70 PINE STREET, BRACEBRIDGE, ONTARIO P1L 1N3 Telephone (705) / Fax (705) / (705 area code)

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1 70 PINE STREET, BRACEBRIDGE, ONTARIO P1L 1N3 Telephone (705) / Fax (705) / (705 area code) To: From: Chair and Members Corporate and Emergency Services Committee Sharon Donald Director of Budgets and Financial Planning Date: January 19, 2018 Subject: Status of Reserves and Reserve Funds Report: CES Recommendation THAT Report CES , Status of Reserves and Reserve Funds, be received. Origin In 2005, Council adopted Policy AD:51 Budget Preparation, Monitoring and Reporting. The revised policy requires staff to submit formal reports to the Standing Committees and Council on the status of the District s capital program as at March 31 st, June 30 th, 30 th and December 31 st. The purpose of this report is to highlight material variances within the reserves and reserve funds. Analysis The Project Quarterly Variance Reports were included on the Standing Committee agendas for the week of November 20, with the exception of Planning & Economic Development, which was included in the December 21, meeting. The overall Tax Supported favourable variance of $1,326,720 and the Rate Supported favourable variance of $770,300 were included in Report CES These impacts are reflected against the respective reserve funds. The project specific impacts were reflected in the Standing Committee reports. Schedule A This schedule summarizes the $130,659,583 cash balance of the District s Reserves and Reserve Funds as at 30,, including transfers from the operating budget, receipts from development fees, grants, capital projects financed and transfers to the operating budget recorded to 30,. Page 1

2 Schedule B Schedule B summarizes the projected balances of $79,894,384 in the District s Reserves and Reserve Funds as at December 31,. Starting with the cash balance as at 30,, commitments on open projects are deducted and the balance of the year s transfers are added. The Reserve Fund projected balance is favourable to the Approved Budget by approximately $3.99 million. The following table summarizes the variances by source: Source of Variance 2016 Reserve Variances (Increase) / Decrease Use of Reserve Description Financing Amendments $1,051,322 Amendments in 2016 (-$1,197) and December 2016 ($1,052,519) quarterly capital variance reports DC Revenue Variance ($690,539) Shortfalls in actual DC revenue received in 2016 versus Budget Reserve Variances $61,501 Mainly due to reserve transfers not being required in 2016 (Strengthening Communities & Community Initiatives ($50K), Pines Lighting Retrofit not completed in 2016 (-$34,500) and Donations received ($45K). Year-end transfers related to 2016 Operating surplus/shortfall $2,756,470 Due to the 2016 operating net surplus resulting in transfers to Reserves. (Mainly Fleet, Water, Debt Reduction, Solid Waste and Affordable Housing Reserves). December 2016 Interest Variance $136,354 Variance due to year-end interest/investment income earned in excess of budget. Subtotal of 2016 Reserve Variances $3,315,108 Reserve Variances Financing Amendments $3,159,919 Amendments in March ($451,851), June ($275,469) and ($2,422,599) quarterly capital variance reports. Projected Year-end transfers related to Due to the net projected operating surplus estimated in the Operating Variance Report ($305K), removal of originally anticipated POA surplus that will not likely be Operating surplus/shortfall ($394,567) recognized ($700K) Major amendments include various amendment requests as indicated in PW-2-, PW-3-, PW-5- and PW-8- Committee Amendments between variance reports ($2,814,349). Reserve Variances $206,035 Mainly due to DC revenues for Roads and Hauled Sewage received higher than budget ($126K), unfavourable variances for Urban Service Area Review refunds (currently $285K to date) and a delay in Affordable Housing Program resulting in a current year favourable variance ($330K) Minor Variances $519,721 Mainly due to closure of projects below budget. Subtotal of Reserve Variances $676,760 Variance to Approved Budget $3,991,868 In relation to report CES-3--1, which was subsequently amended by Resolution 54/, Urban Service Area refunds are underway and total approximately $285K to date. These are not yet finalized and any further refunds will be funded from the Water and Wastewater Reserve funds. Year-end operating variances have been projected as reported in CES Significant variances expected for Water (-$101K), Wastewater (-$197K) and Solid Waste ($604K) have been included in this report, but will be finalized once all year-end entries have been completed. In addition, surplus revenues from POA ($700K) were initially expected but are not likely to be realized. Page 2

