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, 2007.

FINANCIAL CONSIDERATIONS:

The December 31, 2007 closing balance of the Development Charge reserve accounts was $103,258,278 (Schedule A). This balance represents the cash, letter of credit and receivable balances in the reserves, and does not include commitments for approved capital projects. As previously communicated to Council, the majority of the reserves are dedicated to specific capital projects.

The net increase in the reserve fund from January 1, 2007 ($93,901,800) to December 31, 2007 ($103,258,278) was $9,356,478 as seen in Schedule B.

The Net Amount Transferred to Capital Projects was $42,594,299. The two components of the transfer include $43,266,234 of growth related projects (Schedule C) being funded from development charges as well as a transfer back to development charges of $671,935 resulting from the closure of capital projects.

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

January 1, 2007 opening balance $ 93,901,800

Development Charges received $ 48,052,154

Interest earned (Schedule E) $ 3,898,623

Net amount transferred to capital projects $(42,594,299)

Balance as at December 31, 2007 $103,258,278

Schedule D provides information on the service-in-lieu agreements and indicates that the Town has an obligation in the amount of $4,202,085 to be offset from development charges payable when the respective developers execute their agreements.

COMPONENT CATEGORIES

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

Town Wide Soft $ 74,036,946

Town Wide Hard $ 15,088,868

Area Specific $ 14,132,464

Total $103,258,278

Schedule F (attached) provides the year end balance of each reserve for 2005 through 2007 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 Area Specific reserves is primarily due to the acquisition of property and the construction of major road projects; both in advance of development.

Development Charges Committed to Approved Projects

Growth-related projects that are approved as part of the annual budgets generally show development charges as the major funding sources, but the actual cash funding is not transferred to the project until the cash is required. This process retains cash within the Development Charge Reserve Fund to earn as much interest as possible for the reserve. Due to approval of the budget, however, these funds remaining in the DC Reserve Fund are considered to be committed. As an enhancement to this report, staff are indicating what funds that are still retained in the Development Charge Reserve Fund are actually committed to projects underway or about to start, and what funds are left to fund future (currently unbudgeted) projects.

With major capital infrastructure works being planned in the near future, staff will continue to monitor the reserves to determine if external borrowing will be required to fund development charge related capital projects. As the following chart shows, the reserve balance for the year ended December 2007 is significantly lower when unfunded capital commitments of $61,874,331 are taken into account, leaving the amount available to finance future projects at $41,383,947.

Further details on the specific Town Wide Soft reserves with commitments are shown in Schedule A.

RECOMMENDED

BY: ________________________ ________________________

Barb Cribbett, Treasurer Andy Taylor, Commissioner

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