HomeMy WebLinkAboutFSD-027-24Staff Report
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Report To: General Government Committee
3, 2024June
Trevor Pinn
Trevor Pinn, Deputy CAO/Treasurer, Finance and Technology
Mary-Anne Dempster, CAO
By-law Number: 2024-027
Date of Meeting:
Authored by:
Submitted By:
Reviewed By:
File Number:
Report Subject: Financial Policies Update
Recommendations:
1.That Report FSD-027-24, and any related delegations or communication items, be
received;
2.That the Draft “Financial Management Policy”, as Attachment 1, be approved;
3.That the Revised “Multi-Year Budget Policy” as Attachment 2, be approved;
4.That the Revised “Development Charges Interest Policy” (formerly G17) as
Attachment 3, be approved
5.That the Revised “Strategic Asset Management Policy”, as Attachment 4, be
approved;
6.That Council approved policies G5 “Capital Project Overexpenditure”, G15
“Surplus/Deficit Allocation Policy”, G16 “Bank Signing Authority”, “Debt Management
Policy” be rescinded;
7.That By-law 97-203 be repealed as it relates to TR-86-97 “Accounts Receivable
Collections Policy (Overdue Accounts); and
8.That all interested parties listed in Report FSD-027-24, and any delegations be
advised of Council’s decision.
Report Number: FSD-027-24
Resolution Number: GG-102-24, C-067-24
Municipality of Clarington Page 2
Report FSD-027-24
Report Overview
In 2023, the Municipality revised and modernized its policy governance structure. As a
result, several former policies will be changed to management directives as they were
operational in nature.
Staff took this opportunity to consolidate certain Council approved policies into a Financial
Management Policy which will be the core source of strategic direction for financial
management. Management directives will be created in the future to enhance and follow the
policy direction of the Financial Management Policy.
1. Background
1.1 In 2023, the Municipality adopted Policy CP-001 Clarington Policy System. This system
created Council Policies, Management Directives and Standard Operating Procedures.
1.2 Finance and Technology Staff have reviewed existing policies and are updating former
policies to meet the new guideline, or are recommending rescinding policies as they
meet the definition of management directives.
1.3 Management Directives will be created for the following areas as they are more
operational in nature and overall policy is covered in the proposed new “Financial
Management Policy”:
Former Policy
Number
Name How Dealt With
G1 Accounts Receivable Management Directive
G2 Refunds Management Directive
G3 Emergency Cash Disbursement Management Directive
G4 Capitalization Management Directive
G5 Capital Project Overexpenditure Financial Management Policy
and Management Directive
Municipality of Clarington Page 3
Report FSD-027-24
Former Policy
Number
Name How Dealt With
G7 Tax Bill Insert Management Directive
G8 Administration of Contracts Management Directive
G10 Purchasing Card (“PCARD”)
Cardholder
Management Directive
G11 Donation Receipting Referenced in Financial
Management Policy, details
in Management Directive
G12 Petty Cash Management Directive
G14 Budget Policy Rescind as a separate Multi-
Year Budget Policy adopted,
applicable sections added to
Financial Management Policy
G15 Surplus/Deficit Allocation Policy Consolidated into Financial
Management Policy
G16 Bank Signing Authority Policy Consolidated into Financial
Management Policy with
management directives to be
created as necessary
FSD-042-21 Debt Policy Consolidated into Financial
Management Policy with
management directives to be
created as necessary
Municipality of Clarington Page 4
Report FSD-027-24
2. Financial Management Policy
2.1 Staff looked at other municipalities, including the City of Toronto, for suggestions on a
consolidated financial management policy. It was felt that one source of financial
management policy would be more efficient for Council, the public and staff rather than
having to research multiple different policies.
2.2 Staff will prepare management directives from the overall Financial Management Policy
to provide administrative clarity as required. This will reduce some of the former policies
to more strategic council decisions rather than operational decisions.
2.3 The proposed policy has sections on the following areas, where there were previous
separate policies those policies were used to draft the applicable section of the
Financial Management Policy:
2.3.1. Budget (references the multi-year budget policy but also includes
requirements under legislation, and interim authorities from the former Budget
Policy)
2.3.2. Spending authority – Operating (from the former Budget Policy)
2.3.3. Spending authority- Capital (modified from Budget Policy and Capital
Overexpenditure. Authority for dealing with overexpenditures is simplified)
2.3.4. Contingency Funds (new)
2.3.5. Surplus/Deficit Allocation (from the former policy)
2.3.6. Reserve and Reserve Funds (new)
2.3.7. Investments (refers to legislated required policy)
2.3.8. Debt (from the former policy)
2.3.9. Financial Reporting (new)
2.3.10. Financial Administration (new)
2.3.11. Donations (new)
2.3.12. Bank Signing Authority (from former policy but reduced in scope)
2.4 The new section for reserve and reserve funds provides how reserve and reserve funds
will be prepared, requires the Deputy CAO/Treasurer to establish target ranges,
Municipality of Clarington Page 5
Report FSD-027-24
requires that funds that were budgeted but not required be returned to the reserve fund,
and allows for interfund loans between reserve funds.
2.5 Staff are recommending removing the self-imposed annual debt limit, as a management
directive staff will establish controls for prioritizing and assessing the appropriate use of
debt. This is more of a financial planning strategy and will be presented to Council in
future AMPs and Long-Term Financial Plans.
2.6 A Financial Reporting section was added which requires the Deputy CAO/Treasurer to
prepare the financial report in accordance with GAAP. Management directives for
individual standards or processes will be established as required to document reporting
choices as required.
2.7 A Financial Administration section was included which states that the responsibility for
developing administrative directives and procedures to ensure prudent financial
management and internal controls rests with the Deputy CAO/Treasurer.
2.8 The above authority will be used to establish internal contr ols, or make administrative
accounting choices such as, for example, the estimated useful life of assets.
2.9 Donations is a new section and provides policy that the Municipality will accept
donations and that tax receipting shall be in accordance with the CRA requirements. An
existing administrative policy will be converted to a management directive, this is in
accordance with CRA guidelines.
2.10 Bank signing authority policy has been converted to a section which requires two
signatures for all external payments. Explicit positions have not been included as titles
could change. A management directive will be created to identify the required signors,
provided that at least two sign on external payments.
3. Multi-Year Budget Policy
3.1 Subsequent to the adoption of the Multi-Year Budget Policy, the Province of Ontario
provided Clarington with “Strong Mayor” powers. The revised policy as included in
Attachment #2, has been revised to reflect the change in responsibilities as a result of
the legislative change. There are also minor housekeeping changes to reflect changes
in titles as a result of recent organizational changes.
4. Development Charges Interest Policy
4.1 The Development Charges Interest Policy was introduced through Report FND -047-20
and was approved through Resolution #GG-452-20 on November 30, 2020 with an
effective date of January 1, 2021.
Municipality of Clarington Page 6
Report FSD-027-24
4.2 The policy set an interest rate for deferred development charges resulting from changes
introduced through the More Homes, More Choice Act, 2019. This act pr ovided the
mandatory deferral of development charges for rental housing and institutional
development (six installments over five years) and non -profit housing developments (21
payments over 20 years).
4.3 The policy also set an interest rate for the period of time that DCs were “frozen” after the
application date for a maximum of two years (this is now proposed to be 18 months
through Bill 185).
4.4 Certain projects were approved by Council to be a 0% interest rate (non-profit housing
through the Region of Durham, hospices). Development charges was set based on the
Bank of Canada rate + 2 per cent.
4.5 Since the time of the passing of the policy, the Province has set a prescribed rate of
interest. The policy amendments propose added wording to set the rate at the
Province’s prescribed rate, and if there is no prescribed rate the existing rate structure is
maintained. The policy also clarifies a reference of when interest is charged to include
all of section 4, as was the intent. The policy amendment also follows the new policy
template and adds roles and responsibilities as a result. Types of development that
have since been made DC exempt have also been removed.
