HomeMy WebLinkAboutCS 18-09
Call 00 REPORT TO
EXECUTIVE COMMITTEE
T
1CKE 11~1 V G Report Number: CS 18-09
126 Date: June 8, 2009
From: Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject: 2008 Pre-Audit Balances of Reserves and Reserve Funds
Recommendation:
1. That Report CS 18-09 of the Director, Corporate Services & Treasurer be
received for information;
2. That the Ontario Transit Renewal Reserve Fund be closed and the attached By-
law to repeal By-law 6029/02 be enacted;
3. That the Dedicated Gas Tax Reserve Fund be closed and the attached By-law to
repeal By-law 6418/04 be enacted; and,
4. That the appropriate staff of the City of Pickering be given authority to give effect
thereto.
Executive Summary: Based on the preliminary 2008 results, we can now report on
the pre-audit actual activities within the Reserves and Reserve Funds for 2008. A
summary is presented in Appendix A.
The purpose and 2008 financial transactions for each Reserve and Reserve Fund are
set out in Appendices B and C respectively.
The Ontario Transit Renewal Reserve Fund and Dedicated Gas Tax Reserve Fund are
recommended to be closed as they have served their intended purposes.
The purpose and 2008 financial transaction for each Reserve and Reserve Fund are set
out in Appendices B and C respectively.
Financial Implications: Not applicable
Report CS 18-09 Date: June 8, 2009
Subject: 2008 Pre-Audit Balances of Reserves and Reserve Funds Page 2
127
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 2008 pre-audit Reserves and Reserve Funds balance of $60,081,565 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 Council or 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
Board (PSAB) for obligatory Reserve Funds. The combined unspent budget
commitments for all Reserve Funds are $6,310,155.
With the transfer of transit services to the Regional Municipality of Durham (Region), the
Region Transit Reserve, Ontario Transit Renewal Reserve Fund and Dedicated Gas
Tax Reserve Fund are officially closed as at the year-end ended December 31, 2008.
Funds remaining have been transferred to the Region. The by-laws to repeal both the
reserve funds are included in this report. The Transit Region Reserve being a reserve
account was created by council resolution in the year 2002 when the budget was
approved and was not established by by-law, therefore there is no by-law to repeal. This
Reserve will expire on its own as at December 31, 2008 based on reason indicated
above.
The Development Charges, Parkland, Third Party/Developer Contributions, 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
$33,526,370 (See Appendix A). The combined total of the budget commitments, other
restricted balances and obligatory Reserve Funds of approximately $39 million reduced
the "discretionary" balance to approximately $20 million as at December 31, 2008.
The City established a new reserve this year, namely: Capital Maintenance
Management System Reserve which will provide funds to assist in meeting mandatory
Public Sector Accounting Board (PSAB) requirements. Furthermore, it will assist in
providing funding towards future capital asset management initiatives. The purposes of
the Reserves and Reserve Funds are discussed further in Appendices B and C.
Report CS 18-09 Date: June 8, 2009
Subject: 2008 Pre-Audit Balances of Reserves and Reserve Funds Page 3
Internal borrowings from the Reserve Funds commenced in 2001 to assist in funding
capital projects. The outstanding principal balance as at December 31, 2008 is
approximately $3 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 $2.82 million and $198,000 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 2007
internal borrowings. There was no internal loan in 2008.
