HomeMy WebLinkAboutFCS-12-102 - Reserve Fund PolicyStaff Report
ITCR Finance and Corporate Services Department
REPORT TO:
DATE OF MEETING:
SUBMITTED BY:
PREPARED BY:
WARD(S) INVOLVED:
DATE OF REPORT:
REPORT NO.:
SUBJECT:
RECOMMENDATION:
Finance and Corporate Services Committee
May 28, 2012
Dan Chapman, Deputy CAO
Ryan Hagey, Director of Financial Planning
All
May 17, 2012
FCS -12 -102
Reserve Fund Policy
www1itchenerca
THAT the City's existing reserve fund policies, as summarized in Appendix A, be repealed;
THAT the Reserve Fund policy as attached to report FCS -12 -102 be approved;
THAT the changes to reserve funds listed in Appendix B be approved,
AND FURTHER THAT the reserve funds listed in Appendix C, along with the associated
information sheets which provide details for each reserve fund, be approved.
BACKGROUND:
Under the authority of the Municipal Act, municipalities may establish reserve funds to set aside
funds in the present to be used for future purposes. Municipalities should strive to maintain an
appropriate level of reserve funds to ensure future liabilities can be met, capital assets are
properly maintained and sufficient financial flexibility exists to respond to economic cycles or
unanticipated financial requirements. Council is responsible for exercising discretion with
respect to the use of reserve funds, subject to the terms of Council policy as well as statutory
and legal requirements.
As part of the ongoing update to the City's long -term financial planning framework, a
comprehensive review of the City's reserve funds has been completed. The purpose of this
report is to summarize the findings of the review and introduce a new reserve fund policy and
several improvements to the City's reserve fund structure.
REPORT:
History of Kitchener's Reserve Funds
Reserve funds form a critical part of Kitchener's long -term financial planning framework and are
used:
• To segregate funds received or to be used for a specific purpose;
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• To provide rate stabilization in the face of variable and uncontrollable factors (e.g.
growth, interest rates, weather, economic downturns, changes in legislation);
• To provide financing for one -time or short term requirements without permanently
impacting the tax and enterprise rates;
• To avoid spikes in funding requirements for large capital projects, thereby reducing the
reliance on long -term debt; and
• To provide flexibility to manage debt levels within Council approved guidelines and
protect the City's financial position.
The City of Kitchener has maintained reserve funds for decades. While it is difficult to pinpoint
exactly when the first reserve fund was created, staff have located a reserve fund report that
dates back to October, 1987. At the time of that report, the City already had 25 reserve funds
with a total projected year end balance of over $30M. The report provided background on each
of the reserve funds, how funds were generated, how they were used, and provided a target
level for each reserve fund. Some highlights from the report include:
• No additional contribution was required to the working fund reserve fund;
• The equipment reserve fund was "grossly underfunded ", which led to holding on to
vehicles "longer than is desirable and thus, although capital expenditures were
minimized, operating costs were higher "; this led to a situation of "pay me now or pay me
later" and it was noted that "we are now at later ";
• The tax stabilization reserve fund had a target range of 1.5 to 2.0 residential mills"
(residential taxes) and was to be used for "non- recurring, extraordinary type
expenditures arising after the annual mill rates have been established "; and
• The sick leave reserve fund was overfunded based on the target and was projected to
return approximately $200,000 to the general levy.
It is believed that the October, 1987 reserve fund report represents the last time that the City's
reserve funds were reviewed from a policy perspective on a consolidated basis, even though
the report focused on only the four largest reserve funds at that time (working funds, equipment
replacement, tax stabilization and sick leave).
Staff's Approach to the Reviewing Reserve Funds
As this was the first significant review of the City's reserve funds in quite some time, staff took
the approach of reviewing the structure of reserve funds as a whole, as well as attending to
each reserve fund individually. Staff chose a comprehensive approach that spanned a number
of months and included internal as well as external information.
Internally — staff reviewed previous council reports, presentations, existing reserve fund
documents and met with relevant staff to discuss the reserve funds they manage. The
extensive review of the information already known in the City of Kitchener helped staff to better
understand the purpose of each existing reserve fund and also identify the need to create new
reserve funds.
Externally — staff reviewed reserve fund information from other municipalities as well as relevant
third party associations that have expertise in the municipal finance sector. The use of reserve
funds is a common practice amongst Canadian municipalities, although not every municipality
has formalized policies or procedures regarding their administration and governance. The other
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municipalities reviewed by staff were Waterloo, Guelph, Milton, Barrie, York, Sarnia, Meaford,
Edmonton and Calgary given they had relevant content readily available. Another important
external resource was information from the Government Finance Officers' Association (GFOA),
which is a leading organization in the field of municipal finance in North America. The GFOA
provides guidance on a number of municipal finance policy matters including reserve funds. All
of these resources were considered in order to produce the best overall reserve fund policy for
the City of Kitchener.
Major Findings
Through the review, staff determined that there was:
• No overall policy governing reserve fund management
• A need to rationalize reserve funds, as some were no longer needed, while others that
did not exist needed to be created
• Little consistency in documentation for existing reserve funds (e.g some reserve funds
had policies, some did not)
• No funding level targets established for most reserve funds and no overall funding level
target established for reserve funds collectively
• No set interval for reviewing reserve funds as a collective
The End Result — One Consolidated Reserve Fund Policy for the City of Kitchener
Based on the information gathered through the extensive review process, staff are
recommending that the City adopt a single, consolidated reserve fund policy (attached) which
will cover all reserve funds for the City. In addition to the single reserve fund policy,
supplementary information sheets have been prepared for every reserve fund which outline key
information including the reserve fund purpose, source of funding, use of funding, and the
minimum /maximum funding level targets.
The review of other municipalities demonstrated that the use of a single reserve fund policy is a
common practice. A single reserve fund policy is recommended as it provides guiding principles
to be employed for overall reserve fund management, ensures consistency across all reserve
funds regardless of specific uses of funds, applies to all reserve funds (those that currently exist,
as well as any that are created in the future), and is simpler to administer than numerous
individual reserve fund policies.
Highlights of the Proposed Reserve Fund Policy
Specific areas of focus are highlighted below and are documented based on the order in which
they appear in the reserve fund policy. Not all sections of the policy are highlighted as some of
them are quite brief.
Section 1 — Purpose
This section explains the role reserve funds play in City's long term financial plan and outlines
the link between reserves, debt, and investments.
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Section 2 — Policy Statement
This section concludes with the statement that "a reserve fund will only be used for the specific
or intended purpose for which it was established ". This acknowledges that reserve funds are
created for a specific purpose and that they should only be used for that purpose.
Section 3 — Guiding Principles- Reserve Fund Management
First, a key principle is that reserve funds should not enter into a negative position at any point.
This statement formalizes the practice currently adopted by the City, which before now has not
been codified in policy.
Second, five reserve fund categories have been created as part of the policy. The five
categories with brief descriptions and examples are provided below.
• Capital reserve funds — which are used to assist in financing the capital program.
They provide flexibility and liquidity as well as enhance the City's capacity to address
current and future capital infrastructure needs. (e.g. Water Capital reserve fund,
Equipment reserve fund)
• Stabilization reserve funds — which are used to provide a contingency for unforeseen
or extraordinary events and stabilize fluctuations caused by one time expenditures or
revenue shortfalls. They are also used to maintain the City's cash flow and minimize
the need for short term borrowing. They are not intended to be an ongoing funding
source for the operating budget. (e.g. Tax Stabilization reserve fund, Parking
Stabilization reserve fund)
• Program specific reserve funds — which are set aside for specific purposes and often
have a very limited scope of use. (e.g. Oktoberfest Float reserve fund, Election
reserve fund)
• Corporate reserve funds — which are available for corporate programs to protect the
City against the consequences of certain risks and liabilities. (e.g. Sick Leave
reserve fund, Insurance reserve fund)
• Development charges reserve funds — which are used to finance growth related net
capital costs of servicing new development. The City's Development Charges by -law
imposes development charges on new development in the City.
These categories will be used to group similar reserve funds together which will enhance
monitoring and reporting. Currently staff typically report on reserve funds as a whole, while
these categories will allow an additional breakdown of reserve funds which can be used to
pinpoint trends and issues within the categories.
Section 6 —Administration
Reserve fund information will continue to be presented to Council on an annual basis. No
reserve funds will be created or deleted without Council approval, and approvals for the use of
funds held in reserve will continue in the same manner currently practiced by the City of
Kitchener. Borrowing between reserve funds is permitted and debt issuance against a reserve
fund is prohibited.
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Section 7 — Target Reserve Fund Levels
Target minimum and maximums have been prepared for each individual reserve fund. The
target levels represent the desired range of funding for each reserve fund and were based on
analysis of:
• Individual reserve fund activity in the past and projected for the future;
• The general principles applied to reserves within the same category; and
• The minimum and maximum target levels for reserve funds on a consolidated basis in
comparison to external benchmarks
Where possible, third party benchmarks set by organizations such as GFOA and the City's
external actuaries were used to provide objective limits for individual reserve funds and realize
the benefits of considerable study and analysis already completed by others.
