Item - 2025.EX25.11

The Executive Committee recommends that:

1. City Council authorize that the criteria sheet of the Paver Maintenance Reserve Fund be amended to reflect changes to its purpose and withdrawal policy as outlined in Appendix E to the report (July 2, 2025) from the Chief Financial Officer and Treasurer, and amend Municipal Code Chapter 227, Reserves and Reserve Funds, Appendix B, Schedule 8 to reflect the change.

2. City Council authorize the General Manager, Transportation Services to negotiate, enter into and execute amending agreements to existing paver agreements, with terms and conditions satisfactory to the General Manager, Transportation Services, and in a form satisfactory to the City Solicitor.

3. City Council direct that the balance of the Housing Allowance Reserve in the amount of $4,543,300 be transferred to the Social Housing Stabilization Reserve and that it be closed and deleted from Municipal Code Chapter 227, Reserves and Reserve Funds, Appendix A, Schedule 1 – Corporate Reserves.

4. City Council direct that the balance of the Home Improvement Reserve Fund in the amount of $95,002 be transferred to the Social Housing Stabilization Reserve and that it be closed and deleted from Municipal Code Chapter 227, Reserves and Reserve Funds, Appendix B, Schedule 9 – Community Initiatives Reserve Funds.

5. City Council authorize that the criteria sheet of the Social Housing Stabilization Reserve be amended, reflecting changes to its purpose and contribution and withdrawal policies, as outlined in Appendix F to the report (July 2, 2025) from the Chief Financial Officer and Treasurer, and also amended in Municipal Code Chapter 227, Reserves and Reserve Funds, Appendix A, Schedule 3 to reflect its change in purpose.

6. City Council approve a change in the name of the “Municipal Land Transfer Tax Stabilization Reserve Fund” to the “Municipal Land Transfer Tax Stabilization Reserve” and amend City of Toronto Municipal Code Chapter 227, Reserves and Reserve Funds by removing the “Municipal Land Transfer Tax Stabilization Reserve Fund” from Municipal Code Chapter 227, Reserves and Reserve Funds, Appendix B, Schedule 7, Corporate Discretionary Reserve Funds, and adding the “Municipal Land Transfer Tax Stabilization Reserve” to Appendix A, Schedule 3, Stabilization Reserves.

The City of Toronto (City) maintains deferred revenue balances that will be recognized as revenues in future years, in addition to reserves and discretionary reserve funds that are intended to support the City's future activities. This report provides an update of these balances, as well as their related earned revenues and activities for the year ended December 31, 2024.

Deferred Revenue

Deferred revenue , or obligatory reserve funds, are monies received from external parties for specific purposes outlined in Provincial legislation or third-party agreements.   

For the twelve-month period ended December 31, 2024, the City’s deferred revenues increased from $6,362.1 million to $6,728.9 million. The increase of $366.8 million was primarily driven by New Deal contributions from the Provincial government for affordable housing, subway and transit operations, and contributions from the City’s water and wastewater revenues that will be leveraged to support ongoing water and wastewater expenditures and commitments.

Reserves and Discretionary Reserve Funds

Reserves and Discretionary Reserve Funds are established by Council to support the financial management and operations of the City, minimize annual tax rate fluctuations, and provide a measure of financial flexibility to address the impact of significant unexpected pressures.

Reserves and Discretionary Reserve Funds balances increased by $318.9 million over the twelve-month period ended December 31, 2024, going from $5,291.7 million to $5,610.6 million. This net increase is the result of Council-authorized contributions for capital investments in housing, transit, capital infrastructure, and vehicle and equipment replacement. The majority of the City's Reserves and Discretionary Reserve Funds balances ($5,381.7 million, or 95.9 percent) are committed to future Council directed activities that include capital and operating expenditures and rate-based activities.

The remaining reserve and discretionary reserve fund balance ($228.9 million, or 4.1 percent) 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.  The uncommitted amount represents 1.3 percent of the total 2024 approved Operating Budget of $17,119.6 million.

There are total commitments and obligations of $15,720.8 million against the $5,381.7 million balance in committed reserves, consistent with the approved 10-Year Capital Plan. These commitments and obligations are nearly three times greater than the current reserve and discretionary reserve fund balances, requiring continued reserve contributions to support planned expenditures.