Attachments:
1. Appendix A Summary of Reserves and Reserve Funds
2. Appendix B Description of Reserves
3. Appendix C Description of Reserve Funds
4. By-law to repeal By-law 6028/02
5. By-law to repeal By-law 6418/04
Prepared By: Approved / Endorsed By:
Caryn Kong Gillis A. Paterson
Senior Financial Analyst Director, Corporate Services & Treasurer
GAP:ck
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering City Council
Thoma J. uinn, R R., C III
Chief Administrative Officer
ATTACHMENT #.~_.TO REPORT Jk- 01
APPENDIX A g
CITY OF PICKERING
SUMMARY OF RESERVES AND RESERVE FUNDS PRE-AUDIT ACTUALS
DECEMBER 31, 2008
Pre Audit Audited Audited Audited
Appendix B Summary Reserves 2008 2007 2006 2005
4610 Working Funds $400,000 $400,000 $400,000 $400,000
4611/4623 Replacement Capital 618,419 683,214 685,715 722,844
4612 Contingencies-OPG, Election, Other 2 1,401,340 1,328,080 6,356,615 10,774,909
4613 Self-Insurance 2 951,391 951,391 951,391 915,514
4619 Rate Stabilization 17,374,935 15,491,176 6,910,981 3,388,965
4620 Develop. Charges-City's Share 2 1,168,494 745,244 809,654 484,204
4621 Region Transit 2 - 120,999 120,999 237,106
4622 Continuing Studies 2 750,534 713,821 474,484 342,533
4624 Vehicle Replacement 172,547 122,547 72,547 75,000
4625 Easement Settlement 131,279 - - 1,095,129
4626 Library Eastern Branch 2 80,000 55,000 30,000 20,000
4627 Move Ontario 8,243 308,243 833,243 -
4628 Capital Maint Mgmt System New 75,000
Total Reserves $23,132,182 $20,919,715 $17,645,629 $18,456,204
Pre Audit Audited Audited Audited
Appendix C Summary of Reserve Funds 2008 2007 2006 2005
4225 Community Facilities $192,845 $180,880 $194,175 $265,492
4228 Capital Works 348,583 335,486 321,618 309,872
4229 Development Charges 182 26,413,355 23,528,009 22,341,331 21,135,306
4230 Parkland 112 1,984,486 1,557,607 1,993,928 2,103,061
4232 Public Works 1,167,782 1,122,707 1,072,893 1,038,206
4234 Workers Safety Insurance Brd2 1,339,907 1,103,109 834,922 589,575
4235 Third Party/Dev. Contributions' 2,043,667 2,129,221 1,868,148 1,819,264
4236 Ontario Transit Renewal' - - 19,166 19,166
4237 Squash Courts 2 92,530 119,057 78,989 66,087
4238 Prov. Dedicated Gas Tax' - 523,014 771,076 722,039
4239 Federal Gas Tax Revenue' 3,084,862 2,144,076 1,455,769 850,684
4240 Building Permit Stabilization Fees 1&2 - -
4241 Animal Shelter2 152,896 146,195
4242 Pickering Mens' Slow Pitch 2 128,470 - - -
Total Reserve Funds $36,949,383 $32,889,361 $30,952,015 $28,918,752
Total Reserves & Reserve Funds $60,081,565 $53,809,076 $48,597,644 $47,374,956
Notes
' Obligatory Reserve Funds $33,526,370 (Includes 4229 & 4230)
2 Restricted Reserves & Reserve Funds 6,065,562 (Excludes 4229 & 4230)
Total Obligatory' & Restricted 2 -2008 = 39,591,932
Less Budget Committed Projects (6,310,155)
Total Uncommitted Obligatory & Restricted R & RF $33,281,777
Total Reserves & Reserve Funds $60,081,565
Less Obligatory, Restricted Reserve & Reserve Funds (39,591,932)
Net-Discretionary Reserves & Reserve Funds $20,489,633
3 0 ATTACHMENT# ~ TO REPORT#LLF-
APPENDIX B
RESERVE FOR WORKING FUNDS 4610
Actual Balance December 31, 2007 $ 400,000
Transfers into the Reserve -
Transfers out of the Reserve -
Pre-Audit Actual Balance December 31, 2008 $ 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 average annual revenue of $45 million, at 2%, the amount to
maintain for this reserve should be $900,000.
APPENDIX B 3 1
RESERVE FOR REPLACEMENT OF CAPITAL EQUIPMENT - G/L 4611/4623
Actual Balance December 31, 2007 $ 683,214
Transfers into the Reserve
Revenue Fund Contribution 115,462
Transers out of the Reserve
Transfers to Capital Fund (180,257)
Pre-Audit Actual Balance December 31, 2008 $ 618,419
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.
