The Township of King maintains a variety of reserve funds which have been established for different purposes. All reserve funds earn and retain investment income which protects them from the dilution of purchasing power caused by inflation.
Council has approved each reserve fund and its purposes by way of By-law 2021-046 adopted on April 26, 2021 which contains a separate descriptive schedule for each reserve fund. The complete list of reserve funds, with links to each descriptive Bylaw schedule and most recent balances is available at the link below. The Reserve Funds are grouped by broad purpose as follows:
Reserve Funds for Existing Infrastructure
Reserve funds for existing infrastructure are funds set aside by Council to provide funding for future major repairs, rehabilitation or replacement of the Town’s infrastructure. This includes all roads, street lighting, underground water and sewer pipes, pumping stations, sidewalks, trails, parks and park amenities, buildings and facilities, fleet and equipment, furniture and fixtures, as well as computer equipment, business systems and software. All assets must be replaced at end of life to maintain reliable services, and are managed through the Town’s Asset Management Plan. These reserve funds help protect the annual tax rate or utility rates from significant shocks due to periodic, but expensive replacement projects. Some reserve funds are tax rate sourced, while others are sourced from the water and wastewater utility rates.
Reserve Funds for New Infrastructure
Reserve funds for new infrastructure are funds set aside by Council to provide funding to expand the capacity of existing infrastructure, or to construct new infrastructure necessary to accommodate the growth needs of the municipality to maintain our service levels to the growing community and our new residents and businesses. Most development activity requires the payment of development charges, as well as dedication of parklands. In some circumstances, the Township will accept payment in lieu of the parkland dedication. While most growth related Township infrastructure is funded by development charges, not all of it is. This requires some allocation of tax dollars to these New Infrastructure reserve funds to fund the portions that are not covered by the development charges.
Development Charge Reserve Funds
Development Charge reserve funds are included in the Reserve Funds for New Infrastructure grouping, and are specifically established as required and controlled by the Development Charges Act. They serve to fund community growth and development related expansion of municipal infrastructure and services. These reserve funds, and the projects to which they are allocated, are closely monitored by the development community to ensure compliance with the requirements and restrictions of the Act. These funds may not be used for repair, rehabilitation or replacement of existing infrastructure and may not be used for any other purpose by Council. Additional information about Development Charges and our current rates and copy of our Development Charges Bylaw can be found here.
Stabilization Reserve Funds
Stabilization Reserve Funds are funds set aside by Council to be used to reduce the sudden impact to tax or utility rates from unexpected costs in budgets, or unexpected costs arising mid-year. These can be used over a couple of years if necessary to soften the otherwise large pressures on the rates. For example, a significant successful lawsuit against the municipality would be funded from the Insurance Reserve Fund, with the Reserve fund then slowly replenished over several years.
Special Purpose Reserve Funds
Special Purpose reserve funds are set aside by Council or by legislation to provide financial resources for specific purposes or programs. These include required funds to settle future debt payments of the municipality.