THAT Report No. CES , Status of Reserves and Reserve Funds March 2015, BE RECEIVED.

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Stuart Gardner
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1 TO: FROM: Chair and Members Corporate and Emergency Services Committee Sharon Donald Director of Budgets and Financial Planning DATE: July 23, 2015 SUBJECT: Status of Reserves and Reserve Funds March 2015 REPORT NO: CES RECOMMENDATION THAT Report No. CES , Status of Reserves and Reserve Funds March 2015, BE RECEIVED. ORIGIN In 2005, Council adopted Policy AD:51 Capital 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, September 30 th and December 31 st. The purpose of this report is to highlight material variances within the reserves and reserve funds. ANALYSIS The Capital Project Quarterly Variance Report March 2015, with the exception of Community Services, was included on each Standing Committee agenda the week of June 15, The Tax Supported favourable variance of $178,527 and the Rate Supported favourable variance of $1,364,502 were included in Report No. CES These impacts are reflected against the respective reserve funds. The project specific impacts were reflected on the Standing Committee reports. It is important to note that there were six projects that will not proceed in the current budget year totaling $701,601. (Note that this total was erroneously reported as $648,254 in Report No. CES ). The needs for these projects however, will be assessed and reconsidered as required within the 2016 Capital Budget cycle. Schedule A This schedule summarizes the $84,271,238 cash balance of the District s Reserves and Reserve Funds as at March 31, 2015, including transfers from the operating budget, receipts from development fees, grants, capital projects financed and transfers to the operating budget recorded to March 31, Page 1

2 Schedule B Schedule B summarizes the projected balances of $64,715,232 in the District s Reserves and Reserve Funds as at December 31, Starting with the cash balance as at March 31, 2015, commitments on open projects are deducted and the balance of the year s transfers are added. The total favourable variance to the 2015 Revised Budget is approximately $2.73M. The following table summarizes the variances by source: Source of Variance (Increase) / Decrease Use of Reserve Description 2014 Reserve Variances 2014 Reserve Adjustments completed after budget document prepared $653,893 Mainly due to transfers for Policing Credit ($402K) and Employee Benefits Reserve ($171K) Year-end transfers related to 2014 Operating surplus/shortfall $719,219 Due to the difference between the projected operating shorftalls estimated in the 2015 budget document totalling $1.55M and the actual operating net deficit at the completion of the audit totalling $825K. December 2014 Interest Variance $94,114 Variance due to year-end fund balances Subtotal of 2014 Reserve Variances $1,467, Reserve Variances Deferred Projects $701,601 Projects closed in current budget year, but under review for next budget cycle as reported within the quarterly capital variance reports. Financing Amendments $1,213,329 Total Amendments in December 2014 ($372,247) and March 2015 ($841,082) quarterly capital variance reports (excluding deferred projects noted above). Mainly due to Projects Port Carling STP Expansion, PS STP Rehab, PS WTP Rehab, and Committee Amendments between variance reports ($677,141) cancellation of Woodlot Development Area Minor Variances $31,121 Subtotal of 2015 Reserve Variances $1,268,910 Total Variance to Revised 2015 Budget $2,736,136 Schedule C Schedule C reflects the impact on planned funding sources in terms of own source funding and external funding due to results reported in the Tax Supported Capital Project Quarterly Variance Reports. Schedule D Schedule D reflects the impact on planned funding sources in terms of own source funding and external funding due to results reported in the Rate Supported Capital Project Quarterly Variance Reports. STRATEGIC PRIORITIES Reporting on the Status of Reserves and Reserve Funds supports the following goal as outlined in the District of Muskoka s Strategic Priorities: Page 2

3 2. Build financial strength and demonstrate fiscal responsibility and accountability through the budget process, public reporting of budget results, the corporate credit rating and debt reduction. Respectfully submitted, Sharon Donald, CPA, CMA Director of Budgets and Financial Planning Julie Stevens, CPA, CA Commissioner of Finance and Corporate Services Page 3

