HomeMy WebLinkAboutAFC 2013-04-22 AgendaCorporation of the District of Maple Ridge
Audit & Finance Committee
April 22, 2013
8:00AM
Blaney Room
Chairperson:Councillor M. Morden
Committee Members:Councillors:C.Bell; R. Masse; Mayor Daykin
Staff:Chief Administrative Officer:J. Rule
GM –Corporate & Financial Svc:P. Gill
GM –Public Works & Development F. Quinn
GM –Community Dev. Park & Rec K. Swift
Manager of Accounting:C. Nolan
Recording Secretary:Amanda Gaunt
AGENDA
1.Approval of agenda
2.Approval of minutes of March 18, 2013
3.2012 Consolidated Financial Statements
4.Reserves
5.Next Meeting
May 6th Post audit meeting with BDO
“Original signed by Catherine Nolan”
Agenda submitted by:C.Nolan, CGA
Manager of Accounting
District of Maple Ridge
Audit & Finance Committee Meeting Minutes
February 4, 2013
The Minutes of the Audit and Finance Committee Meeting held in the Blaney Room of
the Municipal Hall, 11995 Haney Place, Maple Ridge, BC on Monday ,February 4,
2013 at 8:00 a.m.
PRESENT
Committee Members Municipal Staff
Councillor Morden, Chair J. Rule, Chief Administrative Officer
Mayor Daykin P. Gill, General Manager, Corporate &Financial Services
Councillor Bell K. Swift, General Manager of Community Development,
Councillor Masse Parks and Recreation Services
C. Nolan, Manager of Accounting
Guests T. Thompson, Manager of Financial Planning
Councillor Hogarth
Councillor Ashlie
B. Cox (BDO Canada, LLP)
The meeting was called to order at 8:00 a.m.
1.Approval of agenda
MOVED by Councillor Bell and SECONDED by Mayor Daykin that the agenda be
approved as circulated.
CARRIED
2.Approval of minutes of July 16, 2012
MOVED by Mayor Daykin and SECONDED by Councillor Bell that the minutes of
July 16, 2012 be approved.
CARRIED
3.Community Grants –Draft Policy
The Manager of Accounting reviewed the report and the Community Grants
Policy. She provided background on the work undertaken to develop the policy
and spoke to the financial support process available to groups through the
District.
Audit & Finance Committee Meeting Minutes
February 4, 2013
Page 2
The General Manager of Corporate and Financial Services advised on grant
eligibility and advised that the work done on the policy ac knowledges that the
grant process should not be about competing with private industry.
MOVED by Mayor Daykin and SECONDED by Councillor Masse that the draft
Community Grants Policy be brought forward to Council with the inclusion of
feedback from the Audit and Finance Committee.
CARRIED
4.2012 Audit Update –Overview of 2012 audit by external auditor
Bill Cox, External Auditor, BDO Canada LLP reviewed the Auditor’s letter of
January 18, 2013 and outlined anticipated issues.
He highlighted the table pertaining to higher risk financial statement areas and
provided an explanation of why items may be considered high risk. He
reviewed the list and outlined procedures for each audit area. The au ditor
reviewed the remaining sections of the letter. He foc used on materiality and
the section on “Council’s Fraud Awareness” and upcoming changes in
government accounting.
There was discussion on best practices in terms of setting aside monies for
infrastructure replacement.
Adjournment –8:52 a.m.
____________________________________________
Councillor Morden, Chair
District of Maple Ridge
TO: DATE:
FILE NO:
FROM: ATTN:
SUBJECT
EXECUTIVE SUMMARY:
In the General Revenue fund, overall results were positive with a general revenue surplus of
$340.4K after transfers to reserves for committed projects and Council initiatives. Favorable
variances were driven by investment earnings , higher than anticipated gaming revenues, savings on
debt servicing costs for debt that was not accessed until October 2012, and careful cost
containment in all areas, offset by shortfalls in building permit revenues and costs in excess of
budget in some areas such as snow removal.
