Body: Committee of the Whole Type: Agenda Meeting: Committee of the Whole Date: June 5, 2013 Collection: Council Agendas Municipality: Frontenac County
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Committee of the Whole – Regular Meeting June 5, 2013 – 9:00 a.m. The Frontenac Room, 2069 Battersea Road, Glenburnie, ON
AGENDA Page
CALL TO ORDER a) Appointment of Chair
ADOPTION OF AGENDA
DISCLOSURES OF PECUNIARY INTEREST AND GENERAL NATURE THEREOF
DEPUTATIONS AND/OR PRESENTATIONS
BRIEFINGS 3-17
a) Marian VanBruinessen, Treasurer, will provide the Committee of the Whole with a PowerPoint presentation on the County of Frontenac Reserve and Reserve Funds.
- REPORTS 18-29
a) 2013-056 Reserve and Reserve Funds b) Allocation of Reserve Funds to Support Seniors and Their Continued Independent Living WHEREAS the Council of the County of Frontenac, at its meeting held January 16, 2013 passed the following Mission and Vision Statements: Mission Statement “The County of Frontenac’s mission is the effective, efficient and sustainable delivery of services to citizens” Vision Statement “The County of Frontenac is recognized for its unique pristine natural environment and lifestyle choices and commitment to - and promotion of - strong, resilient, diverse, rural communities”
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Page 6. REPORTS AND WHEREAS the County of Frontenac and its Townships have a goal to provide safe, sustainable and fully accessible senior friendly communities; AND WHEREAS this goal would see a much higher success rate if there were collaboration between the County of Frontenac, its Townships and potentially the provincial and federal governments as well as the CFDC; AND WHEREAS the County of Frontenac currently has sufficient funds in its Federal Gas Tax Reserve and its Working Fund Reserve: THEREFORE BE IT RESOLVE THAT $1,500,000 of the Federal Gas Tax or Working Fund Reserves be earmarked over five years to support the development and implementation of a plan done collaboratively between the County of Frontenac and its Townships that would see the County of Frontenac supporting seniors and their continued independent living by providing safe, sustainable, fully accessible senior friendly communities, to include but not limited to: •The support of one new Seniors Housing development in each Township; •Fulfil the County’s responsibilities as noted in the Municipal Housing Strategy and the Ten Year Homelessness Plan; •Increase community consultation on accessibility and how to better create barrier free communities; •Make better use of Community Improvement Plans to better assist local business and promote pedestrian friendly community development; •Support local health care support services; •Improve rural transportation; AND FURTHER THAT this plan be incorporated into the draft proposed Sustainable Actions Directions for our Future 2013
- RISE AND REPORT
- PUBLIC QUESTION PERIOD
- ADJOURNMENT
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Marian VanBruinessen, Treasurer, will provide the
Operational Reserves FRC Working Funds and FMT Working Funds FRC Land Use Planning FMT Severance & FPS Severance FPS NEER
Asset Management Reserves
AgendaItem#5
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FRC Capital Replacement FRC Ontarians with Disabilities FRC Land Acquisition (Trails) FMT Capital Replacement and FMT Capital FMT Operations FPS Vehicle and FPS Equipment FRC Ambulance and FPS Other Projects FRC GIS Project
Marian VanBruinessen, Treasurer, will provide the
Strategic Regional Reserves FRC Federal Gas Tax FRC Investing in Ontario FRC 150th Anniversary FRC Strategic Projects
*** Working Funds (reallocated)
Legally Restricted Reserves FRC Ferry Revenue FMT Capital Campaign FMT Donations FMT Pathways
External Agency Reserves AgendaItem#5
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FRC Stabilization FRC Library FRC Social Housing Out-of-Scope
Marian VanBruinessen, Treasurer, will provide the
Regional Issues as identified through:
Council Member Observations
County Committee Observations
Staff Observation
Community Consultations
Comprehensive Studies
County Official Plan Development
EOWC Financial Sustainability Study
AgendaItem#5
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Marian VanBruinessen, Treasurer, will provide the
Opportunities and Projects to Address Regional Issues Identified through Council and Committee Member Observation: Sustainability Planning Property Assessed Payments for Energy Retrofit (PAPER) Future renewable energy installations and/or projects (FIT estimated at $500,000, MicroFit estimated at $75,000) Seniors
Supporting Seniors Independent Living in the County (informally estimated at $1.5 million)
AgendaItem#5
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Economic Development Land O Lakes Project Partnership opportunities
Marian VanBruinessen, Treasurer, will provide the
Opportunities and Projects to Address Regional Issues Identified through Independent Consultant Reports and Community Consultation: Trails Development Engineering Study (estimate of $1,050,000 for bridges and trail development identified in the Trails Implementation Plan Phase 1) Outstanding work anticipated to be identified through the Trails Implementation Plan Phase 2 (estimated at $1,500,000) Land Acquisition identified in the Trails Master Plan (estimated at an additional $200,000) Additional opportunities for loops and local trails (is an allocation to an Acquisition Reserve required?)
