2. 2010 City of OTTAWA sinking fund financial statements
ÉTATS FINANCIERS DE 2010 DU FONDS D’AMORTISSEMENT DE LA VILLE D’OTTAWA
That Council receive the 2010 City of Ottawa Sinking Fund Financial Statements.
Recommandation du ComitÉ
Que le Conseil prenne connaissance des États financiers de 2010 du fonds d’amortissement de la Ville d’Ottawa.
1. City Treasurer’s report dated 17 May 2011 (ACS2011-CMR-FIN-0028).
Sous-comité de la vérification
and / et au
Finance and Economic Development Committee
Comité des finances et du développement économique
and Council / et au Conseil
Submitted by/Soumis par : Marian Simulik, City Treasurer/Trésorière municipale
Contact Person/Personne ressource : Mona Monkman, Deputy City Treasurer-- Corporate Finance /Trésorière muncipale adjointe—Finances municipales
Finance Department/Service des finances
613-580-2424 ext./poste 41723, Mona.Monkman@ottawa.ca
Ref N°: ACS2011-CMR-FIN-0028
That the Audit Sub-Committee recommend that the Finance and Economic Development Committee recommend Council receive the 2010 City of Ottawa Sinking Fund Financial Statements.
Que le Sous-comité de la vérification recommande au Comité des finances et du développement économique de recommander à son tour au Conseil de prendre connaissance des États financiers de 2010 du fonds d’amortissement de la Ville d’Ottawa.
The Municipal Act, 2001 requires that the City’s auditor certifies the balance in each sinking and retirement fund of a municipality for the year. Attached to this report are the 2010 audited Sinking Fund Financial Statements.
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 that will be sufficient to meet the principal payments, which are required when the debenture issues mature.
The accounts for the sinking fund have been closed and audited for the year ending December 31, 2010. The Sinking Fund financial statements identify the value of the investments held in the Sinking Fund and the amounts required to satisfy the commitments against those funds. The value of the Sinking Fund portfolio, including short-term investments (cash and cash equivalents), as at December 31, 2010 was $177.16 million on an amortized cost basis (the market value was $181.61 million). The portfolio exceeds the actuarial requirements of $167.2 million which is the minimum amount required as at December 31, 2010, to accumulate sufficient funds to meet total sinking fund debentures at maturity. Commitments of $235 million are scheduled to mature from 2011 to 2019. New commitments of $97.8 million with actuarial requirements beginning in 2021 were added in 2010.
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.
On March 10, 2011, City Council approved the distribution of $4,438,026 from the City of Ottawa Sinking Fund to the City, representing the surplus in excess of the debenture commitment authorized by By-law 33 of 1991, which matured on February 28, 2011. Council approved that this amount be contributed to the Environmental Resources Areas Acquisition Reserve Fund. At the same time, Council also approved that any future excess amounts, which Council authorizes to be distributed from the City of Ottawa Sinking Fund, be contributed to the Environmental Resources Areas Acquisition Reserve Fund.
No public consultation was required.
Section 409 (6) of the Municipal Act, 2001 requires that the municipal auditor shall certify the balance in each sinking and retirement fund of a municipality for the year.
CITY STRATEGIC PLAN
There are no rural implications associated with this report.
Following consideration by the Audit Sub-Committee, this report will be forwarded to the Finance and Economic Development Committee and Council.