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HomeMy WebLinkAboutTR-40-89 TOWN OF NEWCASTLE JjY REPORT File # /o -'a 7 . 1 . Res. # By-Law # - �9- 7� MEETING: GENERAL PURPOSE & ADMINISTRATION MEETING DATE: May 1, 1989 REPORT #: TR-40-89 FILE #: SUD.JECT: 1988 YEAR END TRANSFERS TO RESERVES RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That report TR-40-89 be received; and 2. That the Industrial Debenture Reserve Fund Balance of $32,573 (a/c# 5001- 5-x) be transferred to the Reserve Fund for Retirement of Debentures , a/c # 5001-34-x; and 3. That the Industrial Debenture Reserve Fund be declared redundant; and 4. That the transfers to reserves and reserve funds itemized in Section 3 of the body of this report be approved forthwith; and 5. That Staff be authorized to establish a reserve entitled Reserve for �� Legal, Consulting and Professional Issues; and 6. That the Building and Energy Conservation Reserve, a/c # 2900-20-X be declared redundant, and that By-law #86-46 which established it be rescinded; and ;, 7. That the balance in the Building and Energy Reserve of $196.86 be transferred �l✓�� into the Building Maintenance Reserve, a/c #2900-25-x, which was established in 1989 as part of the Building Profile project; and 8. That the Inventory Reserve, a/c #2900-19-X, being inactive for two years, be declared unnecessary. . . .2 711 i TR-40-89 Page 2 BACKGROUND & COMMENT: 1. There are a number of items in the 1988 trial balance which were either, not anticipated and therefore not included in the 1988 budgeting process, or which were budgeted for and the process is straddling two years, and therefore a number of transfers have had to be made to accommodate the expenditures. There have been reports of this nature brought forward to Council in the past, and it is intended to be an information and concurring report. 2. The Industrial Debenture Reserve Fund has been in existence for a number of years, but has however remained inactive from at least 1986. Since the establishment of the Reserve Fund for Retirement of Debentures was set up in 1987, and specifically deals with the major Debentures at hand, it would seem that the Industrial Debenture Reserve Fund is no longer required, and those funds could be used to partly offset current debt charges. It would therefore seem appropriate at this time to remove the redundancy, while at the same time cleaning up inactive or inappropriate accounts throughout the general ledger. 3. The delay in the completion construction, and subsequent move into the new Newcastle Town Hall, resulted in a number of expenditures which were not anticipated, and therefore not included in the 1988 budgeting process. Included in this over-budget situation were the 1988 debt charges associated with the Newcastle Town Hall and the Bowmanville Recreation complex. It was anticipated that the first debenture payment would be encountered in 1989. However, the repayment schedule was adjusted by the Region to include the first interest payment beginning in November 1988. There were also administrative charges associated with the debenture issue that were paid to the Region. These were not included in the 1988 budget. Consulting costs associated with numerous, unavoidable, change orders with regard to the construction of the Town Hall, and some for the Recreation Complex were not budgeted for. . . .3 712 TR-40-89 Page 3 Many pertinent issues were faced and addressed by legal council during the 1988 year. These items were anticipated and appropriately budgeted for. The time element to settle many of these issues is difficult to predict, and as such some of the following items relate to legal and consulting fees which have been accrued to accommodate the expenditures to be incurred in the current year to deal with and complete these matters. It is recommended that a reserve be established to accommodate this type of transfer which will undoubtedly be required in the future, given the growth of the Municipality and the ever increasing legal and consulting issues at hand. With the above in mind, the following entries are necessary to complete the 1988 year end transactions and adequately provide for the anticipated 1989 budgeted surplus: Account # Amount Detail 7007-X-238 16,379.32 -Legal-Toronto: fees for legal issues - D. Hefferon -OHAP study,- accrued accounts payable, Account # 2005-10-X 7007-X-245 20,000.00 -Pay equity study to commence in 1989, funds accrued in General Capital Reserve #2900-17-X 7007-X-248 25,020.00 -Professional fees, legal issues i.e. Metro Garbage etc. started in 1988 to complete in 1989, accrued in General Capital Reserve #2900-17-X 7007-X-252 16,061.98 -Taxes written off - transfer difference to budget to Tax W/O reserve in accordance with By-law 7602-X-247 12,097.25 -Consulting services, Community Services commenced in 1988, to be completed in 1989, accrued accounts payable, account # 2005-10-X 7710-X-299 16,716.26 -Tourism & Economic Development, projects started in 1988, funds accrued to accommodate completion in 1989 in General Capital Reserve, Account # 2900-17-X 7007-X-299 50,000.00 -Council Resolution # C762-88 approved funds in 1988 re legal issues etc. regarding Ontario Hydro etc. -accrued accounts payable, Account # 2005-10-X . . .4 713 TR-40-89 Page 4 1110-172-X 185,498.75 -Arena debenture payment in Nov./88, this item previously reported in report TR-30-89 - Arena interim financing, & covered by Municipal Act sec. 170 s(3) p 2. Also included is the accrued interest for 1988 1110-172-X 22,500.00 -Arena debenture - Administrative charge imposed by Region on issue of Debenture 1110-175-X 154,582.30 -Newcastle Town Hall, debenture payment in Nov. 1988 plus accrued interest, however there are not excess debenture proceeds to offset cost as in Arena, there- fore covered by funds as provided in the 1988 budgeted transfer to Debt Retirement Reserve Fund. This Reserve Fund was set up for this purpose. 1110-175-X 18,750.00 -Admin. Debenture - Administrative charge by Region on debenture issue. 4. The Building and Energy Conservation Reserve was established to deal with issues brought forward from the energy audit which was conducted a few years ago. This project is complete and the reserve is no longer deemed appropriate. Part of the Capital budget report, CS-05-89 authorized the establishment of a Building Reserve which will address the Building profile issues. The by-law to establish the criteria for this reserve will be forthcoming shortly. 5. The Inventory Reserve account has been inactive for a number of years and it would seem appropriate to remove it from the general ledger accounts. This reserve was established by Resolution, not by by-law and therefore does not require an existing by-law to be dissolved. Respectfully submitted, Recommended for presentation to the Committee r M rie A. Marano, H.BSc. Lawrence/j7. Kotseff, Treasurer. Chief Ad 'nistrative Officer. MAM/pp 714