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Indicator Definitions

Each indicator has a technical definition that describes how it was calculated. The definition explains the meaning of key terminology and what the indicator is measuring. It provides information to consider when interpreting the indicator results and other indicators that measure similar aspects of a municipality's performance.

Select an indicator to display the technical definition:

 

5-year Contributions to Capital Reserves  (%)

Threshold

10% or more

Formula

Total contributions to capital reserves over a 5-year period ÷ Total depreciation accrued over the same 5-year period

Technical Definition

Total contributions to capital reserves over a 5-year period: Total of the net transfers to capital reserves from the general operating fund over the most recent five years

• For March 31, 2012 year: FIR Schedule H - Line 1066020

• For March 31, 2013 and forward: Schedule H - Lines 1066020 and 1066025

Total depreciation accrued over the same 5-year period: The sum of all depreciation that accumulated on capital assets, gain/loss on sale of capital assets, and write downs of capital assets over the most recent five years

• For March 31, 2012 year: FIR Schedule G - Lines 1021350, 1021360, 1021370,1022550, 1022560, 1022570, 1023550, 1023560, 1023570, 1024450, 1024460, 1024470, 1025450, 1025460, 1025470, 1026650, 1026670, 1027350, 1027360, 1027370

• For March 31, 2013 year and forward: FIR Schedule JP1 - Lines 2021000-2027000

Note: Indicator data available only from 2010 onward. As a result, 2012 FCI is based on three years of data, 2013 FCI is based on four years of data, and 2014 and 2015 FCIs are based on five years of data

Rationale

This indicator shows how quickly a municipality is accumulating capital reserves compared to how quickly their assets are aging. Because the cost to replace an asset will be higher than the original cost to purchase the asset (due to new technology, new standards, and inflation), municipalities should be accumulating reserves in anticipation of the replacement of capital assets and plans for new infrastructure.

Interpretations

A lower percentage indicates a slower rate of transfers to reserves compared to depreciation.

A higher percentage indicates a faster rate of contribution, which may indicate greater financial capacity and good capital and asset management.

Caution should be used when interpreting this indicator: Municipalities use multiple approaches to capital planning and investment, including capital purchasing from operating and borrowing to address capital funding. Additional information is required to gain a complete understanding of a municipality’s capital investment and asset management plans.

Data Source(s)

  • Municipal Financial Information Return (FIR) - General Capital Fund (non-consolidated)
  • Municipal Financial Information Return (FIR) - General Operating Fund (non-consolidated)

Related Indicator(s)

  • Debt Service
  • Outstanding Debt
  • Current Capital from Operating
  • Undepreciated Assets
  • 5-year Capital Purchases
  • Operating Reserves
  • 5-year Contributions to Capital Reserves