;..", ..--.--..--- te-- ~_.. St~n Karwowski ---- Manager, Finance & Taxation GAP:vw Co : Chief Administrative Officer Recommended for the consideration of Pickering City Council /, / .'- /( CiUI o~ REPORT TO EXECUTIVE COMMMITTEE Report Number: CS 24-08 Date: June 9, 2008 !),~ From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2007 Pre-Audit Balances of Reserves and Reserve Funds Recommendation: That Report CS 24-08 of the Director, Corporate Services & Treasurer be received for information. Executive Summary: Based on the preliminary 2007 results, we can now report on the pre-audit actual activities within the Reserves and Reserve Funds for 2007. A summary is presented in Appendix A. The purpose and 2007 financial transactions for each Reserve and Reserve Fund are set out in Appendices Band C respectively. Financial Implications: Not applicable Sustainability Implications: Funds available under the Reserves and Reserve Funds provide partial financial support towards the sustainability of Pickering in both capital and operating expenditures. Background: As in previous reports filed over the years, this report provides specific information on each of the City's Reserves and Reserve Funds, including year-end balances. The 2007 pre-audit Reserves and Reserve Funds balance of $53,809,076 is one of the highest balances ever reported in Pickering. However, this balance is not fully available for use due to the outstanding budget commitments of funds not yet spent, the obligations connected with the collection of funds or other specific purposes approved by Councilor under Provincial Legislation. With regard to unspent budget commitments for capital projects, we are continuing the practice of not transferring funding for commitments until the expenditures are incurred. This procedure allows the Reserve Funds to earn interest income as long as funds are still in the Reserve Fund's custody and is in compliance with Public Sector Accounting Report CS 24-08 Date: June 9,2008 Subject: 2007 Pre-Audit Balances of Reserves and Reserve Funds Page 2 6 <'I Board (PSAB) for obligatory Reserve Funds. The combined unspent budget commitments for all Reserve Funds are $6,298,370. The City's share of collections from OPG related to properties under assessment appeal for the period of 2003-2006 in the amount of $5.098 million has been settled. The City has officially recognized this amount and these funds have been transferred to the Rate Stabilization Reserve. These funds can now be used for future budgeting years for both the capital and current expenditures. The Development Charges, Parkland, Third Party/Developer Contributions, Ontario Transit Renewal, Provincial Dedicated Gas, Federal Gas Tax and Building Permit Reserve Funds represent funds received for specific purposes subject to legislative requirements and based on developer agreements or agreements with any third parties. Funds available in these Reserve Funds are obligatory in nature and should be treated as committed. The balance in these obligatory Reserve Funds is $29,881,927 (See Appendix A). The combined total of the budget commitments, other restricted balances and obligatory Reserve Funds of approximately $35 million reduced the "discretionary" balance to approximately $18 million as at December 31 , 2007. The City established two new Reserve Funds this year, namely: Animal Shelter Reserve Fund and Pickering Men's Slow Pitch League Reserve Fund. 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. The outstanding principal balance as at December 31, 2007 is approximately $4.18 million. These loans are undertaken from the Development Charges and Parkland Reserve Funds. The breakdown of the principal balance for both the Reserve Funds is $3.89 million and $292,000 respectively. This provided the Reserve Funds with an attractive rate of interest compared to current market investment rates while at the same time providing a cheaper cost of borrowing to the capital fund. Interest earned on internal loans represents amounts earned on the 2001 to 2006 internal borrowings. Repayment for 2007 internal borrowings will commence in 2008 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 Report CS 24-08 Date: June 9, 2008 Subject: 2007 Pre-Audit Balances of Reserves and Reserve Funds Page 3 h L) Prepared By: ~V-o~ Senior Financial Analyst GAP:ck Copy: Chief Administrative Officer Recommended for the consideration of Pickering CityA;;ouncil 1/ Approved I Endorsed By: ~@~_::~~:~L=::'~_, .. . . .~-_.' ..-.' .." <.... _._..~,.<3'."-"-'::~-"'" '11.._ -----.....- ..."" ,_.' ::;:;=:::=--;-- Gillis A. Paterson Director, Corporate Services & Treasurer '/' ..... '" -L TO REPORT # e ~ .:2.Lf - D f / 1-) f) APPENDIX A CITY OF PICKERING SUMMARY OF RESERVES AND RESERVE FUNDS PRE-AUDIT ACTUALS DECEMBER 31, 2007 Pre Audit Audited Audited Audited Appendix B Summary Reserves 2007 2006 2005 2004 4610 Working Funds 400,000 $400,000 $400,000 $400,000 4611/4623 Replacement Capital 683,214 685,715 722,844 758,175 4612 Contingencies-OPG, Election, Other 2 1,328,080 6,356,615 10,774,909 9,053,320 4613 Self-Insurance 2 951,391 951,391 915,514 940,514 4619 Rate Stabilization 15,491,176 6,910,981 3,388,965 2,619,565 4620 Develop.Charges-City's Share 2 745,244 809,654 484,204 1,921,332 4621 Region Transit 2 120,999 120,999 237,106 1,025,741 4622 Continuing Studies 2 713,821 474,484 342,533 233,159 4624 Vehicle Replacement 122,547 72,547 75,000 25,000 4625 Easement'Settlement 1,095,129 4626 Library Eastern Branch 2 55,000 30,000 20,000 4627 Move Ontario 308,243 833,243 Total Reserves 20,919,715 $17,645,629 $18,456,204 $16,976,806 Pre Audit Audited Audited Audited Appendix C Summary of Reserve Funds 2007 2006 2005 2004 4225 Community Facilities 180,880 $194,175 $265,492 $380,604 4228 Capital Works 335,486 321,618 309,872 302,610 4229 Development Charges 1 & 2 23,528,009 22,341,331 21,135,306 19,496,777 4230 Parkland 1 &2 1,557,607 1,993,928 2,103,061 2,166,696 4232 Public Works 1,122,707 1,072,893 1,038,206 1,152,444 4234 Workers Safety Insurance Brd 2 1,103,109 834,922 589,575 378,731 4235 Third PartylDev. Contributions 1 2,129,221 1,868,148 1,819,264 1,601,076 4236 Ontario Transit Renewal 1 19,166 19,166 14,035 4237 Squash Courts 2 119,057 78,989 66,087 33,713 4238 Provo Dedicated Gas Tax 1 523,014 771,076 722,039 161,515 4239 Federal Gas Ta~ Revenue 1 2,144,076 1,455,769 850,684 4240 Building Permit Stabilization Fees 1&2 4241 Animal Shelter New 2 146,195 4242 Pickering Mens' Slow Pitch New 2 Total Reserve Funds $32,889,361 $30,952,015 $28,918,752 $25,688,201 Total Reserves & Reserve Funds $53,809,076 $48,597,644 $47,374,956 $42,665,007 Notes 1 Obligatory 2 Restricted Total Obligatory 1 & Restricted ~ -2007 = 29,881,927 (Includes 4229 & 4230) 5,136,701 (Excludes 4229 & 4230) 35,018,628 ">.-cti i'-i":'i '1 -.:.1\ ~ '-~''''\RT# ;'), J" ;\(/ :,.;.i(JI ~ . . '1 - U ~ APPENDIX B ... '7 l) "' RESERVE FOR WORKING FUNDS 4610 Actual Balance December 31,2006 Transfers into the Reserve $ 400,000 Transfers out of the Reserve Pre-Audit Actual Balance December 31,2007 $ 400,000 1. Purpose of this Reserve: The reserve for working funds is used to provide operating cash to assist in avoiding short term interest expenses incurred on operations, typically during the first few months of the year prior to tax billing and at other times when cash inflows and outflows do not match as occurs in any corporation. The interest income on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of the Reserve: It is recommended as a "rule-of-thumb" that this reserve be 2% to 3% of total City revenues. Based on an average annual revenue of $45 million, at 2%, the amount to maintain for this reserve should be $900,000. 6 F'. APPENDIX B RESERVE FOR REPLACEMENT OF CAPITAL EQUIPMENT - G/L 4611/4623 Actual Balance December 31, 2006 Transfers into the Reserve Revenue Fund Contribution $ 685,715 115,462 Transers out of the Reserve Transfers to Capital Fund (117,963) Pre-Audit Actual Balance December 31,2007 $ 683,214 1. Purpose of this Reserve: The purpose of this reserve is to reduce the need to levy for the full cost of major equipment in the year of acquisition. The reserve acts as a stabilization factor and helps to avoid both tax rate fluctuations and the issuance of long-term debt or other means of financing. The interest income on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance Levels of this Reserve: This reserve should be kept at a level that is equivalent to the replacement cost of the assets for which they were established. Over the last couple of years, the reserve balance has been kept at a minimum level. Contributions to this reserve are provided for annually in the Current Budget. In 2003, additional sub-categories were set up for accounting purposes to better match the collection of funds to the application of these funds to particular facilities as shown on the following page. APPENDIX B ~ , "' h l) The balances pertaining to these sub-categories are as follows: General Recreation Dunbarton Don Beer Rec Camp Rec Camp Rec Camp Corp Use Prgrms Pool Arena Core Pool Arena Total $ $ $ $ $ $ $ $ Dec 31/06 53,859 11 6,252 32,616 104,678 8 1 ,773 166,312 130,225 685,715 Transfers in 0 1 8,500 4,962 30,000 27,000 15,000 20,000 115,462 Transfers out (51,376) (66,587) (117,963) Dec 31/07 2,483 134,752 37,578 68,091 108,773 181,312 150,225 683,214 --1 /'^i I ' ; APPENDIX B RESERVE FOR CONTINGENOES- G/L 4612 (OPG, Other Assessment Appeals, Election, Miscellaneous) Actual Balance December 31,2006 Transfers into the Reserve Transfers from Revenue Fund $ 6,356,615 70,000 Transfers out of the Reserve: Transfers to Rate Stabilization Reserve Pre-Audit Actual Balance December 31, 2007 (5,098,535) $ 1,328,080 1. Purpose of this Reserve: Like the Capital Equipment Replacement Reserve, this reserve acts in a tax stabilization capacity. It was established in anticipation of unknown, unusual or extraordinary expenditures, which occur from time to time. The interest income on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance Levels of this Reserve: In 2003, the large balances in this Reserve were reviewed and grouped into sub- categories in the general ledger, for accounting purposes only, to better distinguish those amounts that are committed and those amounts available for general corporate use. The sub-categories are as follows: OPG Assessment Appeal, Elections, Other Assessment Appeals and Miscellaneous. The funds related to Contingency-Ontario Power Generation (OPG) Assessment in the amount of $5,098,535 for assessment appeals related to the taxation years 2003-2006 have been reached and this amount was transferred to the Rate Stabilization Reserve in 2007. Report to Council CS 47-07 provides detailed information on OPG Assessment Appeals. The amounts pertaining to the other sub-categories are as follows: Election- $70,000 Other Assessment Appeals - $682,594 and Miscellaneous - $575,486. APPENDIX B RESERVE FOR SELF INSURANCE - G/L 4613 Actual Balance December 31,2006 Transfers into the Reserve $ 951,391 Transfers out of the Reserve: Transfer to Capital Pre-Audit Actual Balance December 31,2007 $ 951,391 1. Purpose of this Reserve: This reserve was established as a necessary form of asset protection. Specifically, it is to cover insurance claims resulting from the increase in deductible levels, costs of uninsured claims and other claim related costs. The higher deductible reduced insurance premiums. Significant savings can be realized through reduced premium costs and staff analyzes the costs/benefits of such actions on an annual basis. The interest income on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance Levels of this Reserve: This reserve should be maintained at a level to ensure that the funding is adequate to meet future liabilities. This situation is analyzed by staff on a regular basis. r) .I APPENDIX B RESERVE FOR RATE STABILIZATION - G/L 4619 Actual Balance December 31,2006 Transfers into the Reserve Excess Surplus Contribution Transfer from OPG Assessment Appeal Reserve Dividend from Veridian $ 6,910,981 3,500,660 5,098,535 1,640,000 10,239,195 17,150,176 Transfers out of the Reserve 2007 Current Budget Provision (1,659,000) $ 15,491,176 Pre-Audit Actual Balance December 31,2007 1. Purpose of this Reserve: The purpose of this reserve is to act as a tax rate stabilization factor for annual current budget funding. The interest income on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: The fund balance should be maintained at a level of 3 to 5 per cent of tax revenues to provide tax rate stabilization for annual current budgeting purposes. The 2007 Current Budget provided for a transfer in the amount of $1,659,000 from this reserve to fund current expenditures. With the settlement of OPG assessment appeal, dividends from Veridian and surplus in the year ended 2007; there is sufficient build-up of funds to draw from this reserve for future budgeting years. In 2008, there is a budgeted draw of $2,486,182 and further draws anticipated in 2009 and after. f/ .