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Home My WebLink AboutTR-32-97 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Meeting: File# Lzl l C=rc-- Date: May 5, 1997 Res. #f:, By-Law# Report#: TE-32-07 File#: Subject: TRANSFERS TO RESERVE AND RESERVE FUNDS - YEAR END 1996 Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report TR-32-97 be received; 2. THAT the transfers to the Reserves/Reserve Funds identified in TR-32-97 be endorsed; and 3. THAT the above recommendations be approved. BACKGROUND & COMMENTS: 1.0 Annual Report 1.1 With the preparation of the 1996 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 standard year end transfers are the following, made to cover approved 1996 budget items which were incomplete at December 31, 1996 but anticipated to be used in 1997 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. i RPaPFAR PAPER. 809 REGYR E THI$ISPR',f DC RECYCt DPAPER TR-32-97 Page- 2 - ;::;:: . FRAM .. a �a �Allss: T> AvsF : . 1. 7007-X-298 / Transfer unexpended 1996 Contingency Budget to $88,765.00 2900-1-X Working Funds Reserve to maintain the Reserve's balance in according with the Working Funds Reserve By-Law 2. Object 233 / Transfer unexpended 1996 Staff Development 46,000.00 2900-17-X Budget to General Capital Reserve Re: Training for 1997 (primarily for computer training due to approved upgrade) 3. 7710-X-205 / Transfer unexpended 1996 funds spent in 1997 21,820.82 2900-17-X Re: Tourist maps, brochures and Visitors's Guide to General Capital Reserve 4. 7710-X-229 / Transfer unexpended 1996 funds spent in 1997 1,739.61 2900-17-X Re: Brochures to General Capital Reserve 5. 7007-X-241 / Transfer portion of unexpended 1996 Audit and 9,000.00 2900-17-x Accounting budget to General Capital Reserve Re: 1996 Year End Audit and Accounting process for use in 1997 for Accounting Purposes 6. 7005-X-247 Transfer portion of unexpended 1996 Consulting 22,949.00 7103-X-247 Budget to GIS Reserve 7602-X-247 Re: Mapping for Planning and GIS applications 7702-X-247 / 2900-7-X 7. 7702-X-247 / Transfer portion of unexpended 1996 Planning 17,500.00 5001-14-X Consulting Budget to Waterfront Reserve Fund previously approved amount was $25,000 per Report PD-155-96 Re: Wilmot Creek Nature Reserve Master Plan 8. 7007-X-405 / Transfer unexpended tax levy portion on 1996 2,299.00 2900-17-X Capital Budget for Treasury equipment purchases to be used in 1997 (ie. calculators, cabinets) 9. 7606-4-173 Transfer 1996 funds for requisitioned items to 18,293.36 7606-5-173 General Capital Reserve received in 1997 7225-X-115 7105-X-115 7208-401-261 / 2900-17-X 810 TR-32-97 Page - 3 - .:: FRAM I �Q DETAILS. TRAl5 'E 10. 7207-411-169 Transfer 1996 funds for requisitioned items to $1,085.79 7029-X-70 General Capital Reserve purchased in 1997 7607-4-70 7202-X-103 / 2900-17-X 11. 7005-1-X / Transfer unexpended 1996 Budget for Volunteer 2,010.00 2900-17-X Recognition Program to General Capital Reserve for 1997 use 12. 7202-X-405 / Transfer the tax levy portion of the incomplete 1996 342,428.00 2900-17-X Capital Public Works projects to be completed in 1997 to General Capital Reserve (ie. Green Road, Middle Road, Bradshaw Street, Uptown Avenue, etc.) 13. 7009-X-405 / Transfer the tax levy portion of the incomplete 1996 15,824.00 2900-24-X Capital Computer Services Hardware Budget to the Computer Equipment - Finance Reserve to be completed in 1997 14. 7007-X-405 / Transfer the unexpended 1996 Health and Safety 4,558.00 2900-17-X Capital Budget to General Capital Reserve 15. 7007-X-405 Transfer the unexpended 1996 Capital Budget for 5,000.00 2900-17-X Unclassified Administration Other Equipment purchases to be used in 1997 (ie. Animal Control communications issues, etc.) 2.2 In 1996, per Council's request to Municipal staff, the property at 150 Port Darlington Road was to be cleaned up, ie. demolition of the shed. The Parkland Cash-in-Lieu Reserve Fund financed the cost of the demolition of the shed in the amount of $2,450.00. 