132
APPENDIX B
The balances pertaining to these sub-categories are as follows:
Corp Use Prgrms Pool Arena Core Pool Arena Total
Dec 31/07 2,483 134,752 37,578 68,091 108,773 181,312 150,225 683,214
Transfers in 0 18,500 4,962 30,000 27,000 15,000 20,000 115,462
Transfers out - - - - (61,663) (45,134) (73,460) (180,257)
Dec 31/08 2,483 153,252 42,540 98,091 74,110 151,178 96,765 618,419
APPENDIX B 1 3 3
RESERVE FOR CONTINGENCIES- G/L 4612
(OPG, Other Assessment Appeals, Election, Miscellaneous)
Actual Balance December 31, 2007 $ 1,328,080
Transfers into the Reserve
Transfers from Revenue Fund 73,260
Transfers out of the Reserve:
Pre-Audit Actual Balance December 31, 2008 $ 1,401,340
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.
As at the year ended December 31, 2007, there are no longer any funds in the
Contingency-Ontario Power Generation (OPG) Assessment Reserve as the
assessment appeals related to the taxation years 2003-2006 have been reached
and this amount was transferred to the Rate Stabilization Reserve in 2007.
The amounts pertaining to the other sub-categories are as follows: Election -
$140,000, Other Assessment Appeals - $682,594, True Sport City Share- $3,260
and Miscellaneous - $575,486.
134
APPENDIX B
RESERVE FOR SELF INSURANCE - G/L 4613
Actual Balance December 31, 2007 $ 951,391
Transfers into the Reserve -
Transfers out of the Reserve:
Transfer to Capital -
Pre-Audit Actual Balance December 31, 2008 $ 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.
1 3 APPENDIX B
RESERVE FOR RATE STABILIZATION - G/L 4619
Actual Balance December 31, 2007 $ 15,491,176
Transfers into the Reserve
Excess Surplus Contribution 2,647,941
Dividend from Veridian 1,722,000 4,369,941
19,861,117
Transfers out of the Reserve
2008 Current Budget Provision (2,486,182)
Pre-Audit Actual Balance December 31, 2008 $ 17,374,935
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 2008 Current Budget provided for a transfer in the amount of $2,486,182
from this reserve to fund current expenditures.
With the settlement of OPG assessment appeal in 2007, dividends from Veridian
and surplus in 2008; there is sufficient build-up of funds to draw from this reserve
for future budgeting years. In 2009, there is a budgeted draw of $2.9 million and
further draws anticipated in 2010 and after.
' 3 6 APPENDIX B
RESERVE FOR DEVELOPMENT CHARGES - CITY SHARE G/L 4620
Actual Balance December 31, 2007 $ 745,244
Transfers into the Reserve
2008 Current Budget Provision 480,000
Returned to source 120,200
1,345,444
Transfers out of the Reserve
Transfer to Capital Fund
-External Subdivision Works (176,950)
Pre-Audit Actual Balance December 31, 2008 $ 1,168,494
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 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.
137
APPENDIX B
REGION TRANSIT RESERVE - G/L 4621
Actual Balance December 31, 2007 $ 120,999
Transfers into the Reserve:
GO Transit Funding from Region -
Transfers out of the Reserve:
Transferred to the Region (120,999)
Pre-Audit Actual Balance December 31, 2008 $ -
1. Purpose of this Reserve:
This Reserve account 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:
With the transferred of the Ajax Pickering Transit Authority (APTA) to the
Regional Municipality of Durham (Region) effective January 1, 2006, there is no
longer any revenue from the Region for this Reserve.
This Reserve is officially closed as at our year December 31, 2008 as we have
settled all our commitments and obligations with APTA.
