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Home My WebLink About2018 Budget Audit Advisory Board MinutesToronto and Region Conservation Authority Budget/Audit Advisory Board Meeting #1/18 was held at TRCA Head Office, on Friday, March 2, 2018. The Chair Maria Augimeri, called the meeting to order at 8:36 a.m. PRESENT Maria Augimeri Jack Ballinger Ronald Chopowick Jennifer Innis ABSENT Gino Rosati RES.#C1/18 - Moved by: Seconded by: MINUTES Ronald Chopowick Jack Ballinger Chair Member Member Member 1A15Fi 07-Xl THAT the Minutes of Meeting #3/17, held on November 3, 2017, be approved. CARRIED 1 Section I — Items for Authority Action RES.#C2/18 - 2018 AND 2019 BUDGET AND UNMET NEEDS UPDATE Update on 2018 municipal budget approval, 2019 preliminary municipal budget submissions, and the organization's 2019 unmet needs. Moved by: Ronald Chopowick Seconded by: Jack Ballinger THE BOARD RECOMMENDS TO THE AUTHORITY THAT Toronto and Region Conservation Authority's (TRCA) 2019 preliminary municipal capital budget submissions for the regions of Durham, Peel and York, and the City of Toronto be consistent with the targets identified for TRCA in the previous budget cycle; THAT the list of unfunded municipal projects included in TRCA's Unmet Priorities — Projects and Programs list outlined in Attachment 3 be submitted to TRCA's member municipalities for their consideration in 2019; AND FURTHER THAT TRCA staff be directed to submit the preliminary 2019 municipal estimates and multi-year funding requests to the City of Toronto, the regional municipalities of Durham, Peel and York, Township of Adjala-Tosorontio and Town of Mono in accordance with their respective submission schedules. CARRIED BACKGROUND On June 23, 2017, the Authority approved the preliminary 2018 operating and capital levies for TRCA partner municipalities, along with a list of unfunded municipal projects and multi-year funding requests (Resolution #A115/17). All 2018 municipal budgets have been approved by the respective municipalities. Attachment 1 provides the detailed funding by Service Area showing approved 2017, 2018 and projected 2019 capital levy. Attachment 2 provides an overview of the approved 2017, 2018 and projected 2019 operating levy. TRCA was successful in securing one-time capital funds with two partner municipalities (City of Toronto and Region of Peel) $2.3M for Black Creek Pioneer Village, $1.51M for Menno-Reesor Restoration Project and $2.61M for Bolton Camp respectively. Additionally, the Regional Municipality of Durham has allocated $41k to fund land management expenditures located within the region and will support TRCA's 2018 National Disaster Mitigation Program (NDMP) application with the intent for further discussion once the application is successful. The internal process for starting the 2019 budget estimates has commenced. Member municipalities require that TRCA provide 10 -year capital budget projections and each municipality has its own requirements and format for this information. As a matter of budgeting protocol, TRCA staff regularly consults with member municipality staff, to ensure that there is alignment on objectives and deliverables; to avoid duplication of effort; to coordinate activities and procurement to realize maximum value and efficiency; and to report on the achievement of project deliverables. 2 RATIONALE Unmet Priorities — Projects and Programs List Attachment 3 lists unmet priority projects and programs for all partner municipalities for the 10 year projection. Staff recommends that the list be submitted to the participating municipalities as "unmet or unaccommodated" priorities for consideration during the 2019 budget process. It is proposed that TRCA staff enter into discussions with staff from City of Toronto and the regions of Durham, Peel and York (participating municipalities) regarding opportunities for these unmet needs in their respective capital budgets. DETAILS OF WORK TO BE DONE The 2018 budget was prepared with a 1.25% cost of living adjustment increase, consistent with the prior year, however this has not gone into effect and a recommendation will be brought to the Authority, once the compensation project is completed; as this will form the foundation for the revised salary grid. When revised salary grid is brought to the Authority, TRCA staff will also present the final 2018 budget for approval. Staff will continue to refine the 2019 budget to meet guidelines that will be provided by the municipal partners with anticipated preliminary submissions in late May 2018. Report prepared by: Jenifer Moravek, extension 5659 Emails: jmoravek(cDtrca.on.ca For Information contact: Michael Tolensky, extension 5965 Emails: mtolensky(oDtrca.on.ca Date: February 12, 2018 Attachments: 3 G7 Attachment 1 Municipal Capital Budqets Service Areas 1 Watershed Studies and Strategies Total 2 Water Risk Management Total 3 Regional Biodiversity Total 4 Greenspace Securement and Management Total 5 Tourism and Recreation Total 6 Planning and Development Total 7 Education and Outreach Total 8 Sustainable Communities Total 9 Corporate Services Total TOTAL CAPITAL El Approved Budget Projected Budget 2017 2018 2019 1,046,000 1,186,000 1,278,000 15,249,000 15,522,100 16,673,000 6,674,000 6,755,200 6,992,000 2,176,000 1,882,000 2,766,000 1,566,000 3,918,000 2,963,000 862,000 877,000 892,000 2,440,000 5,703,500 1,580,000 4,310,220 4,440,700 4,808,700 2,435,371 2,555,571 3,494,571 36,758, 591 42,840,071 41,447,271 Regional Municipality of Durham Details 1 Watershed Studies and Strategies Total 2 Water Risk Management Total 3 Regional Biodiversity Total 4 Greenspace Securement and Management Total 5 Tourism and Recreation Total 6 Planning and Development Total 7 Education and Outreach Total 8 Sustainable Communities Total 9 Corporate Services Total TOTAL Regional Municipality of Peel Details 1 Watershed Studies and Strategies Total 2 Water Risk Management Total 3 Regional Biodiversity Total 4 Greenspace Securement and Management Total 5 Tourism and Recreation Total 6 Planning and Development Total 7 Education and Outreach Total 8 Sustainable Communities Total 9 Corporate Services Total TOTAL City of Toronto Details 1 Watershed Studies and Strategies Total 2 Water Risk Management Total 3 Regional Biodiversity Total 4 Greenspace Securement and Management Total 5 Tourism and Recreation Total 6 Planning and Development Total 7 Education and Outreach Total 8 Sustainable Communities Total 9 Corporate Services Total TOTAL Regional Municipality of York Details 1 Watershed Studies and Strategies Total 2 Water Risk Management Total 3 Regional Biodiversity Total 4 Greenspace Securement and Management Total 5 Tourism and Recreation Total 6 Planning and Development Total 7 Education and Outreach Total 8 Sustainable Communities Total 9 Corporate Services Total TOTAL Approved Budget Projected Budget 2017 2018 2019 9,000 9,000 82,000 337,000 337,000 355,000 410,000 423,200 418,000 3,000 2,800 2,800 105,000 105,000 110,000 14,000 14,200 14,200 101,220 102,200 104,200 82,371 81,671 81,671 1,061.5 1 1,075,071 1,167,871 622,000 742,000 761,000 2,397,000 2,107,000 2,333,000 3,807,000 3,799,000 3,816,000 1,721,000 1,421,400 2,298,400 850,000 872,000 769,000 420,000 434,000 449,000 2,119,000 5,379,500 1,253,000 2,882,000 2,942,100 3,200,100 831,000 916,000 1,346,000 15,649,000 18,613,000 16,225,500 226,000 246,000 246,000 10,692,000 11,247,000 12,144,000 1,449,000 1,486,000 1,501,000 64,000 64,400 64,400 611,000 2,941,000 2,641,000 322,000 321,800 321,800 147,000 147,000 147,000 863,000 928,200 1,026,200 901,000 936,600 960,600 15,275,000 18,318,000 19,052,000 189,000 189,000 189,000 1,823,000 1,831,100 1,841,000 1,008,000 1,047,000 1,081,000 388,000 393,400 400,400 106,000 107,000 107,000 174,000 177,000 180,000 464,000 468,200 478,200 621,000 621,300 621,300 4,773,000 4,834,000 4,897,900 :�J Watershed Studies and Strategies Approved Projected 2017 2018 2019 1.1 Watershed Planning and Reporting Toronto Planning Initiatives Toronto 80,000 100,000 100,000 Watershed Plan Development Durham - - 44,000 Peel 77,000 77,000 77,000 Toronto 78,000 78,000 78,000 York 101,000 101,000 101,000 Watershed and Environmental Report Cards Durham - - 29,000 Peel 50,000 50,000 51,000 Toronto 52,000 52,000 52,000 York 68,000 68,000 68,000 1.1 Watershed and Waterfront Plans Total 506,000 526,000 600,000 1.2 Climate Science Climate Science Application Program Peel 480,000 600,000 618,000 Climate Change - Research and Adaptation Durham 9,000 9,000 9,000 Peel 15,000 15,000 15,000 Toronto 16,000 16,000 16,000 York 20,000 20,000 20,000 1.2 Climate Science 540,000 660,000 678,000 1 - Watershed Studies and Strategies Total 1,046,000 1,186,000 1,278,000 Water Risk Management Approved Projected 2017 2018 2019 2.1 Water Resource Science YPDT - Regional Groundwater Management Programs 7 Durham 175,000 175,000 175,000 Peel 175,000 175,000 175,000 Toronto 175,000 175,000 175,000 York 175,000 175,000 175,000 Regional Watershed Monitoring Program Durham 87,000 87,000 87,000 Peel 155,000 155,000 155,000 Toronto 155,000 155,000 155,000 York 203,000 203,000 203,000 Flood Line Mapping Program Durham 20,000 20,000 38,000 Peel 80,000 80,000 67,000 Toronto 70,000 70,000 67,000 York 80,000 80,000 88,000 Stormwater Management Innovation Peel 100,000 100,000 - Management and Evaluation - Stormwater York 59,000 60,000 61,000 Stormwater Pond Maintenance York 50,000 50,000 50,000 2.1 Water Resource Science 1,759,000 1,760,000 1,671,000 2.2 Flood Management Flood Gauging (Flood Maintenance) Durham 35,000 35,000 35,000 Peel 62,000 62,000 62,000 Toronto 62,000 62,000 62,000 York 81,000 81,000 81,000 7 Water Risk Management Approved Projected 2017 2018 2019 Flood Protection and Remedial Studies Peel 50,000 52,000 54,000 Toronto 75,000 80,000 80,000 York 105,000 107,000 109,000 Flood Control Infrastructure Maintenance Durham 20,000 20,000 20,000 Peel 325,000 325,000 335,000 Toronto 67,000 67,000 67,000 York 70,000 70,000 71,000 Flood Remedial Works Toronto Peel 500,000 200,000 506,000 2.2 Flood Management 1,452,000 1,161,000 1,482,000 2.3 Erosion Management Watershed Erosion Monitoring and Maintenance Program Peel 250,000 Toronto 400,000 York 860,000 Erosion Monitoring and Maintenance Program - TRCA York Erosion Maintenance Projects Peel Erosion Work Major Maintenance Toronto Ashbridge's Bay - Coatsworth Cut Dredging Program Toronto Waterfront Major Maintenance Program Toronto 447-449 Guildwood Parkway Toronto Flood Control Channel Maintenance Toronto 140,000 700,000 1,150,000 300,000 188,000 1,500,000 500,000 145,100 700,000 1,150, 000 300,000 188,000 1,500,000 300,000 258,000 400,000 860,000 143,000 721,000 1,200, 000 250,000 188,000 200,000 Water Risk Management Approved Projected 2017 2018 2019 Future Erosion Risk Mitigation Strategy Toronto 300,000 - Valley Erosion Hazards (including July 8, 2013) Toronto 3,720,000 2,600,000 4,000,000 Denison Drive West Toronto - 750,000 Beechgrove Drive Toronto 100,000 750,000 Enhanced Waterfront Maintenance Strategy (Marie Curtis Park to Marilyn Bell Park) Toronto 250,000 - - Waterfront Major Maintenance & Remedial Works Toronto - 1,600,000 1,000,000 Waterfront Information Management Toronto 50,000 - - Gibraltar Point Toronto 230,000 1,000,000 2,800,000 1 Midland - 81 - 83 Fishleigh Toronto 1,500,000 1,500,000 - 2.3 Erosion Management 12,038,000 12,601,100 13,520,000 2 -Water Risk Management Total 15,249,000 15,522,100 16,673,000 Regional Biodiversity 10 Approved Projected 2017 2018 2019 3.1 Ecosystem Management Research and Directions Aquatic Ecosystem Science Program Durham 33,000 33,000 33,000 Peel 59,000 59,000 59,000 Toronto 60,000 60,000 60,000 York 78,000 78,000 78,000 Terrestrial Ecosystem Science Program Durham 19,000 19,000 35,000 Peel 100,000 103,000 62,000 Toronto 60,000 60,000 62,000 York 60,000 60,000 81,000 Terrestrial Natural Heritage Field Inventory Program Durham 46,000 61,000 61,000 Peel 84,000 110,000 110,000 Toronto 85,000 110,000 110,000 York 110,000 144,000 144,000 Stream Crossing Guidelines Development Project Peel 75,000 77,000 77,000 York 25,000 26,000 27,000 3.1 Ecosystem Management Research and Directions 894,000 1,000,000 999,000 3.2 Biodiversity Monitoring Regional Watershed Monitoring Program Durham 104,000 104,000 104,000 Peel 186,000 186,000 186,000 Toronto 186,000 186,000 186,000 York 243,000 243,000 243,000 Durham Waterfront Monitoring Program Durham 15,000 15,000 16,000 Post Construction Channel Monitoring Peel 60,000 62,000 64,000 10 Regional Biodiversity Approved Projected 2017 2018 2019 Waterfront/Moraine Migratory Bird Corridor Toronto 31,000 32,000 33,000 Waterfront Environmental Monitoring Program Toronto 245,000 245,000 245,000 3.2 Biodiversity Monitoring 1,070,000 1,073,000 1,077,000 3.3 Restoration and Regeneration Terrestrial Natural Heritage Implementation Program Durham 35,000 40,000 41,000 Duff ins -Carruthers Fish Management Plan Implementation Durham 34,000 35,000 36,000 Duffins Marsh Restoration Program Durham 35,000 35,000 36,000 Canada Goose Management Program Peel 40,000 41,000 42,000 Toronto 37,000 38,000 39,000 York 10,000 10,000 12,000 Habitat for Wildlife Program Peel 15,000 15,000 16,000 Toronto 13,000 13,000 14,000 York 11,000 11,000 12,000 Wetland Restoration - Watershed Peel 70,000 72,000 74,000 York 60,000 60,000 61,000 Riparian and Valleyland Restoration- Watershed Peel 167,000 172,000 177,000 York 60,000 60,000 61,000 Stream Restoration - Watershed Peel 140,000 144,000 148,000 Terrestrial Restoration -Watershed Peel 60,000 62,000 64,000 York 57,000 57,000 58,000 Wetland Restoration- Climate Peel 300,000 309,000 318,000 Riparian and Valleyland Restoration- Climate Peel 275,000 283,000 291,000 Stream Restoration - Climate Peel 275,000 283,000 291,000 Terrestrial Restoration - Climate Peel 225,000 232,000 239,000 Regional Biodiversity Humber River Watershed Habitat Implementation Program Toronto Approved 59,000 Projected Rouge Watershed Habitat Implementation Plan Projects 2017 2018 2019 Green Infrastucutre - Climate 64,000 66,000 68,000 Toronto Waterfront Terrestrial and Aquatic Restoration Peel 100,000 103,000 106,000 Natural Channel Project Implementation Toronto Peel 650,000 670,000 690,000 Reforestation Program - Private Lands Toronto Peel 175,000 180,000 185,000 Private Land Stewardship: Tree & Shrub Program Toronto Peel 150,000 155,000 160,000 York 37,000 37,000 38,000 Bioregional Seed Crop Program 50,000 50,000 50,000 Richmond Hill Planting Partnership Durham 14,000 14,000 14,000 York Peel 24,000 24,000 24,000 Toronto 25,000 25,000 25,000 York 32,000 32,000 32,000 Etobicoke-Mimico Habitat Implementation Toronto 38,000 39,000 40,000 Humber River Watershed Habitat Implementation Program 12 Toronto 57,000 59,000 61,000 Rouge Watershed Habitat Implementation Plan Projects Toronto 64,000 66,000 68,000 Toronto Waterfront Terrestrial and Aquatic Restoration Program Toronto 106,000 109,000 112,000 Don River and Highland Creek Restoration Program Toronto 72,000 74,000 76,000 Keating Channel Flood Control Project Toronto 320,000 320,000 320,000 Tommy Thompson Park - Cell Capping Program Toronto 50,000 50,000 50,000 Richmond Hill Planting Partnership York 30,000 30,000 31,000 3.3 Restoration and Regeneration 3,863,000 3,959,000 4,062,000 12 Regional Biodiversity Approved Projected 2017 2018 2019 3.4 Forest Management Managing Hazard Trees Program Emerald Ash Borer Response TRCA Forest Management - Peel Reforestation for Biodiversity Program Peel Forest Management Program 3.4 Forest Management 3 - Regional Biodiversity Total Durham 75,000 67,200 42,000 Peel 13,000 13,000 190,000 York 160,000 162,000 165,000 Peel 215,000 85,000 50,000 Peel 275,000 283,000 91,000 Peel 40,000 41,000 242,000 York 35,000 37,000 38,000 Peel 34,000 35,000 36,000 847,000 723,200 854,000 6,674,000 6,755,200 6,992,000 13 Greenspace Securement and Management Approved Projected 2017 2018 2019 4.1 Greenspace Securement Greenspace Land Acquisition Program 4.1 Greenspace Securement 4.2 Greenspace Management Conservation Land Care Program Albion Hills Master Plan 4.2 Greenspace Management 4 - Land Securement and Management Total Durham 3,000 2,800 2,800 Peel 11,000 11,400 11,400 Toronto 64,000 64,400 64,400 York 22,000 21,400 21,400 100,000 100,000 100,000 Peel 1,175,000 York 366,000 Peel 535,000 1,210,000 372,000 200,000 1,246, 000 379,000 1,041,000 2,076,000 1,782,000 2,666,000 2,176,000 1,882,000 2,766,000 14 Tourism and Recreation 5.1 Conservation Parks 77,000 79,000 Energy Efficiency Program 52,000 54,000 75,000 Peel Audubon Certification for CA's 541,000 - 12,000 Peel Claireville Programs and Infrastructure 375,000 Peel Parks Infrastructure Project 65,000 65,000 Peel 5.1 Conservation Parks 30,000 5.2 Waterfront Parks Tommy Thompson Park Management Program 95,000 Toronto Arsenal Building Renovation Peel Frenchman's Bay Management Plan Program Durham 5.2 Waterfront Parks 5.3 Trails Durham Watershed Trails Program Durham Durham Waterfront Trails Program Durham 5.3 Trails 5.4 Black Creek Prioneer Village Black Creek Pioneer Village Retrofit Program Toronto 5.4 Black Creek Prioneer Village 5 - Tourism and Recreation Total Approved 2017 2018 Projected 2019 75,000 77,000 79,000 50,000 52,000 54,000 75,000 77,000 79,000 525,000 541,000 - 725,000 747,000 212,000 240,000 270,000 270,000 125,000 125,000 - 10,000 10,000 12,000 375,000 405,000 282,000 65,000 65,000 66,000 30,000 30,000 32,000 95,000 95,000 98,000 371,000 2,671,000 2,371,000 371,000 2,671,000 2,371,000 1,566,000 3,918,000 2,963,000 Planning and Development Approved Projected 2017 2018 2019 6.1 Policy Development and Review Planning & Regulation Policy Updates Program Durham 8,000 8,500 8,500 Peel 35,000 34,200 34,200 Toronto 193,000 193,100 193,100 York 64,000 64,200 64,200 6.1 Policy Development and Review 300,000 300,000 300,000 6.2 Development Planning and Regulation Permitting