AgendaItem#5
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Marian VanBruinessen, Treasurer, will provide the
Opportunities and Projects to Address Regional Issues Identified through Independent Consultant Reports and Community Consultation: Roads
The CN Watson Report presented in 2011 identified the regional infrastructure deficit and opportunities to be derived through considering a Regional Roads Corridor (the estimated deficit in immediate capital needs for roads formerly maintained by the Province or County, ie regional roads, was $37 million in 2010 – is there an allocation to reserve required?)
AgendaItem#5
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Marian VanBruinessen, Treasurer, will provide the
Opportunities and Projects to Address Regional Issues Identified through Independent Consultant Reports and Community Consultation (continued)
AgendaItem#5
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Economic/Community Development and Tourism The ability to respond to opportunities for strategic partnerships currently at $160,000 (This accommodated the FISH TV project) Community Improvement Plans at $75,000 per plan requiring $150,000 to complete one in each community plus the opportunity to look at the additional 3 communities recommended in the Community Improvement Plan Project – Phase 1 – Identifying a Pilot CIP Additional CIP opportunities to extend the benefit beyond the baseline work currently being achieved (estimated at $400,000 – $100,000 for each Township) Studies to identify availability of Commercial Land as part of core economic development work (estimated at $75,000)
Marian VanBruinessen, Treasurer, will provide the
Opportunities and Projects to Address Regional Issues Identified through Independent Consultant Reports: Land Ambulance Capital Requirement 2006 IBI study identified the need for an additional station in the area bounded by Division Street, Montreal Street, Railway Street and Highway 401 estimated at $500,000 Future consideration of acquisition of currently leased properties (estimated at $1,650,000) an informal position taken by previous Councils
AgendaItem#5
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Marian VanBruinessen, Treasurer, will provide the
Projects to Address Capitol Issues Identified by Staff: Fairmount Home Capital Requirements not included in capital replacement reserve allocations. Septic bed informally estimated at $400,000 Future Parking lot improvements at $200,000 Future replacement of 2nd well $200,000
AgendaItem#5
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Marian VanBruinessen, Treasurer, will provide the
Consideration of Capitol Issues Identified by Staff based on the Prism Study Estimates in 2012: County of Frontenac Unfunded Capital Asset Liability Asset
Total Depreciation County of Frontenac Replacement Total Unfunded Capital Liability ($) Share ($) Reserve Totals ($) Liability ($) 200,157
94,862
0
94,862
Buildings
4,548,417
2,010,034
0
2,010,034
Bridges
27,764
27,764
0
27,764
Machinery and Equipment
3,580,544
2,198,642
2,304,751
-106,109
Vehicles
1,556,143
1,556,143
775,697
Total
9,913,025
5,887,445
3,080,448
780,446 2,806,997
Note that the County’s share of the unfunded liability is based on the assumption that the cost sharing with the City of Kingston does not change
AgendaItem#5
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Land Improvements
Marian VanBruinessen, Treasurer, will provide the
Regional Issues Identified in the EOWC Financial Sustainability Study (estimates not yet determined):
Rural transportation – further work being done (final report anticipated in Fall 2013) Regional infrastructure including but not limited to water and waste water (reporting out anticipated in 2014) Waste management (reporting out anticipated in 2014)
AgendaItem#5
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Marian VanBruinessen, Treasurer, will provide the
Regional Issues Water
Municipal Fiscal Capacity
Quality
Lack of Municipal Water & Sewer
Limited Population Growth City of Kingston
Climate Change
Issues Affecting Regional Policy
Seasonal Economy
Aging Population
Farming Transportation Infrastructure
AgendaItem#5
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Peak Oil
Marian VanBruinessen, Treasurer, will provide the
Regional Issues Identified through the County Draft Official Plan: In the next 20 years, we will be forced to deal with many costly regional challenges.