3 Schedule C Schedule C reflects the impact on planned funding sources (both own source funding and external funding) due to results reported in the Tax Supported Project Quarterly Variance Reports. There was an overall net favourable variance or decreased use of funding totalling $1,326,720 which is made up of the following: $518,456 net decrease in the use of reserves mainly from projects that are being completed under budget; $652,483 net decrease in the use of reserves due to projects being delayed to future years during the 2018 capital budgeting process; $173,900 net decrease in the use of reserves due to ongoing projects being amended; and $18,119 net increase in external funding based on the actual amount received from municipal contributions for the portion of work completed in conjunction with the District. Schedule D Schedule D reflects the impact on planned funding sources (both own source funding and external funding) due to results reported in the Rate Supported Project Quarterly Variance Reports. There was an overall net favourable variance or decreased use of funding totalling $770,300 which is made up of the following: $380,899 net decrease in the use of reserves mainly from projects that are being completed under budget; $971,291 net decrease in the use of reserves due to projects that have been delayed to future years during the 2018 capital budgeting process; $266,100 net increase in the use of reserves mainly due to amendments required for the Ecclestone construction projects; $1,670 decrease in investment income; and $317,460 net increase in external funding based on the expected municipal contributions related to work completed in conjunction with the District. Strategic Priorities Click on icons below to view strategies under each priority area: s 2.3 Respectfully submitted, Original signed by Sharon Donald, CPA, CMA Director of Budgets and Financial Planning Original signed by Julie Stevens, CPA, CA Commissioner of Finance and Corporate Services Page 3

4 Reserves and Reserve Fund Cash s - Schedule A Opening Cash January Transfer from Operating Development Fees / Grants / Donations / Sale of Assets Interest Earned Inflows Projects Financed Transfer to Operating DC Deficit Outflows Closing Cash Funds Corporate $8,045,574 $745,840 $93,932 $839,771 ($262,869) ($46,425) ($309,294) $8,576,052 Computer Equipment 211,068 91,350 91,350 (5,619) (5,619) 296,799 Fleet 2,903, , , ,334,839 Ambulance 2,036, ,687 23, ,876 (464,262) (464,262) 2,013,995 Hospital Financing 4, , ,138 (400,000) (400,000) (95,743) Roads 13,794,313 11,723, ,696 11,928,946 (2,059,848) (2,059,848) 23,663,410 Active Transportation 738,075 8,281 8, ,356 Port Carling Locks 766, ,812 9, ,390 (22,363) (22,363) 966,233 Environment General 9,034,089 1,903, ,624 2,013,749 (69,935) (69,935) 10,977,902 Pines 2,783, ,625 33, ,759 (53) (53) 3,197,100 Pines Community Support Fund 271,367 5,840 3,069 8,909 (1,328) (1,328) 278,948 Community Housing 3,472, ,250 39, ,753 (57,031) (57,031) 3,606,949 Planning 928,957 76,125 10,696 86,821 (28,499) (28,499) 987,279 Airport 632, ,625 8, ,462 (43,917) (43,917) 978,024 Debt Reduction 19,061,664 2,968, ,159 3,195,152 (513,000) (513,000) 21,743,816 Wastewater 7,328,915 2,747,847 94,427 2,842,274 (413,001) (413,001) 9,758,187 Water 9,407,382 2,658, ,595 2,776,206 (334,811) (334,811) 11,848,778 Solid Waste 2,533,084 2,181,058 38,522 2,219,580 (217,478) (217,478) 4,535,187 Sustainable Infrastructure 4,095, ,113 46, ,915 (424,050) (424,050) 4,650,351 OCIF Subtotal Funds 88,048,422 27,372, ,953 1,070,179 29,380,529 (4,403,735) (960,753) 0 (5,364,489) 112,064,463 Development Charge Funds Roads 980, ,339 13, ,755 (52,439) (52,439) 1,827,567 Hauled Sewage 306, ,283 3, , ,153 Water 840, ,157 10, , ,181,177 Wastewater 763, ,428 9, , ,256,338 Subtotal Development Charge Funds 2,889, ,849,205 37,523 1,886,728 (52,439) 0 0 (52,439) 4,724,236 Operating Funds General TS Stabilization 2,737, ,737,800 WSIB 3,398, ,526 39, ,431 (128,379) (128,379) 3,768,962 Self-Insured Employee Benefit 1,756, ,756,820 Corporate Working Funds 2,508, ,508,813 Affordable Housing Initiatives 1,388,750 15,581 15, ,404,330 Muskoka Services 381,843 4,284 4, ,127 Gateway Homes Muskoka 452,826 5,080 5, ,906 Solid Waste Operating 840,694 9,432 9, ,126 Subtotal Operating Funds 13,466, , , ,808 0 (128,379) 0 (128,379) 13,870,885 $104,404,826 $27,830,924 $2,787,158 $1,181,983 $31,800,065 ($4,456,175) ($1,089,133) $0 ($5,545,307) $130,659,583 Page 4