In the Sewer and Water Utilities many of the costs are driven by Metro Vancouver. When we set
rates for the utilities we need to consider not only our own planned expenses and infrastructure
requirements, but also those planned by the region. For a number of years Council has employed a
rate stabilization policy to smooth the impact of regional activities on our rates. This strategy results
in a gradual build up of the utilities accumulated surplus amounts to allow us to manage fluctuations
in rate increases from the region.
Reserve balances at the start of 2012 were $52.9 million. At the end of the year, reserve balances
increased by $8.2 million, resulting in overall balances of $61.1 million. District reserves are sound
and reflect a commitment to planning for a secure financial future for the residents of Maple Ridge.
RECOMMENDATION:
That the 2012 Consolidated Financial Statements be accepted by Council
DISCUSSION:
Municipal financial statements are prepared using the accounting standards and reporting model
prescribed by PSAB. In 2009 the reporting model changed, requiring the move from a modified
revenue and expenditure basis to a full accrual basis. This new model required the inclusion of
previously unreported non-financial assets such as tangible capital assets and the related
amortization expense. The work required to record and value these assets is ongoing and as better
information becomes available we make sure our records are updated to reflect that. In 2012 this
ongoing work resulted in retroactive adjustments to 2011 results , the effect of which was to
decrease accumulated surplus by $6.8 million to $839.6 million and decrease annual surplus by
$1.6 million to $33.9 million. It should be noted that the magnitude of these changes is less than
1% of accumulated surplus.
The 2012 Consolidated Financial Statements present the District's financial activities during the
year and the financial position as at December 31, 2012. Actual financial performance is compared
to the Financial Plan used to set property taxation rates, adopted in May of 2012, and to prior year
results. The transactions reported in the consolidated financial statements are those that took place
with outside parties; the effects of internal transactions, such as transfers between reserves, have
been eliminated.
BDO Canada LLP has conducted an audit of the 2012 Consolidated Financial Statements and,
pending Council's acceptance of the statements, will finalize their audit report. The audit report is
"unqualified" which is the highest form of assurance that an auditor can provide and indicates that
the statements are free of material misstatements and that readers can rely on them for decision-
making.
A discussion of the 2012 Consolidated Financial Statements follows :
Statement of Financial Position
This is the public sector version of a balance sheet. One of the key indicators that appears on this
statement is our Net Financial Position. Net Financial Position is calculated by subtracting all of our
liabilities from our financial assets and provides an indication of the extent to which revenues that
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will be collected in the future are needed to satisfy the liabilities that exist today. It is one piece of
information that can be used to begin to assess the degree of financial flexibility a municipality has.
At the end of 2012, the District's net financial assets had increased from $22.3 million to $32. 7
million. Changes in Net Financial Position are explained by the excess or deficiency of revenues over
expenditures. For example, if we recognize more revenue that we expend our net financial position
will increase, if the opposite situation occurs, then net financial position will decrease. Key factors
driving the increase in our net financial position are noted in the discussion about our Statement of
Operations. Another key indicator that appears on this statement is our accumulated surplus.
Accumulated surplus is the difference between all assets, both financial and non-financial, and all of
our liabilities. It represents the net economic resources available for service provision. It does not
represent cash that can be used to support operations, as the bulk of the number is comprised of
the physical assets that are used in service provision. At the end of 2012, the District's accumulated
surplus had increased from $839.6 million to $862.2 million with the increase coming from an $8.1
million increase in reserve balances; $12.6 million increase in tangible capital assets and a $1.8
million increase in accumulated surplus balances in the general revenue fund and the sewer and
water utilities.
Statement of Operations
The Statement of Operations is the public sector version of an income statement, reporting revenues
and expenses for the year. The difference between revenues and expenses is the key indicator on
this statement and is referred to as the annual surplus, if positive, or the annual deficit if negative.
The annual surplus , or deficit, indicates whether or not the revenues raised in a year were sufficient
to cover the year's costs. It's important to note that on the revenue side of this equation we report
all revenues earned in the year, including items such as grants received towards capital projects, but
on the expense side, we include only the annual cost of using our assets through amortization, not
the actual cash expended to acquire new or replacement assets. This timing difference results in an
annual surplus, but does not represent a cash surplus. In 2012, the District realized an annual
surplus of $22.6 million.