~ APPENDIX B RESERVE FOR DEVELOPMENT CHARGES - CITY SHARE G1L 4620 Actual Balance December 31,2006 $ 809,654 Transfers into the Reserve 2007 Current Budget Provision 250,000 Transfers out of the Reserve Transfer to Capital Fund -External Subdivision Works (277,725) -Pa rks (36,685) Pre-Audit Actual Balance December 31,2007 $ 745,244 1. Purpose of this Reserve: This reserve has been established to set aside funds for projected growth in the City. From the 1999 and the 2004 Development Charges Studies it was approved that a Reserve be established for the City's share (i.e. the non- development charge portion)' of the costs of services included in the Development Charges Study and that contributions be included in the annual Current Budget for consideration by Council. For the City to meet its obligations for the various capital projects, an annual contribution of $2.4 million is required. The interest incomes on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: Funds continue to be budgeted in the Current Budget to build up this reserve to fund future capital growth of the City. The draws in the current year were to finance Parks and 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. '7 11 i Lf- APPENDIX B REGION TRANSIT RESERVE - G/l 4621 Actual Balance December 31,2006 Transfers into the Reserve GO Transit Funding from Region $ 120,999 Transfers out of the Reserve Pre-Audit Actual Balance December 31,2007 $ 120,999 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 this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: The Ajax Pickering Transit Authority (APTA) has been officially transferred to the Reg,ional Municipality of Durham (Region) effective January 1, 2006, thus there is no longer any revenue from the Region for this Reserve. The balance of this reserve is expected to be used for any unpaid commitments or obligations related to APTA. This Reserve will eventually be closed-out upon settling all our commitments and obligations. i 1 / ~-'j APPENDIX B RESERVE FOR CONTINUING STUDIES & CONSULTING - G/l 4622 Actual Balance December 31,2006 $ 474,484 Transfers into the Reserve Continuing Consulting Work or Studies 251,345 Transfers out of the Reserve (12,008) Pre-Audit Actual Balance December 31, 2007 $ 713,821 1. Purpose of this Reserve: This reserve was established to capture any unspent annual Current Budget provisions related to consulting, continuing studies, professional and legal fees. Under Generally Accepted Accounting Principles, the approval to expend funds for these efforts ceases at year-end, however work may continue beyond that date. The establishment of this fund enables the transfer of unspent funds into future year and accommodates this frequent timing difference between the approval and the expenditure. The interest income on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: There would be no recommended maintenance levels. Funds transferred to this reserve will be used to fund the balance of the expenditures still to be incurred for incomplete studies or consulting contracts. Expenditures incurred in 2007 in the amount of $12,008 pertained to consulting work that was transferred into the Reserve in the prior year. An additional amount of $251 ,345 has been transferred-in for future work. ,} / I t) APPENDIX B RESERVE FOR VEHICLE REPLACEMENT - G/l 4624 Actual Balance December 31,2006 Transfers into the Reserve $ 72,547 50,000 Transfers out of the Reserve to Capital Fund Pre-Audit Actual Balance December 31,2007 $ 122,547 1. Purpose of this Reserve: This reserve was newly established in 2004 to begin building up funds to finance the cost of replacing the City's aging fleet. The interest income on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: There would be no recommended maintenance levels. Funds transferred to this reserve will be committed to fund the purchase of new vehicles. ./ C/ APPENDIX B RESERVE - PROVISION FOR EASTERN BRANCH LIBRARY - G/l 4626 Actual Balance December 31, 2006 Transfers into the Reserve $ 30,000 25,000 Transfers out of the Reserve Pre-Audit Actual Balance December 31,2007 $ 55,000 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 this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: There would be no recommended maintenance levels. In 2002, the Board of the Library requested $10,000 under the Capital Budget for the "Provision for Eastern Branch". A similar request was made in both 2005 and 2006 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 has been done by a "Transfer to Reserve for the Provision for Eastern Branch". In 2007, the annual provision has been increased to $25,000. , ...~ / L APPENDIX B RESERVE - MOVE ONTARIO - G1l 4627 Actual Balance December 31, 2006 Contribution from Province of Ontario $ 833,243 Transfers out of the ReseNe Capital Expenditures -Roads (525,000) Pre-Audit Actual Balance December 31,2007 $ 308,243 1. Purpose of this Reserve: This reseNe was newly established in 2006 to capture the one-time funding received on March 20, 2006 from the Ontario government, the Ministry of Transportation. The Ontario government is providing a one-time investment to help municipalities primarily outside the GTA, with specific emphasis on rural and northern municipalities and to invest in municipal roads and bridges. Municipalities will determine their own roads and bridges priorities. The interest income on this account forms part of the annual Current Budget General Government Revenue. 2. Recommended Maintenance levels of this Reserve: There would be no recommended maintenance levels. ; ACHMENTI~ TO REPC:~ $. r- ,. f C .,j.-< Y .' ) APPENDIX C \.j RESERVE FUND FOR COMMUNITY FACILITIES - GlL 4225 Actual Balance December 31, 2006 $ 194,175 Transfers into the Reserve Fund Interest Earned on External Investments 7,705 7,705 Transfers out of the Reserve Fund Transfer to Capital Fund - Senior Centre (17,500) Transfer to Capital Fund - Community Centre (3,500) (21,000) Pre-Audit Actual Balance December 31,2007 $ 180,880 1. Purpose of this Reserve Fund: This is a "discretionary" reserve fund established by Council to attempt to avoid both tax rate fluctuations and the need for issuing long term debt for major expenditures required for community facilities. The interest income on this reserve fund forms part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund: The balances in this fund have fluctuated from the high in 1998 of $773,483 to the low in 2001 of $69,102. Other than interest income earned, there has been no transfer to this reserve fund in the last six years. Expenditures are transferred out of reserve funds only when incurred. The value of the unspent budget commitments as at December 31, 2007 is $167,648. Taking these commitments into consideration, the uncommitted balance of funds available is $13,232. Additional amounts must be provided to this fund. () ;'1. () \) APPENDIX C RESERVE FUND FOR CAPITAL WORKS - G/L 4228 Actual Balance December 31,2006 Transfers into the Reserve Fund Interest Earned on External Investments $ 321,618 13,868 Transfers out of the ReseNe Fund Pre-Audit Actual Balance December 31,2007 $ 335,486 1. Purpose of this Reserve Fund: This Fund is a "discretionary" one and was established pursuant to section 417(1) (2) of the Municipal Act, 2001 for specified purposes by Council related to the acquisition of assets. The interest income on this reseNe fund forms part of the reseNe fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund: Between the years of 1998 to 2000, the balances have been maintained at $600,000 to $800,000. There has been no major contribution to this ReseNe Fund in the past seven years. The value of the unspent budget commitments at the end of 2007 is $13,822. Taking these unspent budget commitments into account, the uncommitted balance available as at December 31, 2007 will be reduced to $321,664. Major additional contributions will be required in future years. APPENDIX C i (~ I RESERVE FUND FOR DEVELOPMENT CHARGES - G/L 4229 Actual Balance December 31, 2006 $ 22,341,331 Transfers into tre Reserve Fund: Net Developer Contributions $ 1,457,284 Interest Earred on External Investments 801,546 Interest Earred on I nternal Loans 179,538 2,438,368 Transfers out of the Reserve Fund: Transfer Transit component to Region (10,200) Transfer to Current Fum-DC Study (967) Transfer to Capital Fund: Fire-Additim & Renovations to Station 5 $ (294,266) Parks (13,403) Ext. Subdiv- Roads & Related (815,028) Ext. Subdiv- Storm Water Management (115,700) . Sidewalk-401 Pedestrian Bridge to GO Station (2,126) (1,240,523) Pre-Audit Actual Balance December 31, 2007 $ 23,528,009 1. Purpose of this Reserve Fund: This is an "obligatory" reserve fund and as such is governed by Municipal Act 2001, Development Charges Act, 1997, Ontario Regulation 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 and related background studies required for new growth. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: In accordance with development charge legislation, .ill! development charge revenues must be held within separate Reserve Funds and can only be used for the financing of growth-related projects. As such, no reserve fund limits are appropriate for the Development Charge Reserve Funds because they are tied to growth-related capital requirements. This reserve fund has an unspent budget commitment of $3,664,631. The pre- audit actual balance of $23,528,009 would be reduced by this amount to reflect an uncommitted balance of funds available for future expenditures of $19,863,378. ~2 ') ',,1 <.," APPENDIX C RESERVE FUND FOR PARKLAND - G/L 4230 Actual Balance December 31, 2006 Transfers into the Reserve Fund: Developers Contributions $ Interest Earned m External Investments Interest Earned m Internal Loans $ 1,993,928 218,207 72,983 15,790 306,980 Transfers out of the Reserve Fund: Transfer to Capital Fund-Parks: Asphalt Replacement-Amberlea Park (basket crt) Wata-frmt Trail-Park Crescent Park Signage Playground Reconstruction& Equipment Playground Equipment Replacement David Farr Park Case Tractor To-o W/2l'vbwers Purchase of Property-Waterfront Trail Pre-Audit Adual Balance December 31, 2007 1. Purpose of this Reserve Fund: $ (15,560) (34,814) (960) (93,454 ) (33,063) (231,416) (35,629) (83,160) (215,245) (743,301 ) $ 1,557,007 This is an "obligatory" reserve fund and it was established pursuant to section 417(1 )(2) of the Municipal Act, 2001 as required by subsections 42(1), (5), (6), (7), (8) and (9) of the Planning Act. This fund is governed by legislation, regulation or agreement and requires revenues received for the special purposes to be segregated from the general revenues of the municipality. Obligatory reserve funds must be created whenever a statute requires revenues for a special purpose to be segregated from the general revenues of the municipality and the revenue is to be used solely for the purpose prescribed by statute. The interest incomes on these funds form part of the res-erve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund: Due to the obligatory nature of this fund, there are no limits on this fund. The value of the unspent budget commitment as at the year ended 2007 is $429,148. The pre-audit balance of $1,557,607, after taking into account the unspent budget commitments, will provide an uncommitted balance available of $1,128,459 as at December 31,2007. APPENDIX C c~ :-~, RESERVE FUND FOR PUBLIC WORKS - G1L 4232 Actual Balance December 31, 2006 Transfers into the Reserve Fund Third Party Contributions Interest Eamed on Extemallnvestments $ 1,072,893 $ 3,444 46,370 49,814 Transfers out of the Reserve Fund Pre-Audit Actual Balance December 31,2007 $ 1,122,707 1. Purpose of this Reserve Fund: This fund was established by Council pursuant to section 417(1) (2) of the Municipal Act, 2001. The purpose of the reserve fund is to acquire fixed assets, to fund capital works related to public property, without the need to fund on a long-term nature through the issue of debentures. The main purpose at this time is to fund the City's share of the cost of subdivision works committed to under various subdivision agreements. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund: The "average" annual balance of this fund over the last four years has been approximately $1 million. This reserve fund should be kept at least at this level in the future. Staff will periodically review the need for this level with the requirements contained in the capital budget and four year program and report any different findings to Council. The value of unspent budget commitments for 2007 is $25,000. The pre-audit balance of $1,122,707 would be reduced by this amount to reflect an uncommitted balance of funds available of $1 ,097,707 as at December 31,2007. ",I /~ F) L~ APPENDIX C RESERVE FUND FOR VVCRKERS SAFETY I NSURJW;E BOARD - GIL 4234 Actual Balance December 31,2006 $ 834,922 Transfers into the REServe Furd Cmtribution from Current Fund $ 423,349 Interest Eamoo m Extemallnvestments 43,633 466,982 Transfers out of the REServe Fund Claims ard Oher Related Costs $ (63,005) Insurance O:>sts (115,790) Cmtribution to Health & Safety Training (20,000) (100,795) Pre-Audit Actual Balance December 31, 2007 $ 1,103,109 1. Purpose of this Reserve Fund: This reserve fund has been established to provide for the annual costs of insurance coverage, contributions towards the health and safety program, and the payment of claims and other related costs now that the City is a Schedule 2 employer. This reserve fund was created in 2001 further to the recommendation passed in Council Resolution#127/01 and in compliance with Workplace Safety & Insurance Act. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: Starting from 2004 and continuing to 2006, the contributions were more than double the claims experience for the year, resulting to a built-up in the balance of the reserve fund. As Schedule 2 operates on the self-insured principle, any anticipated savings between contributions and claims experience will be transferred to this Reserve Fund to build up the fund balance in the event of any catastrophic claim-related costs, which may occur. The average annual built-up of approximately $220,414 from 2003 to 2007 has resulted to the 2007 year-end balance of $1,103,109. APPENDIX C ~..