5 Reserves and Reserve Fund Projected s - Closing Cash Commitments on Open Projects of Year Transfers Net of Surplus / (Deficit) Projection Impact of TS Project Quarterly Variance - Impact of RS Project Quarterly Variance - Projected December December (Budget Document) Schedule B Variance Favourable / (Unfavourable) to Approved Budget Funds Corporate $8,576,052 ($2,850,514) $67,445 $100,426 $5,893,409 $6,167,635 ($274,226) Computer Equipment 296,799 (172,274) 30, , ,421 10,554 Fleet 3,334,839 (119,100) 143, ,359,472 2,973, ,030 Ambulance 2,013,995 (424,325) 159, ,748,884 1,771,907 (23,023) Hospital Financing (95,743) 0 100,000 4,257 4,263 (6) Roads 23,663,410 (17,130,846) 3,927, ,436 10,855,945 9,088,569 1,767,376 Active Transportation 746, , , , Port Carling Locks 966,233 (1,211,942) (50,312) 268,864 (27,157) (28,339) 1,182 Environment General 10,977,902 (6,669,899) 634, , ,437,878 4,879, ,001 Pines 3,197,100 (271,159) 156,978 17,000 3,099,919 3,139,816 (39,897) Pines Community Support Fund 278,948 0 (16,565) 262, ,315 33,068 Community Housing 3,606,949 (553,973) 83, ,136,858 3,096,173 40,685 Planning 987,279 (664,469) 33, , ,029 (449,831) Airport 978,024 (224,040) 130, , , Debt Reduction 21,743,816 (1,175,696) (1,561,764) ,006,356 19,053,069 (46,713) Wastewater 9,758,187 (8,157,310) 516,868 35,584 2,153,329 2,351,429 (198,100) Water 11,848,778 (9,248,770) 733,946 53,985 3,387,939 2,900, ,417 Solid Waste 4,535,187 (4,205,660) 1,331, ,191 2,658, ,886 2,200,842 Sustainable Infrastructure 4,650,351 (3,821,696) 868, ,697,019 1,650,161 46,858 OCIF 0 (1,607,885) 1,085,994 (521,891) 0 (521,891) Subtotal Funds 112,064,463 (58,509,558) 8,384,311 1,277,226 1,087,760 64,304,202 60,324,937 3,979,265 Development Charge Funds Roads 1,827,567 (1,069,757) 14,758 7, ,181 1,081,622 (301,441) Hauled Sewage 459,153 (171,223) , ,627 (19,092) Water 1,181,177 (85,330) 54, ,149,875 1,286,111 (136,236) Wastewater 1,256,338 (1,161,319) (67,657) 0 27, ,027 (176,665) Post Period Benefits - Wastewater 0 (3,719,813) 3,719, Subtotal Development Charge Funds 4,724,236 (6,207,442) 3,721,547 7, ,245,954 2,879,387 (633,433) Operating Funds General TS Stabilization 2,737, ,737,800 2,737,800 0 WSIB 3,768,962 (273,452) 3,495,510 3,478,430 17,080 Self-Insured Employee Benefit 1,756,820 42,936 1,799,756 1,870,001 (70,245) Corporate Working Funds 2,508,813 2,508,813 2,508,813 0 Affordable Housing Initiatives 1,404,330 (706,080) 698, , ,379 Muskoka Services 386,127 (60,000) (12,940) 60, , , ,605 Gateway Homes Muskoka 457, , , , ,326 Solid Waste Operating 850, , ,235 21,891 Subtotal Operating Funds 13,870,885 (60,000) (526,656) 60, ,344,229 12,698, ,037 $130,659,583 ($64,777,000) $11,579,202 $1,344,839 $1,087,760 $79,894,384 $75,902,516 $3,991,868 Page 5

