HomeMy WebLinkAboutCS 04/99
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REPORT TO COUNCIL
FROM:
Gillis A. Paterson
Director, Corporate Services & Treasurer
DATE: December 6, 1999
REPORT NUMBER: CS 04/99
SUBJECT: 2000 Temporary Borrowing By-Law
RECOMMENDA TION:
It is recommended that Report CS 04/99 of the Director, Corporate Services & Treasurer be
recei ved and that:
1. the temporary borrowing limit to meet 2000 current and capital expenditures pending receipt
of taxes and other revenues be established at $18,000,000 for the period January 1, 2000 to
September 30, 2000 inclusive, and $6,600,000 thereafter until December 31,2000;
2. the temporary borrowing limit for capital purposes for 2000 be established at $7,000,000;
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3. the altached By-Law be read three times and passed; and,
4. the appropriate Town of Pickering officials be authorized to take the necessary actions to give
thereto.
ORIGIN:
Director, Corporate Services & Treasurer
AUTHORITY:
The Municipal Act R.S.O. 1990, as amended, Section 187 and 188.
FINANCIAL IMPLICATIONS:
At this time it is difficult to estimate the interest costs as it is uncertain how much temporary
financing may be required and for how long. An estimate will be provided at a later date in the
2000 Current Budget. In past years no extemal temporary borrowings have been necessary,
however, there have been intemal borrowings.
EXECUTIVE SUMMARY:
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Not applicable.
Report to Council CS 04/99
Date: December 6, 1999
Subject: 2000 Tempor.ary Borrowing By-Law
Page 2
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BACKGROUND:
The borrowing of funds for current and capital purposes may become necessary during the
normal course of operations during 2000. Under the provisions of Section 187 of the Municipal
1\ct, R.S.O. I l)t)(), (the 1\ct), the Council of the Town of Pickering may pass a by-law to provide
lor the temporary bOlTowing of funds to meet current operating expenditures pending receipt of
taxes and other revenues of the Town Under Section 188 of the Act the Corporation may also
undertakc tcmporary borrowings, undcr individual project approvals, for capital projects pending
permancnt financing, including the issuance of debentures by the Region.
Current Budget Financing:
The amount of such temporary borrowing outstanding at anyone time is generally limited by the
Act, unless otherwise approved by the Ontario Municipal Board, to 50 per cent of the estimated
annual rCVCllUCS from Jalluary I to Scptcmber 30 and to 25 per cent thereafter.
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Until the current year's estimates are adopted, the limitation may be calculated upon the revenues
set forth in the estimates auoptcd for the next preceuing year, Based upon the 1999 estimates of
the Corporation, the allowable level of temporary borrowing outstanding under legislation is
estimated at S \8,000,000 from January I to September 30 and $6,600,000 thereafter.
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The requested $18,000,000 should be sufficient to meet the current expenditures of the Town
until the levies for 2000 arc received. It is hoped that this amount will provide more than a
sufficient level of temporary borrowings taking into account the potential effects of Bill 79
(Capping Legislation) and its impact on cash flows.
Capital Budget Financing:
Borrowing for capital purposes under Section 188 of the Act can only be undertaken on projects
approved by Council and will only be undertaken in the event that sufficient funds are not
available at the time they are required. Recommendation 2 provides the authority for the Town
to obtain additional temporary interim financing (internal or external) for capital projects
approved by Council. The $7 million capital borrowing limit would provide sufficient funds to
cover 1998, 1999 and estimated 2000 capital expenditures.
ATTACHMENTS:
I. Temporary Borrowing By-Law
Prepared / Approved / Endorsed By:
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Gillis A. Paterson,
Director, Corporate Services & Treasurer
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Attachment
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Recommended for the consideration of
Pickering Town Council
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ATTACtfHENT...LTOREPORT# (s OJ/{cN
THE CORPORATION OF THE TOWN OF PICKERING
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BY-LAW NO.
Being a by-law to authorize the temporary
borrowing of moneys to meet the cunent and
capital expenditures of The Town of Pickering for
the year 2000.
WHEREAS Section 187 of the Municipal Act provides that the Council of The Town of
Pickering may by by-law authorize the Mayor and Treasurer of the Municipality to borrow from
time to time by way of promissory note such sums as the Council may deem necessary to meet,
until the taxes for the current year are received, the current expenditures of the Municipality for
the year, including the amounts required for principal and interest falling due within the year
upon any debt of the Municipality, and the sums required by law to be provided by the Council
for any local board of the Municipality; and,
WHEREAS Section 187(2) limits the total of such borrowings to not exceeding 50 per cent of
the estimated annual revenues from January I, 1999 to September 30, 1999 and 25 per cent
thereafter; and,
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WHEREAS it is deemed necessary by the said Council to borrow the sum of eighteen million
dollars ($18,000,000) to meet, until the taxes for the currcnt year are received, the current
expenditures of the Municipality for the year 2000, including the amounts and sums aforesaid;
and,
WHEREAS the said sum of eighteen million dollars ($18,000,000) plus any similar borrowings
that have not been repaid, is less than 50 per cent of the total amount of the estimated revenues of
the Municipality from January I to September 30 as set forth in the estimates adopted by the said
Council for the year 1999 exclusive of revenues derivable from the sale of assets, borrowings or
issues of debentures or from a surplus including arrears of levies and $6,600,000 is less than 25
per cent thereafter; and,
WHEREAS Section 188 of the Municipal Act provides that if a municipality has by by-law
approved an undertaking to be financed in whole or in part by incurring long-telm debt, the
council may by by-law authorize temporary borrowing to meet expenditures made in connection
with the undertaking; and,
WHEREAS it is deemed necessary by the said Council to borrow the sum of seven million
dollars ($7,000,000) to meet the capital expenditures approved by Council.
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE TOWN OF
PICKERING HEREBY ENACTS AS FOLLOWS:
1.
The Mayor and Treasurer of The Town of Pickering be and they are hereby authorized to
borrow from time to time by way of promissory notes a sum or sums not exceeding
eighteen million dollars ($18,000,000) to meet, until the levies for the year 2000 are
received, the current expenditures of the Municipality for such year, including the
amounts required for principal and interest falling due within the year upon any debt of
the Municipality for the period January I, 2000 to September 30, 2000 inclusive and
$6,600,000 thereafter until December 31,2000.
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2.
The Mayor and Treasurer of the Town of Pickering be and they are hereby authorized to
borrow from timc to timc by way of promissory notcs a sum or sums not cxcceding in all
the sum of seven million dollars ($7,000,000) to meet the capital expenditures as
approved by Council, of the Municipality including the amounts required for principal
and interest.
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3. Any promissory notes made under the authority of this By-Law shall be sealed and signed
in accordance with the provisions of the Municipal Act and may be countersigned in
writing by the Deputy Treasurer of the Corporation in accordance with the provisions of
the said Act.
BY-LA W read a first, second and third time and finally passed this
day of
,1999.
Wayne Arthurs, Mayor
Bruce Taylor, Clerk
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