5. Strategic Asset Management Policy
5.1 The Infrastructure for Jobs and Prosperity Act, 2015 includes the requirements for
municipalities in Ontario to meet certain asset management planning requirements.
Ontario Regulation 588/17: Asset Management Planning for Municipal Infrastructure
outlines several requirements for municipalities in detail, one is the requirement for a
strategic asset management policy.
5.2 The Municipality approved their Strategic Asset Management Policy in 2019 and is
required to review it at least every five years. The attached revised policy meets this
requirement. The changes to the policy reflect the change in the policy format template
adopted in 2023, and title changes for applicable staff. There were no substantive
changes to the policy.
6. Management Directives
6.1 With the adoption of the new policy framework in 2023, there are several former council
policies and corporate policies which will be converted to management directives. These
were highlighted in the table above.
Municipality of Clarington Page 7
Report FSD-027-24
6.2 Management directives will be written to comply with the Co uncil adopted policies as
well as the Council adopted Long-term Financial Planning Framework. Management
directives are operational in nature and may include items such as estimated useful life
of assets, internal controls among other items. In some cases, the management
directive will be the former policy (either administrative or council approved) in the new
format.
7. Financial Considerations
7.1 Not Applicable.
8. Strategic Plan
8.1 Not applicable.
9. Concurrence
Not Applicable.
10. Conclusion
It is respectfully recommended that the attached policies be approved and the former
policies be repealed/rescinded as necessary.
Staff Contact: Trevor Pinn, CPA, CA Deputy CAO/Treasurer, 905-623-3379 x2602 or
tpinn@clarington.net.
Attachments:
Attachment 1 – Draft Financial Management Policy
Attachment 2 – Revised Multi-Year Budget Policy
Attachment 3 – Revised Development Charges Interest Policy
Attachment 4 – Revised Strategic Asset Management Policy
Interested Parties:
There are no interested parties to be notified of Council's decision.
Attachment 1 to FSD-027-24
Council Policy
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Number: CP-00#
Title: Financial Control
Type: Financial Management
Sub-type: Administrative
Owner: Finance and Technology Services
Finance
Approved By: Council
Approval Date: Click or tap to enter a date.
Effective Date: Click or tap to enter a date.
Revised Date: Click or tap to enter a date.
Applicable to: All staff
1. Legislative or Administrative Authority:
1.1. The Municipality of Clarington (Municipality) is committed to responsible
financial management of spending, revenue generation, and program delivery
in accordance with the Municipal Act.
1.2. The Municipal Act, 2001 regulates the activities and governance of
municipalities in Ontario. Financial management principles are identified
throughout the Act, overall, this policy is governed by legislation approved by
the Province.
2. Purpose:
2.1. This policy documents and establishes sound governance and strong internal
controls for financial management and ensures compliance with applicable
legislation.
3. Scope:
3.1. This applies to all departments, divisions, boards, agencies, and committees of
the Municipality forming the consolidated entity.
4. Definitions:
4.1. Annual Repayment Limit - The calculation provided annually to a municipality
by the Ministry of Municipal Affairs and Housing, or successor, that determines
Attachment 1 to FSD-027-24
Council Policy
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the maximum amount of additional debt servicing costs that a municipality can
undertake or guarantee without seeking approval of the Province of Ontario.
4.2. Asset Management Plan - A plan developed for the management of assets
that combines multi -disciplinary management techniques over the life cycle of
the asset in the most cost- effective manner to provide a specific level of
service.
4.3. Capital Infrastructure Gap Reserve Fund – A reserve fund created to help
mitigate the infrastructure gap without impacting the tax levy. It is funded by
continual contributions from any annual surplus funds.
4.4. Capital Financing - A generic term for the financing of capital assets using
reserve and reserve funds
4.5. Debentures- A debt instrument issued by a municipal corporation and secured
by municipal general fund revenues. They are formal written obligations to
repay specific sums on certain dates. In our two-tiered Regional government,
the regional municipality issues debentures on behalf of the lower tier.
4.6. Debt - An obligation for the repayment of money. For Ontario municipalities,
long-term debt normally consists of debentures; short-term debt normally
consists of notes or loans from financial institutions. Inter-fund borrowing, and
debentures issued to Infrastructure Ontario are also considered to be debt.
4.7. Deficit – When, at year end, there is an excess of expenditures over revenues
in the Operating Budget.
4.8. Department Head – Department Heads are the following positions – Deputy
CAO, Legislative Services/Solicitor, Deputy CAO, Finance and
Technology/Treasurer, Deputy CAO, Planning and Infrastructure and Deputy
CAO, Public Services.
4.9. Deputy CAO/Treasurer – The full title of the position is Deputy CAO, Finance
and Technology Department/Treasurer. For brevity in the document, the title is
shown ass Deputy CAO/Treasurer.
4.10. Division Head – Division Heads refer to the Director, or equivalent, who is
responsible for the operations of a division within a department.
Attachment 1 to FSD-027-24
Council Policy
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4.11. Inter-fund Borrowing – under which financial resources are internally
transferred from one fund to another with the intent to repay the borrowed
funds plus applicable interest. If inter-fund borrowing is long-term in nature it
shall be reported to the Region of Durham.
4.12. Internal controls - are policies and procedures implemented by an
organization to ensure their financial reports are reliable, operations are
efficient, and activities are compliant with applicable laws and regulations.
4.13. Long-term debt- A term longer than one fiscal year. If the Municipality incurs
debt that will not be repaid within a fiscal year, this borrowing must go through
the Region of Durham.
4.14. Reserves - are an allocation of accumulated surpluses that make no reference
to any specific asset and does not require the physical segregation of money.
Reserves are part of the general fund and therefore do not earn interest like a
reserve fund
4.15. Reserve Funds - are segregated monies restricted to meet a specific purpose
and are established either through by-law of the Municipality, legislation or
agreement. Reserve funds are generally disbursed to fund long-term financial
strategies and capital projects. Reserve funds receive an annual interest
allocation based on the average annual balance. There are two types of
reserve funds, obligatory and discretionary.
4.16. Obligatory Reserve Funds are reserve funds established by legislation or
agreement for a unique purpose on behalf of the contributor. Examples are
Development Charges and Federal Gas Tax funds.
4.17. Discretionary Reserve Funds are reserve funds established for a specific
purpose by Council for future expenditures. Examples are Rate Stabilization
and Strategic Capital.
4.18. Surplus – When, at year-end, there is an excess of revenues over
expenditures in the Operating Budget.
4.19. Short-term debt- A term equal to or less than one fiscal year. This type of
borrowing does not require upper tier approval.
4.20. Sinking Fund – A segregated pool of funds managed by the Region of
Durham for which an estimated amount in each year, with interest
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compounded annually, will be sufficient to pay the principal of the related
Sinking Fund Debentures at maturity.
4.21. Retirement Fund – A segregated pool of funds managed by the Region of
Durham for a class of Debentures other than a sinking fund or term debenture.
In each year the fund must contain an amount equal to or gr eater than the
amount required for the repayment of the principal of specific Debentures in
that year if the principal had been payable in equal annual instalments and the
Debentures had been issued for the maximum period authorized by the
Municipality for the repayment of the Debt for which the Debentures were
issued.
5. Policy Requirements:
Budget
5.1. The Municipality will prepare a multi-year budget in accordance with CP-002
Multi-Year Budget Policy.
5.2. The Municipality will prepare and adopt, as required by the Municipal Act,
2001, a budget which is balanced and in accordance with O.Reg.284/09
Budget Matters-Expenses.
5.3. The following authority is provided, in adopting the total of all sums required
during the year for the operating purposes of the Municipality, shall, in
accordance with the Municipal Act, 2001, determine the operating budget
required to provide for the sums required for every purpose and the sums
required for the various categories of purposes:
5.3.1. Prior to February 1, the authority for establishing the budget shall be with the
Mayor, or designate, in accordance with Part VI.1 of the Municipal Act, 2001
5.3.2. If the Mayor has not exercised their power in accordance with the above,
Council may present and adopt a budget.