~ .:'-,) THIRD PARTYIDEVELOPERS CONTRIBUTIONS RESERVE FUND - GIL 4235 Actual Balance December 31,2006 Transfers into the Reserve Fund Contributions from Developer&'Third Parties Interest Eamed on Extemallnvestments $ 1,868,148 $ 205,408 81,324 286,732 Transfers out of the Reserve Fund Capital Expenditures-Ext. Subdivision Works Transfer to own Reserve Fund Pre-Audit Actual Balance December 31, 2007 (24,696) (963) $ 2,129,221 1. Purpose of this Reserve Fund: This reserve fund was established by Council pursuant to Section 417(1) of the Municipal Act, 2001. The purpose of this reserve fund is to capture contributions from developers or third parties per development agreements and any cost sharing arrangements for future capital projects. Due to the externally restricted contributions, this reserve fund is treated as obligatory. The collections are committed for specific purposes and not available for general use. Unless specified, the City is under no obligation to pay interest to any developers or third parties. The interest incomes on these funds form part of the Reserve Fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund No reserve fund limits are appropriate for this fund as collection and commitment of funds are dependent upon development agreements or cost sharing arrangements. hI"'_~-""""""","~""",~_",,,,,,,,,_,,,,,,~- - ~ (-\ "- APPENDIX C ONTARIO TRANSIT REtaVAL RESERVE FUND.. G'L 4236 Actual Balance Decerrber 31, 2>06 $ 19,100 Transfers into the Reserve Fund Cmtribution from Mnistry of Transportation $ I nterest on External Investrrents-reversal Transfers out of the Reserve Fund QffiEKlut aocoLl1t-Reverue Fund (19,100) Pre-Audit Actual Balance Decerrber 31, 2007 $ 1. Purpose of this Reserve Fund: This is an "obligatory" reserve fund established to capture funding received from Ministry of Transportation for the sole purpose of funding acquisition of APTA vehicles or for any major vehicle refurbishment. The interest incomes on these funds form part of the Reserve Fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance Levels of this Reserve Fund: No reserve fund limits are appropriate for this fund as availability of funds is dependent on the amount of grant received. Funds are provided from the Ontario Transit Renewal Program as expenditures are incurred. With the transfer of APTA to the Regional Municipality of Durham effective January 1,2006, this Reserve Fund was officially closed-out in 2007 with the remaining funds recognized as revenue in the Revenue Fund. Hi APPENDIX C SQUASH COlRTS RESERVE FUN::> - G1L 4237 Actual Balance Decerrber 31, 2006 $ 78,009 T ransfe-s into the Reserve Fun::! Surchcrge on Merrberslips 35,549 I nterest on Exte-nal Investrrents 4,519 40,008 Transfe-s out of the Reserve Fund Pre-Audit Actual Balance Decerrber 31, 2007 $ 119,057 1. Purpose of this Reserve Fund: This reserve fund was established to capture funds from Pickering Squash Club memberships' surcharges, corporate sponsorships, third party contribution and any such funds as the Council may approve. This Reserve Fund shall be used for the purpose of paying expenses related to the provision of double squash courts. This Reserve Fund was newly created in 2003 further to the recommendation passed in Council Resolution #79/03, Item 5 per Report to Council CS 40-03. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: No reserve fund limits are appropriate for this fund. ;-' ~~ ,,! ,,> APPENDIX C PROVINCIAL DEDICATED GAS TAX RESERVE FUND - G'L 4238 Actual Balance December 31, 2006 Transfers into the Reserve Fund I nterest on External Investments $ 771,076 33,236 33,236 Transfers out of the Reserve Fund Cost-sharing APTA 2005'06 (281,298) $ 523,014 Pre-Audit Actual Balance December 31, 2007 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 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 incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: No reserve fund limits are appropriate for this fund. Under this program, the provincial government will provide one cent a litre of the provincial gas tax funding in 2004. This rate has been increased to 1.5 cents in 2005 and increased to two cents in 2006. As the purpose for providing this fund is for the public transportation services, with the transfer of APT A to the Region effective January 1, 2006, the balance of this fund will be transferred to the Region once all matters are resolved. At the time of writing (May 2008), Corporate Services is preparing to transfer the remaining funds and interest earned to-date to the Region. ~'. .., ~) ~.f APPENDIX C FEDERAL DEDICATED GAS TAX RESERVE FLtJD - G'L 4239 Actual BaICllce December 31, 2006 $ 1,455,769 Transfers into tre Reserve Fund Provo of O1tario 1,132,644 I nterest on Extemall nvestrrents 74,296 1,206,940 Transfers out of the Reserve Fund Roads & MPE -Purchase of hybrid vehides (66,512) Sidewak-401 Pedestrian Bridge-Design costs (13,109) Sidewak installation-Valley Farm/Diefenbaker (50,000) Storm Water fv1gmt-Toy Ave & Victoria St. (9,200) Civic Cmpx-Upgrade to Ughting System (100,684) Civic Cmpx-Humidification system, Air Handling Unit (15,655) Dunbarton Pool-2 Levels of Roof Replacement (14,255) Commurity Ctrs. -Fumace Replacement & Gym Top (28,075) Recreation Canplex- Vapour Barrier (54,293) Recreation Canplex-~Iine Hot Water Tanks (21,590) Rec Canplex Arena-ComprESsor & Electrical Food (49,260) (518,633) Pre-Audit Actual BaICllce December 31, 2007 $ 2,144,076 1. Purpose of this Reserve Fund: This reserve fund was established in 2005 to capture the transfer of gas tax revenues from the Government of Canada through the Association of Municipalities of Ontario under the New Deal for Cities and Communities. The Council had approved under Report to Council CS 92-05, the establishment of this Reserve Fund under By-law 6609/05 and Resolution 219/05. This program is not application based and does not require matching funding. Municipalities are allowed to invest in environmental sustainable infrastructure in programs such as public transit, storm water system, local roads and bridges. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(1). qi] r' \.~ . 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 ~.............e;;~ ')1 APPENDIX C ~UAL REPORT - WlLDlN3 PERMT FEES fer the YEBr erdEd CBcanoor 31, 2007 Buildng Permit ReJerue $ 933,519 Costs Direct Costs Indroct Costs (1,142,117) (201,244) (1,343,361) $ (400,842) Excessl(DEfldt) ReJfflue o\€r Ca;ts BULDlNG PERMT STAB UZAll GJ ~E FLND -GL 4240 Q:Ering Balmce, Jm. 1, 2007 $ 2007 Contribution Oosing Balmce, ~. 31, 2007 $ 1. Purpose of this Reserve Fund: This reseNe fund was officially established in 2006 based on By-Law 6651/06 and Report to Executive Committee PO 41-05. The need for the establishment of this reseNe 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 seNice delivery stabilization during an economic downturn. The source of funds will be the annual portion of building code permit fees after related direct and indirect costs are netted. The interest incomes on these funds form part of the reseNe fund as per the Municipal Act, 2001 section 417 (3). -', ('" ;, ! 2. Recommended Maintenance Levels of this Reserve Fund: Given the rationale for creating a fee stabilization reserve fund, the targeted reserve fund balance should reflect the reduction in permits witnessed during the last recession when compared to the long-run development average - acknowledging the City's responsibility to manage a portion of the costs associated with an economic downturn. Based on the modeled activity based direct costs conducted by CN Watson; the appropriate balance to maintain is proposed at $1.16 million, expected to be achievable within a target of seven accumulated years. As at the year ended 2007, this reserve fund remains at a zero balance. This is due to the costs exceeded the building permit fee revenues; therefore, there was no transfer to the Building Permit Stabilization Reserve Fund. The Building Code Act, section 7(4) requires an annual reporting of this Reserve Fund, on which Report to Council CS 12-08, Executive Council Meeting of March 17,2008 has provided the detailed information for the 2007 reporting year. 9< APPENDIX C ANIMAL SHELTER RESERVE FUND - G/L 4241 (New) Actual Balance December 31,2006 Transfers into the Reserve Fund Proceeds from PAW Donations from "Dogs in the Park" event Interest on External Investments $ 144,433 963 700 146,195 Transfers out of the Reserve Fund Pre-Audit Actual Balance December 31, 2007 $ 146,195 1. Purpose of this Reserve Fund: This reserve fund was established in 2007 under By-Law 6749/07, Report to Council CS 16-07, Recommendation 9. This reserve fund was established to record the City's share of the proceeds resulting from the dissolution and disposition of the assets of Pickering, Ajax, Whitby Animal Services (PAW). With the establishment of this reserve fund, financial resources received and provided can be used to construct a permanent animal shelter. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: No reserve fund limits are appropriate for this fund. In addition to the proceeds of $144,433 from PAW, $963 was received from donations related to "Dogs in the Park" event held in 2006. ,) 4 APPENDIX C PICKERING MEN'S SLOW PITCH RESERVE FUND - GIL 4242 (New) Actual Balance December 31, 2006 Transfers into the ReseNe Fund $ Transfers out of the ReseNe Fund Pre-Audit Actual Balance December 31, 2007 $ 1. Purpose of this Reserve Fund: This reseNe fund was established at the end of 2007 under By-Law 6822/07, Report to Council CS 58-07. This reserve fund was established to receive donations from the Pickering Men's Slow Pitch League, for safekeeping of donated funds and further application of funds towards a major softball facility. Report to Council OES 43-07 provides detailed information on the memorandum of understanding between the City and the Pickering Men's Slow Pitch League. The interest incomes on these funds form part of the reserve fund as per the Municipal Act, 2001 section 417(3). 2. Recommended Maintenance levels of this Reserve Fund: No reserve fund limits are appropriate for this fund. As this reseNe fund was established at the end of the year, there is no activity to report on. The reporting of this reserve fund for the year ended 2007 is for information only. CiUI at REPORT TO EXECUTIVE COMMITTEE Report Number: CS 26-08 Date: June 9, 2008 C)' C ." ) From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Investment Portfolio Activity for the Year Ended December 31,2007 Recommendation: That Report CS 26-08 of the Director, Corporate Services & Treasurer be received for information. Executive Summary: The following report and attachments represent a summary of the investment activity and year end balance in the portfolio. Investment activity for the year 2007 totaled approximately $114 million (2006 - $149M) with a year end balance in the portfolio of approximately $51.1 million (2006 - $55.9M). Current Fund investments are limited to one year or less and Reserve Funds to 10 years or less under the Council approved policy. As discussed below and as confirmed by the attached Performance Report from BMO Nesbitt Burns, the return on the City's portfolio has performed favourably comparative to market benchmarks. Financial Implications: Total investment income for 2007 was $3,009,000 (2006 - $2,606,000) of which $1,633,000 (2006 - $1,404,000) was for the Current (Operating) Funds. Sustainability Implications: implications. This report does not contain any sustainability Background: The City's investment portfolio is comprised of two main areas: Reserve Funds, and balances available in the Current Fund when not required to meet current operating expenditures. This latter balance can vary greatly depending upon many factors including the timing of the receipt of property taxes and levy payments to the School Boards and the Region. Investments are undertaken as one consolidated pool of funds and interest earned is credited back to the appropriate funds. As the Treasurer of the City of Pickering there are certain information and opinions that I must report, under Provincial Regulation, to the Committee and Council. The attached schedules are also included as part of the information requirements. The portfolio has decreased over prior year by approximately $4.8 million. The main contributing factor is 7 ........,~".."',..",.>".."'_~;,-=.."_,"&~""''''4;; Report CS 26-08 Date: June 9, 2008 Subject: Investment Portfolio Activity for the Year Ended (1 6 December 31,2007 Page 2 the refund to OPG for the settlement of outstanding assessment appeals for the years 2003 to 2006. This decrease was offset by the overall increase in the Reserve Fund balances. The portfolio performed extremely well during 2007 with a weighted yearly rate of return of 4.27% (2006 - 3.81 %) on the combined short term and long-term investments excluding interfund investments. This was achieved by providing a more favourable mix between short-term (highly liquid) and longer term investments. The average return on interfund investments was 4.1 % (2006 - 3.90%) which IS comparable to prior year. As you are aware investment parameters are much narrower for the City than permitted for money market funds due to the Municipal Act and Regulations limiting the selection of qualified investments for municipal entities. However notwithstanding these restrictions, the annual return of 4.27% continues to perform comparably with the annual returns for the CIBC World Markets 91-Day T-Bill Index (3.29%) and the Morningstar Canadian Money Market Mutual Fund Index (3.8%). These returns are deemed comparative benchmarks for reviewing the portfolio's performance and considered the standard for analysis of investment funds in the industry. The reduction in total investment activity from prior year is primarily due to the concerted effort made last year to increase the portion of long term investments to the overall portfolio. This allows the City to take advantage of more stable rates of return rather than fluctuating with the short term markets. This will prove to be beneficial for 2008 returns as we have seen a continual decline in the short term rates as of January 2008. In addition, the City's high interest yield bank account (money market account) was used to a greater extent then in prior years since the interest rate on the account was comparable to the 90 day paper being purchased through Nesbitt Burns. Of the year end total portfolio of some $51.1 million, approximately $26.4 million or 51.7% (2006 - 48.1 %) were external long-term investments and approximately $4.2 million or 8.2% (2006 - 8.6%) were Interfund Investments (Internal Loans). The balance of approximately $20.5 million is short-term investments of 90 days or less. It is my opinion that all investments were made in accordance with the Investment Policy approved by Council. Attachments: 1 . I nvestment Activities for 2007 2. Outstanding Investments as at December 31,2007 3. Correspondence dated May 1,2008 from BMO Nesbitt Burns ....,""'",<.".".'< Report CS 26-08 Date: June 9, 2008 Subject: Investment Portfolio Activity for the Year Ended December 31,2007 Page 3 ;) 7 .J i Prepared By: Approved I Endorsed By: /--~-'" ( ~j'(" t \1 ,'j " _ / ,',I _,Lc J ~.:.:\A .(r( Kris ine Senior Manager, Accounting SeNices '~)~ C _ " _c~_.-' c.----- J/ _ " ~ ---,_._.,;,...~~--....- , Gillis A. Paterson Director, Corporate SeNices & Treasurer GAP:vw Copy: Chief Administrative Officer Recommended for the consideration of Pickering City Council "';"" I .........- .",'1. J.'''' .1:""""2L- ....,~.