Deputy Don’s Update

Last issue, I reported on Simcoe County 2017 Financial results. Below I review Springwater financials. Although a little “dry”, this is important stuff to be aware of.


Springwater Financial Report

The Springwater financial results for the year ended December 31, 2017 were positive, with total revenue of $17.6 million, being $1.38 million over budget and expenses being below budget by $366,000. After net transfers to reserves, the total tax based operating surplus was $830,267. The bulk of the over budget revenue was due to supplementary taxes and user fees being higher than planned and the main expense reduction was due to salary and benefit delays in starting new hires in 2017.


The Finance and Audit Committee met with Director Schmidt and the external auditors, Collins Barrow LLP and reviewed the draft audited financial statements and related year-end reporting, reviewed below. Different options for allocating the surplus were reviewed the Committee recommends to Council to allocate $81,300 to the Planning Reserve, $49,453 to the Land Acquisition Reserve and $634,761 to the Tax Rate Stabilization reserve to reduce Township unfunded capital. This will assist in smoothing potential tax increases in future years and provide for a contingency.


Development Charge Reserve Funds

Development Charges (DCs)are one-time fees collected on new residential and non-residential construction to finance a portion of the capital infrastructure requirements associated with growth. The fees are collected at the time of building permit issuance. The Development Charges Act requires the Treasurer to provide Council with an annual financial statement relating to Development Charge By-laws and Reserve Funds.


During 2017, Development Charge collections totaled $2.4M and capital/operating expenditures funded by DCs totaled $3.0M. The year end summary of the reserve fund balances totals $4.97 million.


Four of the DC reserve funds have unfunded balances as of December 31, 2017. The General Government DC has an unfunded balance in the amount of $97,664. This is due to the Long Range Financial Plan, Official Plan Update and the Development Charge Background Study Update, which are all being temporarily funded from the working reserve fund. The Public Works – Roads & Related DC has an unfunded balance of $1.16 million. This is due to a number of road capital projects. This balance will be repaid via future DC collections. The Midhurst Secondary Plan Area Specific DC is unfunded in the amount of $91,953. This is due to previous studies conducted for the Midhurst Secondary Plan. This balance is being temporarily funded by the Planning Reserve. The Centre Vespra Area Specific DC is unfunded in the amount of $310,543. This balance will be repaid by future DC collections.


2017 Reserves & Reserve Fund Statement

A Reserve is an allocation of Township surpluses set aside for specific purposes. An example of a Reserve is the Public Works Reserve, where Council annually budgets funds for future capital replacements. Reserves are contained within the main Township bank account and do not have interest applied against them.


A Reserve Fund can be either Obligatory or Discretionary. Reserve Funds are contained in different bank accounts than the Township general funds and do earn interest for the purpose of the specific Reserve Fund. Obligatory Reserve Funds are required by various legislation, such as Development Charge funds, which are mandated to be set aside in a Reserve Fund by the Development Charge Act. Discretionary Reserve Funds are set up at Council’s discretion. An example of a Discretionary Reserve Fund is the Hydro Reserve fund. In 2001, Springwater Hydro was sold to Hydro One, the net proceeds were transferred to the Hydro Reserve finance future capital requirements in Elmvale.


Transfers are made to and from the reserves and reserve funds throughout the year by the Director of Finance. The majority of the transfers are related to and approved by the operating and capital budgets. Other transfers are approved through specific resolutions of Council arising from items that are reported on throughout the year.

During 2017, transfers to reserves and reserve funds totaled $8.7 million; whereas capital and operating expenditures funded by reserves and reserve funds totaled $7.1 million. The 2017 yearend balance in the Township’s reserves and reserve funds equate to $29.1 million (excluding outstanding DC commitments).



2018 Budget & Business Plan – Results as of March 31, 2018

For the first quarter ending March 31, 2018, the Township has $42,000 better than planned revenue and the financial results to date are mostly tracking as budgeted.






Deputy Mayor – Don Allen

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