4 Reserves and Reserve Fund Cash Balances - March 2015 Schedule A Opening Cash Balance January 2015 Transfer from Operating Development Fees / Grants / Donations / Sale of Assets Interest Earned Total Inflows Capital Projects Financed Closing Cash Transfer to Operating DC Deficit Total Outflows Balance March 2015 Capital Funds Corporate Capital 6,619, , ,375 6,506 (10,875) (4,369) 6,839,241 Computer Equipment 100,721 30,000 30, ,721 Fleet Capital 1,283, , , ,477,708 Ambulance Capital 1,490, , , ,628,286 Hospital Financing 237, , , ,218 Roads Capital 9,822,384 3,850,000 3,850,000 (197,636) (197,636) 13,474,748 Active Transportation 800, ,522 Port Carling Locks 555,788 62,500 62,500 (18,642) (18,642) 599,646 Environment General 5,260, , ,000 (445,054) (445,054) 5,440,909 Pines Capital 1,719, , , ,844,224 Pines Community Support Fund 185,034 1,675 1,675 (342) (342) 186,366 Community Housing Capital 3,235,031 50,000 50, ,285,031 Planning Capital 764,180 25,000 25, ,180 Airport Capital 2,974, , ,000 (99,390) (99,390) 3,000,510 Debt Reduction 10,552, , , ,541,888 Wastewater Capital 7,799, , ,750 (404,986) (404,986) 7,977,670 Water Capital 5,873, , ,750 (180,207) (180,207) 6,373,730 Solid Waste Capital 3,042, , ,000 (71,191) (71,191) 3,346,612 Sustainable Infrastructure 1,781,196 0 (22,105) (22,105) 1,759,091 Subtotal Capital Funds 64,098,320 8,177,227 1, ,178,902 (1,432,704) (11,217) 0 (1,443,921) 70,833,300 Development Charge Funds Roads 182,140 35,319 35,319 (26,060) (26,060) 191,399 Hauled Sewage 34,377 32,213 32, ,590 Water 483,703 22,496 22, ,200 Wastewater 45,072 32,779 32,779 (4,210) (4,210) 73,640 Subtotal Development Charge Funds 745, , ,807 (30,270) 0 0 (30,270) 837,828 Operating Funds General TS Stabilization 3,450, ,450,272 WSIB 2,581,454 74, ,317 (21,264) (21,264) 2,634,507 Self-Insured Employee Benefit 1,784, ,784,987 Corporate Working Funds 2,508, ,508,813 Affordable Housing Initiatives 1,045, ,045,226 Muskoka Services Investment 360, ,343 Solid Waste Operating 815, ,961 Subtotal Operating Funds 12,547,056 74, ,317 0 (21,264) 0 (21,264) 12,600,109 Total $77,390,667 $8,251,536 $124,482 $8 $8,376,026 ($1,462,974) ($32,481) $0 ($1,495,455) $84,271,238 Page 4

5 Closing Cash Balance March 2015 Reserves and Reserve Fund Projected Balances - March 2015 Commitments on Open Projects Balance of Year Transfers Net of Surplus / (Deficit) Projection Impact of TS Capital Project Quarterly Variance - March 2015 Impact of RS Capital Project Quarterly Variance - March 2015 Projected December 2015 Balance December 2015 (Budget Document) Schedule B Variance Favourable / (Unfavourable) to 2015 Budget Revised Capital Funds Corporate Capital 6,839,241 (892,920) (1,244,280) 0 4,702,041 4,631,911 70,130 Computer Equipment 130,721 (107,400) 90, , ,509 (188) Fleet Capital 1,477,708 (222,000) 584,063 1,839,771 1,816,518 23,253 Ambulance Capital 1,628,286 (445,700) 447,472 1,630,058 1,627,439 2,619 Hospital Financing 337,218 (324,366) 12,852 15,379 (2,527) Roads Capital 13,474,748 (16,093,427) 11,728, ,109,999 8,982, ,181 Active Transportation 800,522 (85,000) 18, , ,973 (83,670) Port Carling Locks 599,646 (259,679) 198,934 (5,000) 533, ,999 (4,098) Environment General 5,440,909 (5,500,016) 1,927, ,052 1,608,729 3,632,175 2,705, ,058 Pines Capital 1,844,224 (1,015) 415,300 2,258,509 2,255,210 3,299 Pines Community Support Fund 186,366 (9,075) (9,955) 167, ,769 8,567 Community Housing Capital 3,285,031 (527,784) 225,006 2,982,253 2,976,748 5,505 Planning Capital 789,180 (143,537) 90, , ,014 1,357 Airport Capital 3,000,510 (3,268,834) 417, , ,084 5,031 Debt Reduction 11,541,888 (3,068,000) 3,768,031 12,241,919 11,507, ,982 Wastewater Capital 7,977,670 (6,537,066) 1,847, ,277 3,673,318 3,175, ,303 Water Capital 6,373,730 (3,719,798) 2,143, ,185 5,154,405 4,909, ,866 Solid Waste Capital 3,346,612 (5,937,239) 3,172, , , ,856 Sustainable Infrastructure 1,759,091 (2,422,495) 1,755,441 (1,000,000) 92,037 1,087,425 (995,388) Subtotal Capital Funds 70,833,300 (49,240,985) 27,252, ,052 1,351,191 50,345,750 48,375,615 1,970,135 Development Charge Funds Roads 191,399 (970,705) 1,397, , ,667 53,738 Hauled Sewage 66,590 (151,535) 197,065 28, ,248 55,272 84,976 Water 506,200 (680,730) 608, , ,041 25,924 Wastewater 73,640 (743,379) 715,896 13,312 59,469 28,370 31,099 Post Period Benefits - Water 0 (52,300) 52, Post Period Benefits - Wastewater 0 (262,576) 262, Subtotal Development Charge Funds 837,828 (2,861,225) 3,234,043 28,128 13,312 1,252,086 1,056, ,736 Operating Funds General TS Stabilization 3,450, ,182 3,989,454 3,587, ,358 WSIB 2,634, ,852 2,974,359 2,969,578 4,781 Self-Insured Employee Benefit 1,784,987 38,169 1,823,156 1,662, ,765 Corporate Working Funds 2,508,813 2,508,813 2,508,813 (0) Affordable Housing Initiatives 1,045,226 (333,370) 711, , Muskoka Services Investment 360,343 (66,547) 293, , Solid Waste Operating 815, , ,605 1,356 Subtotal Operating Funds 12,600, , ,117,395 12,546, ,663 Total $84,271,238 ($52,102,210) $31,003,521 $178,180 $1,364,503 $64,715,232 $61,978,697 $2,736,535 Page 5