In considering the consolidated target balances for all reserve funds, staff used two key
benchmarks which have targets established by independent organizations:
• Debt to reserve ratio, which should not exceed 1:1 according to credit rating agencies
• Reserve funds as a per cent of operating expenses, which should exceed 20%
according to the Ministry of Municipal Affairs and Housing
1) Debt to reserve ratio
As has been outlined in previous presentations, the City's debt to reserve ratio exceeds the
target established by credit rating agencies, as well as the actual results for comparator
municipalities in Ontario. As shown in the chart below, Kitchener's debt to reserve ratio was
three times higher than the target in 2010 and could even be higher in 2011.
Debt levels are especially high for the City due largely to the investment in the Economic
Development Investment Fund (EDIF). While this amount of debt is not expected to continue
indefinitely, debt is a regular funding source for the City's regular capital program, and is also
used for special initiatives such as EDIF and the expansion of the Auditorium.
2) Reserve Funds as a per cent of operating expenses
According to the Ministry of Municipal Affairs and Housing (MMAH), scoring low (i.e. under 10 %)
for this measure indicates "a municipality may have limited flexibility to offset non - budgeted
revenue losses or increases in expenses ". As can be seen in the chart below, Kitchener is well
under the 20% target set by the MMAH and is considered to be in the "low" category for this
specific measure. Kitchener's results are especially low when compared to other lower tier, non
rural municipalities which have an average of nearly 60 % -70% over the past number of years.
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2009
2010
2011
Actual Debt to Reserve Ratio
2.2
3.1
4.4*
Target Debt to Reserve Ratio
1.0
1.0
1.0
Reserve Levels Needed to Achieve Target
$72M
$81 M
$98M
* 2011 value is based on the projection provided to Council on Final Budget Day.
2) Reserve Funds as a per cent of operating expenses
According to the Ministry of Municipal Affairs and Housing (MMAH), scoring low (i.e. under 10 %)
for this measure indicates "a municipality may have limited flexibility to offset non - budgeted
revenue losses or increases in expenses ". As can be seen in the chart below, Kitchener is well
under the 20% target set by the MMAH and is considered to be in the "low" category for this
specific measure. Kitchener's results are especially low when compared to other lower tier, non
rural municipalities which have an average of nearly 60 % -70% over the past number of years.
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At a minimum, Kitchener should be striving to have a debt to reserve ratio of 1:1 and reserve
fund levels that are at least 20% of operating expenses. This would suggest that the minimum
target balance should be $60M (to achieve 20% of operating revenues) to $100M (to achieve
1:1 debt to reserve ratio). The maximum target balance should be close to $200M in order to be
comparable with other lower tier, non rural municipalities.
Based on the analysis of individual reserve fund requirements, as well as the two measures
outlined above, staff have recommended minimum target level for all reserve funds that would
total $65M and maximum target levels for all reserve funds that would total $180M. These
targets are within the thresholds for the benchmark measures calculated above and will be used
for reporting to Council.
Reconciliation of Changes in Reserve Funds
Through the review process, it became apparent that some changes to the roster of existing
reserve funds was required. A complete listing of changes is detailed in Appendix B, and the
changes include:
• renaming reserve funds;
• combining specific reserve funds into a more generalized reserve fund that serves a
similar purpose; and
• creating new reserve funds were a need has been demonstrated
CONCLUSION:
The proposed reserve fund policy addresses reserve fund governance and management at a
high level, while also ensuring that the appropriate details are captured for every specific
reserve fund. Staff's thorough review of existing City reserve funds, along with comparison to
other municipalities and relevant third party organizations ensures that the proposed policy
incorporates the best practices and lessons learned from other organizations that have already
undergone a review of reserve funds in a municipal environment. This holistic approach
provides for a robust policy that is well suited to the specific needs of the City of Kitchener.
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2008
2009
2010
Actual Reserve Funds as a % of operating expenses
10.3%
8.3%
7.8%
Target Reserve Funds as a % of operating expenses
20.0%
20.0%
20.0%
Average of Lower Tier, Non Rural Municipalities
58.9%
68.6%
62.9%
Reserve Levels Needed to Achieve Target
$65M
$58M
$56M
Reserve Levels Needed to Achieve Average of Lower Tier,
Non Rural Municipalities
$190M
$198M
$175M
At a minimum, Kitchener should be striving to have a debt to reserve ratio of 1:1 and reserve
fund levels that are at least 20% of operating expenses. This would suggest that the minimum
target balance should be $60M (to achieve 20% of operating revenues) to $100M (to achieve
1:1 debt to reserve ratio). The maximum target balance should be close to $200M in order to be
comparable with other lower tier, non rural municipalities.
Based on the analysis of individual reserve fund requirements, as well as the two measures
outlined above, staff have recommended minimum target level for all reserve funds that would
total $65M and maximum target levels for all reserve funds that would total $180M. These
targets are within the thresholds for the benchmark measures calculated above and will be used
for reporting to Council.
Reconciliation of Changes in Reserve Funds
Through the review process, it became apparent that some changes to the roster of existing
reserve funds was required. A complete listing of changes is detailed in Appendix B, and the
changes include:
• renaming reserve funds;
• combining specific reserve funds into a more generalized reserve fund that serves a
similar purpose; and
• creating new reserve funds were a need has been demonstrated
CONCLUSION:
The proposed reserve fund policy addresses reserve fund governance and management at a
high level, while also ensuring that the appropriate details are captured for every specific
reserve fund. Staff's thorough review of existing City reserve funds, along with comparison to
other municipalities and relevant third party organizations ensures that the proposed policy
incorporates the best practices and lessons learned from other organizations that have already
undergone a review of reserve funds in a municipal environment. This holistic approach
provides for a robust policy that is well suited to the specific needs of the City of Kitchener.
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ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Foundation: Efficient and Effective Government
Goal: Financial Management
Strategic Direction: Ensure responsible stewardship of public funds within a supportive policy
framework
FINANCIAL IMPLICATIONS:
One of the outcomes of developing the proposed reserve fund policy is that a shortfall in the
overall level of reserve funds has been identified. At the end of 2011, the total balance of all
reserve funds was $35M, which is $30M less than the recommended minimum balance of
$65M. This is not unexpected given the findings of previous financial condition assessments,
but a more precise determination of the value of the shortfall is now possible. In other words,
the actual balance of all reserve funds is below the minimum target level for all reserve funds.
Now that the overall gap has been determined, and can be traced back to specific reserve
funds, staff will begin to develop strategies to improve the level of funding held in reserve. Just
as it has taken a number of years to diminish the level of reserve funds, it will take a number of
years to improve the level of reserve funds to the point that they meet the minimum target
levels.
ATTACHMENTS:
Reserve Funds Policy
Appendix A — Existing Reserve Fund Policies to be Repealed
Appendix B — Reconciliation of Changes to Reserve Funds
Appendix C — Reserve Fund Categories and Information Sheets
COMMUNITY ENGAGEMENT:
Not applicable.
ACKNOWLEDGED BY: Dan Chapman, Deputy CAO (Finance and Corporate Services)
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COUNCIL POLICY RESOLUTION
POLICY NUMBER:
POLICY TYPE: FINANCIAL
SUBJECT: RESERVE FUNDS
POLICY CONTENT:
1. PURPOSE
DATE: MAY 2012
Reserve funds form a critical component of the longer term financial planning and
funding strategies for the City and support sound financial and cash management for
the ongoing financial stability of the Corporation. A clear policy provides the
appropriate guidance for responsible stewardship and management of reserve
funds. This policy should be considered in conjunction with investment and debt
management policies.
2. POLICY STATEMENT
It is the policy of the City of Kitchener to establish and manage reserve funds for
planned future capital expenditures, unexpected or unpredicted events or
extraordinary expenditures which would otherwise cause fluctuations in the
operating or capital budgets. A reserve fund will only be used for the specific or
intended purpose for which it was established.
3. GUIDING PRINCIPLES — RESERVE FUND MANAGEMENT
The general guiding principles with respect to reserve fund management are:
• to ensure all City reserve funds are supported by a financial plan identifying
contribution sources and projected disbursements required to meet planned
future obligations to be funded by the reserve funds;
am
• to ensure that all disbursements from reserve funds relate only to the
intended use of the fund and have Council approval;
• to ensure that reserve funds do not enter into a negative position at any
point, and;
• to ensure the sustainability of the City's programs and infrastructure by
providing annual contributions from the operating budget for the
maintenance of reserve funds at target levels.
For the purpose of this policy and reserve fund management, the City will categorize all
funds as reserve funds under the following classification:
• Capital Reserve Funds
• Stabilization Reserve Funds
• Program Specific Reserve Funds
• Corporate Reserve Funds
• Development Charge Reserve Funds
4. DEFINITIONS
In this policy,
"Reserve fund" means a fund with assets which are segregated and restricted to meet
the purpose of the reserve fund. There are two types of reserve funds: obligatory
reserve funds and discretionary reserve funds.
"Obligatory reserve fund" means a reserve fund created when a provincial statute
requires that revenue received for special purposes be segregated from the general
revenues of the municipality. Obligatory reserve funds are to be used solely for the
purpose prescribed for them by statute.