Growth Management and Specialized Planning Studies Program Durham 6,000 5,700 5,700 Peel 23,000 22,800 22,800 Toronto 129,000 128,700 128,700 York 42,000 42,800 42,800 6.2 Development Planning and Regulation Permitting 200,000 200,000 200,000 6.3 Environmental Assessment Planning and Permitting Environmental Assessment Reviews Program Peel 362,000 377,000 392,000 6.3 Environmental Assessment Planning and Permitting 362,000 377,000 392,000 6 - Planning and Development Total 16 862,000 877,000 892,000 Education and Outreach 7.2 Family and Community Programs Bolton Camp Site(Servicing/Programing) Peel 967,000 1,591,500 29,000 Peel - 2,600,000 - 7.2 Family and Community Programs 967,000 4,191,500 29,000 17 Approved Projected 2017 2018 2019 7.1 School Programs Environmental Leaders of Tomorrow Peel 165,000 170,000 175,000 Stewardship Partnership Services Peel 237,000 244,000 251,000 Investigating City Space Peel 27,000 28,000 29,000 Demographics and Characteristics Mapping Peel 45,000 46,000 47,000 Conservation Youth Corps Program Peel 90,000 93,000 96,000 York 22,000 23,000 23,000 Peel Education Outreach Services Peel 184,000 190,000 196,000 Peel Children's Water Festival Peel 55,000 57,000 59,000 Eco -Schools Expansion Program Peel 289,000 298,000 307,000 Toronto Outreach Education Services Toronto 104,000 104,000 104,000 York Children's Water Festival Program York 41,000 42,000 43,000 York Outreach Ed Services York 70,000 70,000 71,000 7.1 School Programs 1,329,000 1,365,000 1,401,000 7.2 Family and Community Programs Bolton Camp Site(Servicing/Programing) Peel 967,000 1,591,500 29,000 Peel - 2,600,000 - 7.2 Family and Community Programs 967,000 4,191,500 29,000 17 Education and Outreach 7.3 Newcomer Employment and Education Multicultural Environmental Stewardship Program 7.3 Newcomer Employment and Education 7 - Education and Outreach Total Approved Projected 2017 2018 2019 Peel 60,000 62,000 64,000 Toronto 43,000 43,000 43,000 York 41,000 42,000 43,000 144,000 147,000 150,000 2,440,000 5,703,500 1,580,000 e Sustainable Communities Approved Projected 2017 2018 2019 8.1 Living City Transition Program Sustainable Neighbourhood Retrofit Action Plan Program 19 Peel 350,000 361,000 372,000 Toronto 200,000 200,000 200,000 York 75,000 75,000 77,000 Community Transformation Partnership Program - CVA Durham 4,000 4,200 4,200 Peel 17,000 17,100 17,100 Toronto 97,000 96,500 96,500 York 32,000 32,200 32,200 Community Transformation Partnership Program Peel 300,000 309,000 318,000 Pearson Eco -Business Program Peel 400,000 412,000 424,000 Toronto 50,000 82,700 82,700 York 35,000 35,000 36,000 Sustainable Technologies Evaluation Program- Water, Air, Energy 'Peel - Climate 236,000 243,000 250,000 Peel 150,000 155,000 160,000 Toronto 131,000 138,000 140,000 York 138,000 139,000 142,000 Living City Campus Development and Programming Peel 70,000 72,000 74,000 Toronto 30,000 30,000 30,000 York 17,000 17,000 17,000 Green Build Council Support Peel 75,000 50,000 25,000 Toronto 30,000 30,000 30,000 Climate Change Consortium Peel 150,000 155,000 160,000 Urban Agriculture - Growing Local Food Peel 145,000 149,000 153,000 Rural Clean Water Program Peel 88,000 90,000 90,000 York 37,000 40,000 42,000 8.1 Living City Transition Program 2,857,000 2,932,700 2,972,700 19 Sustainable Communities 20 Approved Projected 2017 2018 2019 8.2 Community Engagement Stewardship Durham 50,000 50,000 51,000 Peel 98,000 101,000 104,000 Toronto 85,000 85,000 85,000 York 100,000 100,000 102,000 Duffins-Carruthers Watershed Plan Implementation Durham 47,220 48,000 49,000 Toronto Community Habitat Improvement Program Toronto 100,000 100,000 120,000 Highland Creek Valley and Stream Greening Program Toronto 80,000 106,000 169,000 Community Implementation Etobicoke - Mimico Restoration Priorities Toronto 60,000 60,000 73,000 Peel 202,000 208,000 314,000 West Humber Stewardship Program Peel 120,000 124,000 128,000 Natural and Human Heritage Discovery Walk Peel 55,000 57,000 59,000 Etobicoke-Mimico Stewardship Program Peel 120,000 124,000 128,000 Etobicoke Headwaters Subwatershed Regeneration Peel 175,000 180,000 185,000 Humber Community Environmental Enhancement Program Peel 51,000 53,000 155,000 West Humber Valley and Stream Regeneration Program Peel 80,000 82,000 84,000 William Granger Greenway Program York 10,000 10,000 10,000 East Humber Community Habitat Improvement Project York 20,000 20,000 20,000 8.2 Community Engagement 1,453,220 1,508,000 1,836,000 8 - Sustainable Communities Total 4,310,220 4,440,700 4,808,700 20 Corporate Services 21 Approved Projected 2017 2018 2019 9.1 Corporate Management and Governance Major Facilities Retrofit Program Durham 28,000 28,300 28,300 Peel 114,000 113,900 113,900 Toronto 644,000 643,600 643,600 York 214,000 214,200 214,200 Office Accomodation Project Durham 42,371 42,371 42,371 Peel 172,000 171,100 171,100 Toronto - 36,000 60,000 York 321,000 321,100 321,100 Asset Management Implementation Peel 500,000 585,000 1,500,000 9.1 Corporate Management and Governance 2,035,371 2,155,571 3,094,571 Information Technology Replacement Program Durham 12,000 11,000 11,000 Peel 45,000 46,000 46,000 Toronto 257,000 257,000 257,000 York 86,000 86,000 86,000 9.6 Information Infrastructure and Management 400,000 400,000 400,000 9 - Corporate Services Total 2,435,371 2,555,571 3,494,571 Total Municipal Capital Budget 36,716,591 42,813,471 41,447,271 21 Attachment 2 Municipal Operating Budgets Municipality Approved Budget Projected Budget 2017 2018 2019 Township of Adjala - Tosorontio 870 870 1,000 The Regional Municipality of Durham 526025 539,120 555,000 Town of Mono 2,105 1,710 2,000 The Regional Municipality of Peel 1,798,000 1,856,000 1,917,000 City of Toronto 8,404,400 8,602,100 8,817,200 The Regional Municipality of York 3,197,000 3,322,000 3,344,000 TOTAL OPERATING 13,928,400 14,321,800 14,636,200 22 Atttacbment 3 Unmet Priorities - Projects and Programs Projeq Service Area MunlclPallH A CdpatW Total Cost 1,800,000 2,000,000 2,000,000 2,000,000 Projected 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Albion Hills Conservation Area Road and Guard Rail Improvements 5 Peel 515,000 2019 2920 2921 2022 2923 2024 2925 2020 =7 2029 CA Trails Digital Mapping 5 Durham 29,000 29,000 TBD TBD TBD TBD TBD TBD TBD TBD TBD capful Asset Management Plan Implementation 9 Durham 2500,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250.000 250,000 Claremont Improvement and Retroft 7 Durham 500,000 500.00 - - - - - - - - - CompensationRestrabilmnHabitatBank 9 Durham 60,000 30,000 30,000 - - - - - - - - EmeraldAshBorer 3 Durham 1,150,900 176,000 275,000 275,000 275,000 150000 - - - - - Frenshman's Bay Rotary Park West Master Plan Implementation 4 Durham 175000 100,000 75,000 - - - - - - - - GreenspaceManagementandtandCare 4 Durham 2D00,000 200,000 2001000 200.000 200,000 200.000 200,000 200,000 2001000 2004100 2001000 Outdoor Education 7 Durham 15,080000 1.740,000 1,740,000 1.740.000 1,740,000 1,450.000 1,450.000 1,450.000 1.450.000 11160,000 11160.000 Paradise Park Restoration 3 Durham 200,000 200,000 - - - - - - - - - PostProlectsLong-term Maintenance Program 3 Durham 296,000 20,000 22000 22,000 26,000 28,000 321000 321000 36,000 36,000 40,00) Projects on Watershed Formula Multi Durham 1,290,000 110,000 116)00 1101)00 135,000 135,000 135,000 135,000 140,000 140,000 140.00 Pet9wal Creek ElecMcal System Replacement 5 Durham 500,000 250,000 250.000 - - - - - - - - RatticoalCreak Road 0,.des 5 Durham 600,000 200.000 200.00 208000 - - - - - - - RestorationProjectsEnhancament 3 Durham 600,000 50,000 541000 64,000 60.000 60.000 62.000 62,000 65,000 651000 601000 Tommo Wildlife Centra 4 Durham 435,000 145,000 145= 145,000 - - - - - - - WatershedPlanDevelopment 1 Durham 1,160,000 116.000 116.000 116,000 116.000 116.000 116,000 116,000 116,000 116,000 1161000 B1.1, Creek Pioneer Village Radom Program- EnhancemeM 5 Torento 29,51 4,115,000 3,497,000 3,112,000 2,3a4DDD 2,399,000 2,245,000 2,245,000 2,211 1,997,000 1,074,000 Albion Hills Conservation Area Master Plan Implementation 5 Peel 19,800,000 1,800,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Albion Hills Conservation Area Road and Guard Rail Improvements 5 Peel 515,000 515,000 - - - - - - - - - A thim Hills Field Centre Accaasibdi y AODA 5 Peel 225,000 225,000 - - - - - - - - - BdtonCampCommunitylnfresmolure 7 Peel 10,00,000 2,500,000 2,500,000 2,500,000 2,500,000 - - - - - - CATrailsD,hadMapping 5 Peel 52,000 52.00 TBO MID TBD MID TBD TBD TBD TBD TBD Capital Asset Management Plan implementation 9 Peel 9,5001000 500,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Claireville Conservation Area Water Service Replacement 9 Peel 300,000 300,000 - - - - - - - - - Compensation Resmretion Habitat Bank 3 Peel 60,000 3,000 30,000 - - - - - - - - HeadlamSewerSavicirg 5 Peel i'm,000 800,000 200,000 - - - - - - - Outdoor Education 7 Peel 26,832,000 3,096,000 3,096,000 3,096,000 3,096,000 2,560,000 2,580,000 2,560000 2,580,000. 2,064,000 2,064,000 Post Projecs Long-term Maintenance Program 3 Peel 512,000 to,000 44,000 44,000 48,000 48,00) 55000 55,000 58000 sit'" 62,000 Sustainable Nel9h ourmoods 8 Peel 90,000 - 10,000 10,000 100,000 10,000 10'000 10,000 10,000 100,000 10,000 Toronto Gott Club Banner Mi9ga9on 3 Peel 100000 100,000 - - - - - - - - - TorontoWildlifeCmtre 4 Peel 1,695000 585,000 565,000 565,000 - - - - - - - WaterehedRlBnDBVelmment 1 Peel 2,060,000 206,000 206,000 206,000 206,000 206,000 205000 206,000 206,000 206,000 205000 71,491,000 lism' 00 9,535000 9,305,000 8,764,900 5,]28,000 5,735900 5,735,900 5,738,900 5,222,000 5,226,000 Black Creek Pioneer tallage- Stale of Goo,[ Repair 5 Toronto 13.000.000 1.300.000 1.300.000 1,300,000 1.300,000 1,300,000 1.300,000 1,300,000 1.300.000 1,300,000 1.000000 Black Creek Pioneer Village Area Master Plan 5 Toronto 500,000 100.000 200.000 200.000 - - - - - - - B1.1, Creek Pioneer Village Radom Program- EnhancemeM 5 Torento 4,000000 400.000 K)Om 400.000 400,000 K)Om 400.000 4to,000 400.000 400,000 400.000 CA Trails Digital Mapping 5 Toronto 52,000 52.000 TBD TBD TBD TBD TBD TBD TBD TBD TBD Capital Asset Management Plan Implementation 9 Toronto 5,000.000 500,000 500.000 500,000 600000 mism 500.000 500.000 500.00 500.000 500.00 Climate Research and Resilience 1 Toronto 750000 75000 75000 75.00 75.00 75.000 75.000 75.000 75,000 75.000 75.000 Compensation Restoration Habitat Bank 3 Torond 60.000 mm 30.000 - - - - - - - - Flood MmgatienParity Enheromems 2 Toronto 1,500,000 100.00 150.000 150.000 150.000 150.000 150.000 150.000 150000 150.000 150.000 Fleodiins Mapping Enhancement 2 Toronto 680,000 680000 - - - - - - - - - GreonlaodsAcquisiOmProject 4 Toronto 33.250000 2,250.000 2,500000 2,750,000 3,000000 3,250,000 3,500000 3.750.000 4.000.000 4,250.000 4.000.000 Lower Dan Restoration Project 2 Toronto 4.000000 100,000 200.000 1.200,000 1.200.00 1.300,000 - - - - - MomingsideCreek(Culvert Replasoment and Stream Restoration 3 Toronto 150000 150.000 - - - - - - - - - OutloorEducatim 7 Toronto 26.936000 3,108.000 3.108000 3.108000 3.108000 2,590000 2,590000 2,590.000 2,590000 2.072,000 2,072.00 Past Projects long-term MaIlAdr ance Program 3 Toronto 531,000 45000 48,000 48000 52000 52000 54.00 54,000 58000 58.000 62000 PPG- EcaBusineas Zane - Toronto East End 6 Toronto 2,480000 320000 370,000 250,000 250,000 250000 230000 210,000 200,m 200,000 200.000 Restoration Projects Enhancement 3 Temple 600000 50000 54,000 54,oco mm 60.000 62,000 62,000 65,000 65,000 68.000 Scarborough Bluff West EA 1 Toronto 3,475,000 675,000 1.300.000 1.300,000 - - - - - - - ScarboroughBluffsWestlmplemmtation 1 Toronto 30,000,000 - - 2,000,000 4,000.000 4.000.000 4,000,000 4.000000 4.000,000 4,000.000 4.000.000 Sustainable Neighbwrbcatls 8 Toronto 1,200,000 200.000 275.00 300,000 375.00 - - - - - - South MimiwTmlConneMion 5 Toronto 2,000000 1.300.000 700.000 - - - - - - - - Spedal Puticy Areas(SPAS)and Flood Vulnerable Areas (FVAs)Revidws 6 Toronto 150,000 150,000 TBD TBD - - - - - - - Tommy Thm,pwnPark Enhansommts 5 Toronto 17700,000 1.00,000 4.200.000 2500.000 2,000.000 2000.000 2,000.000 2,000.000 2.000,000 Toronto Wildlife Centre 4 Toronto 9,705,000 3.235,000 31235.000 3,235,000 - - - - - - - WaterfumtRebebil0atien 3 Toronto 100,000000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 Watershed Plan Development 1 Toronto 2,070,000 W7,000 207,900 207,000 207,090 207.000 207,000 207000 207,000 207,000 207.000 259,769,000 26,327,900 28,652000 29,577,000 26,677,000 26,134,9DD 25068,000 25,298,9DD 25,545,000 23,277,DDD 23,034000 23 pi Service Municipality Anticipated Profectetl A. Total Cast 2019 2020 2021 2022 2023 2024 2025 "a 202! 2023 Black Creek NOM Master Man Implementation 5 York 9,250.000 462,500 976.389 976,389 976,389 976,389 976.389 976,389 976,389 976,389 976.389 Boyd Conservation Area Read Improvements 5 York 415.000 415.000 - - - - - - - - - Boyd Offma lmprovemonis(Asset Management) 9 York 200.000 200,000 - - - - - - - - - Boyd l Restoration Service Centre Campus (Asset Management) 9 York 4,000.000 1,00).000 1.000.00 1.00000 1.000.000 - - - - - - CATrails Digital Mapping 5 York 68.000 68,000 TBO TBD TBO TBD TBD TBD TBO TBD TBD Capital Asset Management Plan Implementation 9 York 11.25),000 - 1.250.000 1,250,000 1,250,000 1,250,000 1,250.00 1,250,000 1.250.00 1,250,000 1.250.000 CommunityEngagement 8 York 1,700.000 170.000 170.000 170.00 170.00 170,000 170.00 170.000 170.00 170.00 170.00 Condition Assessments - York Region 9 York 5W,000 Sxl, 0 - - - - - - - - - Compensation Restoration Habitat Bank 3 York 60.000 30.000 30,000 - - - - - - - - GreenspaceImplementation - Humber Trails Bridge Replacement 5 York 7SMD 75,000 - - - - - - - - - GreenspaceManagement- Land Planning and Monitoring 4 York 2,000,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 GreenspaceManagement -Treil Planning and Monitoring 5 York 2,550.D00 255,000 255.000 255.000 255.00 255000 255.00 255.000 255,000 255.000 255.000 Humber Trill Connection 5 York 24,".00 500.000 500.00 500000 500.00 2,000.07 4.00.00 4.00.00 4.00.00 4.00.00 4.00000 Lake St George Improvement end Robbed 7 York- MaWanPond 3 York 30.000 30,000 - - - - - - - - - Milne Dam Conservation Park Master Plan 4 York 400,000 200,000 150.00 50,000 - - - - - - - Nashville ComenmiReserve-Kirby Road Multi -Use Trail Phase 5 York 125,000 125,000 - - - - - - - - - NasMilleMasterPlan 4 York 5,500.OD 400,000 600,000 600,000 600.000 600,000 600.00 600,000 600.000 600,000 300.000 Outdoor Education 7 York 35,152.000 4.056.00 4.056.00 4,056.00 4.056.00 3,380,000 3.380.00 3.3W= 3.380.00 2]04.00 2,704.00 Partners in Project Green - "Once Through Cooling' Program 8 York 1,000,000 100000 100000 100000 1W,W 100000 100000 100000 100000 100,000 100000 Post Projects Lang -tam Maintenance Program 3 York 498.00 40,000 44.000 44,000 48,000 48,000 52,000 52.000 55,000 55,000 60.000 Restoration Projects Enbancemont 3 York 600.Oo 50,000 54,000 54,000 60,000 60,000 62.0) 62,000 65,ODD 65,000 68,00) Restoration Service Centre Improvement(Asset Management) 9 York 300,000 300,000 SNAP 8 York 94Oo0) 130,000 175,000 280,000 355000 - - - - - - TorontoWildlifeContre 4 York 3,210.000 1,070.000 1,070,000 1,070,000 - - - - - - - ValleRoadDecommissioningandRestmaton 3 York 80.000 80,000 - - - - - - - - - WatarsbedPlan Development 1 York 2,700,000 270,000 270,000 270,000 270,000 270,000 270,000 270,000 270,000 2]0,000 270,000 York Land and Boundary Management 4 York 1,000,000 100,000 100.000 100,000 100,000 100000 100.000 100,000 100.000 100.00 1M.00 York Trail Management and lmplamentaticn 5 York 2,250000 300.00 300,000 300.000 300,000 300.00 150000 150000 150000 150.00 150000 11D,053,D00 11,326,500 11,308389 11,2]5,389 10,240,389 9,709,389 11,565,389 11,565,389 11,5]1,389 10,891 10,603,389 467,908,000 52,"1,500 53,154,389 53,269,389 48,465,389 43,950,389 44,513,389 44,843.389 45,111,389 41,351,389 40,837,389 24 RES.#C3/18 - YORK CAPITAL FUNDING CARRYFORWARD REALLOCATION Approval to Request Reallocation. Approval to request reallocation of York Region capital levy carryforward, in order to fund private property erosion projects, as the original purpose for the carryforward will not be realized. Moved by: Jack Ballinger Seconded by: Ronald Chopowick THE BOARD RECOMMENDS TO THE AUTHORITY THAT Toronto and Region Conservation Authority (TRCA) staff be directed to request of York Region the reallocation of York Region capital levy carryforward funds to a Private Property Erosion Hazard Mitigation Program. CARRIED BACKGROUND TRCA has identified 36 private properties within the Region of York that are currently at risk due to erosion hazards. A new Private Property Erosion Hazard Mitigation Program (PPEHM) has been identified as a need within the Regional Municipality of York (York Region) to address a growing number of slope instability and erosion hazards that are placing private properties at risk. As a subprogram of TRCAs long-standing Erosion Management Program, which has historically focused on the protection of public lands, this initiative seeks to systematically address erosion hazards threatening privately -owned lands, which is a systemic problem that is typically beyond most homeowners' financial and technical ability to mitigate on their own. Under this program, the project team will assess known erosion hazards stemming from private or public property to prioritize and reduce or eliminate these risks across York Region through the planning, design and implementation of appropriate erosion control works. This program is already offered extensively in the City of Toronto, where the municipality has utilized TRCA's expertise to help mitigate past development decisions with cost-effective solutions that also foster resilient watersheds and contribute to the expansion of safe and enjoyable public greenspace. Although TRCA is not compelled legally to assist private landowners with erosion control works, TRCA offers this assistance recognizing that this expertise supports TRCA's municipal partners by mitigating past development decisions with cost-effective solutions that also foster resilient watersheds and contribute to the expansion of safe and enjoyable public greenspace. TRCA is a leading expert in erosion control works with nearly 40 years of specialized experience in the planning, design, permits, implementation and monitoring of erosion control works. Data collected and projects planned under the existing Integrated Infrastructure Protection Program developed specifically for Environmental Services Section (York Region Environmental Services) water and wastewater infrastructure will be cross-referenced and integrated into the initiatives under this proposed program wherever possible to reduce duplication of effort and streamline the project lifecycle to champion collaborative works that offer significant cost benefits. 