Rural Transportation
Youth
Seniors
CIPs
The County of Frontenac is recognized for its unique pristine natural environment and lifestyle choices and commitment to – and promotion of – strong, resilient,
Trails
diverse, rural communities.
Land Ambulance Village Servicing
Frontenac Corridor Regional Roads
Long-Term Care
AgendaItem#5
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We can prepare now by planning for long range regional issues and maintaining reserves to address these challenges.
Housing
Waste Management
Marian VanBruinessen, Treasurer, will provide the
Planning Requirements Identified by Staff:
Long Term Financial Plan A long term financial plan should reflect the long-term strategic approach to issues assumed through a municipal strategic plan. It can also minimize volatility created by external influences that impact municipal budgets and can ensure resources are appropriately managed to meet the longer term goals of the County. The first step in the process is to set strategic long term goals.
AgendaItem#5
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County Council is undertaking a service and organizational review which should support those goals.
Marian VanBruinessen, Treasurer, will provide the
Planning Requirements Directions for Our Future
Municipal Strategic Plan Organizational and Service Review
Long Term Financial Plan
Financial Budgets
Capital Plan
AgendaItem#5
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Evaluation through Indicators
AgendaItem#6a)
Report 2013-056 ADMINISTRATIVE REPORT To:
Warden and Council Members of the County Of Frontenac
From:
Elizabeth Savill CAO
Prepared By:
Marian VanBruinessen Treasurer
Date Prepared:
March 11, 2013
Date of Meeting:
March 20, 2013
Re:
Financial Services – Reserve and Reserve Funds
Recommendation RESOLVED THAT Council of the County of Frontenac receive this Financial Services – Reserve and Reserve Funds report; AND FURTHER that Council direct the Treasurer to maintain a County Working Fund Reserve balance to provide for cash flow requirements and mitigation strategies at $2.151 million for 2013; AND FURTHER that Council adopt a bylaw later in the meeting directing that any surplus/deficit realized annually be distributed as a transfer from/to the Working Fund Reserve to the Townships through the budget process after the Working Fund Reserve is replenished to (1) maintain the level of 5% of operating funds as recommended by the Government Finance Officers Association, (2) account for additional mitigation strategies, and (3) acknowledge prior year projects not completed. Background Reserves and Reserve Funds are financial management tools that are an essential part of a sound fiscal policy to address long-term objectives. The ultimate goal is to fully fund the annual capital plan through current reserves while delivering efficient, effective programs to the ratepayers of the County. The key to reserve policies and planning is to balance current and future requirements. Sound program and financial planning accommodates future growth while maintaining acceptable tax rates. A reserve is generally unrestricted and is appropriated from net revenue at the discretion of Council after the provision for all known expenditures. The primary source of revenue from reserves is from current operations, usually surpluses at year-end or as a deliberate segregation during budget deliberations. Reserves are used to mitigate fluctuations in economic factors, Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
changes in government funding, unanticipated events and contingent liabilities. They are also used to accumulate funds in order to finance large projects to avoid debt financing or large swings of the tax levy. Reserve Funds differ from reserves in that they are segregated and restricted to meet a specific purpose as defined by the Municipal Act or at the direction of Council.
Comment The County has a number of reserves and reserve funds which provide a stable foundation for the County and allow County Council to mitigate impacts on the tax levy as a result of unusual or unanticipated budget requirements and also to take advantage of opportunities that are beneficial to the region as a whole. Reserves are provided for operational costs that occur at periodic times as opposed to annually, as well as for specific project goals as directed by Council. A Council’s responsibility is to provide direction most usually through a strategic plan and its objectives. Some priorities were developed in February 2011 and adopted by County Council in September 2011, but these did not provide comprehensive direction. In a report dated June 20, 2012, the Treasurer provided the following discussion:
A long term financial plan provides the opportunity for strategic development based on a collaborative and visionary process. It is part of a complete planning portfolio which starts with a municipal strategic plan. A long term financial plan should reflect the long-term strategic approach to issues assumed through a municipal strategic plan. It can also minimize volatility created by external influences that impact municipal budgets and can ensure resources are appropriately managed to meet the longer term goals of the County. The first step in the process is to undertake a municipal strategic plan. Directions for Our Future
Municipal Strategic Plan
Long Term Financial Plan
Financial Budgets
Capital Plan
Evaluation through Indicators
Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
Council has also expressed its interest in assessing the adequacy of financial reserves for the County. This process is a component of the overall assessment of the financial capacity of the County in the context of strategic direction and the short and long terms goals of County Council. To appropriately align resources with current and anticipated future requirements a clear municipal “roadmap” is required for the next 5-10 years. It is recommended that Council initiate a strategic planning process that can culminate with a long-term financial plan which includes an assessment of the County’s financial reserve requirements. Council did undertake a strategic planning session in the fall of 2012, but no guidance for the future of the County emanated from the session. Initial discussions had suggested that consideration of Reserves and Reserve Funds would be undertaken as part of the long term financial plan. However it would appear that more immediate action is being considered. For that reason and in the absence of Council’s strategic direction, the following is put forward for Council’s consideration. Please note that the following discussion of reserve and reserve funds provides best estimates based on information available prior to final audit reconciliations.
