HomeMy WebLinkAboutFIN 26-13 Resolution #150/13
Dated December 9, 2013
(ay, Report to
Executive Committee
PI KERIN Report Number: FIN 26-13
Date: December 2, 2013
From: Paul Bigioni
Director, Corporate Services & City Solicitor
Subject: 2014 Temporary Borrowing By-law
Recommendation:
1. That Report FIN 26-13 from the Director, Corporate Services & City Solicitor be
received;
2. That the temporary borrowing limit to meet 2014 current expenditures pending
receipt of taxes and other revenues be established at $39,000,000 for the period
January 1, 2014 to September 30, 2014 inclusive, and $19,000,000 thereafter
until December 31, 2014;
3. That the temporary borrowing limit for capital purposes for 2014 be established at
$55,000,000;
4. That the attached draft by-law providing for the temporary borrowing of monies,
be enacted; and,
5. That the appropriate officials of the City of Pickering be authorized to take the
necessary actions to give effect thereto.
Executive Summary: Staff recommend that Council approve temporary 2014
borrowing limits as set out in the above recommendations. Council approval is required
to undertake temporary borrowings, if necessary, for current operations and capital
projects in order to meet the expenses of the City for 2014, until the taxes are collected
and other revenues are received. Approval is always sought at the end of the City's
fiscal (calendar) year in order to be prepared, in the event that loans are necessary, as
we proceed into the New Year.
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. With
internal borrowings being limited, the City must undertake external borrowing from the
Regional Municipality of Durham (Region) in 2014 for approved capital expenditures.
Report FIN 26-13 December 2, 2013
Subject: 2014 Temporary Borrowing By-law Page 2
For current purposes, the $38 million limit for January 1 to September 30, 2013 has
been increased to $39 million for January 1 to September 30, 2014 and the $19 million
limit for October 1 to December 31, 2013 is maintained at $19 million for October 1 to
December 31, 2014. The limit for capital purposes for 2014 has been established at
$55 million based on the draft (dated November 1, 2013) of the 2014 Capital Budget.
This may have to be adjusted once the 2014 Capital Budget has been approved by
Council.
Discussion: The borrowing of funds for current and capital purposes may become
necessary in the normal course of operations during 2014. Under Section 407 of the
Municipal Act, 2001, as amended (the "Act"), Council may pass a by-law to provide for
the temporary borrowing of funds to meet current operating expenditures pending
receipt of taxes and other revenues of the City. Under the Act, the Corporation may
also undertake temporary borrowings under individual project approvals, and for capital
projects, pending permanent financing.
Current Budget Financing -
The amount of such temporary borrowing outstanding at any one time is limited by the
Act, unless otherwise approved by the Ontario Municipal Board, to 50% of the estimated
annual revenues from January 1 to September 30 and to 25% thereafter.
Until the current year's estimates are adopted, the limitation may be calculated upon the
revenues set forth in the estimates adopted for the preceding year. Based upon the
2013 estimates of the Corporation, the allowable level of temporary borrowing
outstanding under the Act is estimated at $39 million from January 1 to September 30
and $19 million thereafter.
The requested $39 million should be sufficient to meet the current expenditures of the
City until the levies for 2014 are received. It is hoped that this amount will provide a
sufficient level of temporary borrowings taking into account the potential effects of
taxation legislation and its impact on cash flows.
Capital Budget Financing
Borrowing for capital purposes under 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 3 provides the authority
for staff to obtain additional temporary interim financing (internal or external) for capital
projects approved by Council. The $55 million capital borrowing limit should provide
sufficient funds to cover the estimated 2014 capital expenditures.
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Report FIN 26-13 December 2, 2013
Subject: 2014 Temporary Borrowing By-law Page 3
Attachments:
1. By-law to Authorize the Temporary Borrowing of Monies to Meet the Current and
Capital Expenditures of the City of Pickering for the Year 2014
Prepared By: Approved/Endorsed By:
Caryn Kong, CGA Stan Ka - - ski
Senior Financial Analyst— Capital & Division --•, Finance & Treasurer
Debt Management
Paul Bigion.
Director, t orpurat- Services & City Solicitor
Recommended for the consideration
of Pickering City Council
daidi /"w ' 1/, 2013
Tony Prevedel, P.Eng.
Chief Administrative Officer
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Attachment 1 to Report FIN 26-13
The Corporation of the City of Pickering
By-law No.
