HomeMy WebLinkAboutCS 24-06
04~)
C¡ú/ 0#
REPORT TO
EXECUTIVE COMMITTEE
Report Number: CS 24-06
Date: May 8, 2006
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
2006 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 2006 Debt and Obligation Repayment Limit.
Debt for these purposes includes all forms of loans, leases and other long term financial
obligations and commitments. The 2006 Annual Repayment Limit (ARL) was
calculated based on 25 percent of 2004 net own-source revenues as reported in City of
Pickering's 2004 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 2006 ARL based on 25% of net revenue fund, after taking into account
net debt charges reported to MMAH is $11,875,565. This is based upon the 2004
Financial Information Return. Based on the 2006 Budget, the total annual principal and
interest charges and all other financial obligations as recorded in the City's books are
$3,391,447 out of which $1,806,294 for external debt has been reported to the MMAH
as required. Taking into account the difference of $1,585,153 ($3,391,447 -
$1,806,294), being the amount included in the City's books for additional annual
charges pertaining to 2005 borrowings ($765,617), estimated committed annual
charges for 2006 budgeted loans and debentures ($633,317) and the balance for
photocopiers contracts, internal telephone lease, and dealer financing of small
vehicles, the net ARL available for 2006 would have to be reduced to $10,290,412.
Report CS 24-06
Date: May 8, 2006 04 6
Subject: 2006 Annual Repayment Limit for Debt
and Financial Obligation
Page 2
The net ARL of $10,290,412 for 2006, 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 afford ability 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, 2004 to commit to payments relating to debt and
financial obligations. The limit is effective January 1, 2006.
For illustration purposes, if the City could borrow at 7%, the rate used by MMAH in the
calculation, the net ARL of $10,290,412 would allow it to undertake additional long
term borrowing as follows:
Terms
a) 5 years
b) 10 years
c) 15 years
d) 20 years
Debt Amount ($j
42,192,720
72,275,548
93,724,188
109,016,771
Attachments:
1. Letter from the Ministry of Municipal Affairs and Housing dated January 18, 2006
Prepared By:
Approved I Endorsed By:
.0A~
Caryn Kong
Senior Financial Analyst
-;1''' "
~~;'~:::-~"'..:...-jÞ
..,~:'./ = ~.... . .."..~
Gillis A. Paterson .. ..
Director, Corporate Services & Treasurer
GAP:ck
Attachment
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering City Council ..
I "
,,,,,",,.'
_...- ..' " .
, / '''77 ~/'-
}homás J. Quinn, DMR., \
Chief Administrative Officer
;
,;
.----"..
047
Ministry of
Municipal Affairs
and Housing
" & r.CHMENT#-t-TOREPORT#.Li..·QY- ()~
Ministère des ~ 0 / t ,", ·
Affaires municipales \} n a r 10
et du Logement
Municipal Finance Branch
777 Bay Street, 13th Floor
Toronto ON M5G 2E5
Phone: (416) 585-6951
Fax: (416) 585-6315
777, Rue Bay, 13" étage
Toronto ON M5G 2E5
Téléphone: (416) 585-6951
Télécopieur: (416) 585-6315
RECEIVED
CITY ('¡IF PICKERING
.JAI\J .L U 2006
January 18, 2006
CORPORATE SERVICES
Dear Municipal Treasurer, Clerkffreasurer:
I am pleased to enclose a report showing your municipality's 2006 Annual Repayment Limit
(ARL) respecting long-term debt and financial obligations.
Your 2006 ARL was calculated based on 25 percent of your 2004 net own source revenues as
reported in your 2004 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
1;)22(06.195)
04R
Ministry of Municipal Affairs and Housing
777 Bay Street,
Toronto. Ontario.
M5G 2£5
Ministère des affaires municipales et du logement
777 rue Bay
Toronto (Ontario)
M5G 2E5
ANNUAL REPAYMENT LIMIT
(UNDER ONTARIO REGULATION 403/02)
MMA CODE: 10102
MUNID: 18001
MUNICIPALITY: Pickering C
UPPER TIER: Durham R
REPAYMENT LIMIT: C $11,875,565
The repayment limit has been calculated based on data contained in the 2004 Financial Information Return, as submitted
to the Ministry. This limit represents the maximum amount which the municipality had available as of December 31,
2004 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
effecti ve J an uary 01, 2006.