The following discusses actual results reported on the Statement of Operations for 2012:
Consolidated Revenues -Actual: $129.2 million; Budget: $155.4 million
Not all monies the District receives are recorded as revenues at the time of receipt. Monies such as
DCCs or Parkland Acquisition fees that are collected for specific capital works are recorded as a
liability when they are received. When we budget for capital expenditures that are funded from
these sources we also budget to record the revenue, which results in drawing down the liability. If
capital expenditures do not occur, no revenue is recognized and the funds remain on hand, recorded
as a liability.
In 2012, consolidated revenues were below budget by $26.2 million. This is comprised of negative
variances from development revenues of $21 million and grants of $9 million, offset by favorable
variances from investment income and contributed assets in excess of financial plan estimates. As
noted in the previous paragraph, negative variance in development revenues and grants does not
represent a cash shortfall as the related expenditures did not occur.
Consolidated Expenses -Actual $106.6 million; Budget $117.5 million
Expenses are comprised of general operating expenses for goods and services, labour, debt
servicing and amortization of our tangible capital assets. The actual cash expended to invest in
replacement or acquisition of assets is not reflected on this statement.
In 2012, consolidated expenses were below budget by $10.9 million. Key items contributing to this
positive variance include $422K in interest cost savings associated with planned debt financing that
was not entered into until October, $4.3 million in projects scheduled for 2012 that will proceed in
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2013 and overall cost containment, approximately $5 million in capital related projects, $1.5 million
in labour and succession planning costs, and $1 million from the RCMP contract.
Statement of Change in Net Financial Assets
The change in Net Financial Position in a year is explained by the excess or deficiency of revenues
over expenditures; if we recognize more revenues than we expend, then net financial position will
increase; if less, then it will decrease. This statement starts with the annual surplus and then factors
in the expenditures associated with non-financial assets such as the acquisition of tangible capital
assets and land bank properties. As noted above, the District's financial position increased by $10.4
million to $32. 7 million,
Statement of cash Flow
The Statement of Cash Flow explains the change in the balance of cash and temporary investments
for the year. It shows the impact the various types of transactions have on the balance. For
example, the statement indicates that $21.3 million was generated from operating activities and
that $14.5 million was used for capital activities.
Segment Report
The Segment Report augments the information found on the Consolidated Statement of Operations.
The information is laid out in the same fashion, but provides a finer level of detail. Municipal
services have been segmented by grouping activities by function, as directed by PSAB. For example,
protection of the public is achieved by activities such as bylaw enforcement and inspection services
in addition to police and fire fighting services so all of these activities are reported as part of the
Protective Services segment. Revenues that are directly related to the costs of a function have been
reported in each segment, this includes revenues related to capital investment, such as grants that
are recognized in full when earned. Expenses are broken down into the categories of Goods and
Services, Labour, Debt Servicing, and Amortization. Amortization represents the annual cost of using
our assets in service provision, so while the revenue for a particular asset is recognized at the outset
of an assets life, the expense of using that same asset will be recognized over time.
The segment report allows us to see how each segment contributes to the annual surplus before
considering allocations of taxes and other municipal resources. As described earlier, annual surplus
is the difference between annual revenues and annual expenses.
The following table shows the Municipal departments included in each segment.
Human Resources
Clerks
Administration
Finance
Purchasing
Information Svc
Legislative Svc
Economic Dev
Communications
P1 otect1 v e Svc
Police
Fire
Bylaws
Inspection Svc
Emergency Svc
Reporting Segments
Rec1 ec1t101 1
Parks
Leisure Svc
Youth Svc
Arts
Library
Pl c111 11111g : PL1l)l1c:
Hc ci ltll & Otl w1
Planning
Recycling
Cemetery
Social Planning
Ti clllSl)O I tcltlOl l
Engineering
Operations
Drainage
Roads
■■
Water Sewer
The above discussion focuses on the Consolidated Financial Statements, and as noted consists of
transactions with outside parties, internal transactions, such as transfers, have been eliminated. It
is also useful to look at some of the elements of the consolidated statements in isolation. The
following discussion touches on the general revenue fund, the utilities and the reserves. While the
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statements don't show each element in isolation, aggregated information is shown on Schedule 1 to
the Consolidated Financial Statements.