5.4. Departments are authorized to expend funds at the previous years’ service
levels, unless otherwise by Council until the current operating budget has been
adopted. New programming or service enhancements are not to be initiated
prior to the operating budget adopted.
Attachment 1 to FSD-027-24
Council Policy
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5.5. When authority has not been granted through the Operating Budget for an
expenditure, a department shall not expend funds unless,
5.5.1. A report was prepared by the Director or Deputy CAO requiring the funds and
approve outside of the budget process by Council.
5.5.2. An emergency occurs requiring the immediate use of funds approved by the
CAO in accordance with the Municipality’s Purchasing By-Law.
5.6. The Mayor, or Council as appropriate, in adopting the capital budget, shall
determine the sums required for each capital project listed in the capital
budget, and each sum provided for a capital project shall be a capital account.
5.7. The Deputy CAO/Treasurer shall certify that funding for the capital projects in
the capital budget is within the Municipality’s updated debt and financial
obligation limit.
Spending Authority - Operating
5.8. No expenditure shall be made and no account shall be paid by or on behalf of
the Municipality, except with Council approval and in accordance with this
Policy.
5.9. No commitment shall be made except in accordance with the provisions of this
Policy and the provisions of the Purchasing Policy.
5.10. Each Department and Division are responsible for monitoring their budget for
both revenue and expenditures on a regular basis. Departments may not
knowingly exceed their budget allotment.
5.11. The Municipality no longer allows petty cash funds. The exception would be
those set up for corporate emergencies including the Emergency Operations
Centre.
5.12. Department Heads are authorized to adjust their budgets during the year as
follows:
5.12.1. Increases to any line items are to be offset by a corresponding decrease in
another item or through enhanced revenues that will be realized by the
additional expenditure.
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5.12.2. Accounts that are used to offset another account must be of a related service
either by division or at the discretion of the Treasurer.
5.12.3. Notwithstanding the source of funding, all expenditures shall be recorded in
their appropriate account for reporting purposes.
Spending Authority – Capital
5.13. The capital budget adopted by Council establishes the spending authority for a
capital project.
5.14. Division Heads shall ensure that expenditures do not exceed the approved
budget.
5.15. Department Heads shall report any anticipated over-expenditure to the Deputy
CAO/Treasurer as soon as the potential over-expenditure is known.
5.16. Over-expenditures on a capital project.
5.16.1. A Department Head is authorized to approve additional expenditures where
costs for a capital project increase to the extent that they exceed the original
funding approval for the capital project by the lesser of 10 per cent or
$250,000.
5.16.2. Such funding required shall be from another capital project within the
department, or from additional sources of funding (such as additional grants,
fundraising, etc).
5.16.3. Where any impacted project includes the use restricted funds, such as
development charges, the Department Head shall seek the concurrence of the
Treasurer.
Contingency Funds
5.17. Contingency Funds – A contingency fund is the money approved in the
operating budget to provide funding for one-time expenditures that were not
known or expected at the time the operating budget was adopted.
5.18. Contingency funds may only be used for:
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5.19. onetime non-recurring costs that were not identified at the time the operating
budget was adopted; and
5.20. unforeseen expenditures resulting from economic, climatic, in-year legislative
changes from senior levels of government and legal settlements.
5.21. The funds shall not be used for programs, and approval must be obtained by
Deputy CAO/Treasurer for any use of the contingency fund.
Surplus/Deficit Allocation
5.22. In the event of an annual operating budget surplus the Deputy CAO/Treasurer
is authorized to distribute the surplus to appropriate reserve and reserve funds
as follows:
5.22.1. Transfer any unspent winter control budget to the Winter Control Stabilization
Reserve Fund.
5.22.2. Transfer carry over amounts to be utilized in the following fiscal year to the
General Capital Reserve, this shall only be used for year-end timing purposes.
5.22.3. Transfer any restricted funds to the appropriate reserve or reserve fund, this
may include grants which have not fully been utilized or development charges
collected and not utilized during the year.
5.22.4. Transfer up to 30 per cent of the discretionary operating surplus to the Rate
Stabilization Reserve Fund.
5.22.5. Transfer up to 30 per cent of any discretionary operating surplus to the Capital
Infrastructure Gap Reserve Fund.
5.22.6. Transfer up to 40 per cent of any discretionary operating surplus to any reserve
or reserve funds operating below their minimum target balances as outlined in
the Reserve and Reserve Fund Policy
5.22.7. If surplus funds remain after this prescribed distribution, the remaining amount
shall be added evenly to the Rate Stabilization Reserve Fund and
Infrastructure Gap Reserve Fund.
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5.23. In the event of an annual budget deficit the Deputy CAO/Treasurer is
authorized to use their discretion to manage the operating deficiency and to
fund the deficit in the same manner as identified in paragraph 5.22.
5.24. The Deputy CAO/Treasurer shall report to Council, the surplus or deficit
amount and the distribution of the funds as part of the annual financial
reporting process.
Reserves and Reserve Funds
5.25. The creation (or amendment) of a reserve or reserve fund will be through the
budget process, by Council resolution, as stipulated in agreements, or as
required by legislation.
5.26. The Deputy CAO/Treasurer shall establish target ranges for the prudent
financial management of reserve funds. The targets shall consider the purpose
of the fund, financial plans and forecasts and economic factors as appropriate.
5.27. The Deputy CAO/Treasurer will regularly monitor the reserve and reserve fund
balances to ensure the Municipality is positioned to meet its long-term financial
commitments and respond to financial opportunities that may arise.
5.28. Council will authorize all appropriations to reserves and reserve funds either
through a resolution or an adopted budget.
5.29. Any funds budgeted for a capital project or specific program that are
unexpended shall be automatically returned to the appropriate reserve fund in
accordance to the timelines established in this Policy.
5.30. Reserve funds relating to the Strategic Capital Reserve Fund (previously Host
Community Trust Funds) and funds from municipal utility investments will be a
separate Council approved policy.
5.31. Council may authorize lending between reserve funds in order to provide for
short-term deficits with interim financing. Lending between reserve funds
requires a strong business plan and the recommendation of the Deputy
CAO/Treasurer.
5.32. If the intention or objective for a discretionary reserve or reserve fund is fulfilled
and deemed no longer necessary then the Deputy CAO/Treasurer shall
prepare a report to Council. The report will detail the complete objectives
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fulfilled by the reserve or reserve fund, the dispersal of any remaining funds
and any by-laws required to amend or repeal to complete process.
5.33. Reserve Funds will be invested in accordance with the Municipality’s
Investment Policy, any interest earned shall be allocated proportionately.
5.34. Council shall receive estimated reserve and reserve fund balances, projected
contributions and planned expenditure withdrawals presented with the annual
budget update. Annually, the Treasurer will provide updated balances and
forecasts for the reserve funds and reserves based on completion of the
Municipality’s audited financial statements.
5.35. No expenditure shall be made and no account shall be paid by or on behalf of
the Municipality, except with Council approval and in accordance with this
Policy.
Investments
5.36. The Municipality shall invest under the Prudent Investor Standard in
accordance with the CP-003 Investment Policy (Legal List).
5.37. Funds deemed by the Treasurer to be required immediately shall be be
invested in accordance with the CP-003 Investment Policy- Eligible List.
Debt
5.38. Council may, where it is deemed in the best interest of taxpayers, approve the
issuance of debt for its own purposes.
5.39. Prior to the issuance of any new debentures or the incurrence of additional
debt, consideration will be given to its impact on future ratepayers in order to
achieve an appropriate balance between capital financing and other forms of
funding while ensuring that the taxpayer benefitting from the use of the asset is
the one paying for it (known as inter-generational equity).
5.40. The primary considerations for capital financing and debt program, in order of
importance, shall be to:
1) Adhere to statutory requirements;
2) Ensure long-term financial flexibility;
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3) Limit financial risk exposure; and
4) Minimize the cost of long-term financing
5.41. The Municipality will not exceed the legislated Annual Repayment Limit as
established by the Province of Ontario.
5.42. The term of temporary or short-term borrowing for operating purposes will not
exceed the current fiscal year.