25 RATIONALE The Clean Water and Wastewater Fund (CWWF) is a federal program designed to accelerate short-term community investments, while supporting the rehabilitation and modernization of drinking water, wastewater and stormwater infrastructure, and the planning and design of future facilities and upgrades to existing systems. TRCA has carried forward approximately $600,000 of York capital levy with the intent to have the funds match the 2017 CWWF application. However, given that the funds were not able to be used for the original intent as the CWWF did not allow for TRCA to supply the matching funding for the allocation, TRCA is proposing to re -purpose this funding to address the top priority site(s) identified by staff through the PPEHM program. The total estimated cost to address all known hazards at present is approximately $11 million over a 10 -year period. The PPEHM program will prioritize erosion hazard sites to address imminent risks and proactively protect private property. Proactively managing erosion risks is critical to mitigating damage to structures and maintaining the safe use of property at these high risk sites. In addition, the Region will benefit economically from reduced costs as reactively implementing emergency works or condemning properties can be very costly and reduce tax revenues. The PPEHM program will directly benefit the Regional Municipality of York and its constituents. The following lists some of the major benefits that can be expected through successful completion of this work: A better understanding of the erosion risks and current conditions within the Region; Improved safety for residents including reducing property and structure loss due to erosion and slope instability; Reduced potential liability by rehabilitating risks to private property and human safety due to erosion. DETAILS OF WORK TO BE DONE Staff will continue to develop the PPEHM program so that it can be brought forward to the Regional Municipality of York as a future initiative, and the repurposing of funds would act as a pilot for this new program. Staff will continue to work with the municipal partner to refine the scope of the priority sites including complete background studies, environmental assessments, detailed designs, permits and approvals, and implementation. Report prepared by: Jenifer Moravek, extension 5659 Emails: jmoravek(&trca.on.ca For information contact: Jenifer Moravek, extension 5659 Emails: imoravekdtrca.on.ca Date: February 7, 2018 26 TERMINATION ON MOTION, the meeting terminated at 9:03 a.m., on Friday, March 02, 2018. Maria Augimeri Chair /ks 27 John MacKenzie Secretary -Treasurer Toronto and Region Conservation Authority Budget/Audit Advisory Board Meeting #2/18 was held at TRCA Head Office, on Friday, June 8, 2018. The Chair Maria Augimeri, called the meeting to order at 8:38 a.m. PRESENT Maria Augimeri Chair Jack Ballinger Member Ronald Chopowick Member Jennifer Innis Member Gino Rosati Member The Chair recited the Acknowledgement of Indigenous Territory. RES.#C4/18 - MINUTES Moved by: Jack Ballinger Seconded by: Ronald Chopowick THAT the Minutes of Meeting #1/18, held on March 2, 2018, be approved. CARRIED PRESENTATIONS 6.1 A presentation by Michael Tolensky, Chief Financial and Operating Officer, TRCA, and Joane Mui, Partner and Vladimir Servan, Manager, KPMG, in regard to item 8.1 - 2017 Audited Financial Statements. 6.2 A presentation by Pamela Papadopoulos, Controller, TRCA, in regard to 2017 TRCA Financial Review. RES.#C5/18 - PRESENTATIONS Moved by: Ronald Chopowick Seconded by: Gino Rosati THAT above -noted presentation 6.1 be received. RES.#C6/18 - PRESENTATIONS Moved by: Gino Rosati Seconded by: Jennifer Innis CARRIED THAT above -noted presentation 6.2 be received. CARRIED s Section I — Items for Authority Action RES.#C7/18 - 2017 AUDITED FINANCIAL STATEMENTS Approval of Financial Statements. The 2017 audited financial statements are recommended for approval. Moved by: Ronald Chopowick Seconded by: Jack Ballinger THE BOARD RECOMMENDS TO THE AUTHORITY THAT the transfer of funds from unallocated surplus to operating reserve in the amount of $613 (all amounts in thousands of dollars) as outlined below and reflected in Note 7, "Accumulated Surplus" to the financial statements (Attachment 1) be approved; AND FURTHER THAT the 2017 audited financial statements, as presented in Attachment 1 be approved, signed by the Chair and Secretary -Treasurer of Toronto and Region Conservation Authority (TRCA), and distributed to each member municipality and the Ministry of Natural Resources and Forestry, in accordance with subsection 38(3) of the Conservation Authorities Act. CARRIED RATIONALE The 2017 TRCA audited financial statements are presented in Attachment 1 to the report for approval. KPMG LLP has completed its audit and has included within the financial statements an unqualified, independent auditor's report. Representatives from KPMG LLP will be in attendance to present the auditor's report on the 2017 financial statements. Auditor Communication on Audit Strategy and Results The KPMG LLP Audit Findings Report, presented in Attachment 2 to the report addresses various matters, including the auditors' approach to the audit, materiality and findings. The auditors identified two proposed audit adjustments and provided performance improvement observations in their findings, which represent comments intended to improve TRCA's efficiency and effectiveness of financial policies and procedures. The comments are consistent with those noted in the prior year audit report, with management update comments provided therein. Financial Statements Summary The Statement of Operations and Accumulated Surplus includes TRCA total revenues, expenses and the net surplus position for the year, with the impact of capitalizing Tangible Capital Asset (TCA) expenditures included. The Statement of Financial Position reports on financial assets such as cash, investments and account receivable, as well as non-financial assets such as tangible capital assets, and financial liabilities such as deferred revenue, vacation and pay accrual, and other trade accounts payable. Collectively, these components comprise the net assets of TRCA. The Statement of Changes in Net Financial Assets reconciles the net surplus for the year to the change in net assets. Finally, the Statement of Cash Flows itemizes the sources of cash inflows and outflows during the year, classified as either operating, investing or capital in nature. 29 Approval of Transfer of Funds The status of TRCA reserves is presented in the chart below. Reserve balances totaled $4,513 at the end of the year, a decrease of $841 from 2016, primarily due to drawings from the capital reserve for the purchase of vehicles and equipment and planned drawings from operating reserves, which was offset by an unplanned operating surplus. At year-end, management proposes the following transfer: Balance Pre -Transfer Proposed Ending Balance Jan 1, 2017 Dec 31, 2017 Transfer Dec 31, 2017 Unallocated Surplus $ - $ 613 $ (613) $_ Operating Reserve 3,006 2,142 613 $2,755 Capital Reserve 2,348 1,758 - $1,758 Total $ 5,354 $ 4,513 $ - $4,513 It is anticipated that additional surplus available in 2018 will replenish any drawings from reserves identified in the 2018 budget, which is expected to be $205. Over time, TRCA's goal is to build the operating reserve in line with industry best practices, while continuing to build the capital reserve to help finance future cash outlays to maintain, repair and replace aging infrastructure, over and above available government funding. Report prepared by: Pamela Papadopoulos, extension 5973 Emails: ppapadopoulos(abtrca.on.ca For Information contact: Pamela Papadopoulos, extension 5973 Emails: ppapadopoulos(ja)trca.on.ca Date: May 30, 2018 Attachments: 2 30 Attachment 1 Financial Statements of TORONTO AND REGION CONSERVATION AUTHORITY Year ended December 31, 2017 31 DRAFT #4 May 30, 2018 INDEPENDENT AUDITORS' REPORT To the Board of Directors of the Toronto and Region Conservation Authority We have audited the accompanying financial statements of Toronto and Region Conservation Authority, which comprise the statement of financial position as at December 31, 2017, the statements of operations and accumulated surplus, changes in net financial assets and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 32 Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Toronto and Region Conservation Authority as at December 31, 2017, and its results of operations, its changes in net financial assets and its cash flows for the year then ended in accordance with Canadian public sector accounting standards. DRAFT Chartered Professional Accountants, Licensed Public Accountants Vaughan, Canada 33 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Statement of Financial Position (In thousands of dollars) December 31, 2017, with comparative information for 2016 2017 2016 Assets Financial assets Cash (note 2) $ 14,414 $ 16,677 Investments (note 3) 21,997 28,083 Receivables (notes 4 and 13) 20,192 13,886 56,603 58,646 Liabilities Financial liabilities: Payables and accrued liabilities 14,455 14;414 Vacation pay entitlements 2,663 2,461 Deferred revenue (note 5) 37,408 38,985 54,526 55,860 Net financial assets 2,077 2,786 Non-financial assets: Other assets 941 721 Tangible capital assets (note 6) 461,869 451,419 462,810 452,140 Accumulated surplus (note 7) $ 464,887 $ 454,926 Contingent liabilities and commitments (note 14) See accompanying notes to financial statements. On behalf of Toronto and Region Conservation Authority: Chair Secretary Treasurer 34 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Statement of Operations and Accumulated Surplus (In thousands of dollars) Year ended December 31, 2017, with comparative information for 2016 2017 2017 2016 Budget Actual Actual (note 15) Revenue (note 16) Government funding (note 8) $ 85,432 $ 82,549 $ 70,125 Authority generated (notes 9 and 13) 30,112 38,410 31,619 Investment income 625 795 714 Net loss on disposal of tangible capital assets (note 6) - (3,111) (69) 116,169 118,643 102,389 Expenses (note 10): Watershed Studies and Strategies 4,020 3,781 3,439 Water Risk Management 28,549 25,060 16,841 Regional Biodiversity 13,185 14,269 12,394 Greenspace Securement and Management 5,854 6,283 5,625 Tourism and Recreation 22,258 21,845 21,528 Planning and Development Review 9,339 9,290 8,109 Education and Outreach 7,010 8,816 9,118 Sustainable Communities 11,601 8,584 7,701 Corporate Services 11,692 10,754 9,701 113,508 108,682 94,456 Net surplus 2,661 9,961 7,933 Accumulated surplus, beginning of year 454,926 454,926 446,993 Accumulated surplus, end of year $ 457,587 $ 464,887 $ 454,926 See accompanying notes to financial statements. 35 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Statement of Changes in Net Financial Assets (In thousands of dollars) Year ended December 31, 2017, with comparative information for 2016 2017 2017 2016 Budaet Actual Actual (note 15) Net surplus $ 2,661 $ 9,961 $ 7,933 Acquisition of tangible capital assets (12,717) (21,138) (13,579) Contributed tangible capital assets — (1,167) (299) Net loss on disposal of tangible capital assets — 3,111 69 Write-off of tangible capital assets (note 6) — 1,429 25 Proceeds on disposal of tangible capital assets — 450 10 Amortization 7,052 6,865 7,374 Change in other assets — (220) (167) Increase (decrease) in net financial assets Net financial assets, beginning of year (3,004) (709) 1,366 2,786 2,786 1,420 Net financial assets, end of year $ (218) $ 2,077 $ 2,786 See accompanying notes to financial statements. 36 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Statement of Cash Flows (In thousands of dollars) Year ended December 31, 2017, with comparative information for 2016 See accompanying notes to financial statements 37 2017 2016 Cash provided by (used in): Operating activities: Net surplus $ 9,961 $ 7,933 Items not involving cash: Amortization 6,865 7,374 Accrued interest on investments (579) (521) Net loss on disposal of tangible capital assets 3,111 69 Write-off of tangible capital assets 1,429 25 Contributed tangible capital assets (1,167) (299) Change in non-cash operating working capital: Receivables (6,306) (440) Other assets (220) (167) Payables and accrued liabilities 41 4,168 Vacation pay entitlements 202 (32) Deferred revenue (1,577) 5,162 11,760 23,272 Investing activities: Purchase of investments (500) (11,871) Proceeds on maturity of investments 7,165 4,060 6,665 (7,811) Capital activities: Purchase of tangible capital assets (21,138) (13,579) Proceeds on disposal of tangible capital assets 450 10 (20,688) (13,569) Increase (decrease) in cash (2,263) 1,892 Cash, beginning of year 16,677 14,785 Cash, end of year $ 14,414 $ 16,677 See accompanying notes to financial statements 37 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (In thousands of dollars) Year ended December 31, 2017 Toronto and Region Conservation Authority ("TRCA') delivers programs and services that further the conservation, restoration, development and management of natural resources other than gas, oil, coal and minerals. As the largest of the 36 provincial conservation authorities, TRCA's area of jurisdiction spans nine watersheds including those within the City of Toronto and areas in the Regional Municipalities of Durham, Peel and York (including lower tier municipalities), the Township of Adjala-Tosorontio and Town of Mono. TRCA is incorporated under the Conservation Authorities Act, having commenced operations in 1957. TRCA is a registered charity under the Income Tax Act (Canada) and, as such, is exempt from income taxes. 1. Significant accounting policies: The financial statements for TRCA are the responsibility of and prepared by management in accordance with the Chartered Professional Accountants of Canada Public Sector Accounting Handbook, that sets out generally accepted accounting principles for government not -far -profit organizations in Canada. The financial statements have been prepared in accordance with Canadian Public Sector Accounting Standards ("PSAS"), excluding Sections PS4200 and PS4270, with the following significant accounting policies: (a) Basis of accounting: The financial statements are prepared using an accrual basis of accounting which recognizes the effect of transactions and events in the period in which the transactions and events occur, regardless of whether there has been a receipt or payment of cash or its equivalent. Accrual accounting recognizes a liability until the obligation(s) or condition(s) underlying the liability is partly or wholly satisfied. Accrual accounting recognizes an asset until the future economic benefit underlying the asset is partly or wholly used or lost. (b) Revenue recognition: Government funding including transfers, municipal capital and operating levies, grants, contract services and management fees are recognized in the financial statements when the payments are authorized and all eligibility criteria have been met, except when there is a stipulation that gives rise to an obligation that meets the definition of a liability. In that case, the funding is recorded as deferred revenue and recognized as revenue as the stipulations are met. TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 1. Significant accounting policies (continued): Authority generated revenues including property rental income, contract services, admissions and parking, permits (development, camping, picnic, commercial filming and photography), environmental assessments, programs (education, family and community), events (weddings, festivals and corporate events), athletic fees and equipment rentals, program and event sponsorships, product sales (nursery, food, beverage and merchandise) and membership fees are recognized as revenue in the period in which the related services are performed. Amounts collected for which the related services have not been performed are recorded as deferred revenue and recognized as revenue when the related services are performed. Unrestricted donations are recorded as revenue in the period they are received or receivable, when a reasonable estimate can be made of the amount involved. Externally restricted donations are deferred and recognized as revenue in the year in which the related expenses are recognized. Donated tangible capital assets are recorded at fair market value, when fair market value can be reasonably estimated. (c) Cash: Cash consists of cash on hand, cashable guaranteed investment certificates, and all deposits in banks including interest bearing savings accounts. (d) Investments: Investments, which consist of guaranteed investment certificates, bonds and a portfolio with the One Investment Program, are recorded at cost. Investment income, including interest and dividends, is recognized when earned. Any discount or premium arising on purchase is amortized over the period to maturity. If there is a permanent loss in value, an investment will be written down to recognize the loss. Any write-down would be included in the statement of operations and accumulated surplus. (e) Other assets: Other assets include inventory for resale and prepaid expenses. Merchandise, food and beverage inventory for resale is valued at the lower of cost and net realizable value. Nursery inventory is valued at the lower of cost and replacement value. Cost is determined on a first -in, first -out basis. 