2.3 In the 1995 year end transfer to Reserves and Reserve Funds, TR-36-96 funds were transferred from the Economic Development Marketing Tourism Budget to General Capital Reserve for Lifestyle brochure and the Visitor's Guide. In 1997, the unexpended Visitor's Guide amount of $2,884.00 is to be used for a Digital Community profile. 2.4 In 1996, the legal costs pertaining to the Stolp Homes Development in the amount of $90,373.00 were charged to the Development Charges Civic Administration Reserve Fund in accordance with the 1992 Development Charges Policy. 2.5 The transfers identified have been reflected in the financial statements for the year ended December 31, 1996, and the costs have been captured in the appropriate general ledger accounts. 811 TR-32-97 Page - 4 - 3.0 1996 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 1996. 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, 1996. 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) ...... $590,000 • Increase in grants-in-lieu from Region of Durham, Ontario Hydro and other enterprises .......................................................................................................... 39,000 • EHT, WCB (NEER) AND UIC rate reduction rebates .......................... 32,000 • Ministry of Agriculture - wolf damage higher than budget...................... 17,000 • Interest income was higher than budgeted due to and conservative budgeting practicesa more proactive cash management strategy......................................... 53,000 Expenditures: • Underexpenditures in various departments, affecting areas such as delayed filling of vacant positions in Planning (Chief Building Official, maternity leave, unused overtime budget re: OMB Hearings), Public Works (Supervisor, Labourer & Equipment Operators) Treasury (vacancy in Systems Manager position for 7 months), Economic Development (vacancy in EDO position). The reductions in these expenditures have a spin off effect to other associated accounts such as benefits, travel, etc. ............................................................................................................................$318,000 • Contribution of the General Fund to Capital Fund lower than budget in the Roads Reconstructionprojects ...................................................................................... 138,000 • Transportation under budget in overall road maintenance sections (ie. bridge and culvert, hardtop, winter control, miscellaneous maintenance) ........................... 280,000 • Recreation under budget in operating (re: construction of Courtice Community Complexnot finished) ......................................................................................... 33,000 TOTAL REVENUE OVER EXPENDITURE 961,500,000 812 TR-32-97 Page - 5 - 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, 1996 is as follows: Mtu�ilczpaXtty % Otttstanchn '` Town of Ajax 4.30% Town of Whitby 4.60% City of Oshawa 5.50% Town of Uxbridge 8.90% Township of Scugog 8.10% Town of Pickering 6.24% Township of Brock 10.37% Municipality of Clarington 7.19% For Clarington, the 1996 year end increase in taxes receivable is 7%. This figure was 7% in 1995 and 5% in 1994. The total outstanding taxes receivable balance at December 31, 1996 was $8,287,831 of which $861,846 was penalty and interest. This is detailed in the December, 1996 Cash Activity Report, TR-5-97. The total tax levy increased by 2.6% in 1996 and 3% in 1995. 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 $600,000 as identified in the 1996 Current Budget. Due to the reasons listed above, which resulted in significant revenue increases and expenditure reductions, the surplus was not used in 1996 in its entirety and has therefore been rolled over into and included in surplus available for the 1997 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, i Az 4 ; -_ Marie Marano, H.BSc., A.M.C.T., W.H. Stockwell, Treasurer. Chief Administrative Officer. MM/NT/LG/hjl 3