"Discretionary reserve fund" means a reserve fund created under Section 290 of the
Municipal Act, at the discretion of Council, to finance future expenditures of a purpose
designated by Council for which it has the authority to spend money, and to set aside a
certain portion of any year's revenues so that the funds are available as required.
Discretionary reserve funds are established through a by -law of Council.
"Capital Reserve Funds" means reserve funds used to assist in financing the capital
program. They provide flexibility and liquidity as well as enhance the City's capacity to
address current and future capital infrastructure needs.
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"Stabilization Reserve Funds" means reserve funds used to provide a contingency for
unforeseen or extraordinary events and stabilize fluctuations caused by one time
expenditures or revenue shortfalls. They are also used to maintain the City's cash flow
and minimize the need for short term borrowing. They are not intended to be an
ongoing funding source for the operating budget.
"Program Specific Reserve Funds" means reserve funds set aside for specific purposes
and are only used for their identified purpose.
"Corporate Reserve Funds" means reserve funds available for corporate programs to
protect the City against the consequences of certain risks and liabilities.
"Development Charge Reserve Funds" means reserve funds used to pay for growth
related net capital costs of servicing new development. The City's Development Charges
by -law imposes development charges on new development in the City.
5. SCOPE
The Reserve Fund Policy applies to all departments of the Corporation of the City of
Kitchener.
6. ADMINISTRATION
6.1 Creation
All proposals to establish a new reserve fund, whether for capital or operating purposes,
will be in the form of a report approved by the City Treasurer and forwarded to Council
for approval.
The report should include:
1. Name of the fund
2. Intended purpose of the fund
3. Classification
4. Funding source(s)
5. Intended use or allocation of funds
6. Minimum and maximum target balances to be maintained
7. Rationale for the minimum and maximum target balances
8. Allocation of excess funding
9. Reporting requirements
10. Allocation of interest
11. Expiry date for the fund, if applicable
12. Review cycle for the fund
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For a reserve fund that is time limited, the report shall also include a request for pre -
approval to wind up the reserve fund upon the expiry date.
6.2 Amending or Closing
Amendments may be undertaken as a response to the periodic review process in
accordance with section 6.3 below or proactively by the originating City department.
The process for amending or closing for any purpose should follow the same process as
approving a new reserve fund as per section 6.1 above.
Any change to the purpose for which a reserve fund is designated must be permitted by
provincial statute and approved by Council. Before creating a new reserve fund, the
option of adding an incremental contribution to an existing reserve fund of a like nature
will be considered. Reserve funds for different purposes shall be separate, but each
may include a group of services in the same category.
6.3 Oversight
The City Treasurer will be responsible for monitoring the status of reserve funds, for
determining the appropriate source of financing for the City's programs and capital
works, and for making recommendations to Council on the use of reserve funds.
Reserve funds will be managed in accordance with the purpose and any or all conditions
and /or restrictions placed upon the reserve fund by Council.
Each reserve fund will be reviewed on a periodic basis to ensure the current target
levels are appropriate and to rationalize a continued need for the reserve fund.
The annual budget will set out the estimated portion of revenues considered necessary
to be paid into City reserve funds.
Money in a reserve fund will be spent only for the predetermined purpose
of the reserve fund.
Reserve funds will not be allowed to enter into a negative position at any point.
6.4 Authorization for Transfers and Utilization of Funds
Transfers will be made into or from reserve funds as prescribed by provincial statute or
approved by by -law, including but not limited to the Development Charges By -law and
the annual budget by -law.
Transfers from operating budgets to reserve funds and transfers from reserve funds to
capital or operating will be completed upon the approval of the City's budget.
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Utilization of funds from a reserve fund must be identified in an approved annual
budget or a separate report submitted to Council for approval outside the normal
annual budget process.
The Chief Administrative Officer, under Chapter 115 of the Municipal Code has the
authority to approve any one time use of funds or contributions under $50,000 that are
not included in the authorizing documents.
6.5 Interest Allocation
Reserve funds must be invested in accordance with the City's approved investment
policy. Earnings from combined investments will be credited to each separate fund in
proportion to the amount invested from it.
6.6 Inter - Reserve Fund Borrowing
Temporary inter -fund borrowing to cover a reserve fund shortfall is permitted and
encouraged to avoid external debt charges. However, borrowing from a reserve fund
may occur only when an analysis of the reserve fund has determined that excess funds
are available and that the use of these funds will not adversely affect the intended
purpose of the reserve fund.
6.7 Reserve Fund External Debt
The City does not issue external debt financed through reserve funds.
6.8 Reporting
Reserve fund balances, projected contributions, planned withdrawals and target levels
will be reported to Council on an annual basis.
Any additional reporting requirements for obligatory reserve funds will be reported
according to the applicable legislation.
7. TARGET RESERVE FUND LEVELS
The adequacy of an individual reserve fund will be determined on a case -by -case basis
using an estimate of the timing and magnitude of the costs to be incurred and a
projection of expected contributions and interest earned. Updated forecasts of reserve
fund balances, including minimum and maximum target levels, will be prepared annually
to assist with the evaluation.
In addition to reviewing the target levels of individual reserve funds, the consolidated
balance of all reserve funds will also be evaluated by comparing the aggregate minimum
and maximum target levels to municipal benchmarks, provincial guidelines and credit
rating agency standards.
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Appendix A - Reserve Fund Policies to be Repealed
Reserve Fund
Policy Number
Activa Group Sportsplex
1 -757
Community Assistance Loan
1 -520
Business Parks
1 -513
Facade Improvements
Upper Storey Renovation
1 -535
Equipment Replacement
1 -735
Federal Gas Tax
1 -547
Gas Capital Investment
1 -562
Hydro Capital Investment
1 -740
Asset Management
1 -727
Sick Leave
1 -755
Training - Senior Management
Training - General
1 -760
Public Art
1 -815
Tax Stabilization
1 -765
Local Environmental Action Fund
1 -607
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Appendix B — Reconciliation of Changes to Reserve Funds
Reserve Fund
Change
Comment
Building Enterprise Capital,
Created
Capital reserve funds created for all enterprises as
Gas Utility (Delivery) Capital,
well as for the tax base. Purpose of these reserve
Golf Enterprise Capital,
funds is to hold surplus capital funds from close outs
Parking Enterprise Capital,
to be reinvested in the capital program or to fund over
Sanitary Sewer Utility Capital,
expenditures in capital projects.
Storm Water Utility Capital,
Water Utility Capital,
Tax Capital
Community Loan
Created
Funding for program has been held in balance sheet
account with limited visibility and reporting. Creating
reserve fund will ensure regular reporting.
Fagade Improvements &
Consolidated into new
Previous reserve funds were for specific programs that
Upper Storey Renovation
Economic
had limited activity /passed the lifespan of the
Development reserve
originally proposed program timing. New reserve
fund
fund will be for all economic development activities.
Gas Utility (Supply) Stabilization
Created
New reserve fund to mirror stabilization reserve funds
created for all other enterprises, including Gas
Delivery.
Golf Cart Replacement
Consolidated into new
Previous reserve fund was specific to one component
Golf Enterprise Capital
of the golf enterprise's capital program. New reserve
reserve fund
fund will be used for all capital items, including golf
ca rts.
Training— Senior Management
Consolidated into new
New reserve fund will be used to fund learning and
& Training - General
Learning &
development of staff, regardless of status within the
Development reserve
organization.
fund
Victoria Park Ice
Consolidated into new
Limited recent activity in the previous reserve fund, so
Tax Capital reserve
it has been combined into a more general reserve
fund
fund.