39 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 1. Significant accounting policies (continued): (f) Tangible capital assets: Tangible capital assets are recorded at cost, which includes amounts directly attributable to acquisition, design, construction development, improvement or betterment of the assets. Costs include overhead directly attributable to construction and development as well as interest costs that are directly attributable to the acquisition or construction of the asset. The cost, less the residual value of the tangible capital assets, is amortized on a straight- line basis over the estimated useful lives as follows: Assets Years Infrastructure Buildings and building improvements Land improvements Machinery and equipment Vehicles 25-50 10-55 20-40 5-20 6-25 Tangible capital assets are written down when conditions indicate they are no longer able to contribute to TRCA's ability to provide goods or services, or when the value of future economic benefits associated with the tangible capital assets are less than their net book value. The net write-downs are accounted for as expenses in the statement of operations and accumulated surplus. Contributed tangible capital assets are recorded at fair market value on the date of contribution, except in circumstances where fair market value cannot be reasonably determined, and a nominal value is recorded. TRCA's collection of historical treasures, including artifacts and buildings, and works of art are not recognized in the financial statements. (g) Change in accounting policy: In the current year, TRCA changed the basis of amortization for vehicles from the declining balance method to the straight line method to more accurately reflect their usage (note 6). all TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 1. Significant accounting policies (continued): (h) Vacation pay entitlements: Vacation entitlements are accrued for as earned by employees. The liability for the accumulated vacation days represents management's best estimate as to TRCA's future liability. (i) Contaminated sites: Contaminated sites are the result of contamination being introduced in air, soil, water or sediment of a chemical, organic, or radioactive material or live organism that exceed an environmental standard. A liability for remediation of contaminated sites is recognized, net of any expected recoveries, when all of the following criteria are met: (a) an environmental standard exists; (b) contamination exceeds the environmental standard; (c) TRCA is directly responsible or accepts responsibility for the liability; (d) future economic benefits will be given up; and (e) a reasonable estimate of the liability can be made. Changes in this estimate are recorded in TRCA's statement of operations and accumulated surplus. Q) Employee pension plan: The cost of the multi-employer defined benefit pension plan is recognized as the required contributions for employees' services are rendered in the year. (k) Reserves: TRCA internally allocates its accumulated surplus to capital reserves to finance the cost of tangible capital assets, purchases, maintenance and related expenditures and operating reserves in order to ensure funds are available for financial relief in the event of a significant loss of revenues or other financial emergency for which no other source of funding is available. These reserve allocations are directed by the Board of Directors of TRCA. 41 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 1. Significant accounting policies (continued): (1) Use of estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of the revenue and expenses during the year. Items requiring the use of significant estimates include allowance for doubtful accounts, accrued liabilities, vacation pay entitlements and tangible capital assets. Estimates are based on the best information available at the time of preparation of the financial statements and are reviewed annually to reflect new information as it becomes available. Measurement uncertainty exists in these financial statements. Actual results could differ from these estimates. 2. Cash - CTC Source Protection Region: The Credit Valley, Toronto and Region and Central Lake Ontario Source Protection Region ("CTC Source Protection Region") was established under the Clean Water Act of Ontario to ensure communities protect their drinking water supplies through prevention - by developing collaborative, watershed based source protection plans that are locally driven and based on science. The CTC Source Protection Region's jurisdiction includes the Credit Valley, Toronto and Region and Central Lake Ontario source protection areas, which are represented by the respective conservation authorities under the Clean Water Act. In the current year, the Ministry of the Environment and Climate Change provided funding of $461 (2016 - $540) for source protection projects to the TRCA, which delivers the management function on behalf of the CTC Source Protection Region. Interest of $8 (2016 - $6) has been imputed on the unspent balance of the funds. Total funding of $512 (2016 - $703) is held in a separate bank account, which is included on the statement of financial position as cash, with a corresponding deferred revenue balance. 42 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 3. Investments: 2017 2016 Provincial bonds: Interest rates: 1.63% - 2.60% (2016 - 1.63% - 3.62%) $ 6,502 $ 8,052 Years of maturity: 2018 - 2022 (2016 - 2017 - 2022) Guaranteed investment certificates: Interest rates: 1.75% - 2.46% (2016 - 1.40% - 2.46%) 4,991 7,489 Years of maturity: 2018 - 2021 (2016 - 2017 - 2020) Municipal bonds: Interest rates: 1.58%- 1.85% (2016 - 1.58% - 1.85%) 1,639 1,611 Years of maturity: 2020 - 2021 (2016 - 2020 - 2021) Corporate bonds: Interest rates: 1.80% - 3.30% (2016 - 3.12% - 3.30%) 1,395 1,693 Years of maturity: 2018 - 2022 (2016 - 2018 - 2019) Financial institution bonds: Interest rates: 1.72% - 2.58% (2016 - 1.72% - 2.71 %) 777 2,690 Year of maturity: 2020 (2016 - 2017 - 2020) The One Investment Program: Bond Portfolio 3,610 3,528 Universe Corporate Bond Portfolio 2,583 2,520 Equity Portfolio 500 500 $ 21,997 $ 28,083 The fair market value of the investments at December 31, 2017 is $21,743 (2016 - $28,033). 4. Receivables: Government funding: Municipal Federal Provincial Authority generated: Trade and other The Living City Foundation (note 13) 43 2017 2016 $ 12,108 $ 8,978 1,217 911 105 1,066 4,374 860 2,388 2,071 $ 20,192 $ 13,886 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 5. Deferred revenue: Government funding (a) Authority generated (b) (a) Government funding: 2017 2016 $ 22,617 $ 25,898 14,791 13,087 $ 37,408 $ 38,985 The proceeds on the sale of properties of $767 (2016 - $747) is attributed to the province and the member municipalities on the basis of their original contribution when the properties were acquired. The Ministry of Natural Resources and Forestry reserves the right to direct the purpose to which the provincial share of funds may be applied or to request a refund. The balance must always be maintained in proportion to the original contribution by the province and TRCA, represented by the member municipalities. TRCA is permitted to withdraw the municipal share of the funds provided that the corresponding provincial share is either matched by other sources of funding or returned to the province. In the current year, $522 (2016 - $284) was applied to the Greenspace acquisition project and nil (2016 - $2) was applied to the revised project for the Etobicoke Motel Strip. Interest of $45 (2016 - $26) has been imputed on the unspent balance of the funds. EVA 2017 2016 Balance, Balance, Balance, beginning of Funding Funding end of end of year received recognized year year Municipal: Capital levies $ 14,849 $ 36,760 $ (38,292) $ 13,317 $ 14,849 Contract services 3,433 16,523 (17,721) 2,235 3,433 Other 148 3,597 (2,721) 1,024 148 Provincial 3,708 5,091 (6,944) 1,855 3,708 Federal 222 2,960 (2,943) 239 222 Revenue sharing policy (i) 3,538 931 (522) 3,947 3,538 $ 25,898 $ 65,862 $ (69,143) $ 22,617 $ 25,898 The proceeds on the sale of properties of $767 (2016 - $747) is attributed to the province and the member municipalities on the basis of their original contribution when the properties were acquired. The Ministry of Natural Resources and Forestry reserves the right to direct the purpose to which the provincial share of funds may be applied or to request a refund. The balance must always be maintained in proportion to the original contribution by the province and TRCA, represented by the member municipalities. TRCA is permitted to withdraw the municipal share of the funds provided that the corresponding provincial share is either matched by other sources of funding or returned to the province. In the current year, $522 (2016 - $284) was applied to the Greenspace acquisition project and nil (2016 - $2) was applied to the revised project for the Etobicoke Motel Strip. Interest of $45 (2016 - $26) has been imputed on the unspent balance of the funds. EVA TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 5. Deferred revenue (continued): (b) Authority generated: 6. Tangible capital assets: 2017 - Cost 2017 2016 Cash in lieu and compensation funds $ 6,513 $ 7,114 Property easements 3,270 841 Master environmental servicing plans fees 2,579 2,215 Wedding and event deposits 948 627 Contract services 849 631 Other 632 1,659 5,568 $ 14,791 $ 13,087 6. Tangible capital assets: 2017 - Cost Opening Additions Transfers Disposals Closing Land $ 346,937 $ 2,453 $ 82 $ (3,343) $ 346,129 Infrastructure 156,019 7,621 4,601 (63) 168,178 Buildings and building 28,712 Land improvements 5,568 630 - improvements 58,080 892 201 (2,255) 56,918 Land improvements 14,517 742 398 - 15,657 Machinery and equipment 9,778 701 - (3,677) 6,802 Vehicles 5,115 929 - (392) 5,652 Assets under construction 10,945 8,965 (5,282) (87) 14,541 $ 601,391 $ 22,303 $ $ (9,817) $ 613,877 Land Infrastructure Buildings and building improvements Land improvements Machinery and equipment Vehicles Assets under construction 45 346,129 $ 346,937 Amortization 48,515 28,206 2017 - Accumulated amortization Opening - net Disposals Closing Infrastructure $ 107,504 $ 3,771 $ (63) $ 111,212 Buildings and building improvements 28,770 2,024 (2,082) 28,712 Land improvements 5,568 630 - 6,198 Machinery and equipment 4,421 642 (2,336) 2,727 Vehicles 3,709 (202) (348) 3,159 $ 149,972 $ 6,865 $ (4,829) $ 152,008 Net book value 2017 2016 Land Infrastructure Buildings and building improvements Land improvements Machinery and equipment Vehicles Assets under construction 45 346,129 $ 346,937 56,966 48,515 28,206 29,310 9,459 8,949 4,075 5,357 2,493 1,406 14,541 10,945 $ 461,869 $ 451,419 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 6. Tangible capital assets (continued): TRCA changed the basis of amortization for vehicles from the declining balance method to the straight-line method to more accurately reflect their usage. The change in amortization method has resulted in a $623 reduction in accumulated amortization, which has been reflected in amortization expenses in the current period. In the current year, TRCA transferred lands in the amount of $3,342 (2016 - nil) to the City of Mississauga, which has been reflected in net loss on disposal of tangible capital assets. Further, TRCA received $1,167 (2016 - $299) of contributed tangible capital assets within the Greenspace Securement and Management service area. 7. Accumulated surplus: Tangible capital assets Unfunded vacation pay entitlements Operating reserves Capital reserves 8. Revenue - government funding: 2017 2016 $ 461,869 $ 451,419 (1,496) (1,847) 2,756 3,006 1,758 2,348 $ 464,887 $ 454,926 O 2017 Budget 2017 Actual 2016 Actual Municipal: Capital levies $ 46,477 $ 38,292 $ 34,346 Contract services 12,717 17,721 10,343 Operating levies 13,928 13,928 13,552 Other 4,036 2,721 2,427 Provincial 6,752 6,944 6,646 Federal 1,522 2,943 2,811 $ 85,432 $ 82,549 $ 70,125 O TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 Revenue - authority generated: Watershed Studies and Strategies: Watershed planning and reporting Climate science Water Risk Management: Erosion and flood management Water resource science Regional Biodiversity: Biodiversity monitoring Ecosystem management Restoration and regeneration Greenspace Securement and Management: Rentals Greenspace management Greenspace securement Tourism and Recreation: Site admissions and athletic fees Wedding and corporate events Camping and picnic permits Heritage Village Events and festivals Facility rentals and other Trails Film and photography permits Black Creek historic brewery Planning and Development Review: Development planning Environmental assessments Education and Outreach: Educational programs Sustainable Communities: Living City transition programs Community engagement Corporate Services 47 2017 2017 2016 Budaet Actual Actual 143 $ 99 $ 3 - - 18 20 2,116 292 36 57 21 427 165 193 10 103 27 1,115 1,712 1,823 402 188 2,454 270 1,352 243 3,224 3,745 1,349 3,461 3,011 1,963 2,228 2,530 2,228 2,122 2,503 3,609 1,538 1,944 1,750 831 903 863 160 443 395 15 324 32 141 249 431 75 108 74 5,622 5,957 5,945 1,181 1,455 1,307 4,187 6,015 3,780 2,383 2,217 1,764 315 293 424 206 921 631 $ 30,112 $ 38,410 $ 31,619 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 10. Expenses by object: 2017 2017 2016 Budget Actual Actual Compensation $ 61,751 $ 61,535 $ 57,990 Contract services 35,118 28,094 20,632 Materials and supplies 7,184 10,246 6,125 Utilities 1,159 1,021 1,215 Property taxes 1,244 921 1,120 Amortization 7,052 6,865 7,374 $ 113,508 $ 108,682 $ 94,456 11. Public sector salary disclosure: TRCA is subject to The Public Sector Salary Disclosure Act, 1996. Salaries and taxable benefits for the 54 employees (2016 - 53 employees) that have been paid by TRCA and reported to the Province of Ontario in compliance with this legislation can be obtained from the Ministry of Finance or upon request from TRCA. 12. Employee pension plan: TRCA makes contributions to the Ontario Municipal Employees Retirement System ("OMERS"), which is a multi-employer pension plan, on behalf of its qualifying full and part- time employees. The plan is a defined benefit plan, which specifies the amount of the retirement benefit to be received by the employees based on the length of service, pension formula and best 60 months of earnings. Employees and employers contribute equally to the plan. As OMERS is a multi-employer defined benefit pension plan, any pension plan surpluses or deficits are a joint responsibility of all eligible organizations and their employees. As a result, TRCA does not recognize any share of the OMERS pension actuarial deficit of $5,403,000 (2016 - $5,720,000), as TRCA's portion of the amount is not determinable. TRCA' current service contributions to the OMERS pension plan in the amount of $4,234 (2016 - $3,923) are included as compensation in the current year. TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 13. The Living City Foundation: The Living City Foundation (the "Foundation") is an independent, non -controlled registered charitable organization which has its own Board of Directors. As such, TRCA's financial statements do not include the activities of the Foundation. In the current year, the Foundation contributed $4,665 (2016 - $1,578) to TRCA programs, which is included as part of authority generated revenue. As at December 31, 2017, the Foundation has an externally restricted fund balance of $3,893 (2016 - $3,532), which is to be used primarily for undertaking TRCA projects, and an operating fund deficit of $103 (2016 - $447). The receivable balance from the Foundation is non-interest bearing, unsecured and has no specified repayment terms. 14. Contingent liabilities and commitments: (a) Legal actions and claims: TRCA has received statements of claim as defendant under various legal actions resulting from its involvement in land purchases, fatalities, personal injuries and flooding on or adjacent to its properties. TRCA maintains insurance coverage against such risks and has notified its insurers of the legal actions and claims. It is not possible at this time to determine the outcome of these claims and, therefore, no provision has been made in these financial statements. (b) Land expropriations: TRCA has completed the acquisition of lands required to undertake various projects which includes acquiring lands under the Expropriations Act. A number of properties required for this Revised Project for the Etobicoke Motel Strip were obtained through expropriation from five owners. Funding was from the City of Etobicoke and the Municipality of Metropolitan Toronto (now collectively known as the City of Toronto) and the Province of Ontario. To date four of the expropriations have been settled and the compensation has been paid. m • TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 14. Contingent liabilities and commitments (continued): (c) Lease commitments: TRCA is committed under operating leases for office spaces over the next five years and thereafter, with minimum lease payments as follows: 2018 $ 1,041 2019 1,075 2020 1,075 2021 585 2022 96 Thereafter 63 $ 3,935 (d) Loan guarantee: TRCA and the City of Toronto have jointly and severally provided a loan guarantee in the amount of $4,600 (2016 - $4,600) to Evergreen for the Don Valley Brick Works restoration project from its financial institutional lender. As of December 31, 2017, Evergreen's outstanding loan balance is $2,752 (2016 - $3,268), and is repayable in monthly installments, with the last payment due on April 15, 2023. 