General Revenue
It's important to look at the General Revenue Fund in isolation, as many of the activities discussed
during business planning are held in this area, and, to a large extent, the transactions that take
place in this fund drive property taxation. As noted above, the information in the statements does
not drill down to this level of detail, so while information is included in Schedule 1, it is part of the
aggregated information about General Revenue and the Utilities.
Council received a detailed report about the General Revenue Fund on March 18, 2013, noting that
overall 2012 General Revenue results were positive, and after providing for various projects and
initiatives identified for 2012 that will proceed in 2013, we were left with a favorable variance to
budget of $340.4K. General Revenue Accumulated Surplus increased to $6.09 million, from $5.75
million in 2011.
Utilities
The Sewer and Water utilities are self-funded business units that manage the collection and
distribution of water and liquid waste as well as the related infrastructure. A large portion of the
costs in the utilities are driven by the Regional District and Council has used a rate stabilization
policy for a number of years to smooth the impact of regional cost increases on our rate payers.
Through this approach, we deliberately built the utility surplus amounts over time, so that when
larger regional rate increases took effect we have the capacity to manage those increases. The
planned 2013 rate increases are 5.5% for water and 4.6% for sewer which is less than previously
planned.
The accumulated surplus amounts in both utilities increased in 2012 , mainly due to work projects
that will proceed in 2013.
The following shows the accumulated surplus amounts in each of the utilities.
Reserves
2012 2011
Sewer Utility 3,139,776 2,508,311
Water Utility 4,004,157 3,176,352
District reserves are an important financial planning tool, providing a mechanism to build capacity
over time to undertake strategic projects. They are reviewed on a regular basis to assess their
adequacy, with adjustments being made when capacity permits.
The term "reserves" is often applied to both our reserve funds and reserve accounts but there are
important distinctions between the two resources. Reserve Funds are statutory, meaning they are
established by bylaw. Once monies are placed into a reserve fund, they can only be used for the
purposes noted in the establishing bylaw. In contrast, Reserve Accounts are discretionary
appropriations of surplus, established to meet business needs. They can be established or
dissolved, as Council directs, to ensure that identified business needs are met and risks are
managed appropriately.
At the beginning of 2012, the District had $52.9 million in total reserves. The Financial Plan
contemplated these resources being drawn down by $15 million, primarily to fund capital projects. At
the end of 2012, the District reserves total $61.07 million ($29.9 million in reserve funds & $31.17
million in reserve accounts) an overall increase of $8.17 million. This variance is the combined
result of planned capital investment that will occur in the future, and end of year provisions for
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various operating projects and initiatives. A separate report provides detailed information on our
reserves.
CONCLUSIONS:
The District's reserves are sound and long-term financial plans reflect the ability of the District to
meet its future obligations. Overall results for 2012 are positive. We ended the year with an annual
surplus of $22.6 million , Net Financial Assets of $32.7 million and Accumulated Surplus of $862.2
million.
"Original signed by Catherine Nolan
Prepared by: Catherine Nolan , CGA
Manager of Accounting
"Original signed by Paul Gill
Approved by: Paul Gill, CGA
GM: Corporate and Financial Services
"Original signed by Jim Rule
Concurrence: J.L. (Jim) Rule
Chief Administrative Officer
Page 6 of 6
Page 1 of 7
District of Maple Ridge
TO:His Worship Mayor Ernie Daykin DATE:April 22, 2012
and Members of Council FILE NO:
FROM:Chief Administrative Officer ATTN:Committee of the Whole
SUBJECT:Reserves
EXECUTIVE SUMMARY:
This report is intended to provide an overview of the District’s financial resources. They are
grouped into four categories:
1.Accumulated surplus (revenue funds). This is the cumulative balance of excess revenues
over expenses and net transfers to reserves.
2.Reserve funds.These allocations are established by bylaw to hold financial assets for
specific purposes, typically capital.
3.Reserve accounts.These allocations represent discretionary appropriations of surplus
established to meet business needs as directed by Council.
4.Restricted revenues.These are monies collected from others for which we are obligated to
provide specific services.