WORKING FUND RESERVE The Working Fund Reserve is the one which has generated the most comment from this Council. In the past, councils have seen the surplus in the working fund as its saving account for future requirements, although the Treasurer has consistently indicated the need for its review in the context of long term planning. Understanding the time frame for retention of these and other funds will allow more prudent investment strategies. This fund was originally established to provide cash flow for operations resulting from unexpected expenditures to eliminate the requirement to borrow funds to meet immediate obligations. This fund has been utilized on an ongoing basis to mitigate the impact of capital planning requirements on an incremental basis and to mitigate the annual tax rate. There are four parts to this discussion. The first is to determine the ongoing operational requirements to be addressed by the working fund reserve. The second is to determine the optimal use of the additional funds currently retained in the Working Fund Reserve. Thirdly, the allocation of future surplus/deficits needs to be considered. The discussion ends with consideration of going forward.
- Working Fund Reserve – Operational Requirements The Government Finance Officers Association (GFOA), the international organization of Municipal Finance Officers of the United States and Canada, recommends a general fund balance of 5% to 15% of general operating revenues. However GFOA does indicate that other factors should be included.
the size of the municipality vulnerability to extreme events budget practices ( inclusion of contingency or not) dependability of intergovernmental revenue
Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
- expenditure volatility
- borrowing capacity
- capital projects – do critical projects have a funding source The GFOA further suggests that in evaluating reserves the following should be considered:
A financially sustainable county government provides an optimal mix and level of services to citizens within available means while pro-actively taking measures to preserve the ability to continue providing value in the long run. Based on this recommendation, and considering cash flow requirements based on the 2013 operating budget suggests that $1.8 million should be retained. In addition, Council, through the 2013 budget process, has presupposed the use of the Working Fund Reserve to mitigate its contribution to the County Capital Replacement Reserve, about $230,500 in total over 4 years. It has been suggested that $150,000 is required for the 150th Anniversary. By the end of 2013, $60,000 will have been allocated to the 150th Anniversary Reserve, suggesting $90,000 should be retained in the Working Fund Reserve or allocated to the 150th Anniversary Reserve. Council has regularly transferred its requirement for the cost of GIS mapping ($11k) and for Land Acquisition ($20k) from the Working Fund Reserve. It is suggested that these requirements be phased on to the tax rate over 3 years, requiring $31,000 from the Working Fund Reserve. 2. Working Fund Reserve – Optimal Balance for 2013
5% of operating revenues (GFOA recommendation)
$
1,800,000
Mitigate capital reserve replacement requirements
230,500
150th Anniversary
90,000
Mitigate ongoing project reserve allocations
31,000
Total Optimal Working Fund Balance for 2013
$
2,151,500
The anticipated levy surplus in 2012 is estimated at $250,000 Variance $ County budget – surplus (deficit)
% of budget
(75,500)
(0.90)
157,300
8.60
Township tax reconciliations – surplus (deficit)
168,200
1.99
Total
250,000
City Transfer payments re Social Services and Social Housing – surplus (deficit)
To date the 2013 budget deliberations have resulted in the use or reallocation of $496,270, detailed as follows:
Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
$ Prior year projects - Corporate - Telephone system review ($5k); INFOHR - recruitment module($4k) Prior year projects - Emergency management - JEPP project Organizational review Capital projects Total project allocations Inter-fund transfer GIS mapping Land Acquisition County Capital replacement 150th Anniversary Total Inter-fund Transfers Total reallocation from the Working Fund Reserve
$ 9,000
4,427 125,000 179,597 318,024
11,000 20,000 117,246 30,000 178,246 496,270
A further increase to the Working Funds Reserve balance reflects the City of Kingston’s commitment to finance its share of the Broadband project in the amount of $344,839. This amount has been billed and, although not yet received, has been accrued for year-end. As the County’s total obligation to the project had been put aside in a reserve that has since been closed, the City’s contribution will return to the Working Funds Reserve as a reimbursement. 