15. Budget figures: The budget in the statement of operations was approved on March 24, 2017. 16. Comparative information: Certain comparative information has been reclassified to conform with the financial statement presentation adopted in the current year. 50 TORONTO AND REGION CONSERVATION AUTHORITY DRAFT Notes to Financial Statements (continued) (In thousands of dollars) Year ended December 31, 2017 17. Segmented disclosures: 2017 2016 Studies Securement Tourism Planning Education and Water Risk Regional and and and and Sustainable Corporate Strategies Management Biodiversity Management Recreation Development Outreach Communities Services Total Total Revenue: Government funding $ 3,649 $ 28,725 $ 12,747 $ 3,090 $ 8,848 $ 2,490 $ 5,684 $ 7,317 $ 9,999 $ 82,549 $ 70,125 Authority generated 99 2,173 1,980 5,285 12,018 7,410 6,015 2,509 921 38,410 31,619 Investment income - 8 - 39 - - 2 - 746 795 714 Expenses Compensation 2,495 7,721 8,880 2,137 10,517 8,552 6,206 5,555 9,472 61,535 57,990 Contract services 699 10,134 4,190 840 4,119 375 1,077 1,589 5,070 26,094 20,632 Materials and supplies 57 2,260 2,056 619 2,235 159 685 401 1,772 10,246 6,125 Utilities - 30 2 82 595 - 202 - 110 1,021 1,215 Property taxes - - 1 914 - - - - 6 921 1,120 Amortization 2 1,440 29 777 3,414 2 182 240 780 6,865 7,374 Internal charges (recoveries) 528 3,475 (891) 914 965 202 464 799 (6,456) 3,781 25,060 14,269 6,283 21,845 9,290 8,816 8,584 10,754 108,682 94,456 Net surplus (deficit) $ (33) $ 5,709 $ 458 $ (876) $ (979) $ 610 $ 2,885 $ 1,242 $ 945 $ 9,961 $ 7,933 51 Attachment 2 19,911MIAll Toronto and Region Conservation Authority Audit Findings Report For the year ended December 31, 2017 May 30, 2018 kpmg.ca/audit I 52 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 2 Table of Contents Executive summary 3 Audit approach 5 Materiality 7 How we deliver audit quality 8 Other matters 9 Adjustments and differences 10 Performance improvement observations 11 Appendices 13 53 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 3 FXecutive surflmary Purpose of this report We identified two uncorrected adjustments and two disclosure omissions. The purpose of this Audit Findings Report is to assist you, as a member of the Budget/Audit Advisory Board, in your review of the results of our audit of the financial statements of Toronto and Region Conservation Authority as at and for the year ended December 31, 2017. Audit approach and findings Our audit is risk -focused. In planning our audit we have taken into account key areas of focus for financial reporting. Audit Materiality Materiality has been determined based on total expenses. We have reviewed the scope of work across segments and businesses across the group. We have determined materiality to be $2,717,000 for the year ended December 31, 2017. Refer to page 7. Adjustments and Differences We did not identify any corrected adjustments. Finalizing the audit As of the date of this report, we have completed the audit of the financial statements, with the exception of certain remaining procedures, which include amongst others: — receipt of legal confirmation; — completing our discussions with the Budget/Audit Advisory Board; — completing our subsequent event review procedures; — receipt of signed management representation letter (dated upon Board approval); — obtaining evidence of the Board's approval of the financial statements. We will update you, and not solely the Chair (as required by professional standards), on significant matters, if any, arising from the completion of the audit, including the completion of the above procedures. Our auditors' report will be dated upon the completion of any remaining procedures. 54 Control and other observations We did not identify any control deficiencies that we determined to be significant deficiencies in ICFR. Refer to page 11 for further details on the observations and management's response. Significant accounting estimates Overall, we are satisfied with the reasonability of accounting policies in place. Significant accounting policies and practices There have been no initial selections of, or changes to, significant accounting policies and practices to bring to your attention. Financial statement presentation and disclosure The presentation and disclosure of the financial statements are, in all material respects, in accordance with the Organization's relevant financial reporting framework. Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 14 Audit 9pUf0aSh Fraud risk from This is a presumed fraud risk. As the risk is not rebuttable, our audit methodology incorporates the required procedures in management override We have not identified any specific professional standards to address this risk. These procedures include testing of journal entries and of controls additional risks of management other adjustments, performing a retrospective review of estimates and evaluating the business override relating to this audit. rationale of significant unusual transactions. No issues noted. 55 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 5 Audit approach Cash and investments • Obtain confirmations of cash and investment year-end balances from third parties • Review bank reconciliations and vouch significant reconciling items to source documents • Review of investment earnings • Perform cut-off testing • Review of financial statement presentation and disclosure Revenue, Deferred revenue and Accounts • Revenue recognition consideration (recognized versus deferred) receivable • Select a sample of deferred revenue and vouch to supporting documentation • Select a sample of revenue and vouch to supporting documentation • Vouch operating and capital levy revenue to supporting documentation • Subsequent receipts of a sample of amounts receivables post year-end • Review of accounts receivable sub -ledger for credit balances • Review of disclosure requirements Tangible capital assets • Select a sample of additions of tangible capital assets and work -in -progress and agree to original invoices to ensure proper accounting treatment • Review of significant transfer of items out of the work in progress account • Review of any significant disposals • Select a sample of expense transactions and agree to original invoices to ensure proper classification of expenses Expenses / Accounts Payable and • Review supporting documentation for significant accruals Accrued Liabilities • Perform trend analysis • Review of expense cut-off through the search for unrecorded liabilities 56 Payroll Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 6 • Obtain an understanding on payroll processes • Perform substantive analytical procedures over compensation expenses • Testing of payroll input to source documents • Review supporting documentation for significant payroll and vacation accruals 57 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 7 materiality The determination of materiality requires professional judgment and is based on a combination of quantitative and qualitative assessments including the nature of account balances and financial statement disclosures. Metrics Total revenue or expenses and net assets Total expenses Benchmark Based on actual 2017 total expenses for the year. $108,682,000 Materiality Determined to plan and perform the audit and to evaluate the effects of identified misstatements on $2,717,000 the audit and of any uncorrected misstatements on the financial statements. The corresponding amount for the prior year's audit was $2,361,000. % of Benchmark The corresponding percentage for the prior year's audit was approximately 2.5%. 2.5% Performance materiality Used 75% of materiality, and used primarily to determine the nature, timing and extent of audit $2,037,000 procedures. The corresponding amount for the prior year's audit was 75%. Audit Misstatement Posting Threshold used to accumulate misstatements identified during the audit. The corresponding amount $135,000 Threshold (AMPT) for the previous year's audit was $118,050. CONTINUOUS IMPROVEMENT I Training DEPTH OF EXPERIENCE see 1IF JIM • t�'? Years' Industry Continuity Involvement experience experience of team of specialists TWO-WAY COMMUNICATION 01M Ongoing dialogue QTAILORED APPROACH ��' Quality I I I I reviews Xm ® Q No surprises 1111 L0.4/ Profound Materiality Coverage Risk-based 1 understanding �O Root cause Timely analysis INSIGHT reporting &% Data d Independent Skepticism and Team hours Current Action analytics view judgment developments Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 9 other matters We have highlighted below other significant matters that we would like to bring to your attention: Change in capitalization threshold for machinery and equipment During the year, TRCA changed the capitalization threshold for machinery and equipment from $1,000 to $5,000 to be consistent with all tangible capital asset thresholds, other than land and buildings. The change resulted in management writing off $1.4M of machinery and equipment, made up of individually insignificant items, predominately of older equipment items from 2008/2009. We reviewed the supporting disposals listing and ensured that all assets had acquisition costs below the $5,000 threshold. We also reviewed the tangible capital assets additions in the current period on a sample basis, and ensured that all additions were above the $5,000 capitalization threshold and valid capital asset additions. No issues noted. Change in accounting policy for During the year, TRCA changed the basis of amortization for vehicles from the declining balance method to the straight-line amortization of vehicles method to more accurately reflect their usage. We note that such as change would constitute a change in accounting policy, and from a financial reporting perspective, would require retroactive application (to account for the change as if it was always under the new policy since inception). The change in amortization method resulted in a $623K adjustment to accumulated amortization which has been reflected in amortization expense in the current period. The adjustment was made to reflect what the accumulated amortization of vehicles would have been, had the basis of amortization always been straight-line. We noted that the change in accounting policy has been applied retrospectively by TRCA to 2017 amortization expense, without adjusting the impact to opening accumulated surplus. As this adjustment of $623K do not belong to the operations of 2017, the entire amount should be adjusted to opening accumulated surplus. As such, we proposed an uncorrected audit adjustment to reverse the $623K from amortization expense to opening accumulated surplus. Refer to the schedule of uncorrected misstatements. From a disclosure perspective, the change in accounting policy has been appropriately reflected in note 1 (g) and note 6 to the financial statements. Litigious matters As part of TRCA's normal operations, TRCA could be involved in various legal actions resulting from its involvement in land purchases, fatalities, personal injuries and flooding on or adjacent properties. TRCA maintains insurance coverage against such risks and has notified its insurers of the legal actions and claims. We discussed all ongoing and potential legal claims with management and reviewed significant legal invoices throughout the year to identify any potential claims. Where significant claims are identified and covered by the insurance coverage, we reviewed management's support to corroborate. No discrepancies were noted. We also sent out legal confirmations to five of TRCA's legal counsels. We are currently pending receipt of one legal letter. Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 10 AdIustments and differences Adjustments and differences identified during the audit have been categorized as "Corrected adjustments" or "Uncorrected differences". These include disclosure adjustments and differences. Professional standards require that we request of management and the audit committee that all identified differences be corrected. We have already made this request of management. Corrected adjustments We did not identify any adjustments that were communicated to management andsubsequently corrected in the financial statements. Uncorrected differences and disclosure omission The management representation letter includes the Summary of Uncorrected Audit Misstatements, which disclose the impact of all uncorrected differences considered to be other than clearly trivial. Below also summarizes the uncorrected differences and disclosure omissions: 1) Uncorrected differences noted: a. An entry to record a cash receipt and corresponding deferred revenue of $782K relating to 2018 operating levy received in advance. b. To reflect the $623K change in accounting policy for the depreciation of vehicles as an adjustment to opening accumulated surplus. 2) Disclosure omission noted: a. Deferred revenue — disclosure of any changes in deferred revenue balance attributable to each major category of external restriction. We note that there is no deferred revenue roll included in the financial statements for Authority generated revenue. b. Letter of credit — an omission in disclosure of the terms of a new letter of credit outstanding as at December 31, 2017 Based on both qualitative and quantitative considerations, management have decided not to correct certain differences, and represented to us that the uncorrected differences—individually and in the aggregate—are, in their judgment, not material to the financial statements. We concur with management's representation that the differences are not material to the financial statements. Accordingly, the differences have no effect on our auditors' report. 61 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 11 Performance improvemen(observations We have previously communicated to management some performance improvement observations identified during the prior year audit. Below is a summary of these performance improvement observations and updated management's response: Manual adjustments 2016 audit observation: Management is constantly During the audit, we noted that management focuses its in -year financial information needs on exploring processes and subproject/program statements of operations which leads to a high volume of manual journal modifying procedures to entries subsequent to year-end related to payroll, tangible capital assets, deferred revenue and improve the efficiency of other correcting entries. Given the extent of entries occurring at year-end, it is possible that financial reporting. Specifically, management does not have full visibility of the in -year actual results and resources available in the current year across the organization. management performed a By permitting all employees, regardless of their level of relevant financial training, access to the detailed review of its deferred revenue processes, which general ledger accounts for processing transactions, it increases the risk of error. During the resulted in the configuration of audit, we noted many entries recorded to correct originally recorded journal entries. a deferred revenue report and We further noted several adjustments relating to employees' time coded to various projects. improved transparency in Project statements are available to review during the year; however, review may not happen changes to deferred revenue. until year-end. By delaying a fulsome review to year-end, it increases the risk of undetected In fiscal year 2017, errors during the year. management implemented a We noted that Tangible Capital Asset (TCA) entries are coded to expense accounts, requiring nine-month hard close reporting manual effort to review whether expenditures should have been capitalized if they were capital process for the statement of in nature at year-end. As part of this annual assessment, we noted no formal process to provide operations. For fiscal year evidence to support an asset being moved from an asset under construction to its completed 2018, management is state. We recommend management review acquisitions throughout the year and implement a implementing reporting formal process to acknowledge the completion of an asset. deadlines for four quarters of We noted a manual process related to the reporting of deferred revenue. At year-end, manual 2018 to provide more current effort is required to identify all revenue that should be deferred. This increases the risk of in -year financial information. missing an item for deferral or the risk of an error related to the recognition of revenue subject to As management configures the restrictions. We recommend that management: general ledger module in 2018, - Consider implementing a semi-annual review of in -year financial information to identify employees with access to corrections to projects/programs on a more timely basis. record journal entries will be - Review its current process with deferred revenue, and consider recording deferred limited to a group of staff based revenue on a quarterly or semi-annual basis. on job responsibility, with accounting approval and quality control on all journal entries. l•L Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 12 We recommend management provide training to individuals who post journal entries, charge and/or approve time to ensure they understand the financial reporting implications and that permission to record entries be restricted to users with appropriate training to do so. 2017 update: We obtained an update on the status of the recommendations. Refer to 2017 Management Response column. Reporting system (Business 2016 audit observation: Modules have been secured World) and management is developing A different set of codes and chart of accounts exist, creating additional steps for all users to a plan to effectively implement the ERP system for use across cross reference to in order to search for any transactions within the two systems. the organization. We note that management has not maximized the functionality of Business World which could As noted above, the general help alleviate some of the manual processes. We recommend management explore the options ledger update and related available with the ERP system to simplify and automate some of its current processes, such as training are expected to take allowing users to record journal entries directly in the ERP. place in 2018. 