6 Use of Reserve Funds (Increase) / Decrease Tax Supported Project Quarterly Variance Report - Corporate Roads Port Carling Locks Environment General Pines DC Roads Muskoka Services Area Municipality Schedule C Hauled Sewage Bracebridge Lagoon Upgrade/Expansion $195,500 $195, Inlet Works/Flow Measuring (12 Mile Lagoon) 300, ,000 Hauled Sewage Subtotal - (Increase) / Decrease , ,500 Roads ML MR 4 from MR 25 to MR 24 21,875 3,125 25, BB MR 16 from MR 118 (Wellington) to Stephens Bay Rd 3.7 km 94,863 94, BB MR 118 from West Mall Dr to BB/ML Bndry 7,870 1,250 9, DMM Culvert Replacement Program , , ML MR 29 Acton Island Bridge Rehab # ,000 28, ML MR 169 CPR Subway Rehab # ,000 25, HV MR 23 Deerhurst Dr to Deerfoot Trail 3.1 km (8,470) (446) (8,916) BB MR 42 from York to Front St 0.3 km 69,986 3,684 (18,119) 55, BB MR 16 Kelvin Grove Park Bridge/Underpass # (6,100) (6,100) Roads Subtotal - (Increase)/Decrease 0 395, ,613 0 (18,119) 384,930 Port Carling Locks Small Lock Hydraulic System 180, , Island Boardwalk 88,864 88,864 Port Carling Locks Subtotal - (Increase)/Decrease , ,864 Public Works - Tax Supported - (Increase)/Decrease $0 $395,436 $268,864 $495,500 $0 $7,613 $0 ($18,119) $1,149,294 Corporate & Emergency Services Project Quarterly Variance Report - Corporate Roads Port Carling Locks Environment General Pines Muskoka Services Area Municipality DC Roads Corporate & Emergency Services Network & Server 2016 $65,468 $65,468 Corporate & Emergency Services Subtotal - (Increase)/Decrease $65,468 $0 $0 $0 $0 $0 $0 $0 $65,468 Community Services Project Quarterly Variance Report - Corporate Roads Port Carling Locks Environment General Pines Muskoka Services Area Municipality DC Roads Community Services Pines Interior - Carpet Replacement $17,000 $17, !MPACT Muskoka Beaver Creek Dr Upgrades 34,958 60,000 94,958 Community Services Subtotal - (Increase)/Decrease 34, , , ,958 Tax Supported Grand Impact on Financing $100,426 $395,436 $268,864 $495,500 $17,000 $7,613 $60,000 ($18,119) $1,326,720 Reserve Fund Impact - (Increase)/Decrease $1,344,839 External Funding - (Increase)/Decrease ($18,119) Page 6

7 Use of Reserve Funds (Increase) / Decrease Rate Supported Project Quarterly Variance Report - Schedule D Wastewater Solid Waste Income Municipal Contribution Water Water BB James from MacDonald to Ann $50,000 $50, BB 200m on Dawsonwood ,200 (265,200) (197,000) BB 40m on Shaw at Ecclestone (3,700) (3,700) BB Kimberley St from Quebec to Ontario 25,000 25, BB Ontario St from Church to Kimberley 25,000 25, BB 200m Ecclestone Riverside to Bridge CI Repl (49,900) (49,900) BB 230m Ecclestone Young to Anglo CI Repl (81,100) (81,100) BB Demolish Bird's Mill Reservoir 34,000 34, HV George St from Henry to End (168m) (13,515) (25,295) (38,810) Water Subtotal - (Increase)/Decrease 53, (290,495) (236,510) Wastewater BB Dill St SPS Upgrades 70,070 (1,670) 68, HV Chaffey Twp Rd Sewer Repl (N159-N14) 140m 5,100 5, BB Ecclestone Sewer Repl T32-T37 (68,400) (68,400) GH STP Clean Digesters 36,019 36, HV George St Sewer Repl (Wilmott to End) (7,205) (25,295) (32,500) Wastewater Subtotal - (Increase)/Decrease 0 35,584 0 (1,670) (25,295) 8,619 Solid Waste New Disposal Facility - RW Landfill 966, , GH Beiers Monitoring Wells 32,000 32,000 Solid Waste Subtotal - (Increase)/Decrease , ,191 Public Works - Rate Supported - (Increase)/Decrease $53,985 $35,584 $998,191 ($1,670) ($315,790) $770,300 Reserve Fund Impact - (Increase)/Decrease $1,087,760 External Funding - (Increase)/Decrease ($317,460) Page 7