5.43. The term of the capital financing will not exceed the lessor of 40 years, or the
useful life of the underlying asset being financed.
5.44. Long-term debt (borrowing) will only be issued for capital projects owned by
the Municipality of Clarington.
5.45. As part of the annual budget, a Long-term Debt Forecast and Financial
Obligation Management Plan that includes projectio ns for each year over a
multi-year period of estimated long-term debt and financial obligation payments
compared to the annual debt repayment limit.
5.46. The Deputy CAO/Treasurer will present Council a statement indicating that the
debt management plan is in compliance with this policy.
Financial Reporting
5.47. The Deputy CAO/Treasurer is responsible for the preparation of annual
financial statements as required by the Municipal Act and in accordance with
established Generally Accepted Accounting Principles (GAAP).
Financial Administration
5.48. The Deputy CAO/Treasurer is responsible for, and shall be required to develop
the administrative directives and procedures to ensure prudent financial
management and internal control framework for the Municipality.
5.49. Management Directives for the purpose of responsible financial administration
and controls. This will include but is not limited to the following:
a) Cash handling
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b) Payments and purchasing cards
c) Invoicing and Accounts Receivable
d) Interest charges
e) Refunds
f) Taxation
g) Spending Approval limits
Donations
5.50. The Municipality may accept donations for its own purposes, including Boards
of Council. Such donations may be for the municipality's services, programs, or
capital projects but may not specifically benefit an identifiable individual.
5.51. The tax receipting for donations shall be in accordance with Canada Revenue
Agency (CRA) requirements and set out in a management directive to the
satisfaction of the Deputy CAO/Treasurer.
Bank Signing Authority
5.52. All external disbursements of the Municipality require two signatures or
electronic approvals from the appropriately designated persons .
5.53. The appointment of authorized signers shall be established through a
management directive to the satisfaction of the Deputy CAO/Treasurer.
5.54. Each board, committee, agency within the reporting requirements of the
Municipality shall establish a procedure for the approval of disbursements
which shall include a minimum dual signature requirement for all
disbursements.
Review
5.55. The Deputy CAO/Treasurer shall undertake a comprehensive review of this
Policy at least once per term of Council.
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Council Policy
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6. Roles and Responsibilities:
6.1. Council is responsible for:
6.1.1 Establishing the Municipality’s philosophy through the adaption of this policy.
6.2. Chief Administrative Officer (CAO) is responsible for:
6.2.1. Approving management directives that establish the operation framework of
financial management.
6.3. Deputy CAO/Treasurer is responsible for:
6.3.1. Ensure the development of management directives in support of this policy.
6.3.2. Ensuring that this policy and associated management directives are adhered
to.
6.4. Deputy CAOs, Directors and Managers are responsible for the following
within their scope of authority:
6.4.1. Ensuring staff are trained on this policy.
6.5. All Staff are responsible for:
6.5.1. Ensuring compliance with the Finance Management Policy.
7. Related Documents:
7.1. CP-002 Multi-Year Budget Policy
7.2. CP-005 User Fee Revenue Policy
7.3. CP-003 Investment Policy (Legal List)
7.4. CP-TBD Investment Policy (Prudent Investor)
7.5. Long-term Financial Planning Strategy
7.6. Delegation of Authority By-law
Attachment 1 to FSD-027-24
Council Policy
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8. Inquiries:
8.1. Deputy CAO/Treasurer
8.2. Manager, Accounting Services/Deputy Treasurer
8.3. Manager, Financial Planning/Deputy Treasurer
9. Revision History:
Date Description of Changes Approved By
Attachment 2 to FSD-027-24
Council Policy
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Number: CP-002#
Title: Multi Year Budget Policy
Type: Financial Management
Sub-type: Click or tap here to enter text.
Owner: Finance and Technology
Financial Planning
Approved By: Council
Approval Date: May 1, 2023
Effective Date: May 1, 2023
Revised Date: June 3, 2024
Applicable to: All Staff
1. Legislative or Administrative Authority:
This policy was developed in accordance with Section 291 of the Municipal Act, 2001,
which authorizes a municipality to prepare and adopt a budget covering a period of two
to five years in the first year to which the budget applies or in the year immediately
preceding the first year to which the budget applies.
2. Purpose:
The purpose of this policy is to define the procedures for multiple -year budget
approvals. The policy defines the budget planning timeframe as a minimum four-year
outlook to support stable and efficient financial management and predictable taxation
and user rates for stakeholders.
3. Scope:
The scope of multi-year budgeting, including both operating and capital, extends to all
Municipality of Clarington departments and boards and applies to both tax-supported
as well as user fee-supported budgets.
4. Definitions:
4.1. Administrative Changes – Adjustments in future years of a Multi-year Budget
categorized as “housekeeping” items whereby budget funds can be reallocated
within Services to realign the existing Operating Budget and have a net zero
impact to the tax or user rates levied. Capital budget “housekeeping” items are
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defined as items less than $100,000 having a net zero impact, are similar
projects with similar funding and can be realigned with the approved Multi-year
Budget period.
4.2. Boards and Agencies – Groups outside the Corporation, typically (although
not always) funded by the property tax base, which provide specific and/or
specialized services to the community in Clarington.
4.3. Budget – An estimated financial plan of revenues and expenditures for a
defined period.
4.4. Budget Year – The period January 1 to December 31, as defined in the
Municipal Act, 2001.
4.5. Capital Budget – A budget that funds new infrastructure projects as well as
expands and maintains existing infrastructure.
4.6. Initial Budget – The first budget in the multi-year budget cycle.
4.7. Material Changes – An individual item or summation of Operating Budget
items that would have an annual impact of 0.50% to the property tax levy and
payment in lieu of taxes to be levied in a future years’ Budget. Material
changes may result in a change to the approved levy or user rates. A capital
project or summation of Capital Budget projects that would have an annual
impact greater than $500,000.
4.8. Multi-year Budget – Approval of a four-year operating and capital budget
4.9. Multi-year Budget Policy – Refers to this Policy.
4.10. Municipal Act – Refers to the Municipal Act, 2001, as amended.
4.11. Municipality of Clarington – The Corporation of the Municipality of Clarington
4.12. Net Budget – The net budget is the cost to deliver Clarington’s programs and
services, after accounting for all non-tax/non-rate revenues and subsidies
received. This is the portion of the budget paid for through property taxes.
4.13. Operating Budget – A budget that funds the day-to-day operations of the
Municipality.
Attachment 2 to FSD-027-24
Council Policy
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4.14. Reportable Changes – An individual Operating Budget item that would have
an annual impact between 0.05% and 0.49% to the property tax change and
payment in lieu of taxes to be levied in a future years’ Budget and is managed
within the existing approved budget, with no change to the approved levy
increase or user rate increase. A capital project adjustment with a net $0
impact and less than $500,000.
4.15. Senior Leadership Team – The senior management team of the Municipality
consisting of the Chief Administrative Officer (CAO) and the heads of the
Municipality’s departments.
4.16. Service – An organizational unit of the Municipality, possibly a department or
division, which is functionally unique its delivery of service.
4.17. Treasurer – The individual appointed by the Municipality as Treasurer in
accordance with the Municipal Act, 2001.
5. Policy Requirements:
General
5.1. A Multi-Year Budget is developed covering a four-year period beginning in the
second year of a new Council term.
5.2. Annual updates for years two and three will be brought forward for Council
consideration during the remaining Council term. The first year of a new
Council term will reconfirm the fourth year of the Multi-Year Budget.
5.3. In the first year of a new Council term, Council will develop its Strategic Plan.
Council will approve a four-year average annual tax levy adjustment from rates
that address municipal inflationary pressures and funding for additional
investments that are aligned with Council’s Strategic Plan.
5.4. After Council approves the Strategic Plan and the Multi-Year Budget, the
Senior Leadership Team will prepare corporate business plans that clearly
outline the current state and future direction of each service.