2017 update: We obtained an update on the status of the recommendation. Refer to 2017 Management Response column. Compliance with vacation policy 2016 audit observation: Management recognizes the need to enforce its vacation Upon examination of the vacation accrual schedule, we noted that certain employees appear to Policy, and accordingly revised the policy that will effective have accumulated vacation days in excess of what is allowed in the vacation policy. Through on December 31, 200 19. The discussion with management, we noted that payroll does not have the documented approval for new policy will enable exceptions to the vacation policy on file. employees to utilize any We recommend that management enforce the policy and develop a plan to bring the vacation in excess of their organization in line with the policy within a reasonable timeframe. maximum annual entitlement. We further recommend that as a best practice, documented approvals for all banked day TRCA has also recently requests and exceptions be provided to payroll for record keeping, to ensure consistent purchased a Human Resources application of the vacation policy across the organization. Information System software product, which will automate 2017 update: We obtained an update on the status of the recommendations. Refer to 2017 compliance tracking to ensure consistent application across Management Response column. the organization. LGP. Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 13 Aunlces Appendix 1: Required communications Appendix 2: Audit Quality and Risk Management Appendix 3: Background and professional standards Appendix 4: Lean in Audit TM Appendix 5: New Auditor Reporting Appendix 6: Current developments Appendix 7: Audit trends • Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 14 A nendix I Re ulied communications In accordance with professional standards, there are a number of communications that are required during the course of and upon completion of our audit. These include: — Auditors' report — the conclusion of our audit is set out in our draft auditors' — Management representation letter An accordance with professional report standards, copies of the management representation letter are provided to the Audit Committee. 65 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 Appendix 2 Audit lality and RiSk Management KPMG maintains a system of quality control designed to reflect our drive and determination to deliver independent, unbiased advice and opinions, and also meet the requirements of Canadian professional standards. Quality control is fundamental to our business and is the responsibility of every partner and employee. The following diagram summarises the six key elements of our quality control systems. Visit our Audit Quality Resources page for more information including access to our audit quality report, Audit quality: Our hands-on process. Other controls include — Before the firm issues its audit report, the Engagement Quality Control Reviewer reviews the appropriateness of key elements of publicly listed client audits. — Technical department and specialist resources provide real - lime support to audit teams in the field. — We conduct regular reviews of engagements and partners. Review teams are independent and the work of every audit partner is reviewed at least once every three years. — We have policies and guidance to ensure that work performed by engagement personnel meets applicable professional standards, regulatory requirements and the firm's standards of quality. — All KPMG partners and staff are required to act with integrity and objectivity and comply with applicable laws, regulations and professional standards at all times. Other risk management quality controls Independent monitoring Independence, integrity, ethics and objectivity Engagement performance standards We do not offer services that would 15 impair our independence. — The processes we employ to help retain and develop people include: Personnel — Assignment based on skills and management experience; — Rotation of partners; — Performance evaluation; — Development and training; and — Appropriate supervision and coaching. — We have policies and procedures for deciding whether to accept or continue a client relationship or to Acceptance of continuance o perform a specific engagement for clients / I that client. engagements / F _ Existing audit relationships are reviewed annually and evaluated to identify instances where we should discontinue our professional association with the client. 15 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 16 Appendix 3 Background and professional standards Internal control over financial reporting As your auditors, we are required to obtain an understanding of internal control over financial reporting (ICFR) relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances for the purpose of expressing an opinion on the financial statements, but not for the purpose of expressing an opinion on internal control. Accordingly, we do not express an opinion on the effectiveness of internal control. Our understanding of ICFR was for the limited purpose described above and was not designed to identify all control deficiencies that might be significant deficiencies and therefore, there can be no assurance that all significant deficiencies and other control deficiencies have been identified. Our awareness of control deficiencies varies with each audit and is influenced by the nature, timing, and extent of audit procedures performed, as well as other factors. The control deficiencies communicated to you are limited to those control deficiencies that we identified during the audit. 67 Documents containing or referring to the audited financial statements We are required by our professional standards to read only documents containing or referring to audited financial statements and our related auditors' report that are available through to the date of our auditors' report. The objective of reading these documents through to the date of our auditors' report is to identify material inconsistencies, if any, between the audited financial statements and the other information. We also have certain responsibilities, if on reading the other information for the purpose of identifying material inconsistencies, we become aware of an apparent material misstatement of fact. We are also required by our professional standards when the financial statements are translated into another language to consider whether each version, available through to the date of our auditors' report, contains the same information and carries the same meaning. Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 17 Aundix 4 Loan in Audit 11 An innovative approach leading to enhanced value and quality Our new innovative audit approach, Lean in Audit, further improves audit value and productivity to help deliver real insight to you. Lean in Audit is process - oriented, directly engaging organizational stakeholders and employing hands-on tools, such as walkthroughs and flowcharts of actual financial processes. By embedding Lean techniques into our core audit delivery process, our teams are able to enhance their understanding of the business processes and control environment within your organization — allowing us to provide actionable quality and productivity improvement observations. Any insights gathered through the course of the audit will be available to both engagement teams and yourselves. For example, we may identify control gaps and potential process improvement areas, while companies have the opportunity to apply such insights to streamline processes, inform business decisions, improve compliance, lower costs, increase productivity, strengthen customer service and satisfaction and drive overall performance. How it works -Provide basic Lean training and equip our teams with a new Lean mind -set to improve quality, value and productivity. • Perform interactive workshops to conduct walkthroughs of selected financial processes providing end to end transparency and understanding of process and control quality and effectiveness. • Quick and pragmatic insight report including your teams immediate quick win actions and prioritized opportunities to realize benefit. Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 18 Aundix 5 Now Auditor R000rting In response to investors demanding more than a binary pass/fail opinion from the Applicability auditors' report, the new and revised auditor reporting standards have introduced When are the new requirements effective? significant changes to the traditional auditors' report we provide. The new and revised standards in Canada will be effective for audits of financial In April 2017, the Auditing and Assurance Standards Board (AASB) in Canada statements for periods ending on or after December 15, 2018 with early application approved the new and revised auditor reporting standards as Canadian Auditing permitted. Standards (CASs). charged with governance and U.S. developments What's new? Highlights of the new auditors' report include: Change Applicability Re -ordering of the auditors' Listed and non -listed entities report including moving opinion to the first section Expanded descriptions of Listed and non -listed entities management's, those charged with governance and auditors' responsibilities Disclosure of name of the Listed entities engagement partner Description of key audit Applicable only when required by law or regulation matters (KAMs) or when the auditors is engaged to do so In June 2017, the Public Company Accounting Oversight Board (PCAOB) adopted their enhanced auditor reporting standards which includes, among other requirements, discussion of critical audit matters (CAMs) (similar to KAMs) and tenure of the auditor. Highlights and effective dates of the new U.S. standards are: — New auditors' report format, tenure and other information: audits for fiscal years ending on or after December 15, 2017 — Communication of CAMs for audits of large accelerated filers: audits for fiscal years ending on or after June 30, 2019 — Communication of CAMs for audits of all other companies: audits for fiscal years ending on or after December 15, 2020. Impact to Foreign Private Issuers in Canada Auditors of foreign private issuers ("FPIs") will still be able to issue a "combined" report (which many FPIs in Canada issue today) that meets both the CAS and enhanced PCAOB standards for 2017 year-end engagements. Discussions are still underway whether a "combined report" for 2018 year-end engagements will be allowable. The way forward in Canada The AASB, working alongside the regulatory bodies, continue to deliberate how the disclosure of KAMs will be required to listed entities in Canada given the recent developments in the U.S. Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 Appendix G. Current developments The following is a summary of the current developments that are relevant to the Organization: PS 3210 Assets This standard provides a definition of assets and further expands that definition as it relates to control. Assets are defined as follows: • They embody future economic benefits that involve a capacity, singly or in combination with other assets, to provide goods and services, to provide future cash inflows, or to reduce cash outflows. • The public sector entity can control the economic resource and access to the future economic benefits. • The transaction or event giving rise to the public sector entity's control has already occurred. The standard also includes some disclosure requirements related to economic resources that are not recorded as assets to provide the user with better information about the types of resources available to the public sector entity. This standard is effective for fiscal periods beginning on or after April 1, 2017. PS 3380 Contractual Rights This standard defines contractual rights to future assets and revenue. Information about a public sector entity's contractual rights should be disclosed in notes or schedules to the financial statements and should include descriptions about their nature and extent and the timing. The standard also indicates that the exercise of professional judgment would be required when determining contractual rights that would be disclosed. Factors to consider include, but are not limited to: (a) contractual rights to revenue that are abnormal in relation to the financial position or usual business operations; and (b) contractual rights that will govern the level of certain type of revenue for a considerable period into the future. This standard is effective for fiscal periods beginning on or after April 1, 2017. PS 2200 Related Party Disclosures This standard relates to related party disclosures and defines related parties. Related parties could be either an entity or an individual. Related parties exist when one party has the ability to control or has shared control over another party. Individuals that are key management personnel or close family members may also be related parties. Disclosure is only required when the transactions or events between related parties occur at a value different from what would have been recorded if they were not related and the transactions could have a material financial impact on the financial statements. Material financial impact would be based on an assessment of the terms and conditions underlying the transaction, the financial materiality of the transaction, the relevance of the information and the need for the information to enable the users to understand the financial statements and make comparisons. Wk 19 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 20 This standard also specifies the information required to be disclosed including the type of transactions, amounts classified by financial statement category, the basis of measurement, and the amounts of any outstanding items, any contractual obligations and any contingent liabilities. The standard also requires disclosure of related party transactions that have occurred where no amounts has been recognized. This standard is effective for fiscal periods beginning on or after April 1, 2017. PS 3430 Restructuring A restructuring transaction in the public sector differs from an acquisition as they generally include either no or nominal Transactions payment. It also differs from a government transfer as the recipient would be required to assume the related program or operating responsibility. The standard requires that assets and liabilities are to be measured at their carrying amount. It also prescribes financial statement presentation and disclosure requirements. This standard is effective for fiscal periods beginning on or after April 1, 2018. PS 3420 Inter -entity Transactions This standard relates to the measurement of related party transactions and includes a decision tree to support the standard. Transactions are recorded a carrying amounts with the exception of the following: • In the normal course of business — use exchange amount • Fair value consideration — use exchange amount • No or nominal amount — provider to use carrying amount; recipient choice of either carrying amount or value fair. • Cost allocation — use exchange amount This standard is effective for fiscal periods beginning on or after April 1, 2017. PS 3450 Financial Instruments A standard has been issued, establishing a standard on accounting for and reporting all types of financial instruments including derivatives. The effective date of this standard has recently been deferred and it is now effective for fiscal periods beginning on or after April 1, 2019. This standard will require the Authority to identify any contracts that have embedded derivatives and recognize these on the consolidated statement of financial position at fair value. Portfolio investments in equity instruments are required to be recorded at fair value. Changes in fair value will be reported in a new financial statement — statement of remeasurement gains and losses. This standard sets out a number of disclosures in the financial statements designed to give the user an understanding of the significance of financial instruments to the Authority. These disclosures include classes of financial instruments and qualitative and quantitative risk disclosures describing the nature and extent of risk by type. The risks to be considered include credit, currency, interest rate, liquidity, and market risk. Revised Standard PS 2601 Foreign A revised standard has been issued establishing standards on accounting for and reporting transactions that are denominated Currency Translation in a foreign currency. 