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Home My WebLink AboutAFC 2015-03-16 Agenda.pdfCityCityCityCity of Maple Ridgeof Maple Ridgeof Maple Ridgeof Maple Ridge Audit & Finance CommitteeAudit & Finance CommitteeAudit & Finance CommitteeAudit & Finance Committee March 16March 16March 16March 16, 2015, 2015, 2015, 2015 8888:00 A:00 A:00 A:00 AMMMM Blaney RoomBlaney RoomBlaney RoomBlaney Room ChairpersonChairpersonChairpersonChairperson (Acting)(Acting)(Acting)(Acting):::: Mayor Read Committee Members:Committee Members:Committee Members:Committee Members: Councillors: C. Bell; R. Masse; T. Shymkiw Staff:Staff:Staff: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 Manager of Financial Planning T. Thompson Manager Sustainability & Corporate Planning L. Benson Recording Secretary:Recording Secretary:Recording Secretary:Recording Secretary: Amanda Gaunt AGENDAAGENDAAGENDAAGENDA 1.1.1.1. Approval ofApproval ofApproval ofApproval of aaaagendagendagendagenda 2.2.2.2. Approval of Approval of Approval of Approval of mmmminutes of inutes of inutes of inutes of February 2, February 2, February 2, February 2, 2015201520152015 3.3.3.3. Preliminary Year End Update (General Revenue)Preliminary Year End Update (General Revenue)Preliminary Year End Update (General Revenue)Preliminary Year End Update (General Revenue) 4.4.4.4. Fiscal Impact ModelFiscal Impact ModelFiscal Impact ModelFiscal Impact Model (Presentation) 5.5.5.5. Financial Overview ReportFinancial Overview ReportFinancial Overview ReportFinancial Overview Report (Report to be distributed separately) 6.6.6.6. Next MeetingNext MeetingNext MeetingNext Meeting • May 4, 2015 “original signed by Catherine Nolan” _______________________________ Agenda submitted by: C. Nolan, CPA, CGA Manager of Accounting CityCityCityCity of Maple Ridgeof Maple Ridgeof Maple Ridgeof Maple Ridge Audit & Finance CommitteeAudit & Finance CommitteeAudit & Finance CommitteeAudit & Finance Committee Meeting MinutesMeeting MinutesMeeting MinutesMeeting Minutes February 2, 2015 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 2, 2015 at 9:00 a.m. PRESENTPRESENTPRESENTPRESENT Committee MembersCommittee MembersCommittee MembersCommittee Members Municipal StaffMunicipal StaffMunicipal StaffMunicipal Staff J. Rule, Chief Administrative Officer Mayor Read P. Gill, General Manager, Corporate & Financial Services Councillor Bell F. Quinn, General Manager of Public Works and Development Councillor Masse, Chair K. Swift, General Manager of Community Development, Parks Councillor Shymkiw and Recreation Services C. Nolan, Manager of Accounting GUESTSGUESTSGUESTSGUESTS T. Thompson, Manager of Financial Planning Councillor Speirs L. Benson, Manager of Sustainability and Corporate B. Cox, BDO (External Planning Auditor) A. Gaunt, Confidential Secretary The meeting was called to order at 9:03 a.m. 1. Approval of agendaApproval of agendaApproval of agendaApproval of agenda MOVEDMOVEDMOVEDMOVED by Councillor Shymkiw and SECONDEDSECONDEDSECONDEDSECONDED by Mayor Read that the agenda be approved as circulated CARRIEDCARRIEDCARRIEDCARRIED 2. Approval of minutes of January 19, 2015Approval of minutes of January 19, 2015Approval of minutes of January 19, 2015Approval of minutes of January 19, 2015 MOVEDMOVEDMOVEDMOVED by Mayor Read and SECONDEDSECONDEDSECONDEDSECONDED by Councillor Shymkiw that the minutes of January 19, 2014 be approved. CARRIEDCARRIEDCARRIEDCARRIED Audit & Finance Committee Meeting Minutes February 2, 2015 Page 2 3. Adopt Amended Terms of ReferenceAdopt Amended Terms of ReferenceAdopt Amended Terms of ReferenceAdopt Amended Terms of Reference MOVEDMOVEDMOVEDMOVED by Mayor Read and SECONDEDSECONDEDSECONDEDSECONDED by Councillor Bell that the Audit & Finance Committee Terms of Reference be forwarded to the next appropriate Council Meeting for adoption. CARRIEDCARRIEDCARRIEDCARRIED 4. 2014 Audit Update2014 Audit Update2014 Audit Update2014 Audit Update Overview of 2014 audit by external auditor The auditor reviewed the planning letter dated January 21, 2015 titled “Audit of the Consolidated Financial Statements of the City of Maple Ridge for the year ended December 31, 2014.” 5. Other businessOther businessOther businessOther business Councillor Bell recommended that a resolution requesting an increase of monies allocated to cities by the Provincial Government be forwarded to the Lower Mainland Local Government Association. 6. Next MeetingNext MeetingNext MeetingNext Meeting March 16, 2015 AdjAdjAdjAdjournmentournmentournmentournment –––– 9:53 a.m.9:53 a.m.9:53 a.m.9:53 a.m. ____________________________________________ B. Masse, Chair 1 of 4 CityCityCityCity of Maple Ridgeof Maple Ridgeof Maple Ridgeof Maple Ridge TO:TO:TO:TO: Her Worship Mayor Nicole Read MEETINGMEETINGMEETINGMEETING DATE:DATE:DATE:DATE: 16-March-2015 and Members of Council FILE NO:FILE NO:FILE NO:FILE NO: FROM:FROM:FROM:FROM: Chief Administrative Officer MEETING:MEETING:MEETING:MEETING: Audit & Finance SUBJECTSUBJECTSUBJECTSUBJECT: Preliminary 2014 Year-End Update (General Revenue Fund) EXECUTIVE SUMMARY:EXECUTIVE SUMMARY:EXECUTIVE SUMMARY:EXECUTIVE SUMMARY: The 2014 Consolidated Financial Statements are being drafted and will be finalized following the completion of the annual audit. The purpose of this report is to provide a preliminary update on results in