5.5. The business plans will identify the strategies and priorities that are driving the
strategic direction of the service. All strategies and priorities must be aligned
Attachment 2 to FSD-027-24
Council Policy
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with the Council’s Strategic Plan and the funding approved through the Multi-
Year Budget.
5.6. The Treasurer, or designate, may release budget funds prior to a new Multi-
Year Budget or annual budget update approval up to a prorated amount based
on the previous fiscal year’s approved budget. Such authorization will continue
for a reasonable period of time until budget approval of a new Multi-Year
Budget or Annual Budget Update.
Budget Adjustments
5.7. Throughout the Multi-Year Budget process, business plans will be modified for
material changes that result from any material amendments through annual
updates.
5.8. The Senior Leadership Team will present to Council a budget that is in
compliance with the Municipal Act, 2001. The budget will contain adjustments
to reflect inflationary pressures and additional investments or disinvestments
that would further adjust the budget requirement. Each additional investment or
disinvestment submitted for Council consideration shall be supported with a
comprehensive business case.
5.9. In the first year of a budget cycle, the Senior Leadership Team will be seeking
approval of a Multi-Year Budget for a four-year period. Commencing in the
second year and in each subsequent year of the multi-year budget, Council is
required by the Municipal Act, 2001 to review and readopt the budget for that
year. As part of the review process, Council is required to make changes that
are required for the purpose of making the budget compliant with the
provisions of the Act which include ensuring that the municipality has sufficient
funds to pay all debts, amounts required for sinking funds or retirement funds
and amounts required for boards, commissions or other bodies. As such,
Council will have the opportunity to make other amendments to the budget
annually.
5.10. In addition to the matters required to be addressed by the Municipal Act, 2001,
the scope of annual budget changes may include, but are not limited to, the
following:
5.10.1. New or Changed Regulation – A new or changed legislation or regulation with
a financial impact to the Municipality.
Attachment 2 to FSD-027-24
Council Policy
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5.10.2. New Council Direction – A new Council direction that has transpired after the
approval of the Multi-Year Budget.
5.10.3. Cost or Revenue Driver – A corporate or service area budget adjustment
because of changes in economic conditions.
5.11. Proposed changes to future years’ operating budgets should only be brought
forward and approved once per year. Adjustments are limited to one per year,
during the annual update period, to ensure that all requests are considered
together.
Administrative Change Process
5.12. There is an opportunity for Services to realign the budget, provided it has a net
zero impact and is administrative in nature.
5.13. It is not permissible to create new programs, or implement new fees, as by
definition, the changes must be administrative and have no impact to service
levels.
5.14. Any changes must be a reallocation of one expense to another expense, or
from one revenue source to another revenue source, thereby having no overall
financial impact.
5.15. Changes affecting both revenues and expenses with a net zero impact will be
approved by a member of the Senior Leadership Team and the Deputy
CAO/Treasurer.
5.16. Capital projects that are similar in nature and have a similar or interchangeable
funding source.
Reportable Change Process
5.17. There is an opportunity for Services to make budget adjustments providing the
net amount is between 0.05 per cent and 0.49 per cent of the property tax levy
or a capital project between $100,001 and $499,999.
5.18. Any changes will not have an impact on the property tax levy or the user fee
rates and charges or service levels.
Attachment 2 to FSD-027-24
Council Policy
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5.19. Any net increase, or decrease, in the budget will be managed through
efficiencies with offsetting expense reductions or through reserve transfers or
grant funding. All changes are accommodated within the approved budget.
5.20. Changes will be adopted through the annual budget update process.
Material Change Process
5.21. A material change crosses the threshold of 0.50 per cent of the property tax
levy or a capital project $500,000 or greater.
5.22. Budget requests and capital projects will be reviewed, and possible re -
prioritization may occur to accommodate the material change within the
existing approved budget.
5.23. Changes may have an impact on the property tax levy or the user fees, rates
and charges or service levels.
5.24. All material changes will be presented to Council through the annual budget
update process.
6. Roles and Responsibilities:
Roles and Responsibilities section should be organized by the position, department, or
committee that has certain required responsibilities in maintaining compliance and
implementing the policy.
6.1. The Mayor is responsible for:
6.1.1. Presenting a budget to Council by February 1 of each year.
6.1.2. If desired, providing direction to Staff on the preparation of the budget on the
Mayor’s behalf.
6.2. Council is responsible for:
6.2.1. Establishing priorities through the Strategic Plan.
6.2.2. Reviewing, and proposing amendments, if desired, to the Budget
6.2.3. Approving the rates required for taxation and user fees by by-law.
Attachment 2 to FSD-027-24
Council Policy
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6.2.4. Preparing and presenting a budget if the Mayor does not meet the legislated
timeline of February 1 of each year.
6.3. Chief Administrative Officer (CAO) is responsible for:
6.3.1. Directing, in co-operation with the Treasurer and the Senior Leadership Team,
the preparation and presentation of the Budget.
6.3.2. Exercising financial control over all corporate operations in conjunction with the
Treasurer and the Senior Leadership Team to ensure compliance with the
Council-approved Budget.
6.4. Deputy CAO/Treasurer is responsible for:
6.4.1. Planning, leading, and coordinating the overall preparation, engagement,
communication, and administration of the Budget, both internally and externally
6.4.2. Ensuring adherence to budget policies and financial policies as approved by
Council.
6.4.3. Developing the funding strategies for the financing of the Budget.
6.4.4. Coordinating with Local Boards and Agencies to incorporate their budget
requirements into the Budget and forecasts.
6.5. Deputy CAOs and Directors are responsible for the following within their
scope of authority:
6.5.1. Reviewing and approving the annual budget strategy.
6.5.2. Reviewing and recommending a Departmental/Divisional Budget that is aligned
to the Strategic Plan to Council.
6.5.3. Each Deputy CAO or Director and the CAO are accountable for their individual
respective service area budgets.
6.5.4. Recognizing the priorities of the Municipality as a whole, separate from specific
departmental priorities, during the decision-making process.
Attachment 2 to FSD-027-24
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6.5.5. Maintaining a culture of data-driven decision-making that is a result of
appropriate internal collaboration, alignment to the Strategic Plan, business
case option assessment, and risk management.
6.5.6. Supporting transparent and open communication of budget performance and
financial risks to Council.
6.6. Managers are responsible for the following within their scope of
authority:
6.6.1. Developing and recommending, individually, an itemized multiple -year service
budget and forecast to the Senior Leadership Team in accordance with
established guidelines, timelines, and process.
6.6.2. Developing service business plans that identify operating and capital resource
requirements to address changing service delivery needs and implementation
of Strategic Plan initiatives.
6.6.3. Ensuring that the resources and assets under their authority are effectively
managed on an ongoing basis.
6.7. All Staff are responsible for:
6.7.1. Ensuring that resources are utilized within the parameters set by the Council-
approved budget.
7. Related Documents:
7.1. Not applicable
8. Inquiries:
8.1. Manager of Financial Planning/Deputy Treasurer
9. Revision History:
Date Description of Changes Approved By
June 3, 2024 Changes to reflect “Strong Mayor
Powers:” impact to budget
Attachment 2 to FSD-027-24
Council Policy
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Attachment 3 to FSD-027-24
Council Policy
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Page 1 of 7
Number: CP-00#
Title: Development Charges Interest Rate
Type: Financial Management
Sub-type: Click or tap here to enter text.
Owner: Financial and Technology
Financial Planning
Approved By: Council
Approval Date: January 1, 2021
Effective Date: January 1, 2021
Revised Date: June 17, 2024
Applicable to: All Departments
1. Legislative or Administrative Authority:
1.1. This policy was developed in accordance with Sections 26.1, 26.2, and 26.3 of
the Development Charges Act, 1997, which provides municipalities with the
ability to charge interest, at a prescribed maximum rate, on certain
development charge payments as permitted.
2. Purpose:
2.1. The purpose of this policy is to establish the rules and practices for charging
interest, as permitted under sections 26.1, 26.2, and 26.3 of the Development
Charges Act, 1997.