71 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 21 The effective date of this standard has been deferred and is effective for fiscal periods beginning on or after April 1, 2019. Earlier adoption is permitted. An entity early adopting this standard must also adopt the new financial instruments standard. This standard will require exchange gains and losses arising prior to settlement are recognized in a new statement of remeasurement gains and losses. Deliberations on the Future of Accounting Standards for Not -for -Profit Oroanizations In April 2013, the Accounting Standards Board ("AcSB") and the Public Sector Accounting Board ("PSAB") jointly issued a. Statement of Principles ("SOP") that proposed to revise Part III of the CPA Canada Handbook and the CPA Public Sector Accounting Handbook to streamline and improve the existing standards for financial reporting by not- for-profit organizations and Government not-for-profit organizations. The SOP garnered much interest from the Not -for -Profit community and, based on the feedback the Boards received, the proposals did not proceed further through the accounting standards development process. In March 2015, citing different financial reporting challenges, user needs and differing priorities faced by PSAB and the AcSB, the Boards announced that they would independently pursue improvements to not-for-profit accounting standards, but collaborate on common issues. Based on the responses from the SOP, the Public Sector Accounting Board decided that making substantive changes to the Accounting Standards for Government Not -for - Profit Organizations was not a priority at this time. The Board's long-term strategy is to better align the accounting standards used by not-for-profit organizations (as provided in the Section 4200 series in the Accounting Handbook) with those used by other government entities, where practical. 72 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 22 Appendix 7 Audi[ trends KPMG understands the wide range of challenges and evolving trends that you face. We also understand that sometimes keeping up with critical issues as they emerge can be difficult. As your auditors, it is incumbent upon us to provide you with any information that will help you further strengthen corporate governance, enhance your oversight and add greater value within your organization. As such, KPMG's Audit Committee Institute (ACI) provides information, resources and opportunities for you to share knowledge with your peers. First, you are welcome to attend our Audit Committee Roundtable sessions, which are held in major cities across the country. In addition, you will also benefit from our monthly Audit Point of View article series as well as thought leadership and insights on the most pressing audit committee agenda items. More information on all of these can easily be found at www.kpmq.ca/audit. Our discussions with you, our audit opinion and what KPMG is seeing in the marketplace both from an audit and industry perspective—indicate the following is specific information that will be of particular interest to your organization. We would, of course, be happy to further discuss this information with you at your convenience. Audit Trends With a range of provocative data, insight and opinion gleaned from KPMG professionals and The Conference Board of Canada survey of Audit Committees and CFOs, Audit Trends examines seven key issues addressing corporate readiness, preparedness and priority in a volatile business environment. Link to report The Blockchain shift will be Blockchain technology is a focused disruptor of the very foundations of Link to article seismic external and internal audit: financial recordkeeping and reporting. This Audit Point of View article offers insight on how blockchain technology is impacting business and what audit committees should be thinking about to prepare for certain risks. Audit Quality 2017 Learn about KPMG's ongoing commitment to continuous audit quality Link to report improvement. We are investing in new innovative technologies and building strategic alliances with leading technology companies that will have a transformative impact on the auditing process and profession. How do we seek to make an impact on society through the work that we do? 73 Toronto and Region Conservation Authority Audit Findings Report for the year ended December 31, 2017 1 23 kpmg.ca/audit rinlv—WG• KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, Is the Canadian member firm of KPMG International Cooperative ("KPMG International"). KPMG member fines around the word have 174,000 picfessionais, in 455 countries. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes Itself as such. 02017 KPMG LLP. a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG Intemafionar), a Swiss entity. All rights reserved. 74 (Letterhead of Entity) KPMG LLP Vaughan Metropolitan Centre 100 New Park Place, Suite 1400 Vaughan, ON L4K OJ3 Canada Date: (date of FS approval) Ladies and Gentlemen: We are writing at your request to confirm our understanding that your audit was for the purpose of expressing an opinion on the financial statements (hereinafter referred to as "financial statements") of Toronto and Region Conservation Authority ("the Entity') as at and for the period ended December 31, 2017. GENERAL: We confirm that the representations we make in this letter are in accordance with the definitions as set out in Attachment I to this letter. We also confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves: RESPONSIBILITIES: 1) We have fulfilled our responsibilities, as set out in the terms of the engagement letter dated November 17, 2017, including for: a) the preparation and fair presentation of the financial statements and believe that these financial statements have been prepared and present fairly in accordance with the relevant financial reporting framework. b) providing you with all information of which we are aware that is relevant to the preparation of the financial statements, such as all financial records and documentation and other matters, including (i) the names of all related parties and information regarding all relationships and transactions with related parties; and (ii) the complete minutes of meetings, or summaries of actions of recent meetings for which minutes have not yet been prepared, of shareholders, board of directors and committees of the board of directors that may affect the financial statements, and providing you with access to such relevant information. All significant board and committee actions are included in the summaries. c) providing you with additional information that you may request from us for the purpose of the engagement. d) providing you with unrestricted access to persons within the Entity from whom you determined it necessary to obtain audit evidence. e) such internal control as we determined is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. We also 75 acknowledge and understand that we are responsible for the design, implementation and maintenance of internal control to prevent and detect fraud. f) ensuring that all transactions have been recorded in the accounting records and are reflected in the financial statements. g) providing you with written representations that you are required to obtain under your professional standards and written representations that you determined are necessary. h) ensuring that internal auditors providing direct assistance to you, if any, were instructed to follow your instructions and that management, and others within the entity, did not intervene in the work the internal auditors performed for you. INTERNAL CONTROL OVER FINANCIAL REPORTING: 2) We have communicated to you all deficiencies in the design and implementation or maintenance of internal control over financial reporting of which we are aware. FRAUD & NON-COMPLIANCE WITH LAWS AND REGULATIONS: 3) We have disclosed to you: a) the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud b) all information in relation to fraud or suspected fraud that we are aware of and that affects the financial statements and involves: management, employees who have significant roles in internal control over financial reporting, or others, where the fraud could have a material effect on the financial statements. c) all information in relation to allegations of fraud, or suspected fraud, affecting the financial statements, communicated by employees, former employees, analysts, regulators, or others. d) all known instances of non-compliance or suspected non-compliance with laws and regulations, including all aspects of contractual agreements, whose effects should be considered when preparing financial statements. e) all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements. SUBSEQUENT EVENTS: 4) All events subsequent to the date of the financial statements and for which the relevant financial reporting framework requires adjustment or disclosure in the financial statements have been adjusted or disclosed. RELATED PARTIES: 5) We have disclosed to you the identity of the Entity's related parties. 6) We have disclosed to you all the related party relationships and transactions/balances of which we are aware. 7) All related party relationships and transactions/balances have been appropriately accounted for and disclosed in accordance with the relevant financial reporting framework. ESTIMATES: 8) Measurement methods and significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable. 76 GOING CONCERN: 9) We have provided you with all relevant information relevant to the use of the going concern assumption in the financial statements. MISSTATEMENTS: 10) The effects of the uncorrected misstatements described in Attachment II are immaterial, both individually and in the aggregate, to the financial statements as a whole. NON -SEC REGISTRANTS OR NON -REPORTING ISSUERS: 11) We confirm that the Entity is not a Canadian reporting issuer (as defined under any applicable Canadian securities act) and is not a United States Securities and Exchange Commission ("SEC') Issuer (as defined by the Sarbanes-Oxley Act of 2002). We also confirm that the financial statements of the Entity will not be included in the consolidated financial statements of a Canadian reporting issuer audited by KPMG or an SEC Issuer audited by any member of the KPMG organization. Yours very truly, By: Mr. John MacKenzie, Chief Executive Officer By: Mr. Michael Tolensky, Chief Financial Officer 77 Attachment I — Definitions MATERIALITY Certain representations in this letter are described as being limited to matters that are material. Misstatements, including omissions, are considered to be material if they, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. Judgments about materiality are made in light of surrounding circumstances, and are affected by the size or nature of a misstatement, or a combination of both. FRAUD & ERROR Fraudulent financial reporting involves intentional misstatements including omissions of amounts or disclosures in financial statements to deceive financial statement users. Misappropriation of assets involves the theft of an entity's assets. It is often accompanied by false or misleading records or documents in order to conceal the fact that the assets are missing or have been pledged without proper authorization. An error is an unintentional misstatement in financial statements, including the omission of an amount or a disclosure. RELATED PARTIES In accordance with Canadian public sector accounting standards related party is defined as: • Related parties exist when one party has the ability to exercise, directly or indirectly, control, joint control or significant influence over the other. Two or more parties are related when they are subject to common control, joint control or common significant influence. Related parties also include management and immediate family members (see paragraph 3840.04). In accordance with Canadian public sector accounting standards a related party transaction is defined as: • A related party transaction is a transfer of economic resources or obligations between related parties, or the provision of services by one party to a related party, regardless of whether any consideration is exchanged. The parties to the transaction are related prior to the transaction. When the relationship arises as a result of the transaction, the transaction is not one between related parties. we Attachment II Summary of uncorrected misstatement Method used to evaluate differences: Income statement (Roll over) J Impact on financial statement captions - DR CR # Account # Account Name Description / Error Amount Balance Sheet Effect Cash Flow Effect Statement Identified During Type Income Effect of DR (CR) Compreh ensive Income - Debit Credit DR (CR) Income Income Income Equity at Current Non-Curre Current Non-Curre Operating Investing Financing effect of effect of effect period end Assets nt Assets Liabilities nt Activities Activities Activities correcting current (Rollover Liabilities the period method) balance balance sheet in sheet prior period $ $ $ $ $ $ $ $ $ $ $ $ 1 1000 Cash To set up 2018 operating levy as Factual 782,000 - 782,000 - - - - - - - deferred revenue 2200 Deferred Revenue 782,000 - 782,000 - 782,000 - - - 2 5100 Amortization Expense To reflect the change in accounting Factual 623,000 - 623,000 623,000 623,000 623,000 - - - policy as an adjustment to opening accumulated surplus 3560 Accumulated Surplus 623,000 623,000 - 623,000 - - - Total uncorrected misstatements (before tax) - 623,000 623,000 - 782,000 - (782,000) - (782,000) - - - Tax effect of uncorrected misstatements - - - - - - or tax misstatements Total uncorrected misstatements (after tax) - 623,000 623,000 - 782,000 - (782,000) - (782,000) - - - Final financial statement amounts - 9,961,000 464,887,000 56,603,000 462,810,000 54,526,000 11,760,000 6,665,000 (20,688,000) Percentage of uncorrected misstatements after tax financial statement amounts. 6.25% -% 1.38% 0.00% 1.43% 0.00% 6.65% 0.00% 0.00% 0.00% J Attachment II Summary of uncorrected misstatements in presentation and disclosures Description of Audit Misstatement Resolution Type of Misstatement 1 Deferred revenue - PSAS 3100.18 requires Uncorrected Factual disclosure of any changes in deferred revenue balance attributable to each major category of external restriction. No deferred revenue roll is included in the financial statements of the Authority with respect to Authority Generated Revenue. 2 In the current year TRCA obtained a letter of Uncorrected Factual credit in line with the requirements of a third parry funder. As at December 31, 2017 the available amount of the credit amounted to $273,000. TRCA has elected not to disclose this commitment as it is not material in nature and is outside of regular operations. RES.#C8/18 - 2019 PRELIMINARY MUNICIPAL LEVIES Update on the Recommended 2019 Preliminary Municipal Levy Submissions. Update on the 2019 municipal levy submission process. Moved by: Gino Rosati Seconded by: Jack Ballinger THE BOARD RECOMMENDS TO THE AUTHORITY THAT Toronto and Region Conservation Authority's (TRCA) 2019 preliminary municipal levy submissions for the regional municipalities of Durham, Peel and York, and the City of Toronto, be consistent with the anticipated 2019 funding envelopes identified for TRCA in the 2018 budget cycle; THAT preliminary operating levy targets be set at: Durham Region 2.5%, Peel Region 3.3%, York Region 3.7% and City of Toronto at 2.5%; THAT the list of unfunded municipal projects included in TRCA's "Unmet Priorities List" be submitted to the municipalities for their budgetary consideration in 2019; AND FURTHER THAT TRCA staff be directed to submit the preliminary 2019 municipal estimates and multi-year funding requests to the regional municipalities of Durham, Peel and York, and the City of Toronto, in accordance with their respective submission schedules. CARRIED BACKGROUND TRCA's member municipalities require that TRCA provide 10 -year capital budget projections and each municipality has its own requirements and format for this information. Attachment 1 includes summary tables for capital projects and programs in the City of Toronto and the regional municipalities of Durham, Peel and York. TRCA staff regularly consults with member municipality staff to: ensure that there is alignment on objectives and deliverables; avoid duplication of effort; coordinate activities and procurement to realize maximum value and efficiency; report on the achievement of project deliverables. Attachment 1 provides a summary of the anticipated distribution of funding at the service area level by regional municipality. Detailed information sheets on each TRCA project and program are available to members upon request. RATIONALE Municipal Capital Funding Regional Municipality of Durham Durham Region guidelines will be provided to TRCA later this year. TRCA will be requesting a funding envelope in the amount of $1.168 million, which compares to $1.075 million in 2018. The increase reflects an 8.6% adjustment on the base; rationale for the adjustment includes inflation (2%) and the transition of multiple TRCA programs to the watershed formula base funding model. The funding distributes mandatory jurisdiction based works on a land area bases. Regional Municipality of Peel Peel Region guidelines provide a 2019 funding envelope in the amount of $16.176 million, which compares to $15.928 million excluding one-time costs for emerald ash borer and Bolton Camp of $2.685 million in 2018. This reflects a 1.6% increase on the base and it is consistent with the 2019 targets contained in the 2018 cycle submission. City of Toronto City of Toronto guidelines for TRCA established during the 2018 — 2027 capital budget cycle provides a 2019 capital funding envelope in the amount of $19.064 million, which compares to an approved $18.330 million in 2018. City of Toronto capital funding is supported by debt financing and Water Rate. Regional Municipality of York York Region's funding envelope is anticipated to be in the amount of $4.898 million, which compares to $4.834 million in 2018. This reflects an approximate 1.3% increase on the base. Operating Lew The operating levy anticipated funding envelopes for the regional municipalities of Durham, Peel and York have been set at the amounts indicated in the multi-year targets for TRCA, and which approximate recent historical average increases support. The anticipated Toronto target of 2.5% equals the 2018 increase in support to TRCA and is equal to the multi-year target included for Water Rate on the portion of TRCA's operating levy funded by water revenues, or 58% of the total Toronto operating levy. Since the 2019 guideline approved by the City calls for no increase over 2018 for tax supported programs (42% of levy) a special case for support will be made to the City, mostly on the basis of the unique funding arrangement with the regional municipalities. Unmet Priorities Project List Attachment 2 lists unmet priorities which staff recommends be submitted to the participating municipalities as "unmet or unaccommodated" priorities for consideration during the 2019 budget process. Discussions continue with municipal staff to review available funding, over and above the guidelines. 