Winter Control
Created
New reserve fund to provide better stability to one of
the most variable programs within the tax supported
budget
Renamed:
Some reserve funds renamed to better reflect their
Equipment Replacement
Equipment
current use, provide better consistency and avoid
Gas Capital Investment
Gas Utility Investment
confusion with other reserve funds
Hydro Capital Investment
Hydro Investment
Asset Management
Land Inventory
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Appendix C - Reserve Funds by Category
Reserve Fund Category
Reserve Fund Name
Capital
•
Building Enterprise Capital
•
Auditorium Ticket Sales
•
Gas Utility (Delivery) Capital
•
Computer
•
Golf Enterprise Capital
•
Telephone
•
Parking Enterprise Capital
•
Equipment
•
Sanitary Sewer Utility Capital
•
Federal Gas Tax
•
Storm Water Utility Capital
•
Gas Utility Investment
•
Water Utility Capital
•
Hydro Investment
•
Tax Capital
•
Business Parks
•
Land Inventory
•
Recreational Land
Stabilization
•
Building Enterprise Stabilization
•
Sanitary Sewer Utility Stabilization
•
Gas Utility (Delivery) Stabilization
•
Storm Water Utility Stabilization
•
Gas Utility (Supply) Stabilization
•
Water Utility Stabilization
•
Golf Enterprise Stabilization
•
Tax Stabilization
•
Parking Enterprise Stabilization
•
Winter Control
Program Specific
•
Activa Group Sportsplex
•
Oktoberfest Float
•
Community Loan
•
Public Art
•
Economic Development
•
Local Environmental Action Fund
•
Election
Corporate
•
Arbitration
•
Sick Leave
•
Insurance
•
Workplace Safety & Insurance
•
Mediation
•
Learning & Development
Development
•
Development Charges
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Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Building Enterprise Capital
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provides funding for the Building Enterprise capital projects
Funding Source
- transfers from Building Enterprise capital projects as a result of capital close outs
- interest income
Appropriation of Funds
- transfers to Building Enterprise capital projects for deficits or funding shortfalls
Target Level
Minimum:
Closing balance should not drop below $10,000
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital
forecast
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital
expenditures
Rationale: provides funding to be accumulated for significant improvements
Consistent with maximum funding for other capital reserve funds
Excess:
Excess funding greater than the maximum balance transfers to the
Building Enterprise Stabilization Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
2017 budget
TBD
Community Services, Building Division
Director, Building
1 -152 30- Jan -06
Building Enterprise
Original policy was for both stabilization and capital
9 -16
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable) Not applicable
9 -17
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Gas Utility (Delivery) Capital
Reserve Fund
Discretionary
Capital
Purpose
Provides funding for the Gas Utility capital projects
Provides funding for Federal and Provincial grant programs
that require the City to match their funding
Funding Source
- transfers from Gas Utility capital projects as a result of capital close outs
- interest income
Appropriation of Funds
- transfers to Gas Utility capital projects for deficits or funding shortfalls
Target Level
Minimum:
Closing balance should not be less than $4 million
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
Provides for unanticipated requirements
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital
expenditures
Rationale: allows for funding required to address backlog of infrastructure work and
provides flexibility for funding for projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Gas Utility Stabilization Reserve Fund
If the Gas Utility Stabization Reserve Fund is at the maximum, the excess
is used to adjust user rates
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre TBD
Divisional Ownership Finance & Corporate Services, Financial Planning
Ownership Lead Senior Analyst, Financial Planning
(Infrastructure Services - Utilities)
Interest Allocation
Yes
Other
Previous Policy New
Previous Title Not applicable
9 -18
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -19
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Golf Enterprise Capital
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provides funding for capital projects for the Golf Enterprise
Funding Source
- transfer from Golf Enterprise Capital projects as a result of capital closeouts
- interest income
Appropriation of Funds
- transfers to Golf Enterprise capital projects for deficits or funding shortfalls
Target Level
Minimum:
Closing balance should not be less than $65,000
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
provides for unanticipated overruns
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital
expenditures
Rationale: allows for funding required to address backlog of infrastructure work and
provides flexibility for funding for projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Golf Enterprise Stabilization Reserve Fund
If the Golf Enterprise Stabilization Reserve Fund is at the maximum, the excess
is used to adjust the user fees
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre TBD
Divisional Ownership Finance & Corporate Services, Financial Planning
Ownership Lead Senior Analyst, Financial Planning
(Community Services, Enterprise)
Interest Allocation
Yes
Other
Previous Policy New
Previous Title Not applicable
Resolution Date
9-20
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
Consolidation of Other Reserves 6510002 Golf Cart
Replacement
9 -21
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Parking Enterprise Capital
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provides funding for capital projects for the Parking Enterprise
Funding Source
- transfers from the Parking Enterprise capital projects as a result of closeouts
- interest income
Appropriation of Funds
- transfers to Parking Enterprise capital projects for deficits or funding shortfalls
Target Level
Minimum:
Closing balance should not be less than $900,000
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
provides for unanticipated overruns
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital expenditures
Rationale: allows for funding required to address backlog of work and
provides flexibility for funding of projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Parking Enterprise Stabilization Reserve Fund
If the Parking Enterprise Stabilization Reserve Fund is at the maximum, the excess
is used to adjust the user fees
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre TBD
Divisional Ownership Finance and Corporate Services, Financial Planning
Ownership Lead Senior Analyst, Financial Planning
(Infrastructure Services, Transportation Services)
Interest Allocation
Yes
Other
Previous Policy New
Previous Title Not applicable
Resolution Date
Amendment Date(s):
9-22
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable)
9-23
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Sanitary Sewer Utility Capital
Reserve Fund
Discretionary
Capital
Purpose
Provides funding for capital projects for the Sanitary Sewer Utility
Provides funding for Federal and Provincial grant programs
that require the City to match their funding
Funding Source
- transfer of funds from Sanitary Sewer Utility capital projects as a result of closeouts
- interest income
Appropriation of Funds
- transfers to Sanitary Sewer Utility capital projects for deficits or funding shortfalls
Target Level
Minimum:
Closing balance should not be less than $6.8 million
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
which provides for unanticipated overruns
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital
expenditures
Rationale: allows for funding required to address backlog of infrastructure work and
provides flexibility for funding of projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Sanitary Sewer Utility Stabilization Reserve Fund
If the Sanitary Sewer Utility Stabilization Reserve Fund is at the maximum, the excess
is used to adjust the user rates
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre TBD
Divisional Ownership Finance & Corporate Services, Financial Planning
Ownership Lead Senior Analyst, Financial Planning
(Infrastructure Services - Engineering)
Interest Allocation
Yes
Other
Previous Policy New
Previous Title Not applicable
9-24
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9-25
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Storm Water Utility Capital
Reserve Fund
Discretionary
Capital
Purpose
Provides funding for capital projects for the Storm Water Utility
Provides funding for Federal and Provincial grant programs
that require the City to match their funding
Funding Source
- transfer of funds from Storm Water Utility Capital accounts as a result of capital closeouts
- interest income
Appropriation of Funds
- transfers to Storm Water Utility capital projects for deficits or funding shortfalls
Target Level
Minimum:
Closing balance should not be less than $4.3 million
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
will provide for unanticipated overruns
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital
expenditures
Rationale: allows for funding required to address backlog of work and
provides flexibility for funding of projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Storm Water Utility Stabilization Reserve Fund
If the Storm Water Utility Stabilization Reserve Fund is at the maximum, the excess
is used to adjust the user rates
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre TBD
Divisional Ownership Finance & Corporate Services, Financial Planning
Ownership Lead Senior Analyst, Financial Planning
(Infrastructure Services - Engineering)
Interest Allocation
Yes
Other New
Previous Policy Not applicable
Previous Title
9-26
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9-27
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Water Utility Capital
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provides funding for capital projects for the Water Utility
Provides funding for Federal and Provincial grant programs
that require the City to match their funding
Funding Source
- transfer of funds from Water Utility Capital accounts as a result of capital closeouts
- interest income
Appropriation of Funds
- transfers to Water Utility capital projects for deficits or funding shortfalls
Target Level
Minimum:
Closing balance should not be less than $4.5 million
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
provides for unanticipated overruns
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital expenditures
Rationale: allows for funding required to address backlog of infrastructure work and
provides flexibility for funding of projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Water Utility Stabilization Reserve Fund
If the Water Utility Stabilization Reserve Fund is at the maximum, the excess
is used to adjust the user rates
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre TBD
Divisional Ownership Finance & Corporate Services, Financial Planning
Ownership Lead Senior Analyst, Financial Planning
(Infrastructure Services - Utilities)
Interest Allocation
Yes
Other New
Previous Policy Not applicable
Previous Title
9-28
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9-29
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Tax Capital
Category
Reserve Fund
Type
Discretionary
Classification
Capital
Purpose
Provides funding for general capital projects
Provides funding for Federal and Provincial grant programs
that require the City to match their funding
Funding Source
- transfer from capital projects as a result of capital close outs
- interest income
Appropriation of Funds
- transfers to general capital projects for deficits or funding shortfalls
Target Level
Minimum:
Closing balance should not be less than $750,000
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
provides for unanticipated overruns
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital
expenditures
Rationale: allows for funding required to address backlog of work and
provides flexibility for funding of projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Stabilization Reserve Fund
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre TBD
Divisional Ownership Finance & Corporate Services, Financial Planning
Ownership Lead Manager, Financial Planning
Interest Allocation
Yes
Other
Previous Policy New
Previous Title Not applicable
Resolution Date
Amendment Date(s):
9 -30
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable)
Consolidation of Other Reserves Victoria Park Ice 6513003
9 -31
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Auditorium Ticket Sales
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provides funding for capital expenditures to maintain the existing facility
Funding Source
-CRF fees included in the ticket sales
- interest income
- transfers from KMAC capital projects as a result of capital close outs
Appropriation of Funds
- transfers to capital for projects for KMAC
-up to 25% of annual CRF revenue can be allocated to KMAC operations
Target Level
Minimum:
Closing balance should not drop below $87,500
Rationale: 50% of the average annual value of approved expenditures in the 10 year capital forecast
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital expenditures
Rationale: provides funding to be accumulated for significant improvements
Consistent with maximum funding for other capital reserve funds