2.2. This policy will support the Municipality’s ability to build growth-related
infrastructure in a way that is financially sustainable and will help achieve the
following outcomes:
2.2.1. Good government providing reliable programs and services
2.2.2. Continued delivery of complete communities in a fiscally sustainable way
2.2.3. Fair and equitable treatment of all stakeholders involved in delivering housing
supply, including residents, businesses and developers.
Attachment 3 to FSD-027-24
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3. Scope:
3.1. This policy applies to the charging of interest, as permitted under sections
26.1, 26.2, and 26.3 of the Development Charges Act, 1997. This includes all
types of development in the Municipality of Clarington:
3.1.1. That are eligible for instalment payments under section 26.1 of the
Development Charges Act, 1997
3.1.2. Under section 26.2 of the Development Charges Act, 1997, where an
application for approval of development in a site plan control area under
subsection 41(4) of the Planning Act, 1990 has been made, or where an
application for an approval of a development in a site plan control area under
subsection 41(4) of the Planning Act has not been made, but where an
application has been made for an amendment to a bylaw passed under section
34 of the Planning Act, 1990.
4. Definitions:
4.1. Act – The Development Charges Act, 1997, as amended, revised, re-enacted,
or consolidated from time to time, and any successor statute.
4.2. Development – The construction, erection or placing of one or more buildings
or structures on land. This includes the making of an addition or alteration to a
building or structure that has the effect of increasing the size or changing the
use from non-residential to residential or from residential to non-residential and
includes redevelopment.
4.3. Development Charge(s) – The Municipality of Clarington’s development
charges.
4.4. Total Accrued Amount – Equal to the total of the development charges and
interest which has accrued.
Attachment 3 to FSD-027-24
Council Policy
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5. Policy Requirements:
Regulatory Framework
5.1. Under the Act, development charges shall be paid in equal annual installments,
beginning at the earlier of first occupancy or occupancy permit under the
Building Code, Act, 1992 for:
5.1.1. Rental housing development
5.1.2. Institutional development
5.2. Subsection 26.1 (7) of the Development Charges Act, 1997 allows a
municipality to charge interest on the instalments from the date of the
development charges would have been payable under section 26 of the Act, to
the date the instalment is paid, at a rate not to exceed a prescribed maximum
rate.
5.3. Subsection 26.2 (1) of the Act states that the total amount of a development
charge is determined on:
5.3.1. The day an application for an approval of development under subsection 41 (4)
of the Planning Act was made, or
5.3.2. If clause (a) does not apply, the day an application for an amendment to a
bylaw passed under section 34 of the Planning Act was made.
5.4. Under subsection 26.2 (3) of the Act, a municipality may charge interest on the
development charge, at a rate not exceeding the prescribed maximum interest
rate, from the date of application referred to in paragraph 5.3 to the date the
development charge is payable.
5.5. The Act allows a municipality to charge interest on the development charge at
a rate not exceeding the prescribed maximum interest rate.
5.6. The rules for determining the maximum interest rate are prescribed under
section 26.3 of the Act. The maximum interest rate being the average prime
rate, as defined under the Act, plus 1%.
Attachment 3 to FSD-027-24
Council Policy
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General Policy
5.7. Notwithstanding paragraphs 5.1 to 5.6, for hospices qualifying for the deferral
of development charges, the interest rate shall be 0%. Should a development
no longer qualify as a hospice during the deferral period, the development shall
be charged interest, in accordance with paragraphs 5.1 to 5.6, on any unpaid
development charges from the date that it no longer qualifies .
5.8. The interest rate that shall be used for the first installment payment is the
maximum interest rate permitted under section 26.3 of the Act, at the date the
development charges would have been payable (i.e., building permit issuance).
The interest rate that shall be used for each subsequent installment payment
shall be reset at the date of subsequent installment payments and capped at
the maximum interest rate permitted under section 26.3 of the Act at the date
the development charges were payable (i.e., building permit issuance).
5.9. Where the Province of Ontario has not set a prescribed rate the following
applies:
5.9.1. The interest rate shall be set annually on June 30, for the period July 1 to
December 31, and December 31 for the period January 1 to June 30 of the
following year based on the Bank of Canada’s daily bank rate + 2 per cent.
5.10. In the event the interest rate is amended or revised, the new interest rate shall
apply to the total accrued amount, prorated from the date of the interest rate
change to:
5.10.1. The date the total accrued amount is fully paid, or
5.10.2. The date of a subsequent change in the interest rate
5.11. All interest shall be compounded annually and shall accrue from the date of the
applicable application until the date the total accrued amount is fully paid. For
the purposes of proration, a calendar year is 365 days
5.12. If a subsequent application(s) is made for a development:
5.12.1. The date the subsequent application is made will become the new date under
which the total amount of the development charge is determined;
Attachment 3 to FSD-027-24
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5.12.2. All interest that had accrued prior to the subsequ ent application shall be
deemed to be $0;
5.12.3. Interest will be compounded annually and begin to accrue from the date the
subsequent application is made; and
5.12.4. The amount of the development charges will be calculated as of the date of the
subsequent application.
5.13. If a development was one of the eligible types of development for instalment
payments under section 26.1 of the Act, the total accrued amount shall
continue to accrue interest from the date of the issuance of a building permit.
Interest shall accrue on the outstanding balance until the total accrued amount
has been fully paid.
Effective Date and Transition
5.14. This policy shall take effect on the date it is approved by Council.
5.15. This policy may be repealed and/or modified by Council at any time
5.16. To allow for a transition period, this policy does not apply to any development
where:
5.16.1. An application under sections 34 or 41 (4) of the Planning Act is not required,
but:
a) Still qualifies for instalment payments under section 26.1 of the Act, and
b) Has been issued a building permit for development by the Municipality prior
to July 1, 2020
5.16.2. An application under subsection 41 (4) of the Planning Act is:
a) Made after January 1, 2020, and
b) Has been issued a building permit for development by the Municipality prior
to July 1, 2020
5.16.3. An application for an amendment to a bylaw passed under section 34 of the
Planning Act is:
Attachment 3 to FSD-027-24
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a) Made after January 1, 2020, and
b) Has been issued a building permit for development by the Municipality prior
to July 1, 2020
6. Roles and Responsibilities:
6.1. Council is responsible for:
6.1.1. Adopting, reviewing and amending this Policy as appropriate.
6.2. Chief Administrative Officer (CAO) is responsible for:
6.2.1. Ensuring staff compliance with this Policy.
6.3. Deputy CAO/Treasurer, or delegate, is responsible for the following
within their scope of authority:
6.3.1. Updating this Policy for changes in legislation.
6.3.2. Providing the Chief Building Official the up to date interest rate to be charged
on application freezes and deferrals.
6.3.3. Ensuring that interest is properly charged on deferred amounts.
6.4. Chief Building Official, or delegate, is responsible for the following within
their scope of authority:
6.4.1. Ensuring that applicants are aware of the interest charges to be charged.
6.4.2. Confirm that a complete application was made for the purposes of determining
the total amount of the development charge.
6.4.3. Communicating with Financial Services to ensure that projects qualifying for
deferral are identified.
6.5. All Staff are responsible for:
6.5.1. Following this Policy.
Attachment 3 to FSD-027-24
Council Policy
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7. Related Documents:
7.1. Development Charges By-law
8. Inquiries:
8.1. Manager, Financial Planning/Deputy Treasurer
8.2. Chief Building Official
9. Revision History:
Date Description of Changes Approved By
June 17, 2024 Update for change in
format.
Add Roles and
Responsibilities section as
this is new.
Update rate policy to reflect
Province of Ontario
Regulation which sets the
rate. If there is no
prescribed rate, the
previous methodology
remains in the Policy.
Removed affordable
housing and non-profit
housing references as
legislation now exempts
them from DCs.
