HomeMy WebLinkAboutCST 23-11
eitq o~ Report To
Executive Committee
PICKERING Report Number: CST 23-11
55 Date: June 13, 2011
From: Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject: 2011 Annual Repayment Limit for Debt and Financial Obligations
Recommendation:
That Report CST 23-11 of the Director, Corporate Services & Treasurer regarding the
2011 Annual Repayment Limit for Debt and Financial Obligations be received for
information.
Executive Summary: The Annual Repayment Limit presented in this report
represents, under a Provincial formula, the maximum amount which the City has
available to commit to payments relating to debt and financial obligations. An update to
the Annual Repayment Limit is required to determine the annual repayment limit for
both internal and external borrowings. This update is required to enable the City to
borrow externally. The Municipal Act provides that the Treasurer can certify the
appropriateness of funding for each capital project involving debt, lease or other form of
long term financial commitment. Otherwise, Ontario Municipal Board approval is
required.
Financial Implications: There are no financial implications associated with this
report.
Sustainability Implications: There are no sustainability implications associated
with this report.
Background: Recently, the Ministry of Municipal Affairs and Housing (MMAH)
provided information regarding the City's 2011 Debt and Obligation Repayment Limit.
Debt for these purposes includes all forms of loans, leases and other long term financial
obligations and commitments. The 2011 Annual Repayment Limit (ARL) was calculated
based on 25 percent of 2009 net own-source revenues as reported in City of Pickering's
2009 Financial Information Report (FIR) submitted to the Ministry of Municipal Affairs
and Housing (MMAH). The FIR was prepared in conjunction with the annual financial
statements. Own-source revenues represent generally the discretionary revenues of a
municipality including property taxes, user fees, licenses and fines and exclude all
Report CST 23-11 June 13, 2011
Subject: 2011 Annual Repayment Limit for Debt Page 2
and Financial Obligations
156
grants, internal transfers and extraordinary items such as the one time sale of land or
other fixed assets and non-discretionary items such as development charges.
The calculated 2011 ARL based on 25% of net revenue fund, after taking into account
net debt charges reported to MMAH, is $14,081,357. This is based on the 2009
Financial Information Return which included $2,633,532, being the total annual principal
and interest charges and all other financial obligations as recorded in the City's books.
However, for City purposes staff have chosen to update this number, as we have in past
years, to take into account debt incurred in 2010 and the resultant increase in annual
debt charges of $1,147,962 thereby reducing the 2011 ARL to $12,933,395. This
represents the maximum additional principal and interest payments that could be
undertaken without requiring Ontario Municipal Board approval.
It must be pointed out that this calculation does not: measure affordability; take into
account other commitments the City may have; the need to change levels of service; or,
raise property taxes to maintain the debt repayment amount. This limit represents the
maximum amount which the municipality has available for approval and certification by
the Treasurer as of December 31, 2010 to commit to payments relating to debt and
financial obligations. The limit is effective January 1, 2011 for the calendar year.
For illustration purposes, if the City could borrow at 5%, the rate used by MMAH in the
calculation, the net ARL of $12,933,395 would allow it to undertake additional long term
borrowing as follows:
Term (years) Debt Amount
a) 5 55,900,000
b) 10 99,800,000
c) 15 134,200,000
d) 20 161,100,000
Attachment:
1. Letter from the Ministry of Municipal Affairs and Housing dated April 20, 2011
Prepared By: Approved / Endorsed By:
Caryn Kong, CGA Gillis A. Paterson, CMA
Senior Financial Analyst - Capital & Director, Corporate Services & Treasurer
Debt Management
Report CST 23-11 June 13, 2011
Subject: 2011 Annual Repayment Limit for Debt Page 3
and Financial Obligations
157
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering City ouncil
27, toll
Tony Prevedel, P. Eng.
Chief Administrative Officer'
i
ATTACHMENT4I_TOREMRT#(_J- I -
' o
Ministry Ministers des
Municipal l Affairs Affaires municipales
U1 I
and Housing et du Logement
Municipal Finance Policy Branch Direction des politiques relatives aux finances municipales 58
777 Bay Street, 13th Floor 777, rue Bay, 131 stage
Toronto ON M5G 2E5 Toronto ON M5G 2E5
Phone: 416 585-6951 Telephone : 416 585-6951 RECEIVED
Fax: 416 585-6315 Telecopieur : 416 585-6315 CITY OF PICKERING
APR 2 7 2011
April 20, 2011 CORPORATE SERVM
Dear Municipal Treasurer, Clerk/Treasurer:
I am pleased to enclose a report showing your municipality's 2011 Annual Repayment Limit
(ARL) respecting long-term debt and financial obligations. Your 2011 ARL was calculated based
on 25 percent of your 2009 net own source revenues as reported in your 2009 FIR.
If you require any further information, please contact the appropriate Municipal Services Office of
the Ministry of Municipal Affairs and Housing (list enclosed).