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Capital Reserve
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
2017 budget
6513007
Community Services, Enterprise
Director, Enterprise
9 -32
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Auditorium Ticket Sales
Interest Allocation
Yes
Other
Previous Policy None
Previous Title Auditorium Ticket Sales
Repeal Date for Previous Policy Not applicable
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable) Not applicable
9 -33
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Computer
Category
Reserve Fund
Type
Discretionary
Classification
Capital
Purpose
Provides funding for the purchase of computer hardware
Funding Source
- monthly computer usage charges
- interest income
- transfers from capital projects as a result of capital close outs
Appropriation of Funds
- transfer to capital for computer hardware
- direct expenses related to the purchase of computer hardware
Target Level
Minimum:
Closing balance should not be less than $500,000
Rationale: 50% of the average annual Computer Reserve Fund spend over a five year period
to provide for following year projected expenditures
Maximum:
Closing balance should not exceed 1.5 times the minimum value
Rationale: provides funding to be accumulated for any significant hardware
or software purchase
Consistent with reserve funds receiving funding from departmental usage charges
Excess:
Excess funding greater than the maximum balance
is used to adjust the computer usage fees
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
2017 budget
6022006
Finance & Corporate Services, IT
Manager, Client Services
None
No change
Not applicable
9 -34
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable) Not applicable
9 -35
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Telephone
Category
Reserve Fund
Type
Discretionary
Classification
Capital
Purpose
Provides funding for the telephone system
Funding Source
- monthly departmental telephone usage charges
- interest income
- transfers from capital projects as a result of capital close outs
Appropriation of Funds
- telephone system operating costs
- transfer to capital for telephone system replacement /refurbishment
Target Level
Minimum:
Closing balance should not be less than $480,000
Rationale: 50% of the average annual Telephone Reserve Fund spend over a five year period
to provide for the following year projected expenditures
Maximum:
Closing balance should not exceed 1.5 times the minimum balance
Rationale: provides funding to be accumulated for any significant or unanticipated
telephone system expenditures
Consistent with reserve funds receiving funding from departmental usage charges
Excess:
Excess funding greater than the maximum balance
is used to adjust the telephone usage fees
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre 6022002
Divisional Ownership Finance & Corporate Services,
Ownership Lead Information Technology
Manager, Client Services
Interest Allocation
Yes
Other
Previous Policy None
Previous Title No change
Resolution Date
Amendment Date(s):
9 -36
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable)
9 -37
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Equipment
Category
Reserve Fund
Type
Discretionary
Classification
Capital
Purpose
Provides funding for the purchase of vehicles and fleet equipment
Funding Source
- vehicle /equipment usage charges
- transfer from the capital budget
- interest income
Appropriation of Funds
- vehicle /equipment purchases
Target Level
Minimum:
Closing balance should not drop below $2.0 Million
Rationale: 50% of the average annual balance of annual approved expenditures in the 10 year
capital forecast
Maximum:
Closing balance should not exceed 1.5 times the minimum balance
Rationale: allows for additional funding for unanticipated purchases of a
significant nature
Consistent with reserve funds receiving funding from departmental usage charges
Excess:
Excess funding should be used to adjust the equipment usage fees
Next Review: 2013
Review flow of fund transfers
Consider direct equipment purchases from capital fund
Accounting structure /system changes may be required
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
5017002
Infrastructure Services, Fleet
Director, Fleet
9 -38
Reserve Fund Information Sheet
Other
Previous Policy 1 -735 23- Nov -87
Previous Title Equipment Replacement
Repeal date for Previous Policy
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -39
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Federal Gas Tax
Reserve Fund
Obligatory - Municipal Funding Agreement
Capital
Purpose
Provides funding for capital projects that meet the "eligible projects" and
"eligible costs" criteria as outlined in the Municipal Funding Agreement
Funding Source
- funding allocations from Federal Government for share of Federal Gas Tax
- transfers from capital projects funded by Federal Gas Tax as a result of capital close outs
- interest income
Appropriation of Funds
- transfers to capital for projects which meet the "eligible
projects " and "eligible costs" criteria as outlined in the Municipal
Funding Agreement for the Transfer of Federal Gas Tax Revenues
Target Level
Minimum:
Closing Balance should not drop below zero
Rationale: transfers to eligible capital projects should be made only if the fund has a balance
Maximum:
Closing balance should not exceed 50% of the annual funding allocation from the
Federal Government for share of Federal Gas Tax
Rationale: all funds should be allocated to "eligible projects" as funding is received
Excess:
Excess funding should be allocated to "eligible" projects
Next Review:
2017 budget
Reporting
- report to Associations of Municipalities of Ontario annually, by March 31.
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for previous Policy
Resolution Date
Amendment Date(s):
5002037
Finance & Corporate Services, Financial Planning
Director, Financial Planning
1 -547
No change
30- Jan -06
9 -40
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable)
9 -41
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Purpose
Provides funding for City wide capital projects
Funding Source
- transfer from the Gas Utility
- interest income
Appropriation of Funds
- transfers to the Capital Fund
Gas Utility Investment
Reserve Fund
Discretionary
Capital
Target Level
Minimum:
Closing balance should not drop below $2.5 million
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital
expenditures
Rationale: allows for funding required to address backlog of infrastructure work and
provides flexibility for funding for projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Capital Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
2017 budget
5002057
Finance & Corporate Services, Financial Planning
Director, Financial Planning
1 -562 30- Jan -06
Gas Capital Investment
9 -42
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable)
9 -43
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Hydro Investment
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provides funding for capital and operating budgets
Funding Source
-all revenues generated from the City's investment in Kitchener Power Corporation
and all related companies
- interest income
Appropriation of Funds
- transfers to the operating budget
- transfers to the capital budget
Target Level
Minimum:
Closing balance should not drop below $2.5 million
Rationale: 50% of the average annual balance of approved expenditures in the 10 year capital forecast
This balance will cover the equivalent of one year of expenditures if no dividend is received from
Kitchener Power Corporation
Maximum:
Closing balance should not exceed 1.5 times the average annual approved capital
expenditures
Rationale: allows for funding required to address backlog of work and provides
the flexibility to fund projects as needed
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Capital Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Resolution Date
2017 budget
5002017
Finance & Corporate Services, Financial Planning
Manager, Financial Planning
1 -740 2- Feb -01
Hydro Capital Investment
9 -44
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -45
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Business Parks
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provides funding for business parks capital projects
Funding Source
-sale of city owned business park lands
- interest income
Appropriation of Funds
- expenses related to the sale of city -owned business park land
Target Level
Minimum:
Closing balance should not drop below zero
Rationale: Current land inventory will be sold and the revenue from the sale will be
applied to the current deficit balance in the fund
Maximum:
Closing balance should not exceed $5,000,000
Rationale: Allows for accumulation of funding for future business park land purchases.
Excess:
Excess funding greater than the maximum balance transfers to the Economic Development
Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
2014 budget
5002047
CAO, Economic Development
Executive Director, Economic Development
None
No change
9 -46
Repeal Date:
Proposed start date
End Date (if applicable) Transfer to Economic Development when fund
is in a positive balance
Estimated timeline 2014
9 -47
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Land Inventory
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provides funding for strategic property purchases
Funding Source
-net proceeds from the sale of city land except for:
a) sale of park land
b) sale of other land allocated to specific projects (e.g. Fire stations)
c) sale of industrial land
- interest income
Appropriation of Funds
-net costs related to strategic land purchases
-costs related to land acquisition strategy
Target Level
Minimum:
The closing balance should not drop below zero.
Rationale: no purchases will be made unless funding is available
Maximum:
The closing balance should not be in excess of $5 million
Rationale: provides adequate funding for the future purchase(s) of
land of a significant nature
Otherwise a significant purchase could result in the issuing of debt
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Capital Reserve Fund
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre 5002022
Divisional Ownership CAO, Economic Development
Ownership Lead Capital Investment Advisor
Interest Allocation
Yes
Other
Previous Policy 1 -727
Previous Title Asset Management
Resolution Date
13- Jan -03
QCWK
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -49
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Recreational Land
Category Reserve Fund
Type Obligatory - Planning Act
Classification Capital
Purpose
The Planning Act authorizes municipalities to require the conveyance of land for park or
other public recreational purposes. The amount may not exceed 2% for commercial or
industrial development, an may not exceed 5% for all other development: alternatively,
land in the amount of 1 hectare per 300 residential units may be require. This authority
extends to subdivision approvals, consent (e.g. severance, easement, right -of way), and
site plan approval for the development or redevelopment of land.
Funding Source
- contributions from developers
-sale of parkland
- interest income
Appropriation of Funds
- expenditures related to the development or redevelopment and purchase
of parkland
Target Level
Minimum:
Closing balance should not drop below zero
Rationale: no purchases or projects should be funded from the reserve fund
unless funding is available
Maximum:
The maximum balance should not exceed $5 million
Rationale: The Recreational Land Reserve Fund is an obligatory fund
and the funds are not transferrable for another purpose
The fund should be monitored to ensure the funds are being spent to
purchase parkland so that the fund balance does not grow to exceed the maximum
Excess:
All funding remains in the Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
2017 budget
6527006
Infrastructure Services, Operations
Director, Operations
9-50
Reserve Fund Information Sheet
Previous Policy None
Previous Title No change
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -51
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Building Enterprise Stabilization
Reserve Fund
Obligatory - Building Code
Stabilization
Purpose
Provides funding for the Building Enterprise to stabilize building permit fee revenues
as building permit activity is highly cyclical
Funding Source
- transfer from the Building Enterprise for previous years operating surpluses
- interest income
Appropriation of Funds
- transfers to the Building Enterprise operations for deficits or shortfalls in funding
- transfers to the Building Enterprise operations for the reduction of fees
Target Level
Minimum:
Closing balance should not be less than 1.0 times the projected operating expenses
for the following year for the Building Enterprise operations
Rationale: provides an allowance for revenue stabilization during a recession
or downturn in building activity
Maximum:
Closing balance should not exceed 1.5 times the projected operating expenses
for the following year for the Building Enterprise operations
Rationale: to mitigate cyclical drops or when the economy faces a recessionary period
Excess:
Excess funding greater than the maximum balance transfers to the
Building Enterprise Capital Reserve Fund
If the Building Enterprise Capital Reserve Fund is at the maximum, the excess
is used to adjust the user fees
Next Review:
2013 budget
- contributions and balances associated with Building permits to be reviewed every 5 years
as required by Bill 124.