3 8 APPENDIX B
RESERVE FOR CONTINUING STUDIES & CONSULTING - G/L 4622
Actual Balance December 31, 2007 $ 713,821
Transfers into the Reserve
Continuing Consulting Work or Studies 190,570
Transfers out of the Reserve (153,857)
Pre-Audit Actual Balance December 31, 2008 $ 750,534
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 2008 in the amount of $153,857 pertained to consulting
work that was transferred into the Reserve. in the prior year. An additional
amount of $190,570 has been transferred-in for future work.
APPENDIX B 1 3 9
RESERVE FOR VEHICLE REPLACEMENT - G/L 4624
Actual Balance December 31, 2007 $ 122,547
Transfers into the Reserve 50,000
Transfers out of the Reserve to Capital Fund -
Pre-Audit Actual Balance December 31, 2008 $ 172,547
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.
14 0 APPENDIX B
RESERVE - EASEMENT SETTLEMENT - GIL 4625
Actual Balance December 31, 2007 $ -
Transfers into the Reserve: -
Projects returned to source 131,279
Transfers out of the Reserve -
Pre-Audit Actual Balance December 31, 2008 $ 131,279
1. Purpose of this Reserve:
This reserve was established in 2005 due to funds received from easement
settlement in February 2005. The amount collected was $2.5 million. These
funds will be used to finance both the capital and operating expenditures of the
City.
The interest income on these funds forms part of the annual Current Budget General
Government Revenue.
2. Recommended Maintenance Levels of this Reserve:
There would be no recommended maintenance levels. Whenever funds are
received- due to easement settlement, this reserve will be credited accordingly.
Budgeted draws to fund City's expenditures will be dependent on the revenues
collected. Due to the budgeted draws in both 2005 and 2006, the funds originally
received in 2005 have been completely depleted as at the year ended December
31, 2006. The funds available as at the year ended December 31, 2008 are the
results of under-ages from 2005 and 2006 completed projects.
APPENDIX B
RESERVE - PROVISION FOR EASTERN BRANCH LIBRARY - GIL 4626
Actual Balance December 31, 2007 $ 55,000
Transfers into the Reserve 25,000
Transfers out of the Reserve -
Pre-Audit Actual Balance December 31, 2008 $ 80,000
1. Purpose of this Reserve:
This reserve was 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. 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. The same amount was provided for in 2008.
'14 2
APPENDIX B
RESERVE - MOVE ONTARIO - G/L 4627
Actual Balance December 31, 2007 $ 308,243
Contribution from Province of Ontario -
Transfers out of the Reserve
Capital Expenditures -Roads (300,000)
Pre-Audit Actual Balance December 31, 2008 $ 8,243
1. Purpose of this Reserve:
This reserve was 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.
43
APPENDIX B
RESERVE - CAPITAL MAINTENANCE MGMT SYSTEM - G/L 4628 NEW
Actual Balance December 31, 2007 $ -
Contribution from Province of Ontario 75,000
Transfers out of the Reserve
Capital Expenditures -
Pre-Audit Actual Balance December 31, 2008 $ 75,000
1. Purpose of this Reserve:
This reserve was newly established in 2008 to start building-up funds for capital
maintenance and management systems.
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 2008 there was a
budgeted transfer of $75,000 from the Current Budget.
~ATTACHMENT#-,--2-TO REPORT #-LCff10q
144 APPENDIX C
RESERVE FUND FOR COMMUNITY FACILITIES - G/L 4225
Actual Balance December 31, 2007 $ 180,880
Transfers into the Reserve Fund
Returned to source 5,000
Interest Earned on External Investments 6,965 11,965
Transfers out of the Reserve Fund
Transfer to Capital Fund - -
Pre-Audit Actual Balance December 31, 2008 $ 192,845
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, 2008 is $167,648.
Taking these commitments into consideration, the uncommitted balance of funds
available is $25,197. Additional amounts must be provided to this fund.
