Reserves and Surplus Policy Appendix A

October 12, 2021Pages 55–574 sections

A detailed listing of the purpose, funding sources, and target levels for various reserve funds.

6.2 FINANCE & ADMINISTRATION - Mayor Screech, Chair

Special Police Operating Reserve minimum: 20% of RCMP contract expendituresGeneral Operating Surplus target: three months of regular expenditures

RESERVE FUNDS

Fund(s)	Purpose	Funding Source(s)	Minimum $ Level	Optimum $ Level
Reserve for Future Expenditures	For one-time and intermittent projects, and to offset unrealized revenues	• Annual allocation from general operating budget as provided for in financial plan • Other budgeted contributions from operations including any paybacks as a result of funds advanced for specific projects	1% of General Operating Fund Revenues	2.5% of General Operating Fund Revenues
Special Police Operating Reserve	For future police operating costs	• Excess traffic fine sharing revenue not utilized within the annual policing operations • Surplus from the policing operational budget	20% of RCMP contract expenditures rounded to nearest $10,000	Adequate to fund police funding strategy, including increased costs related to reaching population of 15,000
Capital Works and Land Acquisition Reserve	For new or enhanced infrastructure or equipment (one-time capital) not specifically funded from other established Reserves	• Annual allocation from general operating budget as provided for in financial plan • Casino Funds • Net proceeds from the sale of real property	N/A	Adequate to fund all one–time capital projects and new / additional assets identified as capital funded in the long-term capital plan
Capital Renewal Reserve	For expenditures associated with the rehabilitation, renewal or replacement of existing transportation and storm drain infrastructure	• Annual allocation from general operating budget as provided for in financial plan • Annual allocation of a portion of assessment growth • Casino Funds	1% of original cost of transportation and storm drain Engineering structures	Minimum 1% of original cost plus forecasted cash flow requirements of the planned long-term capital renewal program
Park Improvement Reserve	For expenditures associated with park improvements, including playground	• Annual allocation from general operating budget as provided for in financial plan • Casino Funds	N/A	Forecasted cash flow requirements for park improvements identified in the approved parks master plan and long term capital plan
Machinery & Equipment Depreciation Reserve	To replace municipal vehicles and equipment included in the Town’s fleet (excluding Fire)	• Annual allocation from general and sewer operating budgets • Proceeds from the sale of municipal vehicles and equipment	1% of original cost of machinery & equipment	Minimum 1% of original cost plus forecasted cash flow requirements of the vehicle and equipment replacement plan
Fire Department Machinery and Equipment Depreciation Reserve	To replace Fire vehicles and licenced equipment and other equipment such as self-contained breathing apparatus	• Annual allocation from general operating budget • Proceeds from the sale of fire vehicles and equipment • A portion of the Public Safety Building rental suites income	1% of original cost of Fire vehicles and equipment	Minimum 1% of original cost plus forecasted cash flow requirements of the Fire vehicle and equipment replacement plan
Sewerage System Capital Reserve	To fund sewer utility capital projects required for sewer operations or identified in the Sewer Master Plan, and Sewer equipment not included in the Town’s licenced fleet	• Annual allocation from sewer operating budget as provided for in financial plan	1% of original cost of Sewer Engineering structures	Minimum 1% of original cost plus forecasted cash flow requirements of the planned sewer capital program
Police Equipment, Property and Contract Reserve	To fund the Town’s share of the Police building repairs and upgrades, and equipment	• Annual allocation from general operating budget as provided for in financial plan • Share of surplus from the policing building budget	Adequate to fund 2 years of police capital per 5-year plan	Adequate to fund forecasted cash flow requirements of the planned 5-year Police capital program
Cash in Lieu of Parking Reserve	To fund off-street parking spaces or transportation infrastructure that supports walking, bicycling, public transit or other alternative forms of transportation.	• Proceeds from payments in lieu of parking • Allocation from general operating budget as provided for in financial plan	N/A	N/A
Community Amenity Contributions Reserve	To fund any capital asset or service that provides public benefit, improvement or contribution that can enhance the quality of life for a community	• Cash Community Amenity Contributions	N/A	N/A

Page 55–57

STATUTORY RESERVE FUNDS

Fund(s)	Purpose	Funding Source(s)	Minimum $ Level	Optimum $ Level
Development Cost Charges (DCC) Reserves	Holding account(s) for levies from developers to be used for approved DCC programs/projects	• DCC collections and credits	N/A	N/A
Parks & Open Space	To purchase parkland as allowed for under the Local Government Act	• Developer cash contributions as per the requirement under the Local Government Act cash-in-lieu option	N/A	Adequate balance to fund parkland acquisitions, per the long-term capital plan

Page 55–57

RESERVE ACCOUNTS

Fund(s)	Purpose	Funding Source(s)	Minimum $ Level	Optimum $ Level
Casino Revenue	Casino funds can be used for any municipal purpose	• Casino Agreement	N/A	N/A
Community Works Gas Tax Reserve	To be used pursuant to the Community Works Gas Tax Agreement	• Federal Community Works Gas Tax funds distributed by the Union of BC Municipalities (UBCM)	N/A	N/A
~~Community Amenity Contributions Reserve~~	~~To be used pursuant to agreements under Policy 6400-041 Community Amenity Contributions~~	~~• Cash amenity provided as Community Amenity Contributions~~	~~N/A~~	~~N/A~~

Page 55–57

UNAPPROPRIATED SURPLUSES

Fund(s)	Purpose	Funding Source(s)	Minimum $ Level	Optimum $ Level
General Operating Surplus	For working capital purposes within the general operating fund and for unforeseen general operating emergency expenditures	• Any excess general operating fund revenues (including property taxes) over expenditures and transfers at the end of each fiscal year	Two months of regular general fund operating expenditures	Three months of regular general fund operating expenditures
Sewer Operating Surplus	For working capital purposes within the sewer operating fund and for unforeseen sewer operating emergency expenditures	• Any excess sewer operating fund revenues (including user fees) over expenditures and transfers (including capital transfers) at the end of each fiscal year	Two months of regular sewer operating expenditures, plus contingency for sewage treatment plant	Four months of regular sewer fund operating expenditures plus contingency for new sewage treatment plant

Page 55–57

Extracted from: 2021 10 12 Committee of the Whole Agenda - Agenda - Pdf