YOU ARE HERE : Home / Resources / City Committees / Finance Committee / Finance Committee Agendas and Minutes / 2010 Finance Committee Minutes / Nov 16,2010 Finance Committee 
Nov 16,2010 Finance Committee

Agenda                Minutes
5.1 Life Cycle Reserve Analysis

The Manager of Finance advised that the item was brought forward to satisfy the March 30,2010 Finance Committee Meeting motion:

"THAT the Life Cycle process be reformatted to transfer amounts from operating departments to the Life Cycle Reserve Fund over a number of years that would be used to meet capital requirements while conforming to the purpose of the reserve, to fund items over an excess of one year and over $5000; and

THAT items of an operational nature be removed from Life Cycle Reserve funding and placed back into the operational budgets of the departments. "

Also during the March 30,2010 Finance Committee meeting the following action of staff was requested:

"THAT staff were asked to identify line items operational in nature to be removed from the Life Cycle Reserve Fund for 2010 and provided the Committee with a revised list of reserve items. "
The Manager of Finance reported on the process used to satisfy the request to remove items of an operational nature from the 2010 Life Cycle Reserve and that a 50 year comprehensive plan has been prepared that includes over 800 projects in order to include all maintenance and replacement projects that are expected to occur in order that the best estimated annual transfer could be calculated.
To meet the requirements of the Tangible Capital Asset legislation and identify the true definition of Life Cycle items, items were placed in one of four categories: Life Cycle Maintenance Projects, Tangible Asset Replacement Projects, Capital Asset Replacement Projects and Operational Projects.
The Committee requested that the Finance Committee members at large to receive copies of the Tangible Capital Asset Policy once adopted by CounciL

The Manager of Finance then reported on the suggested planned transfer amounts that would be required to compensate for the shortfall in reserve transfers to all departments.

Discussion ensued relative to the suggested course of action and the impact to tax payers in the coming years.

The Committee requested that a list of items with a 1 year life expectancy be circulated to the Committee on request for at least 5 years to be reviewed during the budget review process.

Moved, seconded and CARRIED,
THAT staff change the name for the Asset Renewal Reserve and the Future Capital Reserve to the Tangible Capital Asset Replacement Reserve and the Capital Asset Replacement Reserve, respectively;

AND THAT staff allocate the 2011-15 projects to the Life Cycle, Tangible Capital Asset Replacement Reserve, Capital Asset Replacement Reserve and the Operating Budget as outlined in table 2 of this report;

AND THAT staff continue to increase the transfer to the reserves by $50,000 per year until the estimated $1,300,000 annual reserve transfer is achieved;

AND THAT staff allocate 25% of future annual operating surpluses until the estimated $10,000,000 reserve balance is achieved;

AND THAT the committee's decision to distribute the reserve transfers to the operating departments be reversed;

AND THAT staff allocate annual interest earnings from the city's investment portfolio to the Life Cycle and Capital Asset Replacement Reserves.

Print View   Site Map   Login