X45
APPENDIX C
RESERVE FUND FOR CAPITAL WORKS - G/L 4228
Actual Balance December 31, 2007 $ 335,486
Transfers into the Reserve Fund
Interest Earned on External Investments 13,097
Transfers out of the Reserve Fund -
Pre-Audit Actual Balance December 31, 2008 $ 348,583
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 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:
Between the years of 1998 to 2000, the balances have been maintained at
$600,000 to $800,000. There has been no major contribution to this Reserve
Fund in the past eight years. The value of the unspent budget commitments at
the end of 2008 is $13,822. Taking these unspent budget commitments into
account, the uncommitted balance available as at December 31, 2008 will be
reduced to $334,761. Major additional contributions will be required in future
years.
146 APPENDIX C
RESERVE FUND FOR DEVELOPMENT CHARGES - G/L 4229
Actual Balance December 31, 2007 $ 23,528,009
Transfers into the Reserve Fund:
Net Developer Contributions $ 2,422,276
Returned to source 14,091
Interest Earned on External Investments 856,165
Interest Earned on Internal Loans 162,336 3,454,868
Transfers out of the Reserve Fund:
Transfer to Current Fund-Studies (15,819)
Transfer to Capital Fund:
Parks (169,068)
Ext. Subdiv- Roads & Related (384,635) (553,703)
Pre-Audit Actual Balance December 31, 2008 $ 26,413,355
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 82198, 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, all 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 $3,259,915. The pre-
audit actual balance of $26,413,355 would be reduced by this amount to reflect
an uncommitted balance of funds available for future expenditures of
$23,154,440.
APPENDIX C 4 7
RESERVE FUND FOR PARKLAND - GIL 4230
Actual Balance December 31, 2007 $ 1,557,607
Transfers into the Reserve Fund:
Developers Contributions $ 455,300
Interest Earned on External Investments 58,524
Interest Earned on Internal Loans 10,727 524,551
Transfers out of the Reserve Fund:
Transfer to Capital Fund-Parks:
David Farr Park (613)
Playground Reconstruction& Equipment (57,059)
Parks- Trees (40,000) (97,672)
Pre-Audit Actual Balance December 31, 2008 $ 1,984,486
1. Purpose of this Reserve Fund:
This is an "obligatory" reserve fund and it was established pursuant to section
417(1)(2) of the Municipal Act, 2001 as required by subsections 42(1), (5), (6),
(7), (8) and (9) of the Planning Act. This fund is governed by legislation,
regulation or agreement and requires revenues received for the special purposes
to be segregated from the general revenues of the municipality. Obligatory
reserve funds must be created whenever a statute requires revenues for a
special purpose to be segregated from the general revenues of the municipality
and the revenue is to be used solely for the purpose prescribed by statute.
The interest 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:
Due to the obligatory nature of this fund, there are no limits on this fund. The
unspent budget commitments as at the year ended 2008 are $276,437. The pre-
audit balance of $1,984,486 after taking into account the unspent budget
commitments will provide an uncommitted balance available of $1,709,049 as at
December 31, 2008.
1 4 8 APPENDIX C
RESERVE FUND FOR PUBLIC WORKS - G/L 4232
Actual Balance December 31, 2007 $ 1,122,707
Transfers into the Reserve Fund
Third Party Contributions $ 1,101
Returned to source 95
Interest Earned on External Investments 43,879 45,075
Transfers out of the Reserve Fund
Pre-Audit Actual Balance December 31, 2008 $ 1,167,782
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 2008 is $25,000. The pre-audit
balance of $1,339,907 would be reduced by this amount to reflect an
uncommitted balance of funds available of $1,142,782 as at December 31, 2008.
49
APPENDIX C
RESERVE FUND FOR WORKERS SAFETY INSURANCE BOARD - GIL 4234
Actual Balance December 31, 2007 $ 1,103,109
Transfers into the Reserve Fund
Contribution from Current Fund $ 443,738
Interest Earned on External Investments 53,843 497,581
Transfers out of the Reserve Fund
Claims and Other Related Costs $ (122,896)
Funding Insurance Costs (121,262)
Contribution to Health & Safety Training (16,625) (260,783)
Pre-Audit Actual Balance December 31, 2008 $ 1,339,907
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 2008, 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 $223,317
from 2003 to 2008 has resulted to the 2008 year-end balance of $1,339,907.
