Section 43(1) of the Development Charges Act, 1997 require the Treasurer to submit annually to Council a financial statement relating to development charge by-laws and reserve funds established under section 33 of the Development Charges Act, 1997

As part of the Development Charges Act, 1997 the Treasurer is to report annually on the funds received and dispersed.

Schedule A (attached) detail balances by individual component of the reserve fund.

Schedule B (attached) details of the funds received and dispersed by category.

Schedule C (attached) details of the capital projects funded and closed.

Schedule D (attached) details of the credits recognized.

Schedule E (attached) investment details as required under Reg. 74/97 Section 8 of the Municipal Act.

Once received by Council a copy of this report will be forwarded to the Ministry of Municipal Affairs and Housing as required by the Development Charges Act, 1997.

Enclosed are the statistics for the twelve (12) months ended December 31, 2006.

FINANCIAL CONSIDERATIONS:

The December 31, 2006 closing balance of the Development Charge reserve accounts was $93,901,800 (Schedule A). This balance represents the cash balance in the reserves, and does not include unfunded commitments. As previously communicated to Council, the majority of the reserves are dedicated to specific capital projects.

Appendix C provides the detailed funding for projects approved by Council in the Corporation’s 2006 Capital Budget and throughout 2006. The net increase in the reserve fund in 2006 was $17,788,816 (Appendix B).

The Net Amount Transferred to Capital Projects was $10,304,047 (Schedule C). The two components of the transfer include $10,879,360 of growth related projects being funded from development charges as well as a transfer back to development charges of $575,313 resulting from the closure of capital projects.

A summary of the Development Charges activity for the year is detailed as follows:

January 1, 2006 opening balance $76,112,984

Development Charges received 25,162,157

Interest earned 2,930,706

Net amount transferred to capital projects (10,304,047)

Balance as at December 31, 2006 $93,901,800

In 2006, a complete review of the DC reserve was undertaken and an adjusting entry was prepared to reallocate entries made in previous years. The prior years adjustment transferred balances within each of the three categories (revenue, interest, capital expenses). This entry was a housekeeping matter and had no impact on the net balance in the DC reserves. (Schedule B “Prior Year Adjustment)

COMPONENT CATEGORIES

The balance of the Reserve Fund is made up of the following major categories:

Town Wide Soft $ 63,791,473

Town Wide Hard 6,596,127

Area Specific 23,514,200

Total $ 93,901,800

The Town Wide Hard development charge reserve continues to be depleting at a rate quicker than revenues are being received. Staff continues to monitor this reserve to determine if external borrowing will be required to fund development charge related capital projects. Schedule F (attached) provides the year end balance of each reserve for 2003 through 2005 along with the percentage change over the three year period.

The chart below summarizes the year end reserve balances by component category:

The depletion of the Town Wide Hard Services reserves is primarily due to major road projects being constructed in advance of development.