- reviewed annually by Building Division
Reporting
- annual report to FCSC
- annual report posted on City's website and provided to Waterloo
Region Home Builder's Association by March 31
Accountability
Cost Centre 5002042
Divisional Ownership Community Services, Building Division
Ownership Lead Director, Building
9-52
Interest Allocation
Yes
Other
Previous Policy 1 -512 30- Jan -06
Previous Title Building Enterprise
For both stabilization and capital
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable) Not applicable
9-53
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Gas Utility (Delivery) Stabilization
Reserve Fund
Discretionary
Stabilizaton
Purpose
Provides funding for the Gas Delivery Utility in the event of a shortfall
in the operating budget of the Gas Delivery Utility
Funding Source
- transfer from the Gas Utility for previous years operating surpluses /(deficits)
- interest income
Appropriation of Funds
- transfer to the Gas Utility operations
Target Level
Minimum:
Closing balance should not be less than 10% of the Gas delivery revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Provides contingency for the fluctuations in revenues from year to year
and unforeseen events
Maximum:
Closing balance should not exceed 15% of the Gas delivery revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Helps avoid significant rate increases in any given year
Excess:
Excess funding greater than the maximum balance transfers to the
Gas Utility Capital Reserve Fund
If the Gas Utility Capital Reserve Fund is at the maximum, the excess
is used to adjust the user rates
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
5018777
Finance & Corporate Services, Financial Planning
Senior Analyst, Financial Planning
(Infrastructure Services - Utilities)
New 2012 Budget
Not applicable
9-54
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9-55
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Gas Utility (Supply) Stabilization
Reserve Fund
Discretionary
Stabilization
Purpose
Provides funding for the Gas Supply Utility rate stabilization program
in the operating budget of the Gas Utility
Funding Source
- transfer from the Gas Supply Utility for previous years operating surpluses /deficits
- interest income
Appropriation of Funds
- transfer to the Gas Utility operations through adjustment to the user fees
Target Level
Minimum:
Closing balance should not be less than 10% of the Gas supply revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Provides contingency for the fluctuations in revenues from year to year
and unforeseen events
Maximum:
Closing balance should not exceed 15% of the Gas supply revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Helps avoid significant rate increases in any given year
Excess:
The excess is used to adjust user rates.
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Resolution Date
TBD
Finance & Corporate Services, Financial Planning
Senior Analyst, Financial Planning
(Infrastructure Services - Utilities)
New 2012 Budget
Not applicable
9-56
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9-57
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Golf Enterprise Stabilization
Reserve Fund
Discretionary
Stabilization
Purpose
Provides funding for the Golf Enterprise in the event of a shortfall
in the operating budget of the Golf Enterprise
Funding Source
- transfer from the Golf Enterprise for previous years operating surpluses
- interest income
Appropriation of Funds
- transfer to the Golf Enterprise operations
Target Level
Minimum:
Closing balance should not be less than 10% of the Golf Enterprise user fees
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Provides contingency for the fluctuations in revenues from year to year
and unforeseen events
Maximum:
Closing balance should not exceed 15% of the Golf Enterprise user fees
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Helps avoid significant fee increases in any given year
Excess:
Excess funding greater than the maximum balance transfers to the
Golf Enterprise Capital Reserve Fund
If the Golf Enterprise Capital Reserve Fund is at the maximum, the excess
is used to adjust the user fees
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Other
Previous Policy
Previous Title
Resolution Date
6510777
Finance & Corporate Services, Financial Planning
Senior Analyst, Financial Planning
(Community Services, Enterprise)
New 2012 Budget
Not applicable
9-58
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9-59
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Parking Enterprise Stabilization
Reserve Fund
Discretionary
Stabilization
Purpose
Provides funding for the Parking Enterprise in the event of a shortfall
in their operating budget
Funding Source
- transfer from the Parking Enterprise for previous years operating surpluses
- interest income
Appropriation of Funds
- transfer to the Parking Enterprise operations
Target Level
Minimum:
Closing balance should not be less than 10% of the Parking Enterprise revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Provides contingency for the fluctuations in revenues from year to year
and unforeseen events
Maximum:
Closing balance should not exceed 15% of the Parking Enterprise revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Helps avoid significant fee increases in any given year
Excess:
Excess funding greater than the maximum balance transfers to the
Parking Enterprise Capital Reserve Fund
If the Parking Enterprise Capital Reserve Fund is at the maximum, the excess
is used to adjust user fees
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
7012777
Finance & Corporate Services, Financial Planning
Senior Analyst, Financial Planning
(Infrastructure Services, Transportation Services)
New 2012 Budget
Not applicable
9 -60
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -61
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Sanitary Sewer Utility Stabilization
Reserve Fund
Discretionary
Stabilization
Purpose
Provides funding for the Sanitary Sewer Utility in the event of a shortfall
in their operating budget
Funding Source
- transfer from the Sanitary Sewer Utility for previous years operating surpluses
- interest income
Appropriation of Funds
- transfer to the Sanitary Sewer Utility operations
Target Level
Minimum:
Closing balance should not be less than 10% of the Sanitary Sewer Utility revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Provides contingency for the fluctuations in revenues from year to year
and unforeseen events
Maximum:
Closing balance should not exceed 15% of the Sanitary Sewer Utility revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Helps avoid significant rate increases in any given year
Excess:
Excess funding greater than the maximum balance transfers to the
Sanitary Sewer Utility Capital Reserve Fund
If the Sanitary Sewer Utility Capital Reserve Fund is at the maximum, the excess
is used to adjust the user rates
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
7035777
Finance & Corporate Services, Financial Planning
Senior Analyst, Financial Planning
(Infrastructure Services - Engineering)
New 2012 Budget
Not applicable
9 -62
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -63
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Storm Water Utility Stabilization
Reserve Fund
Discretionary
Stabilization
Purpose
Provides funding for the Storm Water Utility in the event of a shortfall
in their operating budget
Funding Source
- transfer from the Storm Water Utility for previous years operating surpluses
- interest income
Appropriation of Funds
- transfer to the Storm Water Utility operations
Target Level
Minimum:
Closing balance should not be less than 10% of the Storm Water Utility revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Provides contingency for the fluctuations in revenues from year to year
and unforeseen events
Maximum:
Closing balance should not exceed 15% of the Storm Water Utility revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Helps to avoid significant rate increases in any given year
Excess:
Excess funding greater than the maximum balance transfers to the
Storm Water Utility Capital Reserve Fund
If the Storm Water Utility Capital Reserve Fund is at the maximum, the excess
is used to adjust the user rates
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
7040777
Finance & Corporate Services, Financial Planning
Senior Analyst, Financial Planning
(Infrastructure Services - Engineering)
New 2012 Budget
Not applicable
9 -64
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -65
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Water Utility Stabilization
Category Reserve Fund
Type Discretionary
Classification Stabilization
Purpose
Provides funding for the Water Utility in the event of a shortfall
in the operating budget of the Water Utility
Funding Source
- transfer from the Water Utility for previous years operating surpluses
- interest income
Appropriation of Funds
- transfer to the Water Utility operations
Target Level
Minimum:
Closing balance should not be less than 10% of the Water Utility revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Provides contingency for the fluctuations in revenues from year to year
and unforeseen events
Maximum:
Closing balance should not exceed 15% of the Water Utility revenues
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Helps to avoid significant rate increases in any given year
Excess:
Excess funding greater than the maximum balance transfers to the
Water Utility Capital Reserve Fund
If the Water Utility Capital Reserve Fund is at the maximum, the excess
is used to adjust the user rates
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Other
Previous Policy
Previous Title
Resolution Date
Amendment Date(s):
5033777
Finance & Corporate Services, Financial Planning
Senior Analyst, Financial Planning
(Infrastructure Services - Utilities)
New 2012 Budget
Not applicable
9 -66
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable)
9 -67
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Tax Stabilization
Category
Reserve Fund
Type
Discretionary
Classification
Stabilization
Purpose
Provides funding to stabilize the tax rate impact from one year to the
next year by providing for non recurring expenditures and
revenues including the previous years operating deficit and surpluses
Funding Source
- transfers from the Revenue Fund for previous year's operating surpluses
- interest income
Appropriation of Funds
- transfers to the Revenue Fund to provide tax rate stabilization
and for the previous year's operating deficit
Target Level
Minimum:
Closing balance should not be less than 5% of the tax levy
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Provides contingency for uncontrollable factors such as growth and interest rates
and minimizes the need for short term borrowing
Maximum:
Closing balance should not exceed 15% of the tax levy
Rationale: Based on best practices as determined by the Government
Finance Officers' Association (GFOA)
Helps to avoid significant tax increases in any given year
Excess:
Excess funding greater than the maximum balance transfers to
the Tax Capital Reserve Fund
If the Tax Capital Reserve is at the maximum balance, the excess funding is
used to fund tax -based reserve funds with the greatest funding deficiencies
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Other
Previous Policy
Previous Title
Resolution Date
2013 budget
5002012
Finance & Corporate Services, Financial Planning
Manager, Financial Planning
1 -765
No change
2- Feb -01
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -69
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Winter Control
Category
Reserve Fund
Type
Discretionary
Classification
Stabilization
Purpose
Provides funding for winter maintenance in the event of a shortfall in the Winter
Control operating budget. The reserve fund minimizes the financial implications
resulting from extreme weather conditions
Funding Source
- transfer of all or a portion of the surplus from the Winter Control operations if
there is an annual surplus in the tax supported operations greater than
the amount of funds to be transferred to the Winter Control fund
- interest income
Appropriation of Funds
- transfer to the Winter Control operations to provide additional funding
for winter maintenance in the event of a shortfall in the operating
budget for Winter Control
Target Level
Minimum:
Minimum balance should be no less than $1.0 million
Rationale: 25% of the 5 year average annual winter maintenance costs
Maximum:
The maximum balance should not exceed 50% of the 5 year average
annual winter maintenance costs
Rationale: Based on highest winter control variance experienced within the past 5 years
Excess:
Excess funding greater than the maximum balance transfers
to the Tax Stabilization Reserve Fund
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre TBD
Divisional Ownership Infrastructure Services, Operations
Ownership Lead Director, Operations
Interest Allocation
Yes
Other
Previous Policy New
Previous Title Not applicable
Resolution Date
9 -70
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -71
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Activa Group Sportsplex
Category Reserve Fund
Classification Program Specific
Type Discretionary
Purpose
Provides capital funding for the Activa Sportsplex. The fund was initially created to "top up" the
Places to Play campaign to achieve a $2 million contribution to the capital cost of the project. When
all pledges for the fundraising campaign have been received, any balance in excess of $2 million will
be used for future capital expenditures for the building and sports partners chattels.
