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HomeMy WebLinkAboutTR-65-90 TOWN OF NEWCASTLE REPORT File # If; ,57 /'5-~ , Res. # By-Law II MITJING: SPECIAL GENERAL PURPOSE AND ADMINISTRATION COMMITTEE MEETING DATE: July 23, 1990 (8:30 a.m.) JE=ffiT #: TR-65-90 FILE #: ~CT: TRANSFERS TO RESERVE - 1989 YEAR END & POST AUDIT - 1990 TRANSFERS RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That report TR-65-90 be received; and 2. That the transfers to Reserves/Reserve Funds identified be endorsed. BACKGROUND & COMMENTS 1. With the completion of the 1989 year end financial statements, there are a number of routine transfers to Reserves or Reserve Funds that are approved annually in accordance with Municipal by- laws or policies and practices. (Section 2) In addition, subsequent to the year end analysis, there are surplus funds, unconfirmed at the time of the 1990 budget preparation, which are recommended in part for transfer to specific reserves. (Section 3) 2. Among the standard year end transfers are the following, made to cover approved, 1989 budget items which were incomplete at December 31, 1989 but anticipated to be used in 1990 for the purposes they were originally intended: Transfer Required a) 7702-X-247: to (2900-26-X) Planning Administration - Consulting Account. Transfer up to budget value to accommodate consulting such as Lot Levy study which extends beyond the year end. Transfer to Professional Fees Reserve Account. $ 30,683 TR-65-90 b) 7611-5-X c) 7612-19-X d) 7612-26-X e) 7613-18-X 3. a) 7007-X-405 to (2900-26-X) b) 7007-X-405 to Paqe 2 Transfer Required Municipal Capital Grants: (to General Capital Reserve) Durham Agricultural Fair $ 10,850 7,088 3,511 13,789 550,000 Solina Hall Board Brownsdale Community Centre Heritage Week Committee Transfer to Reserve for Professional Fees to provide for the possibility of a liability arising from the delay claim as disclosed in 1989 Financial Statements. (Note 7) Should this claim not be successful the funds will revert back to the general fund for reduction of the mill rate. Transfer to Working Funds Reserve to 350,000 provide up to the maximum balance allowed under by-law #88-159 (attached). These funds are available for use by Council resolution for dealing with. The above will confirm the year end transfers made to accommodate the completion of expenditures on approved budget items. These items were not previously addressed through report PD 104-89, which dealt with 1989 year end transfers, due to timing differences. Other items not requiring "general fund" transfers approved in the 1990 Capital Budget, such as the Mail Room construction, will be charged directly to the Administrative Improvement or other Reserve Funds in 1990 and will form part of the 1990 Financial Statements Transactions. The 1989 financial statement audit reveals a substantial surplus which has resulted from a number of economic issues such as a higher interest rate on investments, actual revenues in excess of budget, receipt of Ontario Hydro permit fees, combined with internal factors such as early transfer of capital funds into the general fund and maximum investment of available funds. The transfers identified in 3. above distribute some of this surplus. The financial statements disclose a potential liability dealing with the reconstruction of the Municipal Administrative Centre. The outcome of that issue is at this point, not determinable, and therefore it is recommended that provision be made in the event of a successful claim. The nature of the claim excludes it from the Town's insurance coverage. The transfer to the reserve would provide for the maximum claim if it is successful. If the outcome is in favour of the Town, the funds are being recommended for application to the municipal mill rate in the appropriate year. TR-65-90 Page 3 The transfer to the Working Funds Reserve is suggested to be available for use, as council directs, on issues that affect the general fund operations which may not be fully accommodated through the budget process, such as pay equity, as well as being available for future application on the municipal mill rate. By-law #88-159 provides for a limit that this reserve should operate within. Staff are a recommending that the upper limit be maintained in light of the surplus situation and current economic conditions. Staff feel that the above transfers will support the financial planning process. The balance of the surplus (net of the 1990 budget application), approximately $450,000, will be used to reduce the 1991 mill rate. Respectfully submitted, Recommended for presentation to the Committee ~~Marano. H.BSe. Treasurer .J otseff i(jstrative Officer MAM/ges Attachment THE CORPORATION OF THE TOWN OF NEWCASTLE BY-LAW 88- 159 being a by-law to establish a policy respecting Working Funds Reserves WHEREAS the Council of the Corporation of the Town of Newcastle considers .it desirable to re-establish the policies respecting Working Funds Reserves; ( '.. AND WHEREAS Section 308 (1) of The Municipal Act, R.S.O. 1970, as amended, provides, that "every Municipality and every board, commission, body or local authority established or exercising any power or authority with respect to municipal affairs under any general or special Act in an unorganized township or unsurveyed territory may in each year provide in the estimates for the establishment or maintenance of a Reserve Fund for any purpose for which it has authority to spend funds: NOW THEREFORE BE IT ENAcrED AND IT IS ENAcrED AS A BY-LAW OF THE CORPORATION OF THE TOWN OF NEWCASTLE AS FOLLOWS: policy: 1. That a policy is hereby established whereby an amount be included in the annual estimates of the Town to be transferrred to the Working Funds Reserve. 2. That the balance in the Working Funds Reserve by allowed to float \iithin target limits of 5% to 10% of the current year's total Municipal portion of the tax billing. 3. That the Treasurer be authorized, after any given year-end, to transfer to the General capital Reserve, any funds that are no longer required to meet the cash requirements of the previous year. ( By-LaW read a first time this 24th BY-LaW read a second time this 24th day of October day of October 24th day of October 1988 1988 By LaW read a third and final time this 1988 ;. Mayor ') " ~..' , 1 'J . /~' . -'9;;A/VU ,~~ 109 Clerk (.. ".~. .