Item - 2023.EX9.5

The Executive Committee recommends that:

1. City Council direct that the 2021 operating surpluses totalling $535,253 from five Arenas (George Bell, William H. Bolton, McCormick, Moss Park and Ted Reeve) be payable to the City of Toronto and be used, in part, to fund the operating deficit of $12,808 for Forest Hill Memorial Arena, resulting in a net operating surplus of $522,455 prior to the contribution to the Tax Rate Stabilization Reserve (XQ0703) for COVID-19 backstop, as illustrated in Appendix A to the report (October 17, 2023) from the Interim Chief Financial Officer and Treasurer.

2. City Council direct the excess of the actual operating net surplus balance of $522,455 over the approved 2021 budgeted equating to $490,307, be allocated to the Tax Rate Stabilization Reserve (XQ0703) for COVID-19 backstop and the remaining $32,138 be retained by the City as illustrated in Appendix A to the report (October 17, 2023) from the Interim Chief Financial Officer and Treasurer.

3. City Council direct a funding provision be made through the 2023 Year-End Operating Budget Variance for the $32,138 difference between the reported Arena Boards 2021 surplus of $522,455 and the final net surplus to the City of $490,307, as shown in Appendix A to the report (October 17, 2023) from the Interim Chief Financial Officer and Treasurer.

On an annual basis, the City of Toronto receives the audited financial statements from eight Arena Boards of Management (Arenas). The audited financial statements assist the City to determine whether additional operating subsidy payments need to be provided to or clawed back from the Arenas to settle their operating deficits or surpluses. City staff report annually on the Arenas' operating surpluses and deficits once the respective Boards financial statements have been audited and approved by Council. The audited financial statements are based on the Public Sector Accounting Board requirements for government not-for-profit entities while the operating deficits or surpluses align with the modified cash basis of accounting.

This report recommends the settlement of six of the Arenas' operating surpluses and deficits for 2021 based on their audited financial statements for the year ended December 31, 2021, with operating surpluses payable to the City and operating deficits funded by the City upon Council’s approval.

At the time of preparation of this report, the 2020 and 2021 audited financial statements for Leaside Memorial Community Gardens Arena and 2021 audited financial statements for North Toronto Arena remains in progress and therefore the settlement for these outstanding Arenas will be presented in a future report for consideration and approval purposes.

While normally the prior year end settlement reports for both Association of Community Centres and Arena Boards are submitted together to Council in the following year, the 2021 settlement reports were delayed due to delays in completing the 2021 audits. City staff will present the 2022 Settlement Reports at the first opportunity to the City Council for consideration and approval.