HomeMy WebLinkAboutCS 32-05PICKERING
REPORT TO
EXECUTIVE COMMITTEE
Report Number: CS 32-05
Date: April 25, 2005
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject: 2005 Annual Repayment Limit for Debt and Financial Obligations
Recommendation:
That this report be forwarded to Council for information.
Executive Summary: Not applicable
Financial Implications: Not applicable
Background: Recently, the Ministry of Municipal Affairs and Housing (MMAH)
provided information regarding the City's 2005 Debt and Obligation Repayment Limit.
Debt for these purposes includes all forms of loans, leases and other long term financial
obligations and commitments. The 2005 Annual Repayment Limit (ARL) was
calculated based on 25 percent of 2003 net own-source revenues as reported in City of
Pickering's 2003 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 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 2005 ARL, 25% of net revenue fund, after taking into account net debt
charges is $11,449,747. Based on the 2005 Budget, the total annual principal and
interest charges and all other financial obligations as recorded in the City's books are
$2,500,371. The difference of $866,469 ($2,500,371 - $1,633,902), being the increase
in debt charges (approximately $800,000) since 2003 and other financial obligations
such as photocopier leases, and small vehicle financings, the ARL available for 2005
would have to be reduced to $10,583,278.
Report CS 32-05
Subject: 2005 Annual Repayment Limit for Debt
and Financial Obligation
Date:
April 25, 2005
Page 2
The net ARL of $10,583,278 for 2005, as adjusted, represents the maximum additional
principal and interest payment for the year that could be undertaken without Ontario
Municipal Board approval. This calculation does not measure affordability nor 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, 2003 to commit to payments relating to debt and
financial obligations. The limit is effective January 1,2005.
For illustration purposes, if the City could borrow at 7%, the rate used by MMAH in the
calculation, the net ARL of $10,583,278 would allow it to undertake additional long
term borrowing as follows:
Terms
a) 5 years
b) 10 years
c) 15 years
d) 20 years
Debt Amount ($)
43,393,529
74,332,516
96,391,585
112,119,398
Attachments:
1. Letter from the Ministry of Municipal Affairs and Housing dated January 18, 2005
Prepared By:
Approved / Endorsed By:
Caryn K'ong
Senior Financial Analyst
Gillis A. Paterson
Director, Corporate Services & Treasurer
GAP:ck
Attachment
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickeri
T~as-J4 ~nn, ~ief Administ~~
Ministry of
Municipal Affairs
and Housing
Municipal Finance Branch
777 Bay Street, 13th Floor
Toronto ON M5G 2E5
Phone: (416) 585-6951
Fax: (416) 585-6315
January 18, 200~
;~T'i'^CHMENI~ ~_L._TO REPOP, T#./L~ ~-'
Minist~,re des
Affaires municipales
et du Logement
777, Rue Bay, 130 ~tage
Toronto ON M5G 2E5
T61~phone: (416) 585-6951
T~l~copieur: (416) 585-6315
Ontario
~rY OF PICKERir~':.::
Dear Municipal Treasurer, Clerk/Treasurer:
I am pleased to enclose a report showing your municipality's 2005 Annual Repayment Limit
(ARL) respecting long-term debt and financial obligations.
Your 2005 ARL was calculated based on 25 percent of your 2003 net own source revenues as
reported in your 2003 FIR. Note that revenues for municipal 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,
Janet Hope
Director
Enclosures
1322(06/95)
Ministry of Municipal Affairs and Housing
777 Bay Street,
Toronto, Ontario.
M5G 2E5
Minist?re 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 2003 Financial Information Return, as submitted
to the Ministry. This limit represents the maximum amount which the municipality had available as of December 31,
2003 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, 2005.
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.
Page: 01 of 03 Date Prepared: January 6, 2005
DETERMINATION OF ANNUAL DEBT REPAYMENT LIMIT
1.0
GROSS DEBT CHARGES
1.1 Principal SLC 74 3099 01 991,724
1.2 lnterest SLC 74 3099 02 642,178
1.3 SUBTOTAL Add Lines 1.1, 1.2 ] 1,633,9021
2.0
DEBT CHARGES ON O.C.W.A. PROVINCIAL PROJECT
2.1 Water Projects -- this municipality only SLC 74 2810 03 0
2.2 Water Projects -- share of integrated project(s) SLC 74 2820 03 0
2.3 Sewer Projects -- this municipality only SLC 74 2830 03 0
2.4 Sewer Projects -- share of integrated project(s) SLC 74 2840 03 0
2.5 SUBTOTAL Add Lines 2.1 thru 2.4 [ 01
3.0 PAYMENT IN RESPECT OF LONG TERM COMMITMENTS AND
LIABILITIES SLC 42 6010 01 0
5.0
DEBT CHARGES FOR MUNICIPAL UTILITIES
5.1 Electricity SLC 40 3099 02 + SLC 40 3099 08 0
5.2 Gas SLC 40 3299 02 + SLC 40 3299 08 0
5.3 Telephone SLC 40 3499 02 + SLC 40 3499 08 0
Amounts Recovered from Unconsolidated Entities
5.4 Electricity (Principal) SLC 74 3030 01 0
5.5 Electricity (Interest) SLC 7413030 02 0
5.6 Gas and Telephone (Principal) SLC 74 3040 01 + SLC 74 3050 01 0
5.7 Gas and Telephone (Interest) SLC 74 3040 02 + SLC 74 3050 02 0
5.8 SUBTOTAL Add Lines 5.1 thru 5.7 [ 01
6.0
PAYMENTS TO PROVINCE FOR DOWNTOWN
REVITALIZATION PROGRAM LOANS
SLC 42 5410 01 0
7.0
DEBT CHARGES FOR TILE DRAINAGE AND SHORELINE
ASSISTANCE
SLC 40 1850 02 + SLC 40 1850 08
Page: 02 of 03 Date Prepared: January 6, 2005
DETERMINATION OF ANNUAL DEBT REPAYMENT LIMIT
10.0
11.0
12.0
13.0
14.0
TOTAL REVENUE FUND REVENUES
SLC 10 9910 01 53,388,002
FEES FOR REPAYING THE PROVINCE FOR DOWNTOWN
REVITALIZATION LOANS
SLC 42 5410 01 0
FEES FOR TILE DRAINAGE AND SHORELINE ASSISTANCE
SLC 12 1850 04 0
GRANTS FROM GOVERNMENT OF ONTARIO, GOVERNMENT
OF CANADA AND OTHER MUNICIPALITIES
13.1 Ontario Grants SLC 10 0699 01 + SLC 10 0810 01 735,470
13.2 Canada Grants SLC 10 0820 01 15,554
13.3 Other Municipalities SLC 10 1099 01 302,383
13.4 SUBTOTAL
Add Lines 13.1 thru 13.3 I 1,053'4071
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
Page: 03 of 03 Date Prepared: January 6, 2005