This is the exact embedded text of the captured official document.
Snapshot 6bc81a22add4 · verified 2026-06-05 ·
original document ·
archived snapshot ·
unofficial consolidation, the official version is held by the municipal clerk.
Purpose
1. The purposes of this Policy is to:
(a)
assist in planning for the long-term financial health and stability of the
Town;
(b)
assist in reducing the impact created by unstable and unpredictable tax rates;
(c)
integrate the Reserve Business Cases into the Operating, Capital and
Reserve Budgets;
(d)
ensure the Town has the ability to fund projects and events:
(i)
that produce long-term efficiency gains,
(ii)
that are strategic or require significant cost sharing between the Town
and another person, entity or level of government,
(iii) between budget approvals where there is sudden or unexpected
business opportunity or obligation,
(iv) where future obligations can be reasonably foreseen,
(v)
where substantial risk to the Town may occur, and
(vi) reduce the current and future financial impacts to the taxpayer by
minimizing significant budget fluctuations and reliance on debt financing
by balancing the need for sufficient funds for unforeseen opportunities or
obligations.
TOWN OF BRIDGEWATER
POLICY
RESERVE FUNDS
Policy No.
21
Approved:
Nov. 13, 1990
(90-400)
Revised/Replaced:
Jan. 24, 2022
Definitions
2. In this Policy,
(a)
"Council" means the Council of the Town.
(b)
"Town" means the Town of Bridgewater.
(c)
"Reserve" is a fund that has been set aside by a Policy of the Town in which
funds are held for a future use that is permitted under the Municipal
Government Act.
(d)
"Restricted Reserves" means the portion of Reserve Funds that the Town
maintains, or that Council has designated (or "restricted") for use in specific
programs or initiatives for which funds are collected or that are restricted in
use by the provider of the funds or by motion of council that has specifications
related to its' use.
(e)
"Un-restricted Reserves" is a fund that is not dedicated to any one project
and/or initiative. Council, by way of resolution or through annual budget
process can direct the use of funds.
(f)
"Reserve Business Case" means the formal application to council to set up a
new Reserve and/or to create a Restricted Fund within an existing Reserve.
Roles and Responsibilities
3. Council shall consider,
(a)
in respect of the annual Reserve Budgets, whether to approve the transfers
to/from Reserve in the Reserve Budgets;
(b)
with respect to the Reserve Business Case, whether to approve the Reserve
Business Case;
(c)
with respect to expenditure of Reserve Funds, whether to approve
recommendations to expend Reserve Funds when not previously included in
the Reserve Budget;
4. The Chief Administrative Officer or designate may recommend to the Council that
Reserve funds be expended. Council must approve any recommendations to
expense reserve funds.
5. The Director of Finance shall:
(a)
review the active Reserves and Restricted Funds within Reserves annually to
ensure that funds are contributed and withdrawn according to the approved
Reserve Business Case, relevant policies of the Town, Operating and Capital
Budgets and accounting policies;
(b)
review each Reserve on a regular basis to ensure continuing relevance and
adequacy with the strategic direction of the Town;
(c)
provide to the Council an annual report on Reserve activity and balances (non-
consolidated financial statements); and
(d)
recommend to the Council the closure of any Reserves or Restricted
Funds whose purpose is outdated or to combine any Reserves or
Restricted Funds with similar purposes.
Establishing a Reserve
6. The establishment of a Reserve, or a Restricted Fund within an existing reserve
fund shall require:
(a)
a clear and specific purpose of the Reserve which captures the strategic goal
and related success factors, and such purpose shall be set out in the Reserve
Business Case;
(b)
identifying the source of the funding for the Reserve and its relation to its
stated purpose;
(c)
identifying the risks and consequences of not establishing the Reserve;
(d)
identifying a maximum and minimum balance which should be set to meet the
purpose of the Reserve, and identified in the Reserve Business Case; and
(e)
setting a start and end date for the Reserve based on its purpose, including
any required conditions for renewal.
Types of Reserves
7. Council may only create Reserves for the following purposes:
(a)
a contingency fund for opportunities;
(b)
a contingency fund for risk; and
(c)
a saving fund for future obligations.
8. A contingency fund for opportunities recognizes that:
(a)
not all expenditures are planned or anticipated; and
(b)
an opportunity may arise to develop services or achieve efficiencies and that
the Town must react rapidly or lose that opportunity, such as a sudden change
in the economy or the introduction of cost shared programs from other levels
of government or the private sector.
9. A contingency fund for risk recognizes that:
(a)
the financial risk of unforeseen events involving substantial costs, such as
emergencies or economic events, and that a Reserve can mitigate this risk by
providing funding for sufficient public safety or preventing service interruptions.
(b)
a withdrawal from a contingency fund for risk must be quantifiable or subject
to estimate based on assumptions.
10. A saving fund for future obligation recognizes that:
(a)
an obligation may be associated with recapitalization of a specific asset where
the estimated lifecycle cost of an asset can be reasonably estimated;
(b)
an obligation may be associated with a strategic plan where the asset or
project may not yet be specified, such as the purchase of land; and
(c)
that a future expenditure may be managed through the long-term operating or
capital budget, depending on the magnitude or situation of the obligation.
11. Reserves and reserve funds will be categorized as either restricted or un-restricted
within the Reserve Fund as approved by Council and as may be required by
provider of the funds.
Borrowing from Reserves
12. From time to time, short-term working capital requirements of the Town or the
Public Service Commission may require short term borrowing from Reserves to be
repaid as soon as funds are available, this often occurs prior to the interim tax bill
or while waiting for large capital project financing to be completed through a
debenture.
13. Any funds borrowed from the Reserve Fund for longer than twelve months will be
paid back through a prescribed repayment schedule. The Director of Finance shall
request approval of any such usage and the proposed repayment schedule from
through a motion of Council.
Administration of Reserves
14. No Reserve shall have a negative balance.
15. Staff shall not re-designate or transfer funds between Reserves for short-term
needs unless approved by the Council.
16. If Council approves an inter-reserve transfer or to re-designate funds pursuant to
Section (15) of this section, the resolution granting such approval shall prescribe
the terms of repayment to return the Reserve to its original purpose, if applicable.
17. A Reserve may be funded by internal or external sources, providing that the source
of the funds does not impose restrictions on the use of such funds that are contrary
to the purpose of the Reserve.
18. Long Term Loans from the Reserve funds to other funds shall be approved by
council.
19. Under the direction of Council, the Director of Finance or designate will ensure the
funds are invested according to the guidelines set out in the Town's Investment
Policy and in accordance with the Municipal Government Act.
20. Interest earned by the reserve fund must also remain in that fund unless there is a
special resolution of council which allows the interest to be taken into the general
operating fund or as approved in the general operating and reserve fund budgets
as approved by council.
Financial Reporting
21. The Director of Finance shall include in the annual budget, a reporting of the
reserve fund balances and expected future use of the reserves.
Amendments to Reserves
22. Amendments to an existing Reserve may result from a change in the strategic
direction of the Town, or the relevance of the Reserve's defined purpose.
23. Upon review by staff of the change in strategic direction or the change in defined
purpose, staff may recommend to the Council that the Reserve be revised or closed
and Council may consider such a recommendation.
Corrections to Reserves
24. Management of Reserve balances and correction of errors may be approved by
the Director of Finance, within the parameters of Council's direction as set out in
the approved Reserve Business Case.
Repeal
25. The Reserves Policy as adopted by the Council on November 13, 1990 is hereby
repealed and replaced by this policy.