Council
Attachment 4 to FSD-027-24
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Number: CP-00#
Title: Strategic Asset Management Policy
Type: Financial Management
Sub-type: Asset Management
Owner: Finance and Technology
Financial Planning
Approved By: Council
Approval Date: April 29, 2019
Effective Date: April 29, 2019
Revised Date: June 17, 2024
Applicable to: All Departments
1. Legislative or Administrative Authority:
1.1. This policy was developed in accordance with the Infrastructure for Jobs and
Prosperity Act, 2015, which gives the province the authority to guide municipal
asset management planning through regulation. This policy was also
developed in accordance with O. Reg 588/17: Asset Management Planning for
Municipal Infrastructure which requires municipalities to develop a Strategic
Asset Management Policy.
1.1.1. The following resolution was passed by Council regarding the Strategic Asset
Management Policy:
Resolution #GG-220-19 (April 15, 2019)
That Report FND-010-19 be received; and
That the Strategic Asset Management Policy attached to Report FND-010-19 be
approved.
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2. Purpose:
2.1. The Municipality of Clarington is required by O. Reg. 588/17: Asset
Management Planning for Municipal Infrastructure, under the Infrastructure for
Jobs and Prosperity Act, 2015, to publish a Strategic Asset Management
Policy.
3. Scope:
3.1. This policy applies to all assets owned by the Municipality of Clarington which
are currently supporting provision of services. Assets which have been
declared surplus and are actively being marketed are not included in the scope
of this policy.
4. Definitions:
4.1. Asset - means an infrastructure asset directly owned by the Municipality or
included on the Municipality’s consolidated financial statements.
4.2. Asset Management - means the coordinated set of activities required to
realize optimal value from municipal Assets. Involves balancing costs,
opportunities and risks against the desired performance of Assets to achieve
strategic objectives.
4.3. Asset Management Plan - means the documented information that specifies
the activities required for an individual Asset, or group of Assets, to achieve the
Municipality’s Asset Management objectives.
4.4. Capitalization Threshold – means the minimum cost an individual asset must
have before it is to be recorded as a capital asset for financial reporting
purposes. The thresholds are outlined in the Municipality’s Capitalization
Policy.
4.5. Lifecycle Activities – means activities undertaken, with respect to a municipal
asset over its service life, that would result in either a capital or significant
operating cost. This may include, but is not limited to, activities such as
construction, maintenance, rehabilitation, and replacement.
4.6. Lifecycle Costs – means the costs associated with Lifecycle Activities.
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4.7. Level of Service - means defined measure(s) that evaluate the effectiveness
of a particular activity as perceived by customers or in relation to a technical
standard or service.
5. Policy Requirements:
Strategic Alignment
5.1. The Municipality of Clarington envisions building a connected, dynamic and
welcoming community. This vision requires the alignment of many initiatives
and it is crucial that all existing and planned asset decisions support both the
recommended levels of service and the long term vision for the community.
5.2. These levels of service will be determined by comparing and developing
performance measures adopted during the preparation of the Asset
Management Plan. The Municipality will reference the metrics required for
departments to measure service levels and support recommendations with
financial sustainability. The Asset Management Plan should be a foundational
document when considering asset decisions, desired levels of service and
current and future budgets.
5.3. Asset management planning cannot occur independent of other municipal
plans and objectives. A holistic approach will be employed to develop a
practical asset management plan that coordinates the responsibilities and
ambitions of our community’s municipal plans. Council and senior
management will review this policy at least once every five years and adopt an
asset management planning approach that integrates:
5.3.1. Municipal Budget
5.3.2. Corporate Strategic Plan
5.3.3. Official Plan and Secondary Plans
5.3.4. Development Charge Studies
5.3.5. Climate Change Mitigation and Adaptation Plans
5.3.6. Master Plans
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Guiding Principles
5.4. The Infrastructure for Jobs and Prosperity Act, 2015 sets out principles to
guide asset management planning for municipalities in Ontario. The
Municipality of Clarington shall incorporate the following principles for asset
management priority setting, planning and investment:
5.4.1. Forward Looking: The Municipality shall take a long-term view while
considering demographic and economic trends in the Region of Durham.
5.4.2. Budgeting and Planning: The Municipality shall take into account any
applicable budgets or fiscal plans, such as fiscal plans released under the
Fiscal Transparency and Accountability Act, 2004 and Budgets adopted under
Part VII of the Municipal Act, 2001.
5.4.3. Prioritizing: The Municipality shall clearly identify infrastructure priorities which
will drive investment decisions.
5.4.4. Economic Development: The Municipality shall promote economic
competitiveness, productivity, job creation and training opportunities.
5.4.5. Transparency: The Municipality shall be evidence-based and transparent.
Additionally, subject to any prohibition under an Act or otherwise by law on the
collection, use, or disclosure of information, the Municipality shall:
i. Make decisions with respect to infrastructure based on information that is
publicly available or made available to the public, and
ii. Share information with implications on infrastructure and investment
decisions with the Government and broader public sector entities.
5.4.6. Consistency: The Municipality shall ensure the continued provision of core
public services.
5.4.7. Environmental Conscious: The Municipality shall minimize the impact of
infrastructure on the environment by respecting and helping maintain ecological
and biological diversity, by augmenting resilience to effects of climate change
and by endeavoring to make use of acceptable recycled aggregates where
feasible.
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5.4.8. Health and Safety: The Municipality shall ensure that the health and safety of
workers involved in the construction and maintenance of infrastructure assets
is protected.
i. Innovation: The Municipality shall create opportunities to make use of
innovative technologies, services and practices, particularly where doing so
would utilize technology, techniques, and practices developed in Ontario.
ii. Integration: The Municipality shall, where relevant and appropriate, be
mindful and consider the principles and content of non-binding
provincial or municipal plans and strategies established under an Act
or otherwise, in planning and making decisions surrounding the
infrastructure that supports them.
iii. Community Focused: The Municipality shall promote community
benefits, being the supplementary social and economic benefits arising
from an infrastructure project that are intended to improve the well-being
of a community affected by the project, such as local job creation and
training opportunities, improvement of public spaces within the
community, and promoting accessibility for persons with disabilities.
iv. Customer Focused: The Municipality will have clearly defined levels of
service and apply asset management practices to maintain the
confidence of customers in how municipal assets are managed.
v. Service Focused: The Municipality will consider all the assets in a
service context and take into account their interrelationships as
opposed to optimizing individual assets in isolation.
vi. Risk Based: The Municipality will manage the asset risk associated with
attaining the recommended levels of service by focusing resources,
expenditures, and priorities based upon risk assessments and the
corresponding cost/benefit, recognizing that public safety is the priority.
vii. Value-based Affordable: The Municipality will choose practices,
interventions and operations that aim at reducing the lifecycle cost of
asset ownership, while satisfying recommended levels of service.
Decisions are based on balancing service levels, risks, and costs.
viii. Sustainable Development: The Municipality shall ensure that the future
development of Clarington is pursued in a manner that ensures that
current needs can be met without compromising the ability of future
generations to meet their own needs.
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Capitalization Thresholds
5.5. The Strategic Asset Management Policy applies to all municipal assets actively
managed in their service delivery. Assets may also be subject to the
capitalization thresholds set out in the Capitalization Policy and recorded in the
Municipality’s financial statements. The service provided by an individual or
pooled asset will be the determining factor for inclusion in the asset
management plan; this may also result in the asset not being recorded as an
asset for financial reporting purposes.
Governance and Continuous Improvement
5.6. The Municipality requires the commitment of key stakeholders for the
organization to ensure that the policy creates appropriate practices in asset
management planning that can be implemented, reviewed and adapted.
5.7. Council are the stewards of all municipal assets and are responsible for their
oversight on behalf of citizens. By resolution , Council will approve an asset
management plan and its updates every five years as well as support the
ongoing efforts to continuously improve and implement this plan. Council
commits to an annual review of progress regarding implementation, obstacles,
consultation with department heads and strategies to address impediments .
The strategic asset management policy will also be reviewed by staff
periodically to ensure consistency with other municipal strategic documents.
5.8. The CAO is ultimately responsible for asset management planning for the
Municipality and will maintain compliance with the regulation. This role will be
directly supported by the Treasurer who will be responsible for the strategic
financial management of the asset management plan. Department Heads will
support their services areas and update long and short-term asset
requirements in coordination with the annual budget process.