The amounts on Schedule “A” detail the balances in each of these categories. At the end of 2012,
the balance in the accumulated surplus (revenue funds),reserve funds and reserve accounts
totalled $74.3 million and we had a further $45.4 million in restricted revenues.
RECOMMENDATION:
None required.For information only.
DISCUSSION:
The District of Maple Ridge has financial resources that have been summarized on the attached
Schedule “A”. Some of these resources are subject to legislation in the Community Charter while
others are not.As part of our financial planning process,detailed projections are done for key
reserves to ensure that the available resources can support the planned activities.
The transactions between our reserves, funds and accounts, are what we refer to as transfers.
Transfers are internal transactions that do not result in revenues or expenses. For example,the
Capital Works Reserves received 1% of general taxation, fixed transfer amounts of approximately
$200,000, and 75% of the proceeds from any land sales.Generally, this reserve builds funds for
large projects and is then drawn down.As another example, each year, we contribute money into
the Equipment Replacement Reserve so that we can replace equipment when needed. In 2012,a
transfer of $2.274 million was made to this reserve.These are both examples of “transfers to”
transactions.We also have “transfers from”transactions.For example, in 2012,some of our fleet
vehicles were replaced and the identified funding source was the Equipment Replacement
Reserve,so monies were transferred from the reserve for those purchases.
The District’s financial resources can be categorized as follows:
MAPLE RIDGE
Br itish Colu mb ia
Deep Roots
Greater Heights
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1.Accumulated Surplus (Revenue Funds)
The District’s business is comprised of three major cost centres: General Revenue, the Sewer
Utility and the Water Utility. The excess of revenues over expenses and net transfers to reserves
for each cost centre flows to the accumulated surplus balance. The accumulated surplus
balance in the revenue funds at the end of 2012 is $13.2 million. Of this amount,$7.1 million
relates to the sewer and water utilities and,as per Council’s rate stabilization policy,these
balances are used to mitigate the impact of regional rate increases to our rate payers.The
general revenue fund has an accumulated surplus amount of $6.1 million and can be used to
provide funding for extraordinary one-time items in line with Council’s financial sustainability
policies.
2.Reserve Funds
Reserve funds are established by bylaw and hold financial assets for specific purposes,
typically for capital investment. Once a reserve fund has been established, the funds in it can
only be used for the purposes noted in the establishing bylaw and any use of the funds must be
authorized in the Financial Plan Bylaw.
The following provides a brief summary of the District’s reserve funds:
i).Local Improvement
The balance in this fund is comprised primarily of monies returned to us by the
Municipal Finance Authority (MFA) when debt was retired for which sinking fund
monies had been held. These funds are intended to be used for local capital
improvement projects where a community benefit is derived and a municipal
contribution is deemed necessary.
ii).Equipment Replacement
Each year we transfer monies to this reserve in recognition of the fact that the
equipment in use today will need to be replaced in the future.This reserve provides
for the replacement of our municipal fleet, fire department vehicles as well as our
computers and photocopiers.
iii).Capital Works
The capital works reserve provides for future capital investment. Each year 1% of
general taxation is credited to the reserve along with fixed transfer amounts of
approximately $200,000 as well as 75% of the proceeds from any land sales.Our
practice is to retain a minimum balance of 10% of the prior year’s taxation in order to
have some funds available in the event of an emergency.In 2012,$1.3 million of
debt proceeds were transferred to this reserve to repay it for internal financing for
the cemetery expansion.
iv).Fire Department Capital
Each year 2% of general taxation is transferred to the reserve to build the financial
capacity required to respond to increasing the fire protection capacity needed as the
community grows.The balance in this reserve was drawn down between 2007 and
2010 to fund the construction and renovation of Fire Hall #1.Council has authorized
the use of debt financing for the construction of Fire Hall #4 in the future. This
reserve will provide the funding for that debt.
---
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v).Sanitary Sewer
This fund resulted from surpluses on sanitary sewer projects in previous years and is
available for use on current and future sanitary sewer projects.
vi).Land
This reserve receives 25% of the proceeds from land sales and is used for land
acquisitions.In 2009 the fund received an infusion of $1.5 million as part of the year-
end process to provide funding for land acquisitions of importance for Council where
there is no other identifiable source of funding.In 2010, Council was able to use this
reserve to assist with the purchase of strategic lands in the town centre.