&.., : J Th0mas J. Quinn, ~DMR.;..,CMM "' Chief Administrative Officer II . // ,/ /J>' ", ""(\ .' /' , Iftl.c::. .' 1,.., i I . i I CITY OF PICKERING INVESTMENT ACTIVITIES FOR 2007 Financial Purchase Maturity Institution Instrument Cost Principal Yield Term Date Date Short-term Nesbitt Burns BNS BON 2,024,851 2,047,000 4.159% 96 04-Jan-07 10-Apr-07 BNS BA 3,177,386 3,210,000 4.163% 90 30-Jan-07 30-Apr-07 ..-.,,~., _......,1 BNS BA 2,999,890 3,019,000 4.152% 56 02-Feb-07 30-Mar-07 BNS BA 2,290,240 2,313,000 4.169% 87 02-Feb-07 30-Apr-07 BNS BA 6,011,359 6,073,000 4.159% 90 06-Mar-07 04-Jun-07 TDBA 486,016 487,000 4.104% 18 08-Mar-07 26-Mar-07 BNS BON 4,295,061 4,337,000 4.144% 86 26-Mar-07 20-Jun-07 BNS BON 8,018,901 8,099,000 4.143% 88 30-Mar-07 26-Jun-07 BNS BON 2,058,930 2,080,000 4.150% 150 10-Apr-07 07-Sep-07 BNS BA 2,665,802 2,684,000 4.153% 60 30-Apr-07 29-Jun-07 BNS BA 4,499,524 4,537,000 4.126% 73 30-Apr-07 12-Jul-07 BNS BA 2,633,352 2,661,000 4.165% 92 30-Apr-07 31-Jul-07 BNS BON 6,184,842 6,253,000 4.250% 94 05-Jun-07 07-Sep-07 FIRSTBANK BA 4,340,010 4,385,000 4.251% 89 20-Jun-07 17-Sep-07 FIRSTBANK BA 2,688,689 2,717,000 4.270% 90 29-Jun-07 27-Sep-07 BNS BON 2,092,978 2,116,000 4.317% 93 10-Jul-07 11-0ct-07 FIRSTBANK BA 4,536,674 4,585,000 4.320% 90 12-Jul-07 10-0ct-07 BNS BA 8,936,190 9,000,000 4.420% 59 31-Jul-07 28-Sep-07 BNS BON 2,661,284 2,692,000 4.482% 94 31-Jul-07 02-Nov-07 BNS BON 4,384,459 4,433,000 4.811% 84 17-Sep-07 10-Dec-07 BNS BON 2,890,355 2,922,000 4.701% 85 27-Sep-07 21-Dec-07 BNS BON 5,999,861 6,056,000 4.678% 73 28-Sep-07 10-Dec-07 FIRSTBANK BA 2,115,903 2,132,000 4.628% 60 11-0ct -07 10-Dec-07 """, --' FIRSTBANK BA 4,598,153 4,650,000 4.677% 88 11-0ct-07 07-Jan-08 -, BNS BON 4,045,504 4,068,000 4.412% 46 29-0ct-07 14-Dec-07 ;:r; () CIBC BA 5,999,741 6,065,000 4.511 % 88 29-0ct-07 25-Jan-08 I FIRSTBANK BA 2,704,243 2,732,000 4.408% 85 05-Nov-07 29-Jan-08 3: RBC BA 4,067,551 4,113,000 4.482% 91 14-Dec-07 14-Mar-08 !'.!J TDBA 2,921,406 2,942,000 4.288% 60 21-Dec-07 19-Feb-08 =Ii' Total Short-term 112,329,156 113,408,000 I' BA - Bankers Acceptance Total Long-term -I 0 ;;::J Total External Investments 112,329,156 113,408,000 rn -0 0 Interfund Investments (Internal Loans) ;;;.J ~ Development Charge Reserve Fund 597,000 =tt I"''''' -. Total Investment Activity 114,005,000 Dispositions of Long-term Investments f"'~; Province of Ontario 493,173 474,000 5.200% 643 03-Jun-05 08-Mar-07 :",:.: CITY OF PICKERING OUTSTANDING INVESTMENTS AS AT DECEMBER 31, 2007 Financial Purchase Maturity Interest Institution Instrument Cost Principal Yield Term Date Date Payable Short-term Current & Reserve Fund Investments Nesbitt Burns FIRSTBANK BA 4,598,152.50 4,650,000.00 4.68% 88 11-0ct-07 07 -Jan-08 CIBC BA 5,999,740.60 6,065,000.00 4.51% 88 29-0ct-07 25-Jan-08 FIRSTBANK BA 2,704,242.88 2,732,000.00 4.41% 85 05-Nov-07 29-Jan-08 FIRSTBANK BA 4,067,551.35 4,113,000.00 4.48% 91 14-Dec-07 14-Mar-08 TDBA 2,921,406.00 2,942,000.00 4.29% 60 21-Dec-07 19-Feb-08 Total Short-term 20,291,093.33 20,502,000.00 Long-term Reserve Fund Investments Nesbitt Burns Farm Credit Corporation 250,000.00 250,000.00 4.20% 3653 27 -Jun-03 27-Jun-13 Jun 27 & Dec 27 Province of Ontario 3,500,000.00 3,500,000.00 4.50% 3652 29-0ct-04 29-0ct-14 29th day each month Province of Ontario 4,300,000.00 4,300,000.00 3.70% 1826 21-Jun-05 21-Jun-10 Jun 21 & Dec 21 CIBC 2,000,000.00 2,000,000.00 4.25% 1826 10-Feb-06 10-Feb-11 Feb 10 & Aug 10 RBC 2,000,000.00 2,000,000.00 4.50% 1826 25-Apr-06 25-Apr-11 Apr 25 & Oct 25 Province of Ontario 616,251.64 619,000.00 4.00% 1106 09-May-06 19-May-09 May 19 & Nov 19 Province of Ontario 1,972,052.40 1,964,000.00 4.50% 702 16-May-06 17 -Apr-08 Apr 17 annually Canada Housing Trust 3,796,505.31 3,783,000.00 4.40% 591 02-Aug-06 15-Mar-08 Mar 15 & Sept 15 Province of Ontario 4,102,402.10 4,085,000.00 4.40% 840 02-Aug-06 19-Nov-08 May 19 & Nov 19 Canada Housing Trust 3,930,566.75 3,883,000.00 4.65% 1140 02-Aug-06 15-Sep-09 Mar 15 & Sept 15 Total Long-term 26,467,778.20 26,384,000.00 )."';~ -i Total External Investments 46,758,871.53 46,886,000.00 ;; () :c Interfund Investments (Internal Loans) ::?: rn /~.. Parkland Reserve Fund 292,287.00 3.67% 6 yr 01-Jan-05 31-Dec-10 Dec 31 Development Charge Reserve Fund 3,891,813.00 3.67% to 4.7% various various various Dec 31 :l.t Totallnterfund Investments 4,184,100.00 Total as at December 31, 2007 51,070,100.00 ,:tl~ '-l....> ,--.C) May 1, 2008 Mr. Gil Paterson Director of Finance Finance Department, City of Pickering 1 The Esplanade, Pickering ON L 1 V 6K7 Dear Gil, o J"rlS I am pleased to provide the attached performance report for the 2007 calendar year for your account # 365-13206-10 Corporation of the City of Pickering, as well as a brief investment review of 2007. Calendar Year 2007: During 2007 the Canadian economy remained quite robust, given the material slowdown of the US economy. Interest rates were cut to accommodate credit market concerns. 90 day T-Bill rates dropped from 4.17% in 01 to 3.84% in 04. Year over year Bank of Canada core inflation figures eased from 2.3% in 01 to 1.6%in 04. The S&P/TSX Composite index rose 9.8% once again on the strength of commodity and materials based equity issues. Consumer price inde-x Indice des prix ~ la consommation Annu al percent change Variation an nuelle en pou rcentage " ~ ata I 2 Excluding energy Sans energie c 2004 2005 2008 2007 2C:08 ;::0 In -() o ;;:;:I -i ::tt I~ j~V' )<\ 1'1;--" Interest rates Taux d'interet 0' Ie 1-i f Ccn~umer loan rate 12 -aux de prtst ala censcmmaticn 10 8 Lcng term be no Obligaticns a Icng terme ~ .~ , - 2 Prime rate ; ~ a ux p ri... ile gie ....,,"'~ "::uu- 200~ 200e 2007 2008 Stock mar~;ets MarChes )ou~slers ~SE 15.000 14.000 ~ ,. ,... _c::}<vJ, . . F ': I' r:...."""',' . . . '.i j /'.. f'::"j ,.." '!/ ssp eM ...vu 13.000 12.000 11.000 1 n nnr: g.ooo Cl.OOO 2005 200e 2007 2008 :::;a"p 1.300 1.500 1 AOO '1.300 1.200 1.100 1.000 ~j -3- Portfolio Performance Review: For comparison purposes I have included the following benchmarks that provide the closest representative return data. Please keep in mind that there are two separate issues that should be taken into consideration when comparing the representative rates of return. First, the guidelines set out in the Municipal Finance statutes governing your investment policy prohibit you from owning any fixed income investments that are not either government guaranteed or issued by a major Canadian Chartered Bank. Canadian money market funds used to construct the Morningstar Canadian Money Market Index contain a high percentage of higher yielding money market products that your investment policy prohibits you from holding. Secondly, your portfolio has a relatively small percentage of qualified fixed income investments that are slightly longer than the 1 year maturity period that typically defines money market investments. Return Comparisons* Comparative Benchmarks** 2007 2006 2005 2004 2003 2002 ~ 2000 CIBC WM 91 day T-Billlndex 3.29% 3.80% 2.50% 2.30% 2.90% 2.40% 4.80% 4.10% Morningstar Canadian Money Market Mutual Fund Index 3.80% 3.30% 1.90% 1.50% 2.20% 1.80% 3.70% 4.80% Your BMO Nesbitt Burns Account 4.27% 3.81% 2.51% 4.39% 3.16% 2.70% 4.48% 5.81% * Return Comparisons are derived from separate third party sources which are believed to be accurate but are not guaranteed by BMO Nesbitt Burns Inc. ** Comparative benchmarks have been selected that are most reasonable to use for comparison purposes but are not 100% specific to the investment guidelines followed by the representative account in question. *** The Morningstar Fund Indices are the best available representation of the performance of aggregate dollars actually invested, currently and historically, in Canadian money market mutual funds and/or segregated funds. The indices measure the dollar weighted return of assets in Canadian funds. The return calculation does not suffer from survivorship bias, as the impact of returns with funds that are no longer active are retained. Funds that report returns before fees are excluded from Morningstar Fund Indices. @ - "BMO" is a registered trademark of Bank of Montreal, used under license. - "Nesbitt Burns" is a registered trademark of BMO Nesbitt Burns Corporation Limited, used under license. TM - The "M-bar roundel symbol" is a trademark of Bank of Montreal, used under license. REPORT TO EXECUTIVE COMMITTEE Report Number: CS 28-08 Date: June 9,2008 (1 ..~ \ j '" From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Development Charges - Annual Indexing Recommendation: 1. That Report CS 28-08 of the Director, Corporate Services & Treasurer be received; 2. That effective July 1, 2008 as provided for in Section 16 of By-law 6349/04, the Development Charges referred to in Sections 6 and 11 of that By-law be increased by 7.2 percent being the annual increase in the Construction Price Statistics for the Non-residential Building Construction Price Index as reported by Statistics Canada for the year ended March 31,2008; and, 3. That the appropriate officials of the City of Pickering be given authority to give effect thereto. Executive Summary: Adoption of the Recommendations of this report will put into effect for the period July 1, 2008 to June 30, 2009 increases that are provided for in the Development Charges Act 1997 and Ontario Regulation 82/98 and By-law 6349/04 and are needed to finance construction costs under the City's Development Charge Background Study adopted by Council in July 2004. This is an annual adjustment needed to keep revenues current with costs. Financial Implications: Increasing the Development Charges by 7.2 percent will assist in keeping the revenues generated thereunder in line with current costs. The residential development charges for single and semi detached units will increase by approximately $669. Other residential charges will increase similarly and the commercial/industrial charge will increase by approximately $0.19 per square foot or $2.06 per square metre. Sustainability Implications: This annual increase is necessary in order to ensure that the costs of financing growth related construction projects are sustainable. Report CS 28-08 Date: June 9, 2008 Subject: Development Charges - Annual Indexing "' n II 1 I] it Page 2 Background: As provided for in the Ontario Reg. 82/98 and in the City's By-law 6349/04, each year the development charges charged by the City for all types of development may be increased without amending the By-law. Adoption of the recommendations contained in this report will allow that increase to take effect July 1, 2008 thereby assisting in keeping our revenues in line with the costs that development charges go towards. Statistics Canada indicates the increase in the Construction Price Index for the most recently available annual period ending March 31, 2008 of 7.2 percent for Non- residential Building Construction Price Index (an indicator of our costs of construction) for the Toronto area. The change is reflected in the table attached. The City's obligations under Recommendations contained in the same report CS 21-04 (2004 Development Charges Background Study) to Council in the form of contribution to the Development Charges - City's Share should also increase by 7.2 percent. The 2008 Budget contained $480,000 of contribution for this purpose and a budgeted draw of $226,950 thus, decreasing the 2008 year-end balance to $998,294. Significant contributions in 2009 and after are necessary in order to bring the fund balance to an acceptable level. The Commercial/Industrial Development Charge remains at the Council approved portion pertaining to Roads and Related only with approximately 50 percent of the justified cost recovery amount, meaning the City has to contribute to the balance. At this juncture, the Region of Durham has not finalized the annual indexing of the development charges the City collects on their behalf. The City will continue to use rates prescribed as effective from January 1, 2008 until further notice from the Region. The Education Development Charges will remain unchanged for the current year The main changes are to update the amounts to reflect recommendations contained in this report. Upon receiving the final figures from the Region for the portion of the development charges the City collects on their behalf, the brochure will be revised and distributed. The brochure will be posted on the City's website and made available at various counters throughout the Civic Complex. Attachments: 1 . Current and Proposed Development Charges 2008/2009 Report CS 28-08 Date: June 9, 2008 Subject: Development Charges - Annual Indexing Page 3 I-- I :~) Prepared By: Approved I Endorsed By: ~~~ (~ ) ~.:-2 ~- --;"0 ~'-,., ~-- ./ _~- c~ Gillis A. Paterson Director, Corporate SeNices & Treasurer Caryn Kong Senior Financial Analyst GAP: ck Copy: Chief Administrative Officer Chief Building Official Recommended for the consideration of Pickering City Council " I .'" Thorn s J. Quil}h, RD ", CM~ III Cl1ief Administrative Officer "-, --"--..