5.9. Continuous improvement is the hallmark of asset management, and the
Municipality will employ a framework that will strategically focus on efficiencies
and effectiveness. The CAO will endorse, and Council shall approve by
resolution the asset management plan and annual update reports on the
following schedule:
5.9.1. Asset Management Plan: Phase 1 (Core Assets) to be issued on or before July
1, 2022.
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5.9.2. Asset Management Plan: Phase 2 (Non-core Assets) to be issued on or before
July 1, 2024.
5.9.3. Asset Management Plan: Phase 3 (Financing Strategy and Proposed Levels of
Service) to be issued on or before July 1, 2025.
5.9.4. Asset Management Plan: Reviews to be issued on a rolling five-year cycle,
beginning no later than July 1, 2027.
5.9.5. Subsequent asset management plans to be issued on a five-year cycle
commencing no later than July 1, 2027.
Budgeting
5.10. The asset management plans and the progress made will be considered
annually in the creation of the Municipality’s capital budgets, operating
budgets, and long-term financial plans. Plans will also be referenced by the
service area’s department head in their preparation of their budget submission
to assist in identifying all potential revenues and costs including operating,
maintenance, replacement, and decommission. Prospective earnings and
expenses associated with future infrastructure and asset decisions will be
evaluated on the validity and need of each new capital asset, including the
impact on future operating costs and will incorporate new revenue tools and
alternative funding strategies where possible.
5.11. Finance will be involved in asset management planning to facilitate and bridge
between the financial strategies developed in the asset management plan, the
budget submissions of each service area, the budgeti ng process as a whole
and the Municipality’s strategic documents.
Community Planning
5.12. Best practice in asset management planning is ensuring alignment with the
Municipality’s Official Plan. Partnering these documents will determine how the
community is projected to change and inform asset management decisions
regarding levels of service, location and affordability in development and
redevelopment areas. Clarington’s Official Plan recognizes three key principles
that provide direction in community planning; sustainable development, healthy
communities and growth management.
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Sustainable Development
5.13. Development in Clarington will be pursued in a manner that ensures current
needs are met without compromising the ability of future generations to meet
their needs. The Asset Management Plan will incorporate considerations
regarding climate change and sustainable resource management in an effort to
mitigate and adapt to our dynamic environment, protect the integrity and vitality
of natural systems and processes, and support the transition to a clean energy
economy.
Healthy Communities
5.14. Healthy communities will nurture the well-being of residents and endeavor to
provide the highest quality of life. The Asset Management Plan will pursue
excellence in urban design, public safety, economic vitality, diversity,
accessibility and active lifestyles through the integration of land uses and the
development of complete communities.
Growth Management
5.15. Growth management recognizes the importance of sustainable development
and healthy communities and applies those principles to the land development
process. The Asset Management Plan will utilize the most recent Development
Charges Background Study to forecast municipal expansion of assets for
urban growth and encourage balanced growth and compact urban form to align
with municipal financial resources. Growth management will extend assets in
an orderly, cost-effective manner through an understanding of current and
future needs.
Climate Change
5.16. Municipalities play an essential role in developing climate change solutions
locally and are often on the front lines of responding to climate change impacts.
The Municipality has made great strides to protect the environment and
develop sustainable communities addressing the complexity and realities of
climate change with coordinated, cross-corporate action. A key element in
advancing these efforts is the integration of climate change considerations into
asset management planning.
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5.17. The Municipality commits to the development of local actions that will support
the reduction of greenhouse gas emissions and the adaptation of buildings and
infrastructure to be more resilient to the adverse impacts of climate change. In
applying a climate change lens to asset management planning, integrating the
levels of service and adhering to maintenance schedules the Municipality’s
disaster response plans and contingency funding will be enhanced, while
addressing the capital infrastructure deficit. Efforts will be made to reduce the
life cycle costs of new builds, with more importance being placed on methods
to improve the energy efficiency and reduce the carbon footprint of our existing
assets. The asset management plan will incorporate this sustainable approach
to climate change mitigation and strengthening resilience.
5.18. Understanding the potential risks that the Municipality could face in a changing
climate is an important component of the Municipality’s risk management
approach and asset management planning. Balancing the potential cost of
vulnerabilities, changing environmental conditions and asset planning will
contribute to mitigating climate change risks and associated costs.
Risk Management
5.19. The Municipality will work to develop risk management tools and frameworks
that assist with key asset management risk decisions. Instruments that will
enable the Municipality to evaluate risks and priorities consistently across the
entire asset portfolio by establishing context, assess & control, apply
treatments, monitor results and review assets and the potential risks.
5.20. Climate change research and analysis will concentrate on land usage, clean
and renewable energy, active transportation, energy use and bu ilding retrofits.
This approach will balance life cycle costing as we adapt to climate change
impacts on new and existing assets. Efforts will be made to reduce life cycle
costs of new builds and more importance will be placed on methods to improve
the energy efficiency of our existing assets.
Stakeholder Engagement
5.21. Creating the opportunity for residents, businesses, institutions and our
neighbours to engage the Municipality in asset management decisions and the
municipal services they need is invaluable. Stakeholders can help align
corporate strategies with operations through insights for asset management
coordination and planning when platforms are made readily available. The
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Municipality will foster informed dialogue with these parties and engage with
them by:
5.21.1. Providing information on our website for stakeholders served by the
municipality on appropriate asset management planning;
5.21.2. Coordinating asset management planning with other departments and strategic
documents;
5.21.3. Striving to develop a social media presence dedicated to updating
stakeholders on upcoming asset management developments.
5.21.4. Holding, when appropriate, public meetings to receive concerns, questions and
comments from stakeholders on specific asset management planning
decisions.
6. Roles and responsibilities
6.1. Council is responsible for:
6.1.1. Approving, by resolution, the Municipality’s Asset Management Plan and
updates every five years.
6.1.2. Approving, by resolution, any updates to the Strategic Asset Management
Policy resulting from the policy reviews conducted every five years.
6.1.3. Supporting the implementation of the Asset Management Plan and ongoing
efforts to improve the Plan and ensure it includes changes necessitated by the
updates to other strategic documents.
6.2. Chief Administrative Officer (CAO) is responsible for:
6.2.1. Endorsing the Strategic Asset Management Policy and Municipal Asset
Management Plan.
6.2.2. Maintain compliance with the Strategic Asset Management Policy and O. Reg
588/17: Asset Management Planning for Municipal Infrastructure, in
conjunction with the Deputy CAO/Treasurer, or delegate.
6.3. Deputy CAO/Treasurer, or delegate, is responsible for:
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6.3.1. Developing the Municipality’s Asset Management Plan and presenting to
Council for consideration and endorsement.
6.3.2. Completing periodic updates of the Municipality’s Asset Management Plan, in
accordance with O. Reg 588/17, and presenting the updates to Council for
endorsement.
6.3.3. Completing periodic reviews of the Municipality’s Strategic Asset Management
Policy, in accordance with O. Reg 588/17, and presenting any resulting
updates to Council for endorsement.
6.3.4. Collaborating with representatives from other divisions and departments to
ensure the data presented in the Asset Management Plan is reflective of
current assumptions.
6.4. Deputy CAOs, Directors and Managers are responsible for the following
within their scope of authority:
6.4.1. Designating staff resources to assist with the preparation of the Asset
Management Plan.
6.4.2. Reviewing and confirming the accuracy of the asset information included in the
Asset management Plan.
6.4.3. Ensuring the effective management of assets by developing service level plans
that address the needs outlined in the Asset Management Plan.
6.4.4. Ensuring that assets are being maintained in a manner that allows them to
perform up to their desired levels of service.
7. Related Documents:
7.1. Not Applicable
8. Inquiries:
Manager, Financial Planning/Deputy Treasurer
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9. Revision History:
Date Description of Changes Approved By
June 17, 2024 Update for change in format
Add roles and
responsibilities section
Update policy to reflect
legislation changes that
have occurred since the
previous policy.
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