3.Reserve Accounts
Reserve accounts are appropriations of surplus, established to meet business needs. They can
be established or dissolved as Council directs to ensure that identified business needs are met
and risks are managed appropriately.
The following provides a brief summary of the District’s reserve accounts:
i).Committed Projects (capital and operating)
These represent items approved by Council in prior years that were not completed,
but are still deemed necessary. A number of the capital projects that will receive
funding from this reserve are reliant on third party funding and/or awaiting the
outcome of property acquisition negotiations. The amounts in these reserves have
increased by $2.7 million from the 2011 balance.The bulk of this increase relates to
Council approved items provided for as part of 2012 year-end processes:Capital
projects ($945K)Town Centre Investment Incentive Program ($1.25 Million) and a
provision for a future incentive program ($550K).
ii).Self Insurance
In order to control insurance premium costs we have relatively high deductibles and
have chosen to self-insure many events. This reserve account provides funding for
insurance deductibles and for self-insured claims.
iii).Police Services
This reserve was established a number of years ago to fund one -time police services
initiatives.As per policy, at least 50%of RCMP contract savings are transferred into
this reserve each year.Some of the projects funded from this reserve are the result
of changing standards mandated by the RCMP, for example the c ell retrofit
undertaken in 2010, or initiatives such as the pilot Community Safety Officer
program.In 2013, should RCMP members be awarded a retroactive settlement, this
reserve will provide the District with the capacity to meet that settlement.
iv).Core Reserve
This reserve was established at the outset of project to construct the new downtown
facilities to provide a mechanism to build our capacity to finance the project over
time while smoothing the impact to taxpayers.It assists in managing the cash flows
related to the commercial component of the project and is also available to assist
with capital improvements.In 2010, funds from this reserve we used to assist with
the acquisition of strategic lands in the downtown area.
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v).Recycling Reserve
The recycling reserve retains the balance of recycling levies in excess of contract
costs as well as the District’s share of the Recycling Society’s profits. The reserve is
used to provide funding for recycling related projects, such as studies or equipment
purchases, or to help offset losses incurred by the Society in the event of falling
commodity values.
vi).Building Inspections
This account is designed to allow us to deal with the impact of an unexpected
reduction in building permit revenues.The amount of revenue realized from building
permits varies from year to year in relation to development activity. In years when
revenues exceed budgeted targets, a portion of the favourable variance is transferred
to this reserve. In years when building permits revenues fall short of financial plan
targets, we can mitigate the impact of that shortfall by transferring monies from the
reserve, providing us with some capacity to sustain service levels in the short-term.
In 2011, we transferred $263,885 from this reserve to offset a shortfall in building
permit revenues. In 2012, we were able to manage a shortfall in building permit
revenues without drawing from the reserve.
vii).Gravel
Soil removal fees are credited to this account each year. It is intended to assist with
minor infrastructure repair that may be required as a result of soil removal activities.
In 2011,this reserve provided the funding needed to resurface a portion of Dewdney
Trunk Road that sees a lot of traffic from gravel trucks.
viii).Facility Maintenance
Not all facility maintenance is required on an annual basis and this reserve was
established to smooth the impact of annual fluctuations in required maintenance
costs.
ix).Snow Removal
This reserve in intended to ensure that the District has the financial capacity to
respond to costs associated with higher than normal snowfall without the need to
curtail other services. Our annual budget for snow removal is approximately
$230,000, with actual costs fluctuating in relation to the severity of weather
experienced; in recent years it has not been unusual to see costs in excess of budget.
The reserve was established in 1999 with a balance of $200,000; in each of 2007
and 2008, in recognition of inflationary pressures and the increased costs associated
with changing weather patterns the balance in the reserve was increased to a
balance of $700,000.In 2011, costs exceeded budgeted amounts by $13,985.
This amount was transferred from the reserve to offset the impact to the bottom line,
no similar draw down was required in 2012.
x).Cemetery Maintenance
Any excess of revenues over expenses in the cemetery cost centre is transferred to
this reserve at year-end and is used as a funding source to maintain the cemetery
function, both the facility and the related technology.In 2011, this reserve provided
some of the funding needed to install a columbarium at the cemetery.The perpetual
care fund is a separate entity and is managed as a trust.