6 Tax Supported Capital Project Quarterly Variance Report - March 2015 Schedule C Port Carling Locks Capital Environment General DC Hauled Sewage Project Number Total Hauled Sewage Power & Security - Various Sites 56,205 56, Ryde Upgrade/Expansion ,847 28, ,975 Hauled Sewage Subtotal - (Increase) / Decrease 0 155,052 28, ,180 Port Carling Locks Large Lock Gates Electric Enclosures & Seal Boards (5,000) (5,000) Port Carling Locks Subtotal - (Increase) / Decrease (5,000) 0 0 (5,000) Public Works - Tax Supported - (Increase) / Decrease (5,000) 155,052 28, ,180 Tax Supported Grand Total Use of Reserve Funds (5,000) 155,052 28, ,180 Reserve Fund Impact - (Increase) / Decrease 178,180 External Funding - (Increase) / Decrease 0 Page 6

7 Public Works - Rate Supported Capital Project Quarterly Variance Report - March 2015 Schedule D Wastewater Capital Sustainable Infrastructure Environment General DC Wastewater Project Number Water Capital Total Water HV Anthony Court 194, , DMM MOE Water System Inspections ,358 90, DMM ATS Upgrades ,000 45, DMM Repl Surge Protectors 23,575 23, HV WTP Chlorination / Soda Ash Pump Upgrades (46,400) (46,400) DMM Water Quality Regulations ,000 50,000 Water Subtotal - (Increase) / Decrease 357, ,185 Wastewater HV Church St PS Upgrade (1,000,000) 1,587,000 13, , HV Mountview and Mill St Ease Sewer Repl 173, , HV Crescent Rd (HVSAN0932 & 36) 200m 100, , PS STP Roof Repairs 50,000 50, DMM Automatic Transfer Switch Upgrades ,051 32, HV MV STP EA & Engineering 2, , BB Milton & Golf Course SPS #8 19,113 19, GH Segwun & Caroline SPS/Control Monitoring 29,804 29,804 Wastewater Subtotal - (Increase) / Decrease 0 385,277 (1,000,000) 1,608,729 13,312 1,007,318 Public Works - Rate Supported - (Increase) / Decrease 357, ,277 (1,000,000) 1,608,729 13,312 1,364,503 Reserve Fund Impact - (Increase) / Decrease 1,364,503 External Funding - (Increase) - Decrease 0 Page 7

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

70 PINE STREET, BRACEBRIDGE, ONTARIO P1L 1N3 Telephone (705) 645-2231 / Fax (705) 645-5319 / 1-800-461-4210 (705 area code) www.muskoka.on.ca To: From: Chair and Members Corporate and Emergency Services