Funding Source
-sale of naming rights
- contributions from the Places to Play campaign in excess of $2 million
- interest income
Appropriation of Funds
- transfers to the capital budget for approved projects for the Activa Group Sportsplex
- contributions to Places to Play campaign if under $2 million
Target Level
Minimum:
Closing balance should not drop below zero
Rationale: no capital projects to be funded until all committed funds for
naming rights have been received
Maximum:
Closing balance should not exceed the total amount committed to purchase the
naming rights of $500,000
Rationale: Naming rights are the primary funding source for the reserve.
Excess:
The reserve concludes once all the contractual payments have been received and funds have been
expended in capital maintenance of the building.
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
2017 budget
5002062
Community Services, Enterprise
Director, Enterprise
9 -72
Reserve Fund Information Sheet
Other
Previous Policy 1 -757 7- Apr -08
Previous Title Not applicable
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
Repeal Date: 31- Dec -17
Proposed start date
End Date (if applicable) 31- Dec -17
9 -73
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Community Loans
Category
Reserve Fund
Type
Discretionary
Classification
Program Specific
Purpose
To provide funding for interim financing to Community organizations
for the purpose of equipment and facility purchases which are donated
to the City or remain with the community organization
Funding Source
-loan repayments
- interest income
Appropriation of Funds
- interim financing to Community organizations
Target Level
Minimum:
Closing balance should not drop below zero
Rationale: no interim financing should be funded from the reserve fund
unless funding is available
Maximum:
Closing balance should not be greater than $500,000
Rationale: since the plan was established in 1997 there have been
11 loans. The last loan issued was in 2008
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Stabilization Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Department Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
2017 budget
59500014
Community Services,
Community Programs & Services
Director, Community Programs & Services
1 -520 - continue to be used as the guidelines and
procedures of the loan program
Community Assistance Loan Program
9 -74
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable)
9 -75
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Economic Development
Category Reserve Fund
Type Discretionary
Classification Capital
Purpose
Provide funding to support the Kitchener Economic Development Strategy
Funding Source
- proceeds from the sale of downtown lands
- transfers from EDIF capital projects as a result of capital close outs
- transfers from Economic Development capital projects as a result of capital close outs
- repayment of applicable Fagade and Downtown Improvement Program loans
- interest income
Appropriation of Funds
-net costs related to the purchase of downtown lands
- transfers to capital for projects for Economic Development
-costs related to replacement of surface parking capacity when downtown lands are sold
Target Level
Minimum:
Closing balance should not drop below zero
Rationale: projects should not proceed unless funding is available
Maximum:
Closing balance should not exceed $10 million
Rationale: allows for additional funding for economic development capital purchases of a
significant nature
Excess:
Excess funding greater than the maximum transfers to the
Tax Capital Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
2017
TBD
Chief Administrator's Office,
Economic Development
Executive Director, Economic Development
9 -76
Reserve Fund Information Sheet
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
Consolidation of Other Reserves
5002047
4011002
4011003
None
not applicable
not applicable
Not applicable
Business Parks -when the fund has a surplus
Fagade Loan Program
Fagade Grant Program
4011004 Upper Storey Loan Program
EDIF balances to be consolidated at the end of 2013
9 -77
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Election
Category Reserve Fund
Type Discretionary
Classification Program Specific
Purpose
Provides funding for the cost of a municipal election every 4 years
Funding Source
- transfers from the operating budget
- interest income
Appropriation of Funds
- transfers to the operating budget for election related expenses
Target Level
Minimum:
Closing balance should not drop below zero
Rationale: in an election year the entire balance in the fund could be transferred to
cover election expenses; in the following 4 year period the
fund builds to cover the costs for the next election
Maximum:
Closing balance should not exceed $415,000
Rationale: highest projected cost for the next two elections
no requirement to build the fund greater than the financial needs for the next election
Excess:
Excess funding greater than the maximum transfers to
the Tax Stabilization Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
Resolution Date
2015 after next election
6007002
Finance & Corporate Services,
Legislative Services
Director, Legislative Services
None
No change
Not applicable
9 -78
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -79
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Oktoberfest Float
Category Reserve Fund
Type Discretionary
Classification Program
Purpose
Provides funding for the cost of the Oktoberfest Float (includes
annual maintenance costs and float replacement cost every 3 years)
Funding Source
- transfers from the operating budget
- interest income
Appropriation of Funds
- transfers to the operating budget for related expenses
Target Level
Minimum:
Closing balance should not drop below $15,000
Rationale: the cost of the projected annual maintenance costs
Maximum:
Closing balance should not exceed $50,000
Rationale: allows for the anticipated costs for maintenance and replacement of the float
Excess:
Excess funding greater than the maximum transfers to
the Tax Stabilization Reserve Fund
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre 4009002
Divisional Ownership Chief Administrator's Office, Communications
Ownership Lead Director, Communications
Interest Allocation
Yes
Other
Previous Policy None
Previous Title No change
Resolution Date
Amendment Date(s):
Repeal Date:
Reserve Fund Information Sheet
Proposed start date
End Date (if applicable)
9 -81
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Public Art
Category
Reserve Fund
Type
Discretionary
Classification
Program Specific
Purpose
Provides funding for public art and facilities for artistic and cultural activities
Funding Source
- donations from individuals and corporations
- interest income
Appropriation of Funds
- acquisition of art including sculptures, paintings, photography
- expenditures for facilities for artistic and cultural activities
- artist in residence program
- additional details regarding criteria for expenditures are provided in report CSD -03 -134
Target Level
Minimum:
Closing balance should not drop below zero
Rationale: funding is being used to cover the cost of the artist in residence
program. (approx. $5,000 per year). Once the funds are spent,
the reserve fund will be closed.
Maximum:
Closing balance should not exceed $65,000
Rationale: Approximates the projected balance of the reserve fund. No additional
funding is anticipated for this reserve.
Excess:
Any excess funding over the maximum transfers to the Tax Stabilization Reserve Fund
As well, at the end of 2025, any remaining funds will transfer to the
Tax Stabilization Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Department Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
2017 budget
6508002
Community Services, Arts and Culture
Co- ordinator, Arts and Culture
1 -815
Public Arts and Acquisitions Trust Fund
9 -82
Resolution Date
Amendment Date(s):
Repeal Date: 31- Dec -25
Proposed start date Not applicable
End Date (if applicable) 31- Dec -25
9 -83
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Local Environmental Action Fund (LEAF)
Reserve Fund
Discretionary
Program Specific
Purpose
Provides funds for environmental initiatives as approved by Council from time to time.
Generally, qualifying initiatives would reduce greenhouse gas emissions and increase public
awareness /promote changed behaviour at the local level.
