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HomeMy WebLinkAboutCS 23-02 008 Ciú¡ o~ REPORT TO COUNCIL Report Number: CS 23-02 Date: October 2,2002 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Veridian - Return of Capital to Shareholders Recommendation: 1. That Report CS 23-02 from the Director, Corporate Services & Treasurer be received and that 2. The attached Resolution be approved and the Mayor be authorized to take the appropriate action on behalf of the City of Pickering; 3. Funds be deposited to the credit of the Corporation and a transfer be made to the Reserve for Replacement of Capital Equipment; and, 4. The appropriate officials of the City of Pickering be given authority to give effect thereto. Executive Summary: The Board of Directors has considered the matter of a $1 million return of capital invested in Veridian Corporation to its shareholders. Under the Business Corporations Act, a Shareholder Resolution is required when a return of capital is considered. Financial Implications: Approval of the Recommendations will provide for a return of capital from Veridian to the City of Pickering of approximately $410,000 in 2002. Background: On September 25, 2002 I received the attached Resolution from Veridian together with a request that it be executed by the City of Pickering. The Mayor, as a City Shareholder representative and as the Mayor of the City, is requested to sign the Resolution on behalf of the City. The same request is being made to each shareholder. The Board of Directors has considered the matter of a $1 million return of capital invested in Veridian Corporation to its shareholders. The Board approved a return of capital on the basis that Veridian Corporation has posted favourable financial results to plan and to also reflect the $648,000 in proceeds received by Veridian from the class action suit settlement between the former municipal utilities and the former Ontario Hydro. Report CS 23-02 Date: October 2, 2002 0 n 9 Page 2 Subject: Veridian - Return of Capital to Shareholders Under the Business Corporations Act, a Shareholder Resolution is required when a return of capital is considered. Accordingly, the Mayor, as shareholder representative for the City, is required to sign the attached resolution. Approval of the Recommendations will provide for a return of capital from Veridian to the City of Pickering of approximately $410,000 in 2002. This is a one-time transaction and will reduce the value of the City's ownership of shares by the same amount. The financial effects will be proportionately identical for each of the other partners. When the funds are received they will be deposited in the City's bank account. An appropriation to the Reserve for Replacement of Capital Equipment was decided as the balance has been significantly reduced over the last few years through the Capital Budget. Since this is a one-time infusion of funds it should go towards future capital requirements. This request is being put forth as a Confidential Report given the subject matter. It is also being sent directly to Council as I wish to expedite the return of capital to the City and all shareholders will be doing the same thing at approximately the same time. Attachments: 1. Veridian Corporation Shareholder Resolution Prepared I Approved I Endorsed By: - ~~ ~~ Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Attachment Copy: Chief Administrative Officer Recommended for the consideration of Pickering City Council " n10 ATTACHMENT#-L- TO REPORT#~ ~3-o~ Vendian Corpomtion Shareholder Resolurion Septembe.t 25, 2002 .. '!'hit the Sha.rehoJ4ers of Vetidian Co.1:po:ation approve a $1. :ttrli1.io'ii dolW: tetcim of capital to shaxebolde:s of record as at Aupt 29 t 2002 with such retUrn of apital reducing the stated capit2l ofVt:.tidW:l Co1poratìon. Disc:ibution to each shareholder of Veri diaD Co.1:pomtion will be payable to shareholders September 3D, 2002 as £oD.ows: Town of Ajax City 0 f B eD.eviJle Mtmicip:ility of C1arington City of Picketing 'Total $321,000 135tOOO 156,000 410.QQQ $1.000.000 MayoI Steve Parish, Town of Ajax Ma.YOf Gc:orge Zegow:as, City of Belk:vi11e MayO! John Mutton, Mucicipality of Clarington Mayor Wayne Arthun. City of :Pickering