HomeMy WebLinkAboutCS 12-03
REPORT TO FINANCE &
OPERATIONS COMMITTEE
Report Number: CS 12-03
Date: February 3, 2003
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
2003 Annual Repayment Limit for Debt and Financial Obligation
Recommendation:
1. That this report be forwarded to Council for information.
Executive Summary:
Not applicable
Financial Implications:
Not applicable
Background: Recently, the Ministry of Municipal Affairs provided information
regarding the City's 2003 Debt and Obligation Repayment Limit. Debt for these
purposes includes all forms of loans, leases and other long term financial obligations
and commitments. The 2003 Annual Repayment Limit ( ARL) was calculated based on
25 percent of 2001 net own-source revenues as reported in City of Pickering's 2001
Financial Information Report (FIR) submitted to the Ministry of Municipal Affairs. 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 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 ARL for 2003 is $11,246,607 and represents the maximum principal and interest
payment for the year that could be undertaken without Ontario Municipal Board
approval. This calculation does not measure affordability or take into account other
commitments the City may have and 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, 2001 to commit to payments relating to debt and
financial obligations. The limit is effective January 1, 2003.
Report CS 12-03
Date: February 3, 2003
Subject: 2003 Annual Repayment Limit for Debt
and Financial Obligation
Page 2
This limit takes into consideration the $8.7 million of internal loans and financial
commitments outstanding at December 31, 2001 and the related annual repayment
amount of approximately $1.2 million.
During the year of 2002, we undertook both internal loans and external debt. The value
of the additional internal loans from reserve funds is $1,224,000 and the new external
debt through the Region of Durham is $4,278,000. As of year-end December 31,
2002, the total of the approved and committed loans, debt, leases and other long term
obligation are valued at $14,241,623. The related principal and interest charges or
annual repayment in 2003 for the committed debt and long term obligation is
$1,731,872 which is included in the 2003 Current Budget. After taking into account this
committed annual charge, the ARL is reduced to $9,514,735 for the 2003 calendar
year.
For illustration purposes, if the City could borrow at 7%, the ARL of $9,514,735 would
allow it to undertake additional long term borrowing as follows:
Terms
a) 5 years
b)10 years
c) 15 years
d) 20 years
Debt Amount ($j
39,012,292
66,827,517
86,659,388
100,799,238
Attachments:
1.
Letter from the Ministry of Municipal Affairs dated January 6, 2003
Prepared By:
Approved I Endorsed By:
X
Senior Financial Analyst
- -- .?-/¿~-- --
Gillis A. Paterson
Director, Corporate Services & Treasurer
GAP:vw
Attachment
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering City Council
J
ATTACHMENT#..L TO REPORT # Cs J.;2 -03
Ministry of
Municipal Affairs
and Housing
Ministère des
'Affaires municipales
et du logement
@ Ontario
Municipal Finance Branch
13th Floor, 777 Bay Street,
Toronto, ON. M5G 2E5
Tel: (416) 585-6951
Fax: (416) 585-6315
January 6, 20Ø3
Dear Municipal Treasurer, Clerk/Treasurer:
I am pleased to enclose a report showing your municipality's 2003 Annual Repayment Limit (ARL)
respecting long-tenn debt and financial obligations.
Your 2003 ARL was calculated based on25 percent of your 2001 net own source revenues as reported
in your 200 1 FIR. Note that revenues formunicipal electrical utilities are not included in the calculation of
the ARL, in accordance with Public Sector Accounting Board (PSAB) guidelines.
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,
¡jþ#V t~
Dan Cowin
Director
Enclosures
Ministry of Municipal Affairs and Housing
777 Bay Street,
Toronto, Ontario.
M5G 2E5
Ministère des affaires municipales et du logement
777 rue Bay
Toronto (Ontario)
M5G 2E5
ANNUAL REPAYMENT LIMIT
(UNDER ONTARIO REGULATION 403/02)
The repayment limit has been calculated based on data contained in the 2001 Financial'Information Return, as
submitted to the Ministry. This limit represents the maximum amount which the municipality had available as of
December 31,2001 to commit to payments relating to debt and financial obligations. 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 01,2003.