Being a by-law to authorize the temporary
borrowing of monies to meet the current and
capital expenditures of the City of Pickering
for the year 2014.
Whereas Section 407(1) of the Municipal Act, 2001, provides that the Council of the
City of Pickering may by by-law authorize the Mayor and Treasurer of the City 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 collected and other revenues
are received, the current expenditures of the City for the year, including the amounts
required for principal and interest falling due within the year upon any debt of the City,
and the sums required by law to be provided by the Council for any local board of the
City;
Whereas Section 407(2) limits the total of such borrowings to not exceed 50% of the
estimated annual revenues from January 1, 2014 to September 30, 2014 and 25%
thereafter;
Whereas it is deemed necessary by the said Council to borrow the sum of thirty-nine
million ($39,000,000) to meet, until the taxes for the current year are received, the
current expenditures of the City for the year 2014, including the amounts and sums
aforesaid;
Whereas the said sum of thirty-nine million ($39,000,000) plus any similar borrowings
that have not been repaid, is less than 50% of the total amount of the estimated
revenues of the City from January 1 to September 30 as set forth in the estimates
adopted by the Council for the year 2013 exclusive of revenues derivable from the sale
of assets, borrowings or issues of debentures or from a surplus including arrears of
levies, and nineteen million dollars ($19,000,000) is less than 25% of the estimated
revenues thereafter;
Whereas the Municipal Act, 2001, provides that if a municipality has by by-law approved
an undertaking to be financed in whole or in part by incurring long-term 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 Council to borrow the sum of fifty-five million
($55,000,000) to meet the capital expenditures approved by Council. .
By-law No. Page 2
Now therefore the Council of the Corporation of the City of Pickering hereby enacts as
follows:
1. The Mayor and Division Head, Finance & Treasurer of the City of Pickering are
hereby authorized to borrow from time to time by way of promissory notes a sum or
sums not exceeding thirty-nine million ($39,000,000) to meet, until the levies for the
year 2014 are received, the current expenditures of the City for such year, including
the amounts required for principal and interest falling due within the year upon any
debt of the City for the period January 1, 2014 to September 30, 2014 inclusive and
nineteen million dollars ($19,000,000) thereafter until December 31, 2014.
- 2. The Mayor and Division Head, Finance & Treasurer of the City of Pickering are
hereby authorized to borrow from time to time by way of promissory notes a sum or
sums not exceeding fifty-five million ($55,000,000) to meet the capital expenditures
as approved by Council, of the City including the amounts required for principal and
interest.
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, 2001, and may be
countersigned in writing by the Manager, Accounting Services of the Corporation in
accordance with the provisions of the said Act.
4. This By-law shall come into effect on the first day of January, 2014.
By-law passed this 9th day of December, 2013.
David Ryan, Mayor
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Debbie Shields, City Clerk
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e5�RIBE eSCRIBE Workflow Status: eSCRIBE Approval Workflow
MEETINGS,EVOLVED
',Workflow Information
Initiator: Webster,Valerie Document: FIN 26-13 2014 Temporary Borrowing By-law
Started: 11/7/2013 1:28 PM Status: Approved
Last run: 11/11/2013 8:45 AM
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Assigned To Title Due Date Status Related Content Outcome
Bigioni,Paul FIN 26-13 2014 Temporary Borrowing By-law.docx Review 11/9/2013 Completed FIN 26-13 2014 Temporary Borrowing By-law Approved
Prevedel,Tony FIN 26-13 2014 Temporary Borrowing By-law.docx Review • 11/11/2013 Completed FIN 26-13 2014 Temporary Borrowing By-law Approved
Workflow History _J
The following events have occurred in this workfow.
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Q Date Occurred Event Type LI User ID Description Outcome
11/7/2013 1:28 PM • Workflow Initiated Webster,Valerie eScribe Approval Started
11/7/2013 1:28 PM Task Created Biglonl,Paul Approval Task Assigned
11/7/2013 1:57 PM Task Completed Bigioni,Paul Document Approved
11/7/2013 1:57 PM Task Created Prevedel,Tony Approval Task Assigned
11/9/2013 1:58 PM Comment System Account Task Overdue Reminder Sent Task Overdue
11/11/2013 8:45 AM Task Completed Prevedel,Tony Document Approved
11/11/2013 9:45 AM Workflow Completed System Account Document was Approved
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