0211Ib1IJ&4*1a1TL*]0Ilk 1107=31111161L,Iy TRCA budgets will be finalized in the fourth quarter of 2018 and will include municipal levy projects and programs as agreed to by the respective participating municipalities. Staff will make a presentation on key aspects of the 2019 budget in the fourth quarter of 2018, prior to anticipated municipal council approvals in the first quarter of 2019. Report prepared by: Jenifer Moravek, extension 5659 Emails: jmoravek(&trca.on.ca For Information contact: Jenifer Moravek, extension 5659 Emai Is: lmoravek(dtrca.on.ca Date: May 30, 2018 Attachments: 2 RN 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 Attachment 1 - Regional Municipalities Projected Levies (Operating and Capital) Projected Levies Regional Municipality of Peel Details Watershed Studies and Strategies Total 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Regional Municipality of Durham Details 2,107,000 2,333,000 2,362,000 2,420,000 2,461,000 2,530,000 2,582,000 2,649,000 2,695,000 2,753,000 2,811,000 Watershed Studies and Strategies Total 9,000 82,000 85,000 85,000 93,000 93,000 97,000 101,000 101,000 104,000 104,000 Water Risk Management Total 337,000 355,000 365,000 365,000 365,000 375,000 377,000 385,000 385,000 385,000 385,000 Regional Biodiversity Total 423,200 418,000 418,000 427,000 429,000 434,000 437,000 449,000 450,000 456,000 461,000 Greenspace Securement and Management Total 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 Tourism and Recreation Total 105,000 110,000 111,000 116,000 118,000 122,000 124,000 128,000 130,000 134,000 138,000 Planning and Development Total 14,200 14,200 14,200 14,200 14,200 14,200 14,200 14,200 14,200 14,200 14,200 Education and Outreach Total - - - - - - - - - - - Sustainable Communities Total 102,200 104,200 106,200 108,200 110,200 112,200 114,200 116,200 118,200 120,200 122,200 Corporate Services Total 81,671 81,671 81,671 81,671 81,671 81,671 81,671 81,671 81,671 81,671 81,671 Total Capital 1,075,071 1,167,871 1,183,871 1,199,871 1,213,871 1,234,871 1,247,871 1,277,871 1,282,871 1,297,871 1,308,871 Total Operating 539,120 553,000 567,000 581,000 596,000 611,000 626,000 642,000 658,000 674,000 691,000 1,614,191 1,720,871 1,750,871 1,780,871 1,809,871 1,845,871 1,873,871 1,919,871 1,940,871 1,971,871 1,999,871 Regional Municipality of Peel Details Watershed Studies and Strategies Total 742,000 761,000 787,000 806,000 842,000 862,000 889,000 916,000 938,000 966,000 990,000 Water Risk Management Total 2,107,000 2,333,000 2,362,000 2,420,000 2,461,000 2,530,000 2,582,000 2,649,000 2,695,000 2,753,000 2,811,000 Regional Biodiversity Total 3,799,000 3,992,000 4,080,000 4,219,000 4,307,000 4,395,000 4,514,000 4,644,000 4,768,000 4,897,000 5,026,000 Greenspace Securement and Management Total 1,421,400 2,298,400 2,366,400 2,436,400 2,509,400 2,584,400 2,661,400 2,740,400 2,822,400 2,906,400 2,993,400 Tourism and Recreation Total 872,000 212,000 218,000 224,000 230,000 238,000 246,000 254,000 262,000 270,000 278,000 Planning and Development Total 434,000 449,000 449,000 449,000 461,000 461,000 473,000 473,000 485,000 485,000 485,000 Education and Outreach Total 5,379,500 1,253,000 1,291,000 1,329,000 1,369,000 1,410,000 1,452,000 1,496,000 1,540,000 1,585,000 1,633,000 Sustainable Communities Total 2,942,100 3,175,100 3,270,100 3,366,100 3,464,100 3,567,100 3,668,100 3,775,100 3,886,100 4,007,100 4,124,100 Corporate Services Total 916,000 1,753,000 1,796,000 1,840,000 1,885,000 1,932,000 1,980,000 2,029,000 2,080,000 2,132,000 2,186,000 Total Capital 18,613,000 16,226,500 16,619,500 17,089,500 17,528,500 17,979,500 18,465,500 18,976,500 19,476,500 20,001,500 20,526,500 Total Operating 1,856,000 1,917,000 1,980,000 2,045,000 2,112,000 2,182,000 2,254,000 2,328,000 2,405,000 2,484,000 2,566,000 20,469,000 18,143,500 18,599,500 19,134,500 19,640,500 20,161,500 20,719,500 21,304,500 21,881,500 22,485,500 23,092,500 City of Toronto Details Watershed Studies and Strategies Total 246,000 246,000 252,000 252,000 268,000 268,000 274,000 278,000 278,000 283,000 286,000 Water Risk Management Total 11,247,000 12,144,000 12,159,000 12,159,000 12,175,000 14,512,000 14,512,000 14,526,000 14,526,000 14,526,000 14,535,000 Regional Biodiversity Total 1,486,000 1,501,000 1,518,000 1,559,000 1,586,000 1,600,000 1,603,000 1,611,000 1,611,000 1,614,000 1,633,000 Greenspace Securement and Management Total 64,400 64,400 64,400 64,400 64,400 64,400 64,400 64,400 64,400 64,400 64,400 Tourism and Recreation Total 2,941,000 2,641,000 641,000 641,000 641,000 641,000 641,000 641,000 641,000 641,000 650,000 Planning and Development Total 322,000 322,000 322,000 322,000 322,000 322,000 322,000 322,000 322,000 322,000 322,000 Education and Outreach Total 147,000 147,000 147,000 147,000 180,000 189,000 189,000 189,000 189,000 189,000 192,000 Sustainable Communities Total 928,000 1,026,000 1,100,000 1,174,000 1,200,000 1,281,000 1,396,000 1,497,000 1,627,000 1,753,000 1,778,000 Corporate Services Total 948,600 972,600 1,024,600 1,054,600 1,085,600 2,080,600 2,080,600 2,080,600 2,080,600 2,080,600 2,080,600 Total Capital 18,330,000 19,064,000 17,228,000 17,373,000 17,522,000 20,958,000 21,082,000 21,209,000 21,339,000 21,473,000 21,541,000 Total Operating 8,602,300 8,742,358 8,885,916 9,033,064 9,183,891 9,338,488 9,496,950 9,659,374 9,825,859 9,996,505 10,171,418 26,932,300 27,806,358 26,113,916 26,406,064 26,705,891 30,296,488 30,578,950 30,868,374 31,164,859 31,469,505 31,712,418 1 2 3 4 5 6 7 8 9 Regional Municipality of York Details Watershed Studies and Strategies Total 189,000 189,000 198,000 198,000 218,000 218,000 227,000 234,000 234,000 240,000 240,000 Water Risk Management Total 1,831,100 1,841,000 1,894,000 1,899,000 1,905,000 1,932,000 1,965,000 1,986,000 1,992,000 1,997,000 2,003,000 Regional Biodiversity Total 1,047,000 1,081,000 1,094,000 1,118, 000 1,127, 000 1,139, 000 1,148,000 1,176, 000 1,182, 000 1,196, 000 1,207,000 Greenspace Securement and Management Total 393,400 400,400 408,400 416,400 424,400 432,400 440,400 448,400 457,400 466,400 475,400 Tourism and Recreation Total - - - - - - - - - - - Planning and Development Total 107,000 107,000 107,000 107,000 107,000 107,000 107,000 107,000 107,000 107,000 107,000 Education and Outreach Total 177,000 180,000 184,000 187,000 191,000 195,000 200,000 205,000 210,000 215,000 220,000 Sustainable Communities Total 468,200 478,200 485,200 493,200 498,200 509,200 514,200 525,200 530,200 541,200 553,200 Corporate Services Total 621,300 621,300 621,300 621,300 621,300 621,300 621,300 621,300 621,300 621,300 621,300 Total Capital 4,834,000 4,897,900 4,991,900 5,039,900 5,091,900 5,153,900 5,222,900 5,302,900 5,333,900 5,383,900 5,426,900 Total Operating 3,322,000 3,444,000 3,499,000 3,586,475 3,676,137 3,768,040 3,862,241 3,958,797 4,057,767 4,159,211 4,263,192 8,156,000 8,341,900 8,490,900 8,626,375 8,768,037 8,921,940 9,085,141 9,261,697 9,391,667 9,543,111 9,690,092 Township of Adjala - Tosorontio Details Total Capital Total Operating 870 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 870 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Town of Mono Details Total Capital - - - - - - Total Operating 1,710 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 1,710 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 Attachment 2 - Unmet Priorities Projected Cost *TRCA is engaging municipal partners to determine the work required to compile and update watershed planning information. Updated information will ensure that Municipal Comprehensive Reviews conform to new provincial Growth Plan policies. At this time, provincial requirements have not yet been fully articulated. As a result, the cost and anticipated timelines associated with compiling and updating has not be established. TRCA will continue collaborating with municipal staff, and will report back in the Fall when more information is available. Total Cost 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Regional Municipality of Durham Details Emerald Ash Borer 1,150,000 175,000 275,000 275,000 275,000 150,000 - - - - Capital Asset Management Plan Implementation 2,500,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 Greenspace Management and Land Care 2,000,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Toronto Wildlife Centre 435,000 145,000 145,000 145,000 - - - - - - - Watershed Plan Development* - - - - - - - - - - - 6,085,000 770,000 870,000 870,000 725,000 600,000 450,000 450,000 450,000 450,000 450,000 Regional Municipality of Peel Details Bolton Camp Community Infrastructure 10,000,000 2,500,000 2,500,000 2,500,000 2,500,000 - - - - - - Albion Hills Conservation Area Master Plan Implementation 19,800,000 1,800,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Capital Asset Management Plan Implementation 9,500,000 500,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Toronto Wildlife Centre 1,695,000 565,000 565,000 565,000 - - - - - - - Watershed Plan Development* - - - - - - - - - - - 40,995,000 5,365,000 6,065,000 6,065,000 5,500,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 City of Toronto Details Black Creek Pioneer Village - State of Good Repair 13,000,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 Scarborough Bluff West EA 3,475,000 875,000 1,300,000 1,300,000 - - - - - - - Waterfront Rehabilitation 100,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 Toronto Wildlife Centre 9,705,000 3,235,000 3,235,000 3,235,000 - - - - - - - Watershed Plan Development* - - - - - - - - - - - 126,180,000 15,410,000 15,835,000 15,835,000 11,300,000 11,300,000 11,300,000 11,300,000 11,300,000 11,300,000 11, 300,000 Regional Municipality of York Details Capital Asset Management Plan Implementation 11,250,000 - 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 Greenspace Management and Land Care 7,800,000 855,000 855,000 855,000 855,000 855,000 705,000 705,000 705,000 705,000 705,000 Nashville Master Plan 5,500,000 400,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 300,000 Toronto Wildlife Centre 3,210,000 1,070,000 1,070,000 1,070,000 - - - - - - - Watershed Plan Development* - - - - - - - - - - - 30,460,000 2,595,000 4,045,000 4,045,000 2,975,000 2,975,000 2,825,000 2,825,000 2,825,000 2,825,000 2,525,000 *TRCA is engaging municipal partners to determine the work required to compile and update watershed planning information. Updated information will ensure that Municipal Comprehensive Reviews conform to new provincial Growth Plan policies. At this time, provincial requirements have not yet been fully articulated. As a result, the cost and anticipated timelines associated with compiling and updating has not be established. TRCA will continue collaborating with municipal staff, and will report back in the Fall when more information is available. Section III — Items for the Information of the Board 2017 EXPENDITURES REPORT Receipt of Toronto and Region Conservation Authority's (TRCA) expenditures for the year ended, December 31, 2017. Moved by: Ronald Chopowick Seconded by: Jack Ballinger THAT the 2017 Expenditures Report be received. CARRIED BACKGROUND As part of TRCA's financial governance procedures, staff is presenting the 2017 Expenditures Report, which covers the period from January 1, 2017 through December 31, 2017. FINANCIAL DETAILS The operating and capital expenditures by service area are provided in Attachments 1 and 2, respectively. Each attachment contains two charts, the first of which provides a numerical analysis of expenditures to date, while the later provides variance explanations for service areas which have not spent between 90% - 110% of their approved budgetary expenses in the normal course of operations. This threshold allows for an unexplained variance of +/- 10% from the annual budget. The capital expenditures presented (both budgeted and actual) include asset costs that are capitalized as the tangible capital assets in the audited financial statements. TRCA's continued focus on budgeting has led to improved variances of only 3% for both the capital and operating budgets, as compared to 15% and 4%, respectively, in 2016. Staff have done a good job assessing their 2017 deliverables when completing their budgets and determining what capacity/resources were required to complete the tasks, which has led to the reduction of in -year surprises. Report prepared by: Janice Darnley, extension 5768 Emails: idarnlev(&trca.on.ca For Information contact: Michael Tolensky, extension 5965 Emails: mtolenskyo_trca.on.ca Date: May 3, 2018 Attachments: 2 Attachment 1 Operating Expenditures (All dollar amounts are presented in thousands of dollars) Service Area 2017 Budgeted Expenditures 2017 Actual Expenditures $ Variance % Variance Variance Explanations Watershed Studies and Strategies $1,707 $1,670 ($37) (2%) unex lained variance is 3%, which falls within the expected range. Water Risk Management $1,033 $1,020 $13 1% Regional Biodiversity $712 $1,464 $752 106% A Greenspace Securement and Management $3,162 $3,286 $124 4% Tourism and Recreation $12,952 $13,823 $871 7% Planning and Development $8,654 $8,652 $2 0% Education and Outreach $6,348 $6,230 $118 2% Sustainable Communities $235 $174 $61 26% B Corporate Services $10,016 $9,618 $398 4% Total $44,819 $45,937 $1,118 3% Fib Variance Explanations A Unbudgeted Rouge Park expenditures of $1,164 were offset by cost savings of $190 from the inland fill program and $236 from the plant propagation program. Once these are taken into account, the % of unexplained variance is 4%, which falls within the expected range. B Plant material internal recoveries exceeded budget by $53. Once taken into account, the % of unex lained variance is 3%, which falls within the expected range. Fib Attachment 2 Capital Expenditures (All dollar amounts are presented in thousands of dollars) Service Area 2017 Budgeted Expenditures 2017 Actual Expenditures $ Variance % Variance Variance Explanations Watershed Studies and Strategies $2,436 $2,100 ($336) (14%) C Water Risk Management $28,518 $30,732 $2,214 8% Carruthers Plan projects were under budget by $128, partially due to technical issues delaying the Regional Biodiversity $12,619 $13,173 $554 4% The Living City Centre project incurred $1,100 of unbudgeted costs in order to bring site servicing Greenspace Securement and Management $3,412 $3,914 $502 15% D Tourism and Recreation $9,012 $9,266 $254 3% Conservation Pilot Program and $175 from the Growing Local Foods project. Once these are Planning and Development Review $709 $570 ($139) (20%) E Education and Outreach $3,436 $4,375 $939 27% F Sustainable Communities $11,318 $9,703 $1,615 14% G Corporate Services $2,896 $2,467 $429 15% H Total $74,356 $76,300 $1,944 3% Variance Explanations C Anticipation of Provincial guidance on municipal requirements in regards to watershed plan updates resulted in cost deferral of $162. Further, the Climate Science Applications Project had cost savings of $179 due to unanticipated staff gapping, causing the deliverables to be delayed until 2018. Once these are taken into account, the % of unexplained variance is 0%, which falls within the ex ected range. D The market value of unbudgeted land transfers totals $798. Once taken into account, the % of unexplained variance is 9%, which falls within the expected range. E Carruthers Plan projects were under budget by $128, partially due to technical issues delaying the transfer of information to the consultant resulting in work deferral to 2018. Once these are taken into account, the % of unexplained variance is 1 %, which falls within the expected range. F The Living City Centre project incurred $1,100 of unbudgeted costs in order to bring site servicing to the Kortright Campus. Offsetting cost deferrals related to Bolton Camp site improvement of $141 and the Pan Am Equestrian Facility landscaping of $56 were incurred. Once these are taken into account, the % of unexplained variance is 1 %, which falls within the expected range. G Unanticipated staff gapping variances, project deferrals and efficiencies in implementation led to $600 in savings from the Partners in Project Green program, $212 from the Performance Based Conservation Pilot Program and $175 from the Growing Local Foods project. Once these are taken into account, the % of unexplained variance is 6%, which falls within the expected range. H Head office cost deferrals relating to the construction of the new head office of $919 were partially offset by asset management implementation of $218 and restoration and infrastructure modernization of $130. Once these are taken into account, the % of unexplained variance is 5%, which falls within the expected range. TERMINATION ON MOTION, the meeting terminated at 9:05 a.m., on Friday, June 08, 2018. Maria Augimeri Chair /ks e John MacKenzie Secretary -Treasurer