APPENDIX C
THIRD PARTY/DEVELOPERS CONTRIBUTIONS RESERVE FUND - G/L 4235
Actual Balance December 31, 2007 $ 2,129,221
Transfers into the Reserve Fund
Contributions from Developers/Third Parties $ 20,840
Interest Earned on External Investments 85,815 106,655
Transfers out of the Reserve Fund -
Current Expenditures-Consulting fees (18,000)
Capital Expenditures:
Entrance Eastern Gateway (42,238)
Ext Subdivision Works (656)
Development Control- Helm St (3,315)
Development Control-St Martins/ Bayly St (128,000) (174,209)
Pre-Audit Actual Balance December 31, 2008 $ 2,043,667
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.
51
APPENDIX C
ONTARIO TRANSIT RENEWAL RESERVE FUND - G/L 4236
Actual Balance December 31, 2007 $ -
Transfers into the Reserve Fund
Contribution from Ministry of Transportation $ -
Interest on External Investments-reversal - -
Transfers out of the Reserve Fund
Close-out account-Revenue Fund -
Pre-Audit Actual Balance December 31, 2008 $ -
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.
The by-law to repeal this reserve fund is included in this report to council.
152
APPENDIX C
SQUASH COURTS RESERVE FUND - G/L 4237
Actual Balance December 31, 2007 $ 119,057
Transfers into the Reserve Fund
Surcharge on Memberships 10,432
Interest on External Investments 5,259 15,691
Transfers out of the Reserve Fund -
Recreation Centre Expansion & Squash Courts (42,218)
Pre-Audit Actual Balance December 31, 2008 $ 92,530
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, 2007 $ 523,014
Transfers into the Reserve Fund
Interest on External Investments - -
Transfers out of the Reserve Fund -
Transferred to the Region (523,014)
Pre-Audit Actual Balance December 31, 2008 $ -
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 (APTA). This reserve fund was created in 2004
further to the recommendation passed in Council Resolution #167104, 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 APTA to the Region effective January 1,
2006, the balance of this fund has been transferred to the Region in May
2008. This account is officially closed. The by-law to repeal this reserve
fund is included in this report to council.
154
APPENDIX C
FEDERAL DEDICATED GAS TAX RESERVE FUND - GIL 4239
Actual Balance December 31, 2007 $ 2,144,075
Transfers into the Reserve Fund
Returned to source 86,892
Prov. of Ontario 1,415,710
Interest on External Investments 115,663 1,618,265
Transfers out of the Reserve Fund -
Capital Expenditures in the following cost centres:
Civic Complex (153,180)
Dunbarton Pool (183,961)
Community Centre (7,360)
Recreation Complex (248,045)
Rec Complex-Pool (6,267)
Roads (30,380)
Storm Water Mgmt (4,996)
Development Control (37,049)
Library (6,240) (677,478)
Pre-Audit Actual Balance December 31, 2008 $ 3,084,862
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).
155
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 fundin 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
156
APPENDIX C
ANNUAL REPORT - BUILDING PERMIT FEES
for the year ended December 31, 2008
Building Permit Revenue $ 614,756
Costs
Direct Costs (1,102,003)
Indirect Costs (195,851) (1,297,854)
Excess/(Deficit) Revenue over Costs $ (683,098)
BUILDING PERMIT STABILIZATION RESERVE FUND -GL 4240
Opening Balance, Jan. 1, 2008 $ -
2008 Contribution
Closing Balance, Dec. 31, 2008 $ -
1. Purpose of this Reserve Fund:
This reserve fund was officially established in 2006 based on By-Law
6651/06 and Report to Executive Committee PD 41-05.