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xi).Infrastructure Sustainability
In 2007,the first infrastructure sustainability account was established in recognition
of the need to build the capacity to maintain our growing infrastructure, the
replacement cost of which exceeds $1.3 billion. The level of annual maintenance
and rehabilitation spending required to maintain it is estimated at over $40 million,
our actual expenditures are less than a quarter of this amount. Starting in 2008,we
began to dedicate 1% of taxation to address the gap between required and actual
spending.
xii).Critical Building Infrastructure
This reserve was established in 2006 in recognition of the need to provide for
emergency or irregular items associated with facility maintenance. Facilities, such as
the RCMP building, Municipal Hall and the Leisure Centre were constructed at
approximately the same time;consequently,some of the building infrastructure, such
as the boilers,will likely need to be replaced at similar times. Such infrastructure is
costly to replace and our existing lifecycle budget does not have the capacity to
provide the necessary funding. This reserve is intended to provide the necessary
capacity without having to defer other planned facility infrastructure maintenance.
xiii).Infrastructure Grants Contribution
This reserve was established in 2008 to provide the capacity to take advantage of
infrastructure grant programs that typically require a municipality to provide matching
funds.In 2010, as senior levels of government began winding down the current
round of infrastructure grant programs, Council authorized using some of the monies
in this reserve to assist in the acquisition of strategic lands in the downtown area.
The federal government has recently announced a renewal of infrastructure funding
programs so there may be an opportunity use this reserve to leverage funding
opportunities in the future.
xiv).Gaming Revenues
In 2010, Council entered into an agreement with the Province, resulting in the District
receiving a portion of the net revenues from provincial casino gaming at the Maple
Ridge community gaming centre. Monies received under this agreement must be
used to benefit the community. In June of 2011,Council adopted a policy framework
to guide the use of gaming monies in the community. (Policy 5.55)Under this policy,
gaming revenues will be targeted to fund non-recurring items, in particular, capital
improvements that cannot be funded through development charges.
The resources listed above represent the District’s financial assets and do not include non -
financial assets, such as our Silver Valley land holdings, a strategic non-renewable resource
available to Council.
4.Restricted Revenues
Restricted revenues are monies collected from others for which we are obligated to provide
specific works. Due to the restrictions on their use, these monies are reported as a liability
until the specific works are undertaken.
The following provides an overview of the District’s restricted revenues:
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i).Development Cost Charges
These funds are collected from the development community and are used to assist in
funding the infrastructure requirements resulting from development.DCC’s are the
largest source of funding for the District’s capital program with planned investment in
infrastructure exceeding $50 million between 2013 and 2017.
ii).Parkland Acquisition (ESA)
The Parkland Acquisition Reserve consists of monies paid by the development
community that are used to acquire environmentally sensitive areas, such as land
required for watercourse protection. Land acquisitions along the North Alouette and
adjacent to Davison’s Pool exhausted this funding source in 2007.Subsequent
collections have started to rebuild capacity in this fund.
iii).Downtown Parking Facilities
These funds are collected in lieu of providing parking spaces and are to be used for the
provision of parking in the downtown area.
iv).Developer Specified Projects
Charges collected from the development community to assist with the provision of
certain infrastructure works.
CONCLUSIONS:
The above information and attached schedule are intended to provide an overview of the District’s
financial resources. At the end of 2012 our accumulated surplus (revenue funds), reserve fund
and reserve accounts total $74.3 million and we have a further $45.4 million in restricted
revenues. Much of this amount is held for capital investment in the community. Not included in
these amounts are non-financial resources, such as our land holdings in Silver Valley.
The District has a sound business planning framework which includes a series of financial
sustainability policies. The funds, accounts and revenues outlined in this report were established
over many years and assist Council in managing the municipality’s finances.