Funding Source
-one time funding provided from Hydro Capital Investment reserve fund and from
the Economic Development Investment Fund (EDIF)
- paybacks from some initiatives funded through LEAF
- interest income
Appropriation of Funds
-funds provided to qualifying projects, that meet the criteria as approved in report DTS -08 -33
Target Level
Minimum:
Closing balance should not be below $0
Rationale: there is no ongoing funding source for this reserve fund, so it should be managed in a way
that it does not enter into a negative balance.
Maximum:
Closing balance should not exceed $31VI
Rationale: Approximates the maximum balance forecasted for the reserve fund.
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Capital Reserve Fund
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre 5002052
Divisional Ownership Community Services
Planning
Ownership Lead Director, Planning
Interest Allocation
Yes
Other
Previous Policy 1 -607 17- Mar -08
Previous Title No Change
Reserve Fund Information Sheet
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -85
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Arbitration
Category
Reserve Fund
Type
Discretionary
Classification
Corporate
Purpose
Provides funding for labour arbitration legal fees. Arbitration expenses can
vary from year to year as they are subject to labour negotiations.
Funding Source
- transfers from the operating budget (net of annual budget and
actual expenditures for labour arbitration costs)
- interest income
Appropriation of Funds
- transfers to the operating budget (net of annual budget and
actual expenditures for labour arbitration costs)
Target Level
Minimum:
Closing balance should not drop below $50,000
Rationale: the cost of the last labour arbitration for Fire which represents a complex matter
Maximum:
Closing balance should not exceed 1.5 times the minimum value
Rationale: Provides additional funding for unexpected costs
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Stabilization Reserve Fund
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre 4021002
Department Ownership Finance & Corporate Services, Human Resources
Ownership Lead Director, Human Resources
Interest Allocation
Yes
Reserve Fund Information Sheet
Other
Previous Policy None
Previous Title Arbitration
Repeal Date for Previous Policy Not applicable
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable) Not applicable
9 -87
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Insurance
Category
Reserve Fund
Type
Discretionary
Classification
Corporate
Purpose
Provides funding for insurance premiums, claim deductibles and self insurance costs
Funding Source
- contributions from the tax, utility and enterprise operations
- contributions from non -city organizations
- interest income
Appropriation of Funds
- premium payments
- insurance claims
-other insurance related costs
Target Level
Minimum:
Closing balance should not drop below $2.0 million
Rationale: average annual spend over a five year period in order
to provide for one year of projected expenditures in case of high losses, premium increase or
retroactive assessment from insurance pool
Maximum:
Closing balance should not exceed 1.5 times the minimum balance
Rationale: provides funding to be accumulated for an unanticipated increase in claims
Consistent with reserve funds receiving funding from departmental usage fees
Excess:
Excess funding greater than the maximum balance is used to adjust the user fee
for insurance premiums
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre 5031002
Divisional Ownership Corporate & Financial Services, Financial Planning
Ownership Lead Senior Analyst, Financial Planning
Interest Allocation
Yes
Other
Previous Policy None
Previous Title No change
Resolution Date
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Mediation
Category
Reserve Fund
Type
Discretionary
Classification
Program Specific
Purpose
Provides funding for development mediation
Funding Source
- transfers from the operating budget (a portion of the planning
and development application fees)
- interest income
Appropriation of Funds
- transfers to the operating budget to fund costs related to dispute resolution
for planning and development issues
Target Level
Minimum:
Closing balance should not drop below $25,000
Rationale: average annual spend over a five year period in order
to provide for one year of projected expenditures
Maximum:
Closing balance should not exceed $125,000 which is 5 times the minimum balance
Rationale: allows for additional funding for higher than anticipated costs
for dispute resolution which could be a significant amount
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Stabilization Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Department Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
2017 budget
7029002
Community Services, Planning
Director, Planning
None
No change
Not applicable
9 -90
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable) Not applicable
9 -91
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Sick Leave
Category
Reserve Fund
Type
Discretionary
Classification
Corporate
Purpose
Provides funding for the accumulated sick leave benefit liability to eligible employees
upon retirement, termination or death. It also funds extended absences of current employees.
Funding Source
- transfers from the operating budget (fringe benefit charges)
- interest income
Appropriation of Funds
- payments to eligible employees upon retirement, termination or death
-costs of extended sick leave
Target Level
Minimum:
Closing balance should not be less than 50% of the actuarial liability
Rationale: based on actuarial calculations and advice; approximates the equivalent
of 4 years of anticipated payments to employees eligible to retire
Maximum:
Closing balance should not exceed 75% of the actuarial liability
Rationale: based on provincial comparators used by actuary
Provides additional funding to cover unexpected early retirements
Excess:
Excess funding greater than the maximum balance transfers to
the Tax Stabilization Reserve Fund
Next Review:
Reporting
- annual report to FCSC
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Resolution Date
Amendment Date(s):
Repeal Date:
2013 budget
5002003/5002007
Finance & Corporate Services, Financial Planning
Manager, Financial Planning
1 -755
No change
5- Jul -99
9 -92
Reserve Fund Information Sheet
Proposed start date
End Date (if applicable)
9 -93
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Workplace Safety & Insurance
Reserve Fund
Discretionary
Corporate
Purpose
Provides funding for workplace safety and insurance claims. The City moved to
WSIB's Schedule 2 self insured plan which covers actual claim costs plus an
administrative fee to WSIB
Funding Source
- fringe benefit charges for each employee
- interest income
Appropriation of Funds
-WSIB insurance Claims
-WSIB administrative expenses
- Claims management costs
Target Level
Minimum:
Closing balance should not be less than 100% of the actuarial liability
Rationale: based on actuarial calculations and advice
Funding 100% of the actuarial liability acknowledges the potential volatility
for possible injury claims
Maximum:
Closing balance should not exceed 1.5 times the actuarial liability
Rationale: provides additional funding to cover unexpected or unusually
high workers compensation claims
Excess:
Excess funding greater than the maximum balance transfers
to the Tax Stabilization Reserve Fund
Next Review: 2013 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre 4021011/4021016
Divisional Ownership Finance & Corporate Services, Financial Planning
Ownership Lead Manager, Financial Planning
Interest Allocation
Yes
Other
Previous Policy None
Previous Title No change
Resolution Date
9 -94
Reserve Fund Information Sheet
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
9 -95
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund
Category
Type
Classification
Learning and Development
Reserve Fund
Discretionary
Corporate
Purpose
Provides funding for the learning and development of staff
Funding Source
- transfer from the Revenue fund
- interest income
Appropriation of Funds
- expenditures incurred to provide staff with access to training programs, management
development courses and to acquire training equipment
Target Level
Minimum:
Closing balance should not be below $440,000
Rationale: average annual projected spend over a 5 year period to provide
funding for one year of projected expenditures
Maximum:
Closing balance should not exceed 1.5 times the minimum value
Rationale: Provides additional funding for unexpected costs
Excess:
Excess funding greater than the maximum balance transfers to the
Tax Stabilization Reserve Fund
Next Review: 2017 budget
Reporting
- annual report to FCSC
Accountability
Cost Centre 4021008/4003002
Divisional Ownership Finance & Corporate Services
Human Resources
Ownership Lead Director, Human Resources
Interest Allocation
Yes
Other
Previous Policy 1 -760 27- May -02
Previous Title Staff Training
Resolution Date
Amendment Date(s):
9 -96
Reserve Fund Information Sheet
Repeal Date:
Proposed start date
End Date (if applicable)
9 -97
Reserve Fund Information Sheet
Name of Reserve /Reserve Fund Development Charges*
Category Reserve Fund
Type Obligatory - Development Charges Act
Classification Development
* tracking sheet addresses both Central Neighbourhoods /Suburban Areas
Purpose
Provides funding to pay for the growth related costs of servicing new developments
Funding Source
- development charges
- transfers from capital projects as a result of capital close outs
- interest income
Appropriation of Funds
- transfers to capital fund for servicing new development projects
Target Level
Minimum:
Closing balance should not be less than zero
Rationale: growth related projects will only be funded if funding
is available in the consolidated reserve fund
Maximum:
Closing balance should not exceed the total projected net capital costs
as determined in the development charge study
Rationale: all funds in the reserve fund are to be used for servicing new growth and
should not exceed the projected funding requirements
Excess:
Excess funding should only be used for growth related costs of servicing new
development
Next Review: 2013/2014
-by -law is replaced every 5 years
Reporting
- financial statement to Council annually
- financial statement to the Ministry of Municipal Affairs and Housing 60 days after presenting to
Council (specific reporting requirements are detailed in the Development Charges Act)
- presentation of DC reserve Fund results to the Waterloo Region Home Builders Association
Accountability
Cost Centre
Divisional Ownership
Ownership Lead
Interest Allocation
Yes
Other
Previous Policy
Previous Title
Repeal Date for Previous Policy
Resolution Date
Amendment Date(s):
Repeal Date:
Proposed start date
End Date (if applicable)
7012006/7012002
F &CS, Financial Planning
Director, Financial Planning
DC bylaw- 2009 -91
no change
For both stabilization and capital
Not applicable
9 -99