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Home My WebLink AboutTR-37-98 \ THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: Date: General Purpose and Administration Committee File # f.:t).~ Res. #l-::>9A - 351 ~ Cjq' June 8, 1998 Report #: Subject: TR-37-98 File #: By-law # TRANSFERS TO RESERVE AND RESERVE FUNDS - YEAR END 1997 Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report TR-37-98 be received; 2. THAT the transfers to the Reserves/Reserve Funds identified in TR-37-98 be endorsed; and 3 . THAT the above recommendations be approved. BACKGROUND & COMMENTS: 1.0 Annual Report 1.1 With the preparation of the 1997 year end financial statements, there are a number of routine transfers to Reserves or Reserve Funds that have been approved annually by Council at or around the time that the year end financial statements are presented to Council. These transfers are in accordance with Municipal by-laws or policies and practices. 2.0 Transfers 2.1 Among the following are standard year end transfers, made to cover approved 1997 budget items which were incomplete at December 31, 1997 but anticipated to be used in 1998 for the purposes they were originally intended. The transfers to Reserves or Reserve Funds earmark the funds only, and draws on these funds still require adherence to the Purchasing By-Law, and any projects requiring tenders will be brought to Council for final approval. In addition, many of the items have been purchased or projects completed at the time of writing this report, but are recorded here because they were outstanding over the year end. 809 TR-37-98 PAGE 2 1. 7202-X-405/ Transfer the tax levy portion of incomplete 1997 Capital Public $278,229.22 2900-17-X Works projects to be completed in 1998 to General Capital Reserve. (ie. Farewell Creek Erosion, Sidewalk Replacement, Division Street, Pre-Engineering Design and Street Lighting projects, Uptown Ave., and Scugog S1.) 2. 7702-X-405/ Transfer portion of unexpended Tax levy for 1997 Capital $1,438.70 2900-24-X Budget for Planning Department to Computer Equipment Reserve. 3. 7007-X-405/ Transfer unexpended Tax levy portion of 1997 Capital Budget $3,876.86 2900-17-X for Health and Safety and Public Works furniture/fixtures to General Capital Reserve 4. 7009-X-259/ Transfer unexpended portion of the Computer Services Software $4,665.24 2900-24-X application development to Computer Equipment Reserve for software changes in 1998. 5. 7007-X-405/ Transfer unexpended 1997 Capital Budget for the Newcastle $7,000.00 2900-17-X Town Hall auditorium improvements to the General Capital Reserve for access as required in 1998. 6. 7202-1-405 / Transfer unexpended tax levy portion of 1997 Capital Budget for $3,947.97 2900-17-X Public Works to General Capital Reserve. Re: Pavement Management System 7. 7603-1-405/ Transfer unexpended tax levy portion of 1997 Capital Budget for $2,154.29 2900-17-X Park development to General Capital Reserve. Re: Park Design 8. 7702-X-405/ Transfer unexpended tax levy portion of 1997 Capital Budget for $1,202.69 2900-17-X Planning Department to General Capital Reserve. Re: Office chairs - for purchase as required. 9. 7007-X-241/ Transfer portion of unexpended 1997 Audit and Accounting $36,000.00 2900-17-X budget to General Capital Reserve. Re: 1997 Year End Audit and Accounting process for use in 1998 for accounting purposes. During 1998 $18,000.00 will be transferred to Professional Fees Reserve for future studies. 10. 7007-X-405 / Transfer unexpended tax levy portion on 1997 Capital Budget $10,700.00 2900-17-X for Treasury equipment purchases to be used in 1998 (ie. Headsets, tax counter improvement) 11. Various Departments/ Transfer 1997 funds for requisitioned items to General Capital $10,058.20 2900-17-X Reserve received in 1998. These are small dollar items awaiting delivery over year end and are not separately, listed. 12. 5001-22/ Interfund transfer only: $112,813.00 5001-18 Transfer 1997 funds per Capital Budget for the Library from Development Charges - Library Reserve Fund to the Courtice Library Reserve Fund for Collection Materials. The Development Charges Library Reserve Fund is in a negative position due to the funding for the construction of the Courtice Library. 810 TR-37-98 PAGE 3 13. 