August 28, 1998

TO: Emergency and Protective Services Committee

FROM: Chief Financial Officer and Treasurer

SUBJECT:FEASIBILITY OF PLACING PARKING TAG REVENUES INTO A RESERVE

Purpose:

To report on a request from the Committee regarding a change in Council policy that would provide for revenues from parking enforcement to be placed into reserve accounts rather than treating such funds as revenue.

Financial Implications and Impact Statement:

The re-direction of revenue associated with parking enforcement from the corporate revenue account to a reserve would result in a net impact on the corporate budget of $20.0 million and an increase in the tax rate of close to 0.8 percent.

Recommendations:

It is recommended that this report be received for information purposes.

Background:

At its meeting on April 21, 1998 the Emergency and Protective Services Committee requested that the Chief Financial Officer and Treasurer report on a change in Council policy that would provide for revenues from parking enforcement to be placed into reserve accounts rather than treating such funds as revenue. This request came as a result of a joint presentation from the Parking Enforcement Unit, Toronto Police Service and Parking Tag Operations, Toronto Finance.

Comments:

At present, the revenue associated with parking tags is budgeted as corporate revenue. The net revenue is $20 million. This revenue is used to meet the targeted net corporate expenditures and is a part of the overall mill rate determination. To exclude these funds from the corporate revenue stream would create a budgetary pressure of $20.0 million annually and would necessitate approximately a one percent increase in the tax rate to offset this revenue loss.

The Budget Committee requested the Commissioner of Works & Emergency Services to report back to the Budget committee by October 1998, on the options and models available for integrating the operations of the Parking Authority, Parking Enforcement and Permit parking under one umbrella. At that time, recommendations will be made regarding the total revenue and expenditure stream for parking and parking enforcement activities, as well as where and how the monies arising from parking tag violations should be reported. However, it must be recognised that any transfer of parking tag violations net revenue will create a budgetary pressure of $20 million or one percent during 1998 and future years.

Conclusions:

The 1998 budget as approved by the City of Toronto Council, on April 30, 1998, is based on the premise that these revenues will be available to meet targeted corporate net expenditures. It is therefore not recommended that the parking tag revenues be removed from the corporate revenue stream. Placing these monies into an earmarked reserve which would create a net annual budgetary pressure of $20.0 million and would contribute to a mill rate increase.

Contact Name:

Bryan Kerr

Phone No. 392-5880 / Fax No. 397-9577

E-mail address: bryan_a._kerr@metrodesk.metrotor.on.ca

W. A. Liczyk

Chief Financial Officer

and Treasurer