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 12,2006
(':4':1
DETERl\rIINA TION OF ANNUAL DEBT REPAYMENT LIMIT
MUNICIPALITY: Pickering C
MMAH CODE: 10102
1.0 GROSS DEBT CHARGES
1.1 Principal SLC 74 3099 01 1,112,276
1.2 Interest SLC 74 3099 02 694.018
1.3 SUBTOTAL Add Lines 1.1, 1.2 1,806,2941
2.0 DEBT CHARGES ON new.A. PROVINCIAL PROJECT
2.1 Water Projects -- this municipality only SLC 742810 03 0
2.2 Water Projects -- share of integrated project(s) SLC 74282003 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
LIABILmES SLC 42601001 0
4.0 SUBTOTAL· DEBT CHARGES Add Lines 1.3,2.5,3.0 1,806,2941
5.0 AMOUNTS RECOVERED FROM UNCONSOLIDATED ENTITIES
5.1 Electricity (Principal) SLC 74 3030 01 0
5.2 Electricity (Interest) SLC 74 3030 02 0
5.3 Gas and Telephone (Principal) SLC 74 3040 01 + SLC 74 3050 01 0
5.4 Gas and Telephone (Interest) SLC 74 3040 02 + SLC 74 3050 02 0
5.5 SUBTOT.A.L Add Lines 5,1 thru 5.4 01
6.0 PAYMENTS TO PROVINCE FOR DO\VNTOWN
REV1TALIZATION PROGRAM LOA.!\iS SLC 42541001 0
7.0 DEBT CHARGES FOR TILE DRAINAGE AND SHORELINE
ASSISTANCE SLC 40185002 + SLC 40185008 0
8.0 SUBTOTAL· DEBT CHARGES TO BE EXCLUDED Add Lines 5.5,6.0,7.0 01
9.0 NET DEBT CHARGES 1,806,2941/
Page: 02 of 03
Date Prepared: January 12,2006
(¡GO
DETERMINATION OF ANNUAL DEBT REPAYMENT LIMIT
MUNICIPALITY: Pickering C
MMAH CODE: 10102
10.0
TOTAL REVENUE FUND REVENUES
SLC 109910 01
55,409,179
11.0
FEES FOR REPAYING THE PROVINCE FOR DOWNTOWN
REVITALIZATION LOANS
SLC 42 5410 01
o
12.0
FEES FOR TILE DRAINAGE AND SHORELINE ASSISTANCE
SLC 12185004
o
13.0 GRANTS FROM GOVERNMENT OF ONTARIO, GOVERNMENT
OF CANADA AND OTHER MUNICIPALITIES
13.1
13.2
13.3
Ontario Grants
Canada Grants
Other Municipalities
SLC 10069901 + SLC 100810 01
SLC 10 0820 01
SLC 10 109901
310899
6,734
364,109
681,7421
13.4
SUBTOTAL
Add Lines 13.1 thm 13.3
14.0
FEES AND REVENUES FOR JOINT LOCAL BOARDS FOR
HOMES FOR THE AGED
o
15.0
NET REVENVE FUND REVENUES
Lines 10 less Lines 11,12,13.4,141
54,727,4371
13,681,8591
16.0
25% OF NET REVENUE FUND REVENUE
17.0
ANNUAL REPAYMENT LIMIT
25% of Net Revenue Fund Revenues less Net Debt Charges
11,875,56
SLC denotes Schedule, Line, Colunm
FOR ILLUSTRA nON PURPOSES ONLY
If the municipality could borrow at 7.0% or 9.0% annually, the annual repayment limit shown in 17 above
would allow it to undertake additionallong-terrn borrowing as follows:
7.0% Interest Rate:
(a) 20 years @ 7.0% p.a.
(b) 15 years @ 7.0% p.a.
(c) 10 years @ 7.0% p.a.
(d) 05 years @ 7.0% p.a.
125,809,907
108,161,627
83,409,001
48,692,162
9.0% Interest Rate:
(a) 20 years @ 9.0% p.a.
(b) 15 years @ 9J)% p.a.
(c) 10 years @ 9.0% p.a.
(d) 05 years @ 9.0(Æ p.a.
108.406,640
95,725,231
76,213,313
46,] 91 ,807
Page: 03 of 03
Date Prepared: January 12,2006