~ .........,~, in[ iUO TTACHMENT#-L- TO REPORT#.tS-Q W~ ,:)sr CITY OF PICKERING CURRENT RESIDENTIAL DEVELOPMENT CHARGES Effective January 1, 2008 (Revised due to reduction in Transit) PER DWELLING UNIT Service Single & Apt. Two Other Category Semi Apt. One Bdrm Bdrm Dwelling Detached ($) & Smaller ($) & Larger ($) Units Growth Studies $129 $48 $74 $105 Fire Protection 406 152 230 328 Transportation 4,479 1,665 2,544 3,637 Parks & Rec 3,708 1,381 2,108 3,012 Library 590 220 334 478 TOTAL $9,312 $3,466 $5,290 $7,560 Non-Residential - $2.67 per sq. foot or $28.72 per sq. metre PROPOSED RESIDENTIAL DEVELOPMENT CHARGES Effective July 1, 2008 PER DWELLING UNIT Service Single & Apt. Two Other Category Semi Apt. One Bdrm Bdrm Dwelling Detached ($) & Smaller ($) & Larger ($) Units ($) Growth Studies $138 $51 $79 $113 Fire Protection 435 163 246 352 Transportation 4,801 1,785 2,727 3,898 Parks & Rec 3,975 1,480 2,260 3,229 Library 632 236 358 512 TOTAL $9,981 $3,715 $5,670 $8,104 Non-Residential - $2.86 per sq. foot or $30.78 per sq. metre $ Increase: Residential $669 249 380 $544 Non- $0.19 per sq. $2.06 per sq. Residential foot metre Call (J~ REPORT TO EXECUTIVE COMMITTEE Report Number: CS 29-08 Date: June 9, 2008 1 n 7 '-) ; From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: 2008/2009 Property and Liability Insurance Renewal Recommendation: 1. That Report CS 29-08 of the Director, Corporate Services & Treasurer be received; 2. That the City of Pickering renew effective June 16, 2008, its property, liability and other coverages through the Frank Cowan Company for the period July 1, 2008 to June 30, 2009 inclusive on terms and conditions acceptable to the Director, Corporate Services & Treasurer; 3. That the Director, Corporate Services & Treasurer, as part of the Risk Management Program, be authorized to continue the Reimbursable Deductible Program through the Insurance Adjuster and the Frank Cowan Company and further, that the Director be authorized to settle any claims including any adjusting and legal fees where it is in the City's interest to do so; 4. That the Director, Corporate Services & Treasurer be authorized to purchase additional insurance, make changes to deductibles and existing coverages, and alter terms and conditions as becomes desirable or necessary in order to limit potential liability exposure and to protect the assets of the City and it's elected officials and staff; and, 5. That the appropriate officials be authorized to take the necessary actions to give effect thereto. Executive Summary: The City's insurance program continues to operate successfully and the above recommendations provide for a renewal of the policies basically on the same or improved terms and conditions in the past years which also provides coverage for the Library, its Board and its employees. Report CS 29-08 June 9, 2007 Subject: 2008/2009 Property and Liability Insurance Renewal Page 2 '; :~'-~: ;:~ Financial Implications: The premium renewal cost has been provided for in the various cost centers through the approval of the 2008 budget by Council and the renewal premium cost is below the 2008 budgeted amount. The favourable renewal terms are due to favourable claims history as a result of City's management of its insurance responsibilities both through the efforts of staff and its insurance adjusting firm. However, as Members of Council are aware, claims activity and insurance market conditions have a high degree of uncertainty and today's current positive scenario could easily change due to catastrophic events such as weather related events. Sustainability Implications: Insurance renewal provides the City with financial security and is therefore better able to maintain financial sustainability. Background: Each year on July 1, the City's general liability and property insurance policies come up for renewal. As approved by Council at the time of the 1998 renewal, the Treasurer undertook an extensive review of all aspects of the City's insurance program. The City of Pickering embarked in a Risk Management Program, the initial phase of which involved negotiating renewing premiums with the City's broker. The result of the negotiations was a decrease of approximately r$75,000 or 20 percent, in the premiums from that of the prior year. This premium was also approximately $98,000 less than the 1998 budget provision which, after claims under the increased deductible were paid, resulted in a transfer of approximately $50,000 to the Self Insurance Reserve. Our renewal premium is below the budgeted amount which continues in part to reflect our claims experience based on our risk portfolio or municipal services provided. Another key aspect of the City's program is the fact that our deductibles are at a reasonable level within the City's level of affordability. Recommendation 4 provides the Treasurer with the authority to continue to review and adjust insurance coverages where appropriate during the year to reflect current market and business environment conditions. Global Warninq & Weather Impacts on the Current External Insurance Environment Global warming has had an impact on climate change that can affect the insurance market. Global climate models predict that climate change will lead to wet places getting wetter and dry places getting drier. In the future, rainfall will be more intense - in other words, more rain will fall over a shorter period that may result in flood like situations. As the world warms, it seems that hurricanes are getting wetter and those that are hitting the U.S. now already unload seven percent more rain. Report CS 29-08 June 9, 2007 Subject: 2008/2009 Property and Liability Insurance Renewal Page 3 o Natural weather related catastrophes can generate claims in the billions of dollars. Hurricane Katrina has been the most destructive of all hurricanes which damaged the New Orleans levee system and resulted in massive flooding and is estimated to have caused $70 billion worth of insured damage. These claims/payments will probably be covered by the reinsurance industry which in-turn recovers these losses through higher premiums. Basic risk management states that you should diversify your risk. Many insurance companies have customers throughout the Province or Canada to diversify the risk associated with a local catastrophic event. With the City of Pickering being a direct customer of the Frank Cowan Company (who has customers throughout the Province and beyond) the geographical risk diversification is achieved and maintained. Service to our Residents Regrettably, insurance claims or incidents do occur. A key strategic advantage of the City's insurance and risk management program is that every claim is processed with a customer service attitude. After a claim or incident is received, City staff quickly contact (within 24 hours) the claimant to advise them that the City has received the claim and to ensure them that the claim is being investigated by the City's Insurance Adjuster. The City's Insurance Adjuster has many years of local municipal insurance experience which the City uses as an asset to investigate and settle claims. In addition, the City's Insurance Adjuster is familiar with the City and its municipal infrastructure and this experience has assisted in reducing claims cost due to his knowledge and or his familiarity with the City, its policies and procedures. The Insurance Adjuster's service standard is to make contact with the claimant within two business days. Sometimes, the claimants may not completely agree with the outcome and City staff may review the claim and/or to intervene to work towards a solution. The strategic advantage of the "local service delivery model" is that claims are handled quickly professionally and with a customer service perspective. In addition, the current "local" service delivery model allows City staff "hands on" participation in the claims process to better serve claimants who, in the majority of situations, are City residents. Attachments: 1. Program Summary of Insurance Coverage Report CS 29-08 June 9,2007 Subject: 2008/2009 Property and Liability Insurance Renewal Page 4 I .1 1 n . '.' Prepared By: Approved I Endorsed By: //;7 _------..-') .-;/'-- .----.~--- ". - Stan Karwowski '---.- Manager, Finance & Taxation (::~i::~~;7 """ '.~ .<--:---) ~/~~"''I'I--~ ...... Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachment Recommended for the consideration of Pickering Ci~: ounci! 1" .IT ACHMENT I-t __L_ #~.:JqrOf ~ c2~~~ompany .. 1 I I 2008 Municipal Insurance Program Cill! ../ .J. AJJ,~A*' .".-a. ""':':;~.' ,.... ~_....... ., , PI CORPORATION OF THE CITY OF PICKERING Prepared by: Mr. Viano Ciaglia, c.I.P., C.R.M. Account Manager Frank Cowan Company Limited 4 Cowan Street East Princeton, ON NOJ 1 VO This is a summaI)'. Nothing herein alters the terms, conditions and exclusions contained in the printed insurance contract(s). REF: 60275/es May 13,2008 viano.ciaglia@frankcowan.com 1-800-265-4000 T/519-458-4331 F/519-458-4366 I . "\ '''1 r-\ \ I L About the Frank Cowan Company Leader in Public Entity Insurance Since 1927, Frank Cowan Company has grown to become one of Canada's leading providers of Insurance and Risk Management solutions for public entities. Frank Cowan Company has been a pioneer in the development and implementation of innovative insurance programs for the Municipal, Health Care, Voluntary and Education sectors. Cowan Insurance Group Frank Cowan Company is a wholly owned subsidiary of the Cowan Insurance Group Ltd., whose other wholly owned subsidiaries include Cowan Insurance Brokers Limited and Cowan Benefits Consulting, making the Cowan Insurance Group one of the largest privately held companies of its type in Canada. Cowan Insurance Brokers Limited provides personal insurance products (home and automobile), and commercial insurance programs to thousands of individuals and corporations across Canada. Cowan Benefits Consulting provides pension, benefits, actuarial and human resource consulting to corporations and public entities. The Cowan Insurance Group is a wholly owned subsidiary of Princeton Holdings Limited, which also owns controlling interest in The Guarantee Company of North America, an insurance leader in surety bonding, corporate risk products and high value homeowner coverages. Outstanding Service Weare more than just an insurance provider. Weare a trusted partner in providing insurance and risk management services. We work with our clients to develop individualized programs including complete risk management, claims management and an array of other services. Our mandate is clear.. .help our clients reduce risk. Clients also benefit from our affiliations with lawyers, adjusters and others that specialize in the public sector. The combination of our service network and internal expertise allow us to continually develop innovative, cost-effective solutions and services tailored to the risks of individual clients. Financial Stability Frank Cowan Company, as an Underwriting Agent of public entity business, represents a group of select insurers of exceptional reputation and financial stability. This creates a very stable market for your insurance requirements, and gives our customers the comfort of knowing that they will always be protected by long-term, high-quality continuous servIce. Frank Cowan Company Limited - 2 - Cowan Service Solutions ., 1 5 More Than Just Insurance Cowan offers a full range of services to assist in the management and reduction of risk, which is equally vital to our clients. Risk Management, Claims Management and our other value-added services were initiated by Cowan and have evolved throughout our history. Most often we can provide the services listed below at no additional cost to the client. Liability Hazard Assessment Building Valuations Seminars & Staff Training Risk Audits Contractual Review Publications, Bulletins & Information Packages Claims Management ftJ. Our Municipal clients are involved in a wide range of diverse activities to serve the public. These lead to various potential public liability situations. We work with our clients to provide specific hazard identification and analysis of these exposures. ftJ. We conduct periodic detailed inspections of property and buildings with formal reports, replacement cost valuations for insurance purposes, photographic inventory with recommendations to correct potential hazards. ftJ. We deliver a wide range of presentations to our Municipal clients on an ongoing basis that provide continuous education for our clients. ftJ. We help our clients audit systems and processes to reduce potential losses within their operations and specifically focus on documentation, reporting and consistency with accepted standards and practices. ftJ. Our experience contributes insight on the suitability and effectiveness of liability transfers and appropriate msurance and indemnity clauses within your various contracts. Qo Because constant two way communication is important, our website is available on a 24 hour basis for access to information on our Services, Publications and programs. Anyone in your organization can visit us at www.frankcowan.com to keep informed of common issues and solutions. Qo We handle your claim fairly and efficiently. Claims that are made against you are handled with the consistent strategy of defending or discouraging those claims that are without merit, or reaching a reasonable settlement on claims that do merit payment. Detailed claims progress reports are produced and can be organized by type of loss or department to suit your needs. Frank Cowan Company Limited - 3 - MARKETPLACE CONDITIONS '1 '1 i~ \ ~ The Canadian Property & Casualty Insurance marketplace continues to witness consolidation yet remains one of the most saturated insurance markets in the world, with over 200 players. However, amongst the majority of the insurers operating in Canada, specialization continues to be the trend. Only a limited number of insurers are willing to risk their capital on high liability exposure classes such as municipalities, hospitals and public entity sectors. While the last few years have brought some stability for the general Property & Casualty market, speciality classes continue to trend upwards. The Public Entity sector has experienced significant losses in the past few years. Some of these losses have been driven by landmark cases, but overall, frequency and severity of claims has increased dramatically. As well, the overall cost of claims, which takes into account escalating court awards, claims administration expenses and the ever-increasing replacement costs of assets, has continued to rise during this period. Insurers and Reinsurers have become extremely cautious about public entity liability exposures due in part to the continued downloading of services by senior levels of government, along with the fact that these organizations continue to be asked to fill more and more public needs. Insurers are now experiencing the negative impact that the claims from these services are having on public entity insurance results. Reacting to these deteriorating results, a number of insurers have either imposed coverage restrictions or withdrawn from the public entity market entirely. Frank Cowan Company, a specialist in public entity insurance, continues to receive the support and capacity of our insurers. We continue to provide long-term stability for the insurance and risk management needs of our public entity clientele. Our policies and services continue to evolve in response to the exposures faced by our clients. Cowan continues to provide a consistently stable insurance program for public entities. Weare confident that our product and pricing will reflect this position. Frank Cowan Company Limited - 4 - PREMIUM AND COVERAGE SUBMISSION IMPORTANT NOTICE r ..J We have quoted terms and conditions to you based on the following assumptions: No major changes in the loss experience of your portfolio. No major exposure changes prior to Renewal. Continued support of our insurers. No changes in the reinsurance terms or conditions available to our insurers that would affect the terms we have quoted. Any changes to the above assumptions prior to renewal may result in changes to our quotation. Frank Cowan Company Limited - 5 - 1 .