7004-1-247, Transfer portion of unexpended 1997 Consulting Budget to $6,109.70 7602-X-247/ Computer Equipment Reserve. Re: Facility Scheduling 2900-24-X Software for Community Services Department 14. 7005-X-247/ Transfer unexpended 1997 Clerk's Consulting to Records $5,000.00 2900-6-X Maintenance Reserve 15. n02-X-248/ Transfer unexpended 1997 Public Works other Professional fees $5,000.00 2900-7-X Budget to GIS Reserve 16. n08-X-299/ Transfer portion of unexpended 1997 Local Architectural $1,404.00 2900-17-X Conservation Authority Committee Budget to General Capital Reserve for municipal staff development 17. n02-X-247, Transfer portion of unexpended 1997 Consulting and $5,449.38 7004-1-248, Professional fees to Professional fees Reserve. Approximately 7007-X-248/ $3900 is for future planning consulting and the balance for human resources and unclassified administration related 2900-26-X consulting. 18. 7007-X-256/ Transfer unexpended 1997 Supplementary Assessment fee $90,000.00 2900-5-X budget to Tax Write Off Reserve 19. 7007-X-405/ Transfer unexpended tax levy portion on 1997 Capital Budget $12,558.47 2900-17-X for Unclassified Admin. Equipment and leases to General Capital Reserve to be used in 1998 for keyboard mouse holders for Health & Safety reasons. 20. 7005-X-405/ Transfer unexpended tax levy portion of 1997 Capital Budget $1,000.00 2900-17-X for Clerks other Equipment 21. Object 233 / Transfer unexpanded 1997 Staff Development Budget to $36,401.68 2900-7-X General Capital Reserve and GIS Reserve. Re: Training for 1998 (primarily for computer training due to approved upgrade) 22. 7007-X-405/ Transfer funds to the Working Funds and Rate Stabilization $270,000.00 2900-1-X Reserve to distribute current year surplus in order to build up the reserve for the future 23. 7007-X-405/ Transfer funds to the GIS Reserve to distribute current year $50,000.00 2900-7-X surplus in order to build up the reserve for the future. 24. 7007-X-405/ Transfer funds to the Public Works Equipment Reserve to $150,000.00 2900-10-X distribute current year surplus in order to build up the reserve for the future. 25. 7007-X-405/ Transfer funds to the Animal Control Equipment Reserve to $25,000.00 2900-12-X distribute current year surplus in order to build up the reserve for the future. 26. 7007-X-405/ Transfer funds to the Community Services Equipment Reserve $25,000.00 2900-13-X to distribute current year surplus in order to build up the reserve for the future. 27. 7007-X-405/ Transfer funds to the Computer Equipment Reserve to distribute $150,000.00 2900-24-X current year surplus in order to build up the reserve for the future 28. 7007-X-405/ Transfer funds to the Building Maintenance and Improvement $150,000.00 2900-25-X Reserve to distribute current year surplus in order to build up the reserve for the future. 8 1 1 TR-37-98 PAGE 4 2.2 In 1997, the 1995 & 1996 budgeted amounts for the supplementary assessment fees totalling $300,000 were transferred to the tax writeoffreserve pending decision by the province to collect these amounts. There is no final decision on the payment of these fees, and they may be paid out as part of the downloading costs of assessment under "Who Does What". 2.3 Council approved December 9, 1996 through report TR-94-96 that beginning in the 1997 Budget year that the Separate and Public School Boards be invoiced under Bill 26 for recovery of their proportional share of 1997 Budget expenditure for supplementary assessment. The Municipality reduced the December 1997 payment to the School Boards by an estimated Supplementary Assessment fee totalling $80,296.00. The estimated Supplementary Assessment fee has been recorded in the Tax Write Off Reserve. The charges may be adjusted at a future date depending on the final Provincial decision regarding these fees. 3.0 1997 Year End Surplus 3.1 The Municipality has been fortunate to be able to realize a surplus through revenue gains in conjunction with close monitoring of all expenditures during 1997. These differences can not be anticipated during the compilation of the budget, primarily because revenue is predicted more conservatively than expenditures such that if it is not realized, the Corporation would not be negatively impacted to any great extent. Also in many instances expenditures are lowered by taking advantage of economies of scale, seasonal efficiencies and co-operative tendering. For the most part the revenue gains account for the beneficial surplus position that the Corporation is at for the year ended December 31, 1997. 