3. Working Fund Reserve – Allocation of Future Annual Surplus/Deficit Many municipalities do retain annual surpluses to provide for capital requirements. However, these requirements at the County level can be provided for through a planned replacement and budgeting strategy. Moving forward it is recommended that the Working Fund Reserve balance be maintained to provide for cash flow requirements and mitigation strategies, currently established at $1.65 million (this adequacy of this balance should be confirmed on an annual basis). It is recommended that at year-end the surplus be utilized to replenish this Working Fund Reserve balance. Any additional surplus or any deficit, after provision is made for any prior years’ projects not completed, would be redistributed to the Townships. This allocation would become a budget line and thus not affect the current County budgeting process. 4. Working Funds Reserve – Going Forward As of the end of 2013, the Working Fund Reserve balance is estimated at $4.5 million. Through Council discussions and community consultations and through observations contained in the EOWC Financial Sustainability report, a number of regional issues come to the forefront that will impact Frontenac County over the next few years. These include, but are not limited to, rural transportation, regional infrastructure including but not limited to water and waste water, waste management and seniors housing. In all cases, County Council needs to assess the value of possible economies of scale in addressing these or other issues on a regional basis at the County level. In addition, there has been interest expressed in projects like the proposed Property Assessed Payments for Energy Retrofits (PAPER) and other green energy and/or conservation projects. Each of these projects could benefit from: (1) Capital contributions to augment private project contributions – This can be necessary to ensure important community projects get off the ground and could include affordable seniors’ housing projects. Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
(2) Capital contributions to cover the County’s share of provincial or federal funding programs and support for studies required as pre-requisites to provincial or federal funding – This allows the County to be in a position to take advantage of new or special funding programs and avoid missed opportunities. (3) Support for projects that benefit the community – These can allow for investments in the community to be spurred by a County investment that creates a multiplier effect. The Verona Community Improvement Plan is proving the success of these projects. PAPER could become another where the County establishes a pooled fund against which property owners could borrow to make environmental improvements to their properties. Other opportunities might also be identified through a comprehensive long range planning exercise. In each case, the funds required should be considered and a reserve or reserve fund established for that purpose. If, on the other hand, Council has no interest in identifying and addressing these or other issues on a regional basis, the remaining funds these funds should be redistributed to the Townships.
OTHER RESERVES AND RESERVE FUNDS The following is a review of the remaining reserves and reserve funds held by the County, the rationale for their establishment and their impact on the future of the County. As the County provides services which are cost-shared with the City of Kingston, some of the reserves are funded through joint contributions. These reserves are prefaced in their title by JOINT. General Corporate reserves are prefaced by FRC, those for Fairmount by FMT, and those for Land Ambulance by FPS. The reserves and reserve funds retained by the County ensure that it can plan for future projects and activities, take advantage of opportunities, and avoid being jeopardized by unanticipated costs or economic downturns. Corporate Reserves: FRC-1 Stabilization Reserve Purpose: Established to mitigate any unforeseen downturns in the economy and the potential budget implications this might entail. During the 2013 budget deliberations, a number of issues that will impact the 2014 budget were highlighted. One is the social services funding offset of approximately $62,000 received this year which will be a full levy hit in 2014. Also the loss of the Frontenac Islands’ contract services recovery (revenue of approximately $40,000) will come into effect in 2014. This reserve could be used to phase in the impacts of both of these issues. 2013 balance: $975,000
FRC-2 Strategic Projects Reserve Purpose: Established to ensure there are funds available for large strategic projects, which can have a regional focus or to provide the ability to take advantage of unforeseen opportunities requiring a County contribution. These might include Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
partnerships or possible future public/private partnerships, opportunities arising out of the Algonquin Land Claim, the Frontenac Centre, investments in community power, business/incubator park infrastructure. 2013 balance: $160,000
FRC-3 Capital Reserve Purpose: This reserve will provide for County capital replacement requirements. 2013 balance: $800,390
FRC-4 Library Reserve Purpose: This fund was developed when the County learned that the library anticipated capital projects for which the City was reserving its share separately. It has been used to support vehicle purchases and expansion of the IT system. The Library has indicated that an annual allocation of $31,000 should adequately address future requirements. 2013 balance: $97,657