~ (~ i \ '.- PROGRAM SUMMARY SUMMARY OF COVERAGES LIMITS/AMOUNTS PART A - CASUALTY Municipal Liability Limit of Protection per occurrence (No Annual Aggregate Limit) Third Party Claims Deductible including expenses Sewer Backup per Claimant Deductible including expenses Wrongful Dismissal (legal expense) Limit per claim Annual Aggregate Limit Deductible Voluntary Compensation Municipal Marina Liability Malpractice Liability Errors and Omissions Limit of Protection per claim (No Annual Aggregate Limit) Deductible including expenses Non-Owned Automobile Limit of Protection per occurrence (No Annual Aggregate Limit) Legal Liability for Non-Owned Vehicles (S.E.F. No. 94) Third Party Liability Deductible All Perils Physical Damage Limit Deductible Environmental Liability Liability of Protection per claim Annual Aggregate Limit Self-Insured Retention Comprehensive Crime Commercial Blanket Bond Counterfeit Paper and Depositors' Forgery Audit Expense (Sub-Limit $ 100,000.) Money and Securities - Blanket any Location Excess on Securities Frank Cowan Company Limited - 6 - $ 25,000,000. $ 50,000. $ 50,000. $ 250,000. $ 250,000. $ 5,000. Included Included Included $ 25,000,000. $ 50,000. $ 25,000,000. $ $ $ 10,000. 500,000. 500. $ $ $ 1,000,000. 2,000,000. 50,000. $ 2,000,000. Included Included Included 100,000. 100,000. $ $ PROGRAM SUMMARY SUMMARY OF COVERAGES " 1 '7 Ii f LIMITS/AMOUNTS Councillors' Accident One City Mayor/Regional Councillor, Three Regional Councillors (Durham)/ City Councillor and Three City Councillors and Nine Library Board Members Accidental Death & Dismemberment $ (No Annual Aggregate Limit and No Deductible) Weekly Income - Total Disability $ Weekly Income - Partial Disability $ Twenty-Four Hour a Day Coverage applies. Municipal Conflict of Interest Percentage of Legal Fees and Expenses Maximum Limit of Reimbursement per claim $ (No Annual Aggregate Limit) Legal Expense Percentage of Legal Fees and Expenses Maximum Limit of Reimbursement per claim $ Annual Aggregate Limit $ Frank Cowan Company Limited - 7 - 100,000. 500. 250. 100% 100,000. 100% 100,000. 250,000. 'II g PROGRAM SUMMARY SUMMARY OF COVERAGES LIMITS/AMOUNTS PART B - PROPERTY Property Insurance (including Data Processing Insurance) Total Sum Insured * Valuable Papers Accounts Receivable Extra Expense (other than Data Processing) Business Interruption Rent or Rental Value Form Gross Revenue Form Checkroom Liability Data Processing System and Equipment Media Extra Expense Fine Arts Form Exhibition Form $ 146,739,000. $ 500,000. $ 500,000. $ 1,000,000. $ 500,000. $ 2,584,500. $ 5,000. $ $ $ 1,440,800. 47,000. 50,000. $ 2,000. As Per Lists Provided Deductible Exceptions: Fine Arts Form and Exhibition Form - Checkroom Liability - Fire Training Trailer - Peril of Flood - Peril of Earthquake $ $ $ $ 3% or Minimum $ *Note: Please refer to the insurance contract for an itemized list of assets containing specific limits of insurance or that are excluded from the policy. Frank Cowan Company Limited - 8 - $ 10,000. 2,500. 2,500. 2,500. 25,000. 100,000. PROGRAM SUMMARY SUMMARY OF COVERAGES '"\1 0 : ; / LIMITS/AMOUNTS Boiler and Machinery Limit per Accident - Comprehensive Extra Expense Water Damage Ammonia Contamination Expediting Expenses Hazardous Substance (including PCB Contamination) Business Interruption - Loss of Profits (Gross Revenue) - All Buildings & Facilities, Greenwood Museum, Pickering, Ontario - Don Beer Arena, 940 Dillingham Road, Pickering, Ontario - Dunbarton Indoor Pool, 655 Sheppard Ave. E., Pickering, Ontario - Pickering Recreation Complex, 1867 Valley Farm Road, Pickering, Ontario Spoilage ~ Goods under Refrigeration Professional Fees Data Restoration By-Law Cover Errors and Omissions Denial of Access Deductible Frank Cowan Company Limited - 9 - $ 50,000,000. $ 500,000. $ 500,000. $ 500,000. Included $ 500,000. $ 94,500. $ 600,000. $ 100,000. $ 1,790,000. $ 50,000. $ 500,000. $ 25,000. Included $ 100,000. 2 Weeks $ 10,000. ~1 r) II \ L 1.,..1 PROGRAM SUMMARY SUMMARY OF COVERAGES LIMITS/AMOUNTS PARTc--:AmOMonn.;E Automobile Fleet Liability Limit Deductibles Section 3 (Third Party) Section 6 (Direct Compensation) No Physical Damage applies to: - 1951 Antique Pumper (parades) All Perils $ 25,000,000. $ $ 10,000. 10,000. $ 10,000. Garage Automobile Third Party Liability Limit Customer Vehicles Collision Limit Deductible Specified Perils Limit Deductible $ 3,000,000. $ 200,000. $ 500. $ 300,000. $ 500. Frank Cowan Company Limited - 10- 1 'i 1 I /. COMPREHENSIVE INSURANCE PROGRAM COVERAGE FEATURES 2008 - 2009 Frank Cowan Company Limited - 11 - 1 f) () \ i..~ ",."". PART A CASUALTY Frank Cowan Company Limited - 12 - MUNICIPAL LIABILITY INSURANCE _1 r', 7 ! ; ,) Features The Cowan Municipal Program incorporates a comprehensive and broadly worded liability policy which was designed specifically to meet the needs of municipalities and their corresponding risks which are quite different and unique from other commercial risks that are insured under a Commercial General Liability (CGL) policy. When comparing forms of coverage, it is important to note that unless the coverage is specifically excluded, it is generally covered, subject to the terms and conditions of the policy. · Liability coverage provided for Bodily Injury, Property Damage, and Personal Injury. · Separate Limit of Liability applies. · No Annual Aggregate limit is applicable · Coverage is provided on an Occurrence basis. · Broad fonn Definition of Insured applies, including: Councillors, Employees, Statutory Officers, Firefighters, Volunteers, Boards, Commissions, and Committees. · Cross Liability is included. · Coverage applies Worldwide. The following coverages are included to the full policy limit, unless specified otherwise: · Employers' Liability · Contractual Liability · Liquor Liability · Tenants' Legal Liability · Sewer backup Liability · Please be advised that deductibles indicated for sewer backup claims are on a per claimant basis. Therefore, if there are sewer backup claims, you could be responsible for multiple deductibles for those claims, up to the number of claimants. · Professional Liability on an Occurrence basis (e.g. Building Inspection Services, Medical Malpractice). · Malpractice Liability · Watercraft Liability · Products Liability · Wrongful Dismissal legal expense coverage is provided only if a specific amount is shown for this coverage in the Program Summary section of this report. · No exclusion for sexual, physical or mental abuse applies to the entity. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 13 - 1 ~) 4 ERRORS AND OMISSIONS LIABILITY INSURANCE Features This is a claims-made policy that protects the municipality from liability imposed upon it by a court of civil law for compensatory damages because of a wrongful act causingfinancialloss to a third party. Claims for Wrongful Acts causing financial loss to a third party can range from, but are not limited to, negligence in building inspection, zoning, planning, passing by-laws, failing to eriforce by-laws, to misrepresentation, abuse of power and acting in bad faith. . Separate Limit of Liability applies. . No Annual Aggregate limit is applicable. . Broad form Definition of Insured applies, including: Councillors, Employees, Statutory Officers, Firefighters, Volunteers, Boards, Commissions, and Committees. . Administration of Employee Benefit Programs IS included to the full policy limit (no aggregate limit applies). · Coverage applies Worldwide. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 14 - " <'1 1 I J '"'"\ L'--. ..j NON-OWNED AUTOMOBILE INSURANCE Features This policy provides liability protection against claims arising out of accidents involving vehicles not owned by the municipality, but operated on its behalf . The main coverage is as per S.P.F. No. 6--Non-Owned Automobile Policy. . A separate limit of liability applies. . Coverage is extended to provide excess automobile liability insurance, to the policy limit, for Councillors, Board Members, Officers, Employees, and even Volunteers for claims arising while driving their own vehicles on municipal business. . Physical damage coverage, as specified in the Summary of Coverage pages, is provided for the municipality's contractual and legal liability for damage to vehicles not owned by the corporation or any other insured. (Note: Unlike standard industry wordings, we do not restrict this coverage to "hired" automobiles only.) Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 15 - i-'.. ~' ,/ (j ENVIRONMENTAL LIABILITY INSURANCE Features This is a claims-made policy that protects the municipality from environmental liability for claims because of bodily irljury, property damage and the prevention, control, repair, clean-up or restoration of environmental impairment. Cowan's comprehensive wording, among other things, does not limit a municipality to claims arising from a sudden and accidental event. · Separate limits of liability apply specifically to this coverage. · Broad form Definition of Insured applies, including: Councillors, Employees, Statutory Officers, Firefighters, Volunteers, Boards, Commissions, and Committees. · Broad defmition of Environmental Impairment applies. · Coverage is included for sudden and accidental events and for liability resulting from events that occur gradually and over a period of time (i.e. not limited to sudden and accidental claims). · Coverage is included for liability arising out of the escape of contaminants from properties previously owned, leased or operated by the municipality. · Coverage is included for impairment caused by owned watercraft. · Coverage applies Worldwide. · No exclusion for landfill sites, open or closed. · No exclusion for fuel tanks, above or underground. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 16 - '?'? CRIME INSURANCE Features This policy provides protection to the municipality for the loss of money, securities and other property through the fraudulent or dishonest acts of employees and others. · Coverage is provided on a Commercial Blanket Bond package, and may include: Employee Dishonesty, Loss of Money and Securities, Money Order and Counterfeit Paper Currency, and Depositors Forgery. · Audit expense coverage is in addition to the overall bond limit, to the maximum amount provided in the Summary of Coverage pages. · The definition of "employee" is extended to include all persons holding positions in the municipality's service who are not compensated, and includes Members of Council, Members of all Boards, Commissions and Committees appointed by and under Council's jurisdiction. · The definition of "messenger" is also extended to include persons not compensated. · No deductible applies. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 17 - ~~ r~ COUNCILLORS' ACCIDENT INSURANCE Features This policy provides accident insurance coverage for the benefit of the municipality's elected officials. All benefits are payable in addition to any other benefits that the injured person may be in receipt of · Coverage applies while the individual is acting within the scope of their duties, including all travel required. · No aggregate limit applies. · No age restriction applies. · Coverage is not limited to "authorized" travel only. · Weekly indemnities are paid in full regardless of the individual's employment status (e.g. retired, self-employed, etc.). · Weekly indemnity for Total Loss of Time is payable for life. · A schedule of Dismemberment Benefits is provided and payable as set out in the policy. · Funeral expenses are included up to $10,000. · Blanket Accident expenses are included up to $10,000. and include dental, chiropractic, registered nurse, podiatrist, ambulance, drugs, crutches, etc. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 18 - ,) -") ,~ . !, ,} CONFLICT OF INTEREST INSURANCE Features This policy provides for the reimbursement of legal fees and expenses incurred by the elected or appointed members of Council who are charged under the Municipal Conflict of Interest Act, provided that a court finds (1) there has been no contravention, or (2) contravention has occurred by reason of inadvertence, remoteness, or insignificance, or (3) contravention has occurred by reason of a bona fide error in judgement. · Coverage is provided in respect of each individual Insured's claim to the maximum limit specified in the Summary of Coverage pages. · Separate limit of insurance applies to this coverage. · No annual aggregate limit applies. · Coverage is extended to include any member of a Board, Commission, or Committee of the Insured as defined in the Municipal Conflict of Interest Act. · Coverage is also included for any subsequent proceedings under this Act. · The Insured selects and instructs legal counsel with no intervention by the insurer. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 19 - -~ (1 ,>,./ ." LEGAL EXPENSE INSURANCE Features This policy provides for the reimbursement of legal fees including disbursements incurred by the insured in defence of charges laid for an alleged offence under any Statute of the Province of Ontario (except for the Highway Traffic Act and the Municipal Conflict of Interest Act). Some of the more common Statutes where exposure exists include: Environmental Protection Act, Freedom of Information and Protection of Privacy Act, Occupational Health and Safety Act, Ontario Water Resources Act, and Pesticides Act. · Broad form Definition of Insured applies, including: Councillors, Employees, Statutory Officers, Firefighters, Volunteers, Boards, Commissions, and Committees. · Separate limits of insurance apply to this coverage. · Coverage applies to both "guilty" and "not guilty" outcomes if applicable. · The Insured selects and instructs legal counsel with no intervention by the insurer. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 20- PART B PROPERTY Frank Cowan Company Limited - 21 - '17., 1 I ',,) I : ~ () ,,,,i .[ ~ PROPERTY INSURANCE F ea tures This policy provides "All Risk" coverage to protect the municipality's assets from direct physical loss or damage. Coverage is provided on a blanket basis, which means that the municipality will not be jeopardized should the value of an asset be undervalued in the schedule and suffer a total loss. Rather, the municipality will enjoy the protection of the blanket limit of all assets combined. Another key feature of the Cowan wording is that the replacement cost coverage provides replacement of historical or unique buildings with materials as similar as possible to preserve their heritage. · Broad definition of property insured is included. · No co-insurance clauses apply. · Insured is not required to provide a signed statement of values and policy does not contain a stated amount clause. · Replacement Cost coverage is provided (unless specifically stated otherwise). · Worldwide coverage is included. · Replacement on same site is not required. · No restriction on property in transit and coverage is provided to policy limit. · Newly acquired property is automatically included with no limit other than the policy limit. · Pennission is granted for the following: to make additions, alterations and repairs (no limit other than the policy limit), for any property to remain vacant or unoccupied, to use any property for any purpose, and to keep and use materials as usual and necessary. · Sewer back-up coverage is included. · By-law coverage is included to the policy limit. · Debris removal (including EnvironmentalIPollution Clean-up) is included to the policy limit. Frank Cowan Company Limited - 22 - 1 ~ 7., , 5,., Property Insurance Features continued · The following coverages, if applicable, are included to the limit specified in the Summary of Coverage pages: Valuable Papers, Accounts Receivable, Extra Expense (including Interruption by Civil Authority), and Media (unless included under Data Processing Rider) · The following coverages are also available, if applicable (please refer to the Summary of Coverage pages): Data Processing System and Equipment, along with Media and Extra Expense, Fine Arts, Exhibition Form, and Business Interruption. · If a single loss involves both the Automobile and Property Insurance policies, the Property policy deductible is waived only on any insured property attached to the automobile. · One deductible applies should there be a loss involving both the Property and the Boiler and Machinery Insurance policies. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 23 - 1 Z 4 I ,) BOILER AND MACHINERY INSURANCE Features This policy insures sudden and accidental mechanical breakdown to boilers, pressure vessels, and other equipment including resulting damage, all of which is generally excluded under a Property Insurance policy. Examples of common types of breakdowns insured would include: cracking, bulging, burning, explosion, mechanical breakdown and electn.cal burnout. This insurance also provides inspections and certification services as required by law. · Comprehensive Blanket coverage provided. · Broad definition of Object, includes communication equipment and production machinery. · Settlement is based on repair or replacement cost (no depreciation factor). · Broad definition of Accident applies. · New locations and newly installed objects are automatically included. · Computer Control Equipment is included when used solely to control or operate an insured object. · The following coverages, if applicable, are included to the limit shown on the Summary of Coverage pages: Extra Expense, Water Damage, Ammonia Contamination, Expediting Expenses, Hazardous Substance (including PCB Contamination), Loss of Arena Revenues, Spoilage, Professional Fees, Data Restoration, By-Law Cover, Errors and Omissions, and Denial of Access. · One deductible applies should there be a loss involving both the Boiler and Machinery and Property Insurance policies. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 24- PARTe AUTOMOBILE Frank Cowan Company Limited - 25 - "1 7.. r" I ,) ) '.1: .; (-..) ,; ,- AUTOMOBILE FLEET INSURANCE Features This policy provides protection for all claims arising out of the use or operation of licensed automobiles owned or leased by the municipality. Coverage is provided as per the Statutory Automobile Owner's Policy. A special Cowan endorsement is added to enhance the basic policy coverage. · Coverage is provided for Liability, Accident Benefits, Uninsured Automobile, and Direct Compensation - Property Damage. · Loss or Damage coverages are available as requested by the Municipality to protect their licensed vehicles from physical damage caused by an insured peril. · Coverage is automatically extended to include: newly acquired vehicles, inappropriately licensed drivers, permission to carry explosives, permission to rent or lease, damage caused by freezing of Fire-Fighting Apparatus, and permission to carry passengers for compensation. · Our Replacement Cost coverage is unique. It provides repairs or replacement of vehicles with no deduction for depreciation. On a partial loss, repair estimates are calculated by using all new parts to repair damage. On a total loss, the municipality has the option of purchasing a new vehicle, or accepting a cash settlement for the amount it would cost to purchase a new vehicle. · Guaranteed Amount coverage can be provided on specified vehicles. Repairs or replacement will be undertaken without deduction for depreciation up to the Guaranteed Amount shown on the automobile schedule attached to the policy. · Valued coverage can be provided on specified vehicles, usually those that are obsolete, would not be replaced, or would be replaced with a used vehicle. · Actual cash value (ACV) coverage can be provided on specified vehicles. · If a single loss involves both the Automobile and Property Insurance policies, the Property policy deductible is waived only on any insured property attached to the automobile. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 26 - GARAGE AUTOMOBILE INSURANCE I, 'I ) ,I Features This policy provides protection for all claims arising out of a municipality's garage operations and its legal liability for customer vehicles. Coverage is provided as per the Statutory Garage Automobile Policy. Garage operations include not only repair garages, but also storage garages and parking lot operations. · Coverage is provided for Third Party Liability for bodily injury or property damage as per the limit specified in the Summary of Coverage pages. · Coverage is also provided for Accident Benefits, Uninsured Automobile, and Direct Compensation Property Damage. · Loss or Damage coverage is available as requested by the municipality to protect its legal liability for a customer's automobile from physical damage caused by an insured peril, while in the care, custody or control of the municipality. · Physical damage coverage for customer vehicles can include Collision, and Comprehensive or Specified Perils coverage. Please refer to the limits and deductibles for the selected coverage as specified in the Summary of Coverage pages. Please refer to the insurance contract for all limits, terms, conditions and exclusions that apply. Frank Cowan Company Limited - 27 - REPORT TO EXECUTIVE COMMITTEE I . 'I 1 f'< !;() Report Number: CS 31-08 Date: June 9, 2008 From: Gillis A. Paterson Director, Corporate SeNices & Treasurer Subject: 2008 Assessment Appeals Recommendations: 1. That Report CS 31-08 of the Director, Corporate SeNices & Treasurer regarding 2008 assessment appeals update be received; 2. That Council approve the filing of the assessment appeals by Municipal Tax Equity for 2008 for the following roll numbers: 18-01-020-016-146-00, 18-01-030-020- 189-35, 18-01-030-020-189-90 and 18-01-030-020-202-00; 3. That the attached By-law providing for the confirmation of the filing of assessment appeals be enacted; 4. That Council authorize the Director, Corporate SeNices & Treasurer to engage the firm of Municipal Tax Equity and or Walker Poole Nixon LLP to represent the City for the assessment appeals filed above; and, 5. That the appropriate officials of the City of Pickering be authorized to take the necessary actions to give effect thereto. Executive Summary: The City has filed the assessment appeals for the properties outlined above due to the fact their current value assessment (used for 2008 taxation billing) bears little resemblance to the their sales price transaction value. Taxation staff's goal is to have the property's assessment value revised and corrected so that these properties do not benefit from the re-assessment phase-in proposed for 2009. Financial Implications: The City has benefited financially from previous assessment appeals (OPG). If the City is successful with these appeals, the increased property taxation could be as high as $35,000 per year or $140,000 over a four year period. Report CS 31-08 Date: June 9, 2008 Subject: 2008 Assessment Appeals Page 2 ;: n Sustainability Implications: Approving the report will assist the City in maintaining its short term and long term financial sustainability objectives. Background: The City's property tax base funds approximately 64% of its operating costs. In other words for every dollar in expenditures, sixty-four cents comes from property tax payers. Taxation staff review's the assessment data base on an annual basis to ensure that the City receives maximum economic benefit from this major revenue source. As a result of this review in conjunction with the City's consultant (Municipal Tax Equity or MTE), the City has appealed the four properties listed on Table One. Our consultant has recommended that Council confirmation, in the form of a by- law, approval is required for assessment appeals. Table One 2008 Assessment Appeals Roll/Numberl Tax Sale Location Class Owner Amount OVA Difference 020 016 146 00 Vacant Land Pickering 1856 Notion Rd Ind. Ridge Annex $4,800,000 $1,568,000 $3,232,000 030020 202 00 Altona Terraces 1870..Altona Rd. Res. Develop Corp. $1,600,000 $519,000 $1,081,000 030 020 189 35 Grossi Group 361 Chickadee Res Develop Inc. $720,000 $158,000 $562,000 030 020 189 90 Multi Grossi Groqp . Sparrow Cir. Res DevedQpJnc. $870,000 $216,000 $654,000 As the above table indicates, there appears to be a significant difference between the sales price and current assessment value used for taxation purposes. In addition, the assessment appeal is also questioning the tax class of the properties. If the City is successful, the City would receive approximately $35,000 per year in additional property tax revenues. Assessment Appeals and City's Current Assessment Growth As Members of Council are aware, since 1999, the City has been in a limited assessment growth scenario. Unfortunately, it appears that this limited growth scenario may continue until 2011 or 2012. As the chart below indicates the City's assessment growth scenario compares unfavorably with its closest Durham Region neighbour. Report CS 31-08 Date: June 9,2008 Subject: 2008 Assessment Appeals Page 3 .-~ ,1 (1 Assessment Growth (2003 to 2007) 6.00% 5.00 % 4.00% 3.00 % 2.00% 1.00% 0.00 % 2003 2004 2005 2006 2007 III Pickering . Ajax I Assessment property tax base growth has the same characteristics as compound interest over time. Over the last five years Pickering's assessment property tax base has increased due to growth by 4.9% in contrast to Ajax which has increased its property tax base by 30.5% - a difference of 25.6%. To put another way Ajax has increased its total tax revenue base by approximately 1/3 through assessment growth and not through property tax increases. With the City in its current and anticipated future limited growth scenario, it appears that increasing the assessment property tax base via assessment appeals is a viable prudent fiscal strategy. Principle of Fairness to All City Taxpayers The property tax system is based on the principle of every property owner paying their fair share of taxes based on the assessed value of their property. Property owners may disagree with the assessed value of their property but at least they understand that the system is fair because everyone basically pays property taxes based on a fair assessment property value. Where a property is under assessed and therefore pays less in taxes - the other property owners have to pay more to offset the revenue shortfall. The principle of fairness does not exist under this scenario. Property tax owners expect the City to ensure that the principle of fairness is maintained and that all taxpayers pay their fair share. Report CS 31-08 Date: June 9, 2008 Subject: 2008 Assessment Appeals Page 4 " '1 ! ii ! Conclusion Regardless of the fact that the City is in a "limited growth scenario," pursuing the property appeals is an important function of the management of the assessment property tax base and maintains the principle of property tax fairness. The limited growth scenario the City finds its self today just emphasizes the importance of obtaining the additional property tax revenue. Attachments: 1 . Property Locations 2. By-law to Authorize Specific Complaints to the Assessment Review Board Prepared By: Approved I Endorsed By: ..~ .c---------~ ./. ~.- , Stan Karwowski Manager, Finance & Taxation <?<:;~~_/ Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Copy: Chief Administrative Officer Recommended for the consideration of Pickering City COli A TT ACrlliH..; '1 Il ? , .t ... 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TO r . \' '-..- .., l, ',- F . '" .1 ~ .