and / et au
Comité des finances et du développement
économique
SUBJECT:
|
|
OBJET :
|
États financiers du
fonds d'amortissement et RÉPARTITION DES EXCÉDENTS |
That the Audit Sub-Committee recommend that the
Finance and Economic Development Committee recommend Council approve:
1.
The Sinking Fund Financial Statements
for 2011; and
2.
The distribution of the sum of
$1,671,412.36 from the City of Ottawa Sinking Fund representing the surplus in
excess of the debenture commitment authorized by By-law 33 of 1991 which
matured on February 28, 2011, to the City of Ottawa.
Que
le Sous-comité de la vérification recommande au Comité des finances et du
développement économique de recommander au Conseil d’approuver ce qui
suit :
1. Les états financiers du fonds
d’amortissement de 2011;
2. La répartition du montant de
1 671 412,36 $ du fonds d’amortissement de la Ville d’Ottawa,
représentant l’excédent en surplus de l’engagement, autorisé par le Règlement
33 de 1991, des obligations non garanties, lesquelles sont échues le 28
février 2011, à la Ville d’Ottawa.
When sinking fund or term debentures are issued, an
annual contribution is made to the sinking fund, which together with interest
earnings derived from the investment of these funds, will accumulate to an
amount which will be sufficient to pay the debentures on maturity. Investments
are held in the Sinking Fund and are expected to grow to amounts which will be
sufficient to meet the principal payments which are required when the
debenture issues mature. When the
sinking fund balance for a debenture issue is more than sufficient to pay the
principal amount of the debenture issue at the maturity date, this surplus may
be distributed to the general fund in accordance with Section 409 of the
Ontario Municipal Act, 2001.
The accounts for the sinking fund have been closed and
audited for the year ending December 31, 2011. The value of the Sinking Fund portfolio
including short-term investments (cash and cash equivalents) as at December
31, 2011 was $87.15 million on an amortized cost basis (the market value was
$92.73 million). The portfolio exceeds the actuarial requirements of $82.46
million which is the minimum amount required as at December 31, 2011, to
accumulate sufficient funds to meet total sinking fund debentures at maturity.
Commitments of $382.84 million are scheduled to mature from 2012 to 2042. New commitments of $150 million with
actuarial requirements beginning in 2012 were added in 2011.
By-Law 33 of
1991
On February 28, 1991 the former Regional
Municipality of Ottawa Carleton issued debentures in the amount of
$100,000,000 on behalf of the former City of Ottawa and for Regional purposes.
In accordance with this by-law the amount of $3,024,258 was contributed each
year to the Sinking Fund in order to accumulate sufficient funds to meet the
amount of the debenture maturity on February 28, 2011. This levy was
reduced to $2,000,000 commencing February 28, 2006 and was further reduced to
$1,000,000 on February 28, 2008 as approved by City Council.
The last sinking fund levy in the amount
$1,000,000 was made on February 28, 2011. An amount of $100,000,000 was
transferred from the Sinking Fund to the City to meet the debenture commitment
on maturity. Interest earnings for 2011 have been attributed to the sinking
fund account for By-law 33 of 1991 up to February 28, 2011 which results in a
surplus of $1,671,412.36 and may be distributed to the City in 2012.
For reporting purposes this
amount has been included in the 2011 year-end Environmental Resource Areas
Acquisition Reserve Fund balance, which now totals $5.4 million.
There
are no rural implications associated with this report.
No
public consultation was required.
There are no legal impediments to approving the
recommendations of this report. Section
409 of the Municipal Act, 2001 deals
with distribution of any surplus from the Sinking Fund.
There are no risk management impediments to
distributing the surplus in accordance with the recommendation of this report
since the debt commitment has matured and sufficient funds were available to
meet the commitment in full.
Sinking Fund levies
are budgeted as debt charges until such time as the contribution is reduced or
discontinued in accordance with Section 409 of the Municipal Act.
In accordance with Council direction, and as
mentioned in the Disposition of 2011 Tax and Rate Supported Operating
Surplus/Deficit report (ACS2012-CMR-FIN-0008) which was considered at Council
on March 28, 2012, an additional contribution of $1.67 million, representing
the distribution of the surplus from the Sinking Fund has been taken into consideration
in arriving at the projected year-end balance for the Environmental Resource
Areas Acquisition Reserve Fund.
Not
Applicable.
There are
no technology implications associated with this report.
Not
applicable.
Document 1 - Sinking
Fund Financial Statements 2011.
Following
consideration by the Audit Sub-Committee and the Finance Committee and
Economic Development Committee, the recommendation will be forwarded to
Council for approval.