”Original signed by Catherine Nolan”_____
Prepared by:Catherine Nolan, CGA
Manager of Accounting
“Original signed by Paul Gill”__________
Approved by:Paul Gill, CGA
GM: Corporate and Financial Services
“Original signed by Jim Rule”__________
Concurrence:J.L. (Jim) Rule
Chief Administrative Officer
Page 7 of 7
2012 2011 2010 2009 2008
ACCUMULATED SURPLUS (REVENUE FUNDS)
General Revenue 6,091,162$5,750,719$5,156,074$4,985,070$4,448,718$
Sewer Revenue 3,139,776 2,508,311 2,515,823 3,059,571 2,963,911 Note 15
Water Revenue 4,004,157 3,176,352 3,638,446 3,383,195 3,712,928
13,235,095 11,435,382 11,310,343 11,427,836 11,125,557
RESERVE FUNDS
Local Improvement 2,546,836 2,410,449 2,196,846 2,145,754 2,077,103
Equipment Replacement 10,201,905 8,739,798 7,459,146 6,937,477 7,329,490
Capital Works 11,534,975 9,597,847 8,362,412 8,404,633 8,686,373
Fire Department Capital Acquisition 3,837,795 2,636,745 1,473,146 1,807,185 6,062,996
Sanitary Sewer 1,549,532 1,525,588 1,552,189 1,524,971 1,442,312
Land 237,793 234,121 231,528 1,919,946 406,056
29,908,836 25,144,548 21,275,267 22,739,966 26,004,330
RESERVE ACCOUNTS
Specific projects - capital 3,940,405 4,279,626 4,064,496 4,408,631 4,239,744
Specific projects - operating 7,904,720 4,840,167 3,189,906 2,253,608 3,124,747
Self insurance 853,830 921,367 956,241 914,702 938,349
Police services 3,589,380 3,209,740 2,521,930 2,618,915 2,259,704
Core development 1,337,430 904,121 592,016 1,116,807 1,129,505
Recycling 1,519,591 1,504,858 1,583,709 1,634,271 1,475,367
Community development 1,296 1,274 1,252 1,218 1,176 Schedule 6
Building inspections 1,604,768 1,579,971 1,810,750 1,761,704 1,704,522
Gravel extraction 487,715 478,835 563,875 419,417 549,384
Neighbourhood improvements -51,477 50,523 60,697 58,688
Facility maintenance 750,376 479,668 317,512 515,408 360,508
Snow removal 686,015 686,015 700,000 700,000 700,000
Youth and arts centre ---3,708 8,535
Cemetery maintenance 125,198 109,068 189,608 151,980 109,457
Infrastructure Sustainability (town centre bldgs)104,860 38,926 -- 295,385
Infrastructure Sustainability (road network)1,013,438 882,417 1,106,822 1,225,888 419,417
Infrastructure Sustainability (drainage)249,861 201,882 493,634 40,282 -
Critical infrastructure reserve 203,191 200,052 196,759 172,072 368,625
Infrastructure grants contribution 9,383 9,383 271,979 1,200,000 1,200,000
Gaming revenues 1,043,811 704,430 125,600
25,425,268 21,083,277 18,736,612 19,199,308 18,943,113
WATER AND SEWER RESERVE ACCOUNTS
Self Insurance - Sewer 115,373 108,873 102,373 95,873 36,184
Specific projects - Sewer 2,557,611 2,917,913 3,109,415 2,160,492 1,738,057
Self Insurance - Water 95,528 89,028 82,528 99,528 93,028
Specific projects - water 2,973,941 3,563,856 2,201,777 1,722,636 1,088,066
5,742,453 6,679,670 5,496,093 4,078,529 2,955,335
TOTAL RESERVES 61,076,557$52,907,495$45,507,972$46,017,803$47,902,778$
TOTAL RESERVES AND REVENUE ACCUMULATED SURPLUS 74,311,652$64,342,877$56,818,315$57,445,639$59,028,335$
RESTRICTED REVENUES
Development cost charges 39,541,745$35,660,974$32,211,726$31,644,928$34,330,309$
Parkland acquistion 559,473 295,082 162,355 --
Downtown parking facilities 166,770 164,193 161,244 144,515 139,734 Note 11
Developer specified projects 5,089,215 4,922,373 4,641,174 4,367,763 4,129,236
45,357,203$41,042,622$37,176,499$36,157,206$38,599,279$
Schedule "A"
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