- l~ b THE CORPORATION OF THE CITY OF PICKERING BY-LAW NO. XX/08 Being a By-law to Authorize Specific Complaints to the Assessment Review Board. WHEREAS the Council of the Corporation of the City of Pickering (the "City"), may complain in writing to the Assessment Review Board that it or another person was, in respect of real property, assessed too high or too low, was wrongly placed on or omitted from the assessment roll and/or was wrongly on or omitted from the role in respect of school support pursuant to s.40 and s. 40.1 of the Assessment Act, R.S.O. 1990 c. A.31, as amended (hereinafter referred to as the "Acf'); WHEREAS the Council of the City of Pickering deems it appropriate to enact this by- law for the purposes of exercising its privileges under the Act, NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. In this By-law, "property" means any property or portion of property that is or should be identified on the assessment roll prepared in respect of the municipality; and "delegate(s)" means any person or persons upon whom this By-Law confers duties associated with complaints filed with the Assessment Review Board (ARB) under sections 40 or 40.1 of the Act. 2. The City hereby authorizes and ratifies the filing of complaints to the Assessment Review Board in respect of the assessment of the following persons and properties: Roll No. 1801 020 016 146 00 Roll No. 1801 030 020 202 00 Roll No. 1801 030020 18935 Roll No. 1801 030020 18990 3. In respect of the administration of any complaints authorized in paragraph 2 of this By-law, the Director, Corporate Services & Treasurer or designate hereby authorized to sign on behalf of the City, and to participate in any associated legal proceedings with respect thereto. Il '7 ! 4. Municipal Tax Equity Consultants Inc. shall be appointed on record as agent for the City. 5. This By-law shall come into effect on the date it is finally passed and shall serve to ratify all administrative tasks and responsibilities undertaken prior or subsequent to that date in respect of any appeal authorized through this By-law. By-LAW read a first, second and third time and finally passed this 16th day of June, 2008. David Ryan, Mayor Debi Wilcox, City Clerk REPORT TO EXECUTIVE COMMITTEE ,\ ", , l' >\ ~ ~ \,.,c Report Number: CS 32-08 Date: June 9,2008 From: Gillis A. Paterson Director, Corporate Services & Treasurer Everett Buntsma Director, Operations & Emergency Services Subject: Leash Free Area within the City of Pickering Recommendation: 1. That Report CS 32-08 of the Director, Corporate Services & Treasurer be received; 2. That the City of Pickering establishes a leash free area on Valley Farm Road Hydro Lands, included with Report CS 32-08 as Attachment No.1, for a six month trial period; 3. That a volunteer Leash Free Working Group be officially formed and work with City staff during the six month trial period to monitor the leash free area; 4. That By-law 5495/99 Parks and By-law 6811/07 Responsible Pet Ownership be amended to allow dogs to be off leash in City designated Leash Free Areas; and, 5. That the appropriate officials of the City of Pickering be given authority to give effect thereto. Executive Summary: On May 15, 2008 the City along with the volunteer leash free working group hosted a public meeting in order to receive input from residents regarding the establishment of a potential leash free area within Pickering. From completed surveys and feedback received at the meeting, it is being recommended that the City establish a dedicated leash free area on Valley Farm Road Hydro Lands for a six month trial period. Report CS 32-08 Date: June 9, 2008 Subject: Leash Free Area within the City of Pickering Page 2 '1 /1. (, It is also recommended that a volunteer Leash Free Working Group be officially formed. The Leash Free Working Group will be comprised of at least six members for the area and be responsible for the following: · observing the behaviour of dogs and owners using the area; specifically identifying and educating irresponsible pet owners and advise Animal Services if enforcement of violations is required · perform "Dog Watch" duties to identify and educate irresponsible pet owners · organize "off leash" area cleanups at least four times per year · repair areas damaged from dogs digging · consult with Animal and By-law Services for enforcement as required. Financial Implications: The proposed leash free area will be operated, enforced and administered at a low cost within current levels of service. The amount of $30,000 has been included in the 2008 Capital Budget for Operations and Emergency Services Staff is recommending that the amount be used for fencing to enclose the entire area and create a small corral where the dogs enter and exit. Initial clean up of the area, signage identifying rules and regulations and dog waste diversion receptacles and site furnishings as necessary. Once the leash free area has been established the Leash Free Working Group will be responsible for the general maintenance and upkeep of the area. Sustainability Implications: Once complete, the area will become part of the City's Dog Waste Diversion Program. The dog waste will be removed on a regular basis and disposed in an environmentally responsible manner. The concerns and analysis presented address responsible pet ownership within the healthy society objectives. Background: Currently within the City of Pickering, dogs are only allowed to be leash free when on the owners property and are required to be under the owner's control at all times. The primary concern with leash free areas is that dogs may be more able to escape from the owner's control. Most municipalities rely on the Dog Owners Liability Act to make owners Report CS 32-08 Date: June 9, 2008 Subject: Leash Free Area within the City of Pickering Page 3 " ,- 1\ i J. I' - responsible and accountable for their pets, regardless of the location or circumstances. Citizens of Pickering are governed by the provisions of our new Responsible Pet Ownership by-law. At the present time, there are no leash free areas within the City of Pickering. The City of Toronto currently has over 32 leash free areas, Mississauga - 7, Oakville - 5, Ajax - 2, Oshawa -1 and Brampton -3. Leash free areas in urban areas are becoming more common. On September 18, 2006, correspondence was received and a delegation was heard from representatives of the Pickering Leash Free Working Group, submitting a formal request to engage the City of Pickering in the investigation for establishing designated off-leash areas for dogs within the City of Pickering. Council referred the matter to City staff to work with the group to determine the feasibility of potential sites within Pickering. On June 11, 2007 Report CS 27-07 was presented to Council regarding potential sites identified by the Leash Free Working Group. Recommendations included offering a public meeting for the purpose of obtaining comments on the possible establishment of leash free areas and regulations within Pickering. On November 19, 2007 a memorandum was presented to the Chief Administrative Officer and Council identifying the four possible locations to implement Leash Free Areas. During the first week of May, 2008, 1,176 letters were mailed out advising residents of the public meeting which took place on Thursday May 15, 2008 as well as providing them with a 3 page survey explaining the potential sites. The meeting was advertised in the News Advertiser on May ih and 14th, the City's website as well as through handouts created by members of the Leash Free Working Group. The public meeting took place on May 15, 2008 in the Council Chambers at the Civic Complex. The meeting was well attended with a total of 53 people in attendance. At this meeting, residents and park users engaged in discussions with staff and the volunteer Leash Free Working Group regarding the 4 potential sites. A total of 43 surveys were received, with the majority of respondents in favour of designating an area for dogs to run off leash. The following is a synopsis from the surveys that were returned from residents. . Only 26% of residents responded to the survey . 33 residents agreed to leash free areas . 11 residents do not want leash free areas Report CS 32-08 Date: June 9, 2008 Subject: Leash Free Area within the City of Pickering Page 4 '1 L~ 1, i · Of the total surveys returned 26 residents were dog owners, 17 were not dog owners and 1 survey did not advise if they were or not · Special features within any leash free area included fencing, dog waste recycling bins, area large enough for dogs to run around and sufficient parking. The following is the total number of resident's preferred location for the leash free area. PINEGROVE DIANA, WHARF VALLEY NO OTHER PARK PRINCESS STREET FARM RD. PREFERENCE OF WALES PARK 2 11 4 1 5 3 Although the majority of individuals who completed the survey indicated that they would like the leash free area established at Diana, Princess of Wales Park, we found that residents who were not in support of any off leash areas were equally vocal in expressing negative concerns pertaining to that same site. Diana, Princess of Wales Park is currently comprised of a skate park, soccer fields, children's playground, basketball and beach volleyball courts and the soon to be established community garden. The Pickering Official Plan (Town Centre Neighbourhood 8) identifies the future connection of Diefenbaker Court to Pickering Parkway, along the west side of the corridor which would ultimately have a negative impact on a leash free area if established there. Based on the feedback provided, results of the public consultation and extensive research conducted by staff and the volunteer Leash Free Working Group, staff recommend that an off leash area no less than 1f2 acre be designated at the Valley Farm Road Hydro Lands on the portion north of the pathway and east of the road. The property is currently used by the City under an agreement with Hydro One. Once Council approves the recommendations, the expanded use will be confirmed with Hydro One. As part of the design implementation, the City will employ risk reduction strategies such as appropriate signage, fencing and perhaps dividing the area into two areas, for large and small dogs. The implementation of an off leash area will be undertaken in a manner that does not impede the na~ural character of the site Attachment: 1. Map of proposed location-Valley Farm Road. Report CS 32-08 Date: June 9, 2008 Subject: Leash Free Area within the City of Pickering Page 5 ~ :', ') I : l.. Prepared By: Approved I Endorsed By: . c:=<0f~/:. ~' ~is A. Paterson Director,9.erporate S~rvices & Treasurer ....i/~_,......~. i.... /~, . /// /// '- ~ Ever~;t~Wl;~ma V Director, Operations & Emergency Services Y1 / .-') \~, .' r')l.Lt\ILcl(, Lindsey Brenner Supervisor, Animal Services ::u ~".,' , . n . \', I'" ' .. ," '~_\.A ) ( ~.k ~> cr. I. Debi A. Wilcox 7 City Clerk Recommended for the consideration of Pickering City Council <./ ... '" TO REPORT# CS SUBJECT AREA >- W -.-J ---3 :;; cr: o 00 0::- 00:: )-0:: IO U ~SUJ FINCH LODGE :::tJ o )> CJ o <( o n:: OPERATIONS & EMERGENCY SERVICES DEPARTMENT MUNICIPAL PROPERTY & ENGINEERING DIVISION ATTACHMENT FOR OPERATIONS & EMERGENCY SERVICES REPORT PROPOSED DOG LEASH-FREE AREA VALLEY FARM ROAD - OPEN SPACE SCALE: DATE: APRIL 28 /2008 N.T.S L:\MPandE\ Thematic Mappif1g\MopB\O&:~ - Dlrsctor\AHo-=hment for Reporl z w o >- o OJ w z .r w I- 0 ~~ U1 w 0:: U w 2 n:: o DRIVE >- <( I lf) [!J A VEN U E o <( o n:: o <( o 0:: REPORT TO EXECUTIVE COMMITTEE Report Number: OES 18-08 ": [\ 11 Date: June 9, 2008 l ,'. , From: Everett Buntsma Director, Operations & Emergency Services Subject: Single sourcing the purchase of a Vehicle Exhaust Extractor System Apparatus File: A-1440 Recommendation: 1. That Report OES 18-08 regarding single sourcing the acquisition of a vehicle exhaust extractor system be received; 2. That the use of the single sourcing process for the procurement of a fixed mounted vehicle exhaust extraction system for Fire Station #6 (Finch Ave.) City of Pickering Fire Services be approved and that Nederman Canada being the sole provider for this specific system be identified as the single source provider of the unit; and 3. That the appropriate officials of the City of Pickering be given authority to give effect thereto. Executive Summary: The vehicle exhaust extraction system at Station 6 (Finch Ave.) is due for replacement. In the interest of uniformity with our other 3 stations, it is the recommendation to proceed with the Nederman vehicle exhaust extractor system. Financial Implications: $35,000.00 Approved Capital Budget 2008 to be financed by property tax. Sustainability Implications: This project achieves the following sustainability objectives: Objective #1: Healthy Environment - the system by its very nature contributes to cleaner air; Objective #2: Healthy Society - creates a cleaner work environment; Objective #3: Healthy Economy - project to be conducted by an Ontario company; Objective #4: Responsible Development - not applicable to this project; Report OES 18-08 June 9, 2008 Subject: - Single Sourcing the purchase of a Vehicle Exhaust Extractor System Apparatus Page 2 " , , ~ l--; Objective #5: Responsible Consumption - this system utilizes an energy efficient electric motor. Background: In the 2008 Capital Budget Council has approved the purchase and installation of a replacement vehicle exhaust extrication system for Station 6. The existing system has become problematic and also costly to maintain. Our other three fire stations use a Nederman exhaust system that has proven to be a more tested design in operation, efficiency and maintenance. All of our vehicles have had the necessary vehicle modifications to utilize this system. It is my recommendation that in order to perhaps cut down on maintenance and modification costs, and in the interest of uniformity, that we proceed with the Nederman system. Nederman Canada is a division of Nederman International, a Swedish based company that is clearly the system of choice for Fire Station exhaust systems in Ontario. Attachments: 1. Not applicable Prepared By: Approved/Endorsed By: ../' \I . }(/)) /L:'-. l__ Stnfon Almond Deputy Chief, Operations /' .' -....,;.-,..-...'---- ., \.. ,. .-::"''------- <~."",../., ..<'" .. ",' /",..'} Everett'Blintsma v Director, Operations & Emergency Services ~5~~ ~~ Fire Chief /'" --d~~, f::::::--# . ~__n'_-:"'-"~~ '----"Gillis Paterson Director, Corporate Services & Treasurer SAfn Copy: Chief Administrative Officer CORP0227 -07 /01 revised Report OES 18-08 June 9, 2008 Subject: - Single Sourcing the purchase of a Vehicle Exhaust Extractor System Apparatus Page 3 1 !j (") Recommended for the consideration of Pickering Citeouncil ,;/~ ;/ CORP0227-07/01 revised