Yours truly,
Trevor Bingler
Director
Enclosures
r,~1 5 9
t)`~Ontario
Ministry of Municipal Affairs and Housing Ministere des affaires municipales et du logement
777 rue Bay,
777 Bay Street,
Toronto, Ontario M5G 2E5 Toronto (Ontario) M5G 2E5
MMAH CODE: _ 10102 FIR CLEAN FLAG: `C
MUNID: 18001
MUNICIPALITY: Pickering C,,,
UPPER TIER:` Durham R,-,,
;REPAYMENT LIMIT: 14,0817357
,
The repayment limit has been calculated based on data contained in the 2009 Financial Information Return, as submitted to the
Ministry. This limit represents the maximum amount which the municipality had available as of December 31, 2009 to commit to
payments relating to debt and financial obligation. Prior to the authorization by Council of a long term debt or financial
obligation, this limit must be adjusted by the Treasurer in the prescribed manner. The limit is effective January 01, 2011..
FOR,ILLUSTRATION PURPOSES ONLY,
The additional long-term borrowing which a municipality could undertake over a 5-year, a 10-year, a'15-year and a
20-year period is show: -
If the municipalities could borrow at 5% or 7% annually, the annual repayment limits shown above would allow it'to
undertake additional long-term borrowing as follows:
(a) . 20 years'@ 5% p.a. $ 175,484,833
(a) 15_years @ 5% p.a. $ 146,159,670 ,
(a) 10 years @ 5% p.a. $ 108,732,506
(a) . 5 years C 5% p. a. $ 60,964,907;,
'
(a) 20 years @ 7% p ..a. $ 149,178,097,
(a) 15 years'C~ 7% p.a. $ 128,251,789
(a) 10 years @ 7% p. 'a. $ 98,901,559`
(a) 5 years @ 7% p.a., - $ 57,736,344
M.- am 71 77
771
160
+F 9 r C C
Debt Charges for the Current Year +
0210 Principal (SLC 743099 01). . . : t 1,8_91,393
0220 Interest (SLC 74 3099 02). . . , . . . . . 742,139
0299 Subtotal° 2,633,532 s
Ontario Clean Water Agency Provincial Projects _
4410 Water projects -For this Municipalitykonly (SLC 74 2810 03). 0
0420 Water projects - Share of integrated project(s) (SLC 74 2820 03). . . . . ' . 0
0436 Wastewater projects - For, this Municipality only (SLC 74 2830 03). . . . 0~ .
0440 Wastewater projects - Share of integrated project(s) (SLC 74 2840 03). . . . 0
0499 0
Subtotal
0610 Payments for Long Term Commitments and Liabilities financed from the consolidated statement of
operations (SLC 42 6010 01) . ( 0
0810 Debt Charges for Lease Purchase Agreements,(Tangible Capital Leases) (SLC 743140 03) Mme:
9910 y;Total, Debt Chargesa R -2 633; 532 ;
Arh`punts Recovered from Unconsolidated Entities L _1010 Electricity Principal (SLC 74 3030 01) _
1020 Electricity Interest (SLt 74.3030 02) 0
~hY .A
1030 'Gas ".Principal (SCC 74 3040 01) . . . . . . . . . . 0 '
'1640 Gas =Interest (SLC 74 3040 02) . . . . . . . . . . . . . . . . . . . . .
1050 Telephone - Principal (SLC 74 3050 01) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
1060. Telephone - Interest (SLC 74 3050 02) . . . . . . . _ 011
1099 t z Subtotal, 0
1410 Debt Charges for Tile Drainage/ Shoreline Assistance (SLC 74 3015 01 + SLC 74 3015,02) . 0
1420 : Total Debt Charges to be Excluded o
9920 , ° Net DebtiCharges , 2,633,532 Total Revenues ( Excluding Donations of Tangible Capital Assets)
1610
73 084,
158
(SLC 1.0 9910 01 SLC,53 0610 01) : . . . . .
2010 'Fees for Tile. Drainage /Shoreline Assistance (SLC 12 1850 04) . ; 0
Grants from'Gov
_ ernment of Ontario, Canada and Other Municipalities;
22,10 Ontario Grants, including Grants for Tangible Capital Assets (SLC 10 0699 01 + SLC 10 0810 01 + SLC10 0815 01) ' 1,546,045
2220 Canada Grants, including Grants for Tangible Capital Assets (SLC 10 0820 01 + SLC 10 0825 01): . . 3,5342919
2230 s Revenue from other municipalities (SLC 10 1099.01) . . ' ° 129,9.~18
2240 , Gain/Loss on sale of land Et capital assets(SLC 10 181.1 01) . . . 462758
2250 Deferred revenue earned (Development Charges) (SLC 10 1812 61) . . . . . . . 966,962 i
•
2299 Subtotal 6,2 24,602
2410 Fees and Revenue for Joint Local Boards for Homes for the Aged . . . ( 0.
2610,
Net Revenues E 66,859,556
2620 25% of Net Revenues ! 16,714,889i'
9930 - ESTIMATED ANNUAL REPAYMENT LIMIT 14,081,35i]
(25% of Net Revenues less Net Debt Charges)
" SLC denotes Schedule, Line Column.