FRC-5 Land Use Planning Reserve Purpose: To provide for liabilities incurred as a result of the County’s involvement in Land Use Planning. The County is responsible for subdivision approval. Although applicants are required to provide funding for any OMB activity generated, the County recognizes that in some circumstances the County might be faced with additional Land Use planning costs. Depending on the complexity and scale of a planning issue, OMB hearings can require up to a week or more of dates and legal fees could become substantial in defence of the County’s position. For example, depending on the number of appeals and the possibility of the County having to challenge a provincial decision, the hearing for the County Official Plan could easily cost more than $100,000. Furthermore, once County Council gains approval authority, it will be responsible for defending its decisions on the Township Official Plan Amendments and Official Plan updates also. 2013 balance: $226,159
FRC-6 GIS Project Reserve Purpose: To provide for the purchase of GIS mapping data every 5 years. Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
This reserve was established in 2010. $11,000 is allocated to this reserve annually. 2013 balance: $44,000
FRC-7 Social Housing Out of Scope Reserve Purpose: Established to provide for the capital costs incurred in social housing projects in the County which are 100% County costs. Allocations of $25,000 have been made annually. 2013 balance: $419,400
FRC-8 Ontarians with Disabilities Reserve Purpose: The County established this reserve to provide for the retrofits and other mandated expenditures required under the AODA legislation. The can include structural changes as well as adjustments in IT and furnishings. 2013 balance: $55,000 FRC-9 150th Anniversary Reserve Purpose: The reserve was established to support the 150th anniversary celebrations in 2015. It was estimated that a total of $150,000 will be required. $30,000 was contributed in 2012 and it is anticipated another $30,000 will be transferred to this reserve in 2013. 2013 balance: $60,000
FRC-10 Frontenac-Howe Islander Ferry Revenue Reserve Purpose: Required under the 2004 agreement with the Ministry of Transportation for the Frontenac-Howe Islander Ferry service which allows an amount of up to 5% of operating expenses to be reserved. The agreement recognizes the consolidation of fees and fares for the County and Township ferries serving Howe Island. To mitigate the variances in fees and fares collected, MTO agreed that the County could retain up to 5% of the Operating costs in a reserve to offset any shortages related to the County or Township share of the expenditures. Any change in year-end balance reflects allocations or reductions as a result of year end operating revenue and expenses. 2013 balance: $32,452
Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
Corporate Reserve Fund: FRC-11 Investing in Ontario Reserve Fund Purpose: Established with Provincial funding to provide for County capital projects. The Investing in Ontario funds are to be held in a separate fund and can only be used for capital projects. The County approved an allocation of these funds in 2008, but revised the allocation by resolution in August 2010. These projects included Fairmount Capital Projects, the K&P Trail, Green initiatives, and Broadband. 2013 balance: $139,749
Corporate Obligatory Reserve Fund: FRC-12 Federal Gas Tax Reserve Fund Purpose: Established to provide for projects supported by the Federal Gas Tax Agreement (FGT). The FGT Agreement requires that the FGT funds transferred to the municipality are held in a separate fund. The County has undertaken an Integrated Community Sustainability Plan process which now forms the basis for FGT funds disbursement. 2013 balance: $1,578,770
Fairmount Reserves: FMT-1 Working Fund Reserve Purpose: Established to provide cash flow for Fairmount operations and to eliminate the requirement to borrow funds to meet immediate obligations. Currently the County does not provide for the replacement of its share of the Fairmount Home Building. This fund should be considered in that respect. 2013 balance: $509,025
FMT-2 JOINT Severance Reserve Purpose: To provide for requirements related to the termination of employees. The amounts in and out of this fund fluctuate depending on the labour requirements. $30,000 annual allocation 2013 balance: $96,914
Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
FMT-3 JOINT Operations Reserve Purpose: To provide for requirements related to periodic contracts. This reserve was established in 2010. It provides for contracts that arise periodically, but are not required annually, to smooth the budget impact. The duct cleaning contract for example is required every five years. $9,000 is allocated annually. 2013 balance: $36,223
FMT-4 Capital Reserve Purpose: Established to provide for capital replacement under the County’s asset management plan. This reserve is to provide for the County’s share of equipment replacement. An assessment of the Fairmount assets determined that $831,800 was required as the County’s share. There is currently no allocation for the building replacement. 2013 balance: $831,862
