HomeMy WebLinkAboutNovember 26, 2001 (Finance)PICKERING
AGENDA
FINANCE
COMMITTEE
Thomas J. Quinn
Chief Administrative Officer
NOVEMBER 26, 2001
Finance Committee Meeting Minutes
Monday, November 26, 2001 at 10:00 a.m.
Chair: Councillor Holland
PRESENT:
Mayor Wavne Arthurs
COUNCILLORS:
M. Holland
ALSO PRESENT:
T. Quinn
G. Paterson
T. Galinis
N. Killens
D. Kearns
- Chief Administrative Officer
- Director, Corporate Services & Treasurer
-General Manager, Ajax/Pickering Transit
- Manager, Transit Services
- Committee Coordinator
(l) ADOPTION OF MINUTES
Regular Meeting of October.~_."~ 2001
MATTERS FOR CONSIDERATION
CORPORATE SERVICES REPORT CS 32-01
CLOSURE OF TIlE MILLENNIUM ACCOUNT
See Recommendation #1
CORPORATE SERVICES REPORT CS 43-01
ESTABLISHMENT OF WORKERS' COMPENSATION RESERVE FUND
Approved
By-law Forwarded to Council
See Recommendation #2
CORPORATE SERVICES REPORT CS 44-01
VACATION PAY RESERVE AND RESERVE FOR INVENTORY
Approved
See Recommendation #3
CORPORATE SERVICES REPORT CS 41-01
VERIDIAN - INTER-CREDITOR AGREEMENT
Approved
See Recommendation #4
CORPORATE SERVICES REPORT CS 36-01
SECTION 442/443 OF THE ML ~NICIPAL ACT - ADJUSTMENT TO TAXES
Approved See Recommendation #5
Finance Committee Meeting Minutes
Monday, November 26, 2001 at 10:00 a.m.
Chair: Councillor Holland
CORPORATE SERVICES REPORT CS 38-01
BEAUBIEN COIVLMISSION
A_.p_proved
See Recommendation #6
CORPORATE SERVICES REPORT CS 39-01
2002 INTERiM SPENDING AUTHORiTY
A_p_proved
See Recommendation #7
CORPORATE SERVICES REPORT CS 40-01
2002 TEMPORARY BORROWING BY-LAW
B_B_v-law Forwarded to Council
See Recommendation #8
STAFF ITEMS FOR DISCUSSION
The Director. Corporate Services & Treasurer, distributed copies of Report CS 45-01,
concerning Acquisition of Buses.
See Recommendation #9
OTHER BUSINESS
Councillor Holland questioned the Chief Administrative Officer on the timetable for the 2002
Budgets.
{V} ADJOURNMENT
The meeting adjourned at 10:36 a.