3.2 The major areas contributing to the surplus are as follows: Revenue: . Outstanding taxes remain high due to the economy which results in higher penalty and interest (Note: many of these properties will be eligible for tax sale) ...... $427,000 . Increase in grants-in-lieu from Ontario Hydro and the Municipal portion of Supplementary taxes higher than budget................................................................. .88,000 . Increase in Official Plan Amendments, Rezoning and Zoning Clearance fees higher than budget............................................................................................. ..93,000 . EHT, WCB (NEER) AND DIC rate reduction rebates .......................... 30,000 . Increase in Dog licences............................................... ................ 20,000 . Increase in Building Permits issued..................... ................. ........ ..668,000 . Interest income was higher than budgeted due to conservative budgeting practices and a more proactive cash management strategy......................................... 46,000 812 TR-37-98 PAGE 5 Expenditures: · Underexpenditures in various departments, affecting areas such as delayed filling of vacant positions in Planning (maternity leave, unused overtime budget) Treasury (maternity leave) Economic Development & Tourism (unused budget for temporary receptionist). The reductions in these expenditures have a spin off effect to other associated accounts such as benefits, etc. $86,000 · Contribution from the tax levy to Capital Fund lower than budget in the Roads Reconstruction projects...................................................................................... 129,000 · Recreation under budget in operating (re: Courtice Community Complex budget estimates for 6 months of operation - actual represents 3 months of operation. ....................................................................................................................... .113,000 SUBTOTAL $1,700,000 Less: Transfer of current surplus to build up reserves NET REVENUE OVER EXPENDITURE 820,000 $880,000 3.3 Historically, the budget process has applied only the known surplus to the current budget year. This is done due to the uncertainty of the surplus value until the year end audit is complete, combined with the concern not to under levy in any given year which could result in a deficit such as that which the Town found itself in a number of years ago. 3.4 Taxes receivable remain an area of concern for all area municipalities. The percentage outstanding for the area municipalities within the Region of Durham for December 31, 1997 is as follows: Township of Brock Township of Scugog Town ofUxbridge Municipality of Clarington Town of Pickering City of Oshawa Town of Ajax Town of Whitby 9.00% 8.73% 7.40% 6.80% 6.23% 5.48% 4.20% 3.78% (Note: Percent reflects only the 1997 taxes receivable balance as a % of 1997 taxes levied). For the 1997 year end the total taxes receivable has decreased by 8% over the 1996 receivables. This figure was an increase of 3% in 1996. The total outstanding taxes receivable balance at December 31, 1997 was $7,616,863 of which $708,881 was penalty and interest. For 1996 the balance was $8,287,831 of which $861,846 was the penalty 813 TR-37-98 PAGE 6 and interest. This is detailed in the December, 1997 Cash Activity Report, TR-7-98. The total tax levy for all purposes increased by 3.3% in 1997 and 2.6% in 1996. 3.5 The year end surplus is an accumulation of a number of years surplus and maintained in part from not having to use the previous year's budgeted surplus draw of approximately $675,000 as identified in the 1997 Current Budget. Due to the reasons listed above, which resulted in significant revenue increases and expenditure reductions, the surplus was not used in 1997 in its entirety and has therefore been rolled over into and included in surplus available for the 1998 and future mill rates. 4.0 Final Comments The above has been discussed with the external auditors who concur that the Municipality reflects a secure cash position for the current and approaching year. Respectfully submitted, Reviewed by, (~ Marie A. Marano, RBSc., A.M.C.T., Treasurer. ~ W.H. Stockwell, Chief Administrative Officer. MM /KS/LG/km 814