the General Revenue Fund. Overall, results for 2014 were positive. Revenues for the year were $134.6 million; expenses and transfers to reserves totaled $134 million. Preliminary results indicate we will have a General Revenue annual surplus of $627,607 after providing for projects planned for 2014 that will proceed in 2015 and various Council identified priorities. Key variances contributing to the overall positive results include investment returns and building permit revenues in excess of financial plan targets. On the expense side, we realized savings from the RCMP contract and careful cost containment. Included in expenses are the retroactive effects of the contract settlement with CUPE. A detailed review of the Consolidated Financial Statements will be provided in April once the statements are finalized. RECOMMENDATION(S):RECOMMENDATION(S):RECOMMENDATION(S):RECOMMENDATION(S): None required. For information only.None required. For information only.None required. For information only.None required. For information only. DISCUSSION: DISCUSSION: DISCUSSION: DISCUSSION: The Financial PlanFinancial PlanFinancial PlanFinancial Plan (budget) and the Financial Statements Financial Statements Financial Statements Financial Statements are two of the most important documents produced by a municipality in a year. There are fundamental differences between the two documents that are important to understand and the following provides an overview of each. The Financial Plan Financial Plan Financial Plan Financial Plan sets out all the planned uses of funds in a year and identifies the sources of those funds. Planned usesusesusesuses include expenditures for our day-to-day operating activities, transfers to reserves and investments in the infrastructure we use to provide services to the residents of Maple Ridge. Planned sourcessourcessourcessources include property taxes, revenues from user fees, grants from other levels of government, investment income and transfers from reserves. The Community Charter requires that the total of proposed expenditures and transfers to reserves must not exceed the total of proposed revenues and transfers from reserves. The result is a “balanced budget” where planned inflows of funding are equal to the planned outflows. In simple terms, the financial plan looks forward to the next five years and answers the question: “what are we going to do over the next five years, and how are we going to pay for it?” I ~■ mapleridge.ca 2 of 4 The Financial StatementsFinancial StatementsFinancial StatementsFinancial Statements compare our actual financial performance in a year against the activities in the Financial Plan. The Community Charter requires our financial statements to be prepared in accordance with generally accepted accounting principles for local governments. In Canada, those accounting principles are set by the Public Sector Accounting Board. The goal of the financial statements is to look back at the year just ended and answer the question: “what was our financial condition at the end of the year?” The different objectives of the Financial Plan and the Financial Statements can easily result in confusion when trying to compare the two documents. For example, the Financial Plan treats transfers to and from reserves as transactions, while the Financial Statements, at the consolidated level, ignore transfers as they take place within the corporate entity. It’s important to keep those differing objectives in mind as we begin to look at financial results for 2014. General Revenue UpdateGeneral Revenue UpdateGeneral Revenue UpdateGeneral Revenue Update Local government operations are extremely diverse; our business includes everything from the provision of water, maintaining the infrastructure we use to provide services which includes activities such as repaving our roads, developing the plans that will guide our community’s growth, fire protection services and providing swimming lessons. All of these business streams have different resource demands and while some are supported by day-to-day operations, others require long-term planning to ensure we are positioned to meet the demands of a growing community and that we build our capacity to maintain an ever growing inventory of infrastructure. Tools, such as our reserves, the General Revenue Fund and the Sewer and Water Utilities help us manage both the short and long-term demands of our business. This report will focus on operations in the General Revenue Fund as this is the area where Council has the most discretion and it is the planned transactions in this fund that drive property tax rates. Overall, 2014 results are positive and are shown in Appendix 1. Revenues for the year totaled $134.6 million; expenses and transfers to reserves totaled $134 million. Included in expenses are the retroactive effects of the contract settlement with CUPE. While these results are preliminary, they indicate we will end the year with a general revenue surplus of $627,607 after providing for various items noted in the following section. Some key favorable variances to budget were realized from the following sources: Revenues:Revenues:Revenues:Revenues: Investment income $500,000 Building permits 300,000 Recreation user fees (net of shortfall in Leisure Centre) 500,000 Expenses:Expenses:Expenses:Expenses: RCMP contract $2,230,000 Plans and studies 820,000 Town Centre Investment Incentive Program 905,700 Facility maintenance / infrastructure costs 250,000 Protective services 403,000 Minor capital 1,432,760 Many of the savings on the expense side are transferred to reserves at the end of the year as they relate to projects in progress. YearYearYearYear----end Provisionsend Provisionsend Provisionsend Provisions Council has established various reserves to help manage fluctuations in certain key revenue and expense accounts. One of these reserves is the Police Services Reserve, which was established to assist with various policing issues. Council has an established practice of transferring a portion of savings from the RCMP contract to the reserve each year. This practice has allowed us to manage the 3 of 4 cost impact of work needed when RCMP building standards change or when retroactive provisions are anticipated. In 2014 100% of contract savings totaling $2.23 million were transferred to the reserve. This positive variance is the result of vacancies in excess of previous experience. As well, a number of items related to the RCMP contract have not been finalized. The recently released report on RCMP pay also implies that increased costs may be on the horizon. The Police Services Reserve will assist us in managing these obligations. The Building Inspection Reserve is another example of a reserve established to help the city manage the impact of fluctuations in a particular revenue stream, in this case building permit revenues. In years where building permit revenues miss financial plan targets we can mitigate the impact of that shortfall by transferring monies from the reserve in order to sustain service levels in the short term. In years where revenues exceed financial plan targets we can transfer a portion of the favorable revenues to the reserve in order to maintain a balance of approximately one year of revenue. For the past number of years the city has experienced some volatility in building permit revenues with revenues falling short of financial plan targets in two of the past five years. In 2014, revenues exceeded financial plan targets by approximately $300,000. This amount was transferred to the Building Inspection Reserve. This will assist us in funding the additional positons authorized for Public Works and Development Services As part of our year-end processes for 2014 we looked to Council identified priorities that required funding support. The following items have been provided for: Economic Development Restructure $165,000 Mayor’s Task Forces 125,000 Pedestrian Safety 350,000 Branding 55,000 Council Chamber Furnishings 17,500 $712,500 CONCLUSIONS:CONCLUSIONS:CONCLUSIONS:CONCLUSIONS: Final results for 2014 will be available following the completion of the audit. In the interim this report provided an overview of fiscal performance in the General Revenue Fund for the year. Preliminary results indicate the General Revenue accumulated surplus will increase by $627,607 after providing for some key initiatives as part of the year-end process. “Original signed by Catherine Nolan” _______________________________________________ Prepared by: Catherine Nolan, CPA, CGA Manager of Accounting “Original signed by Paul Gill” _______________________________________________ Approved by: Paul Gill, CPA, CGA GM, Corporate and Financial Services 4 of 4 Appendix AAppendix AAppendix AAppendix A Actual RevenuesRevenuesRevenuesRevenues Taxes and grants in lieu 70,359,716- Fees & Other Charges 16,534,126- Investment income 1,636,250- Proceeds and Gains 1,471- Government Transfers 1,568,536- Gaming revenues 1,056,051- Equipment 3,233,939- DCC & Other Contributed Revenue 582,743- Collections for others 39,642,247- Total RevenueTotal RevenueTotal RevenueTotal Revenue 134,615,079134,615,079134,615,079134,615,079- - - - Expenses (excluding amortization)Expenses (excluding amortization)Expenses (excluding amortization)Expenses (excluding amortization) General Government 12,999,752 Protective Services 30,880,209 Transportation 9,001,343 Planning; Public Health & Other 5,374,045 Recreation 19,574,900 Principal Payments 2,673,389 Collections for Others 39,642,247 Total ExpensesTotal ExpensesTotal ExpensesTotal Expenses 120,145,885120,145,885120,145,885120,145,885 TransfersTransfersTransfersTransfers Transfers to/from own reserves 7,526,825 Transfers to reserve funds 4,239,495 Transfers to GCF (fund inventory change) 20,174- Transfers to Capital (Capital Program) 1,891,630 Interest transferred to reserve accounts 203,812 Net TransfersNet TransfersNet TransfersNet Transfers 13,841,58713,841,58713,841,58713,841,587 General Revenue Annual Surplus (Preliminary)General Revenue Annual Surplus (Preliminary)General Revenue Annual Surplus (Preliminary)General Revenue Annual Surplus (Preliminary) 627,607627,607627,607627,607- - - - General Revenue Accumulated Surplus - beginning of year 6,895,061- General Revenue Accumulated Surplus - end of yearGeneral Revenue Accumulated Surplus - end of yearGeneral Revenue Accumulated Surplus - end of yearGeneral Revenue Accumulated Surplus - end of year 7,522,6687,522,6687,522,6687,522,668- - - - General Revenue Fund Analysis General Revenue Fund Analysis General Revenue Fund Analysis General Revenue Fund Analysis For the year ended December 31, 2014