June 21, 1999
TO:Policy and Finance Committee
FROM:Chief Financial Officer and Treasurer
SUBJECT:Development Charge Reserve Funds
Purpose:
To report on the status of the development charge reserve funds for the fiscal period ending December 31, 1998 and the
purpose for which these funds are held.
Financial Implications:
As at December 31, 1998 the City's development charge reserve fund balances totalled $58.7 million. Development charge
revenue of $14 million and $13 million were realized in 1998 and 1997 respectively and approximately $4 million and $11
million was expended in 1998 and 1997 respectively for development related capital works.
Recommendations:
It is recommended that this report be received for information.
Council Reference/Background:
The Strategic Policies and Priorities Committee, at its meeting on May 4, 1999 recommended that the Chief Financial
Officer and Treasurer report on the status of existing development charge reserve funds and the purpose for which these
funds are held.
Background:
In accordance with section 17 of the Development Charges Act, 1990 (DCA, 1990), the statement of development charge
reserve funds for the year ended December 31, 1998 is attached in Appendix A. The statement summarizes the
development charge proceeds levied during each year and the distribution of the proceeds in respect of each service for
which the development charge is imposed. For comparison purposes, the statement of development charge reserve funds,
for the year ended December 31, 1997, is also attached in Appendix B.
The City levied a total of approximately $14 million in development charge revenues in 1998 under the existing
development charge by-laws of the former municipalities within Toronto. Of the total $58 million in development charge
reserve funds held as at December 31, 1998, a balance of approximately $28 million is from former Scarborough, $24
million from former North York, and $6 million for the former municipalities of York, Metro and Etobicoke.
Under the new Development Charges Act, 1997 (DCA, 1997), all existing development charge by-laws enacted under the
old Act will expire on August 31, 1999. To that end, the City is in the process of implementing a new city-wide
development charge by-law to replace all existing by-laws.
A summary of the development charge by-laws in place in each of the former municipalities is provided in Exhibit I.
Exhibit I - Development Charge By-laws by former Municipality
Upon the expiry or repeal of the existing development charge by-laws, the reserve funds established under the old Act will
be rolled into the development charge reserve funds under the DCA, 1997 or a general capital reserve fund if none exist.
The money in the reserve fund established for a service may be spent only for capital costs determined under paragraphs 2
to 8 of subsection 5(1) of the DCA, 1997.
It is anticipated that a number of these projects will evolve over time in response to the specific needs of new development.
As a result, the cost, timing and nature of such projects may be altered as part of the City's annual capital budgetary
process. It is intended that development charge draws will be made for such projects based on the development-related
percentages which have been identified in the Background Study.
Attach.