Fairmount Reserve Funds: FMT-5 Capital Reserve Fund Purpose: Established to provide for Fairmount capital redevelopment requirements. This fund was initially established to provide for the capital requirements of the rebuild. The project was finally supported through a debenture and the County is drawing $125,000 annually to offset part of its contribution to the debenture. The remainder of the fund is available for the Fairmount Home Auditorium renovation project. 2013 balance: $1,486,752
FMT-6 Capital Campaign Reserve Fund Purpose: Established to receive donations made in support of Fairmount’s capital redevelopment requirements. This fund was initially established as the repository for the Fairmount Redevelopment Capital Campaign donation and can only be used for the purpose for which it was raised. Donations received subsequent to the end of the campaign and which were designated for the redevelopment have been deposited into this account. These funds will be used for the Fairmount Home Auditorium Redevelopment in 2013 and the fund will be fully depleted at the end of the project. 2013 balance: $0 Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
FMT-7 JOINT Donations Reserve Fund Purpose: Established to provide for benefit of the residents. This fund is supported by donations from various sources and is meant to be used for the benefit of the residents. Fairmount Residents’ Council makes recommendations for the use of these funds. 2013 balance: $195,437
FMT-8 JOINT Pathways Reserve Fund Purpose: Established to provide for maintenance of the pathways. This fund is supported by specific donations from various sources for the maintenance of the Pathways on the grounds of Fairmount Home. 2013 balance: $38,107
Frontenac Paramedic Service Reserves: FPS-1 General Reserve Purpose: Established to provide for the uncertainty as to the requirements for land ambulance and the Province’s contribution rate. No additional contribution has been made since 2005. With a number of longer term capital projects on the horizon (addressing land ambulance bases), this will provide the opportunity to fund the County’s share of these projects with minimal impact on the tax levy. 2013 balance: $394,217
FPS-2 JOINT Vehicle Replacement Reserve Purpose: Established to provide for the ongoing replacement of vehicles based on the estimated useful life of those vehicles This reserve was set up when the service was transferred to the County. 2013 balance: $443,429
FPS-3 JOINT Equipment Replacement Reserve Purpose: Established to provide for the ongoing replacement of equipment based on estimated useful life. This reserve was established when the service was transferred to the County. Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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AgendaItem#6a)
2013 balance: $679,104
FPS-4 JOINT Severance Reserve Purpose: This reserve was established when the service was transferred to the County. The Ministry of Health and Long Term Care provided severance funding that it had accrued to the date of download. Subsequent County contributions provided for requirements inherent in the historical contracts with Hotel Dieu and Parham Ambulance Services until a contract was negotiated with the County. The current contract does not have the same liability for termination/retirement payments, however there are legislated termination requirements. 2013 balance: $355,610
FPS-5 JOINT NEER Reserve Purpose: Workers Safety Insurance Bureau reconciles claims and contributions over a 4 year period. This can result in a surcharge or a rebate. To smooth the effect of this reconciliation 2013 balance: $151,860
FPS-6 JOINT Other Projects Reserve Purpose: Established to provide for new land ambulance capital projects. By 2009 most of the land ambulance cross border billing contracts were resolved. This liability had been accrued since 2002 on the basis of an estimate of total cost per call, and anticipating payment for all calls. Final contracts are primarily based on a standard cost per call and the County was successful in its assertion that repatriation calls should be paid for by the municipality of residence for that call. As a result a substantial surplus was realized and MOH indicated that its share of the funding for this liability could be transferred to a reserve for special projects. This reserve was used for the Sydenham base and will be used for the Northern base project. 2013 balance: $0 Financial Implications By providing the Treasurer with clear direction with respect to the anticipated use of reserves and reserve funds, with both short and long term considerations, the Treasurer can recommend a long term financial plan and invest the funds for better return. Organizations, Departments and Individuals Consulted and/or Affected Senior Management Team, County of Frontenac Administrative Report Financial Services – Reserve & Reserve Funds March 20, 2013
2013-056 Reserve and Reserve Funds
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