The need for the establishment of this reserve fund arises as a result of
the significant changes to the building regulatory system in Ontario with
the introduction of the Building Code Statute Law Amendment Act, 2002
(known as Bill 124) and associated amendments to the Ontario Building
Code. The purpose of this fund is to secure funding to provide for service
delivery stabilization during an economic downturn. The source of funds
will be 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 reserve fund as per
the Municipal Act, 2001 section 417(3).
157
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 2008, 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 Executive Committee (May 11, 2009)
CS 09-09 has provided the detailed information for the 2008 reporting
year.
153
APPENDIX C
ANIMAL SHELTER RESERVE FUND - G/L 4241
Actual Balance December 31, 2007 $ 146,195
Transfers into the Reserve Fund
Interest on External Investments 6,701
Transfers out of the Reserve Fund -
Pre-Audit Actual Balance December 31, 2008 $ 152,896
1. Purpose of this Reserve Fund:
This reserve fund was established in 2007 based on 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 and the remaining funds
are from interest income earned.
159
APPENDIX C
PICKERING MEN'S SLOW PITCH RESERVE FUND - G/L 4242 (New)
Actual Balance December 31, 2007 $ -
Transfers into the Reserve Fund
Contribution from Men's Slow Pitch League 125,000
Interest Income 3,470 128,470
Transfers out of the Reserve Fund -
Pre-Audit Actual Balance December 31, 2008 $ 128,470
1. Purpose of this Reserve Fund:
This reserve fund was established at the end of 2007 based on 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. In 2008, the City
received the financial contribution of $125,000 from the Pickering Men's
Slow Pitch League.
ATTACH NIEN°I` #A__...TO REPORT #_r_1_ "1 6 0
THE CORPORATION OF THE CITY OF PICKERING
BY-LAW NO.
Being a by-law to repeal By-law no. 6028/02 which
was for the establishment of a Reserve Fund to be
known as the Ontario Transit Renewal Reserve Fund.
WHEREAS the City of Pickering passed By-Law 6028/02 to establish such a reserve
fund for the purpose of receiving funding from the Ontario Transit Renewal Fund
and for the paying of transit related expenses as defined in the Ontario Transit
Renewal Agreement.
WHEREAS with the transfer of transit services to the. Region effective January 1,
2006, this Reserve Fund has served its intended purpose and no longer required
and can now be closed.
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY
OF PICKERING HEREBY ENACTS AS FOLLOWS:
1. That the Reserve Fund known as the Ontario Transit Renewal Reserve
Fund be closed.
2. That By-law 6028/02 be repealed.
3. That this By-law shall come into effect upon the date of the final passing
thereof.
BY-LAW read a first, second and third time and finally passed the 15th day of
June, 2009.
David Ryan, Mayor
Debi A. Wilcox, City Clerk
TTr.. 7 W_ 5 T~7 I~, r?'tT # CS f'g' "I
THE CORPORATION OF THE CITY OF PICKERING 161
BY-LAW NO.
Being a by-law to repeal By-law no. 6418/04 which
was for the establishment of a Reserve Fund to be
known as the Dedicated Gas Tax Reserve Fund.
WHEREAS the City of Pickering passed By-Law 6418/04 to establish such a reserve
fund for the purpose of receiving funding from the Province for the paying of transit
related expenses that are intended to increase ridership.
WHEREAS with the transfer of transit services to the Region effective January 1,
2006, this Reserve Fund has served its intended purpose and no longer required
and can now be closed.
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY
OF PICKERING HEREBY ENACTS AS FOLLOWS:
1. That the Reserve Fund known as the Dedicated Gas Tax Reserve Fund
be closed.
2. That By-law 6418/04 be repealed.
3. That this By-law shall come into effect upon the date of the final passing
thereof.
BY-LAW read a first, second and third time and finally passed the 15th day of
June, 2009.
David Ryan, Mayor
Debi A. Wilcox, City Clerk