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 shown.
Pa~e: 01 of 03
Date Prepared:
January 3, 2003
DETERMINATION OF ANNUAL DEBT REPAYMENT LIMIT
1.0 GROSS DEBT CHARGES
1.1 .. Principal
1.2 Interest
2.0
3.0
SLC 74 3099 01
SLC 74 3099 02
1,203,837
506,892
1,710,7291
1.3 SUBTOTAL
Add Lines 1.1, 1.2
DEBT CHARGES ON O.C.W.A. PROVINCIAL PROJECT
2.1
2.2
2.3
2.4
Water Projects -- this municipality only
Water Projects -- share of integrated project(s)
Sewer Projects -- this municipa1ity only
Sewer Projects -- share of integrated project(s)
SLC 74 2810 03
SLC 74 2820 03
SLC 74 2830 03
SLC 74 2840 03
0
0
0
0
2.5 SUBTOTAL
Add Lines 2.1 thru 2.4
01
PAYMENT IN RESPECT OF LONG TERM COMMITMENTS AND
LIABILITIES .
SLC 42601001
0
5.0
DEBT CHARGES FOR MUNICIPAL UTILITIES
5.1
5.2
5.3
5.4
5.5
5.6
5.7
',",
Electricity
Gas
Telephone
SLC 40 3099 02 + SLC 40 3099 08
SLC 40 3299 02 + SLC 40 3299 08
SLC 40 3499 02 + SLC 40 3499 08
0
0
0
Amounts Recovered from Unconsolidated Entities
Electricity (Principal)
Electricity (Interest)
Gas and Telephone (Principal)
Gas and Telephone (Interest)
SLC 74 3030 01
SLC 74 3030 02
SLC 74 3040 01 + SLC 74 3050 01
SLC 74 3040 02 + SLC 74 3050 02
599,000
59,539
0
0
6.0
5.8 SUBTOTAL
Add Lines 5.1 thru 5.7
7.0
658,5391
PAYMENTS TO PROVINCE FOR DOWNTOWN
REVITALIZATION PROGRAM LOANS
SLC 42 5410 01
0
DEBT CHARGES FOR TILE DRAINAGE AND SHORELINE
ASSISTANCE
SLC 40 1850 02 + SLC 40 1850 08
0
, >
Page: 02 of 03
January 3, 2003
Date Prepared:
"
'.
DETERMINATION OF ANNUAL DEBT REPAYMENT LIMIT
10,0 TOTAL REVENUE FUND REVENUES* SLC 10991001 49,446,699
11.0 FEES FOR REPAYING THE PROVINCE FOR DOWNTOWN
REVITALIZATION LOANS SLC 425410 01 0
12.0 FEES FOR TILE DRAINAGE AND SHORELINE ASSISTANCE SLC 12 185004 0
13.0 GRANTS FROM GOVERNMENT OF ONT ARlO, GOVERNMENT
OF CANADA AND OTHER MUNICIPALITIES
13.1 Ontario Grants SLC 10 0699 01 + SLC 10081001 180,242
13.2 Canada Grants SLC 10 0820 01 16,725
13.3 Other Municipalities SLC 10 109901 54,543
13.4 SUBTOTAL Add Lines 13.1 thru 13.3 251,5101
14.0 FEES AND REVENUES FOR JOINT LOCAL BOARDS FOR
HOMES FOR THE AGED 0
15.0 NET REVENUE FUND REVENUES Lines 10 less Lines 11,12,13.4,14
16.0 25% OF NET REVENUE FUND REVENUE --
SLC denotes Schedule, Line, Column
* Total Revenue Fund Revenues have been adjusted to reflect the removal of the sale of hydro utilities.
Page: 03 of 03
Date Prepared:
January 3, 2003