Item - 2024.EX19.14

The Executive Committee recommends that:

1. City Council receive the City of Toronto Reserve and Reserve Fund Balances as at September 30, 2024 to the report (November 26, 2024) from the Chief Financial Officer and Treasurer for information.

2. City Council direct that $211.1 million of funding in the “Tax Rate Stabilizing Reserve” for bridge funding temporarily held in that reserve as part of the enhanced multi-year budget strategy be transferred to the “Budget Bridging and Balancing Reserve Fund’ consistent with the strategy outlined in the 2024 Budget process.

This report summarizes the activities of the City of Toronto’s (City) Reserves and Reserve Fund balances for the nine months ended September 30, 2024.

Reserves and Reserve Funds established by Toronto City Council (Council) are key to support the financial management and operations of the City, and to minimize annual tax rate fluctuations. The funds help offset future capital needs, obligations such as employee expenses, fiscal pressures from ongoing programs, unforeseen costs, and revenue shortfalls.

Reserves and Reserve Funds balances as at September 30, 2024 totaled $5,857.7 million, an increase of $566.0 million from December 31, 2023 ($5,291.7 million). This net increase is the result of deliberate contributions for capital investments in housing, transit, capital infrastructure, and vehicle and equipment replacement as authorized by Council. The majority of the City's reserve and reserve fund balances ($5,647.3 million, or 96.4 percent) are committed to future Council directed activities that include capital and operating expenditures and rate-based activities.

There are total commitments and obligations of $15.721 billion against the $5,647.3 million balance in committed reserves, consistent with the approved 10-Year Capital Plan.  These commitments and obligations are nearly 3 times greater than the current reserve and reserve fund balances, requiring continued reserve contributions to support planned expenditures.

The remaining reserve and reserve fund balance of $210.4 million, or 3.6 percent of total reserves and reserve funds, is uncommitted and available to respond to various unanticipated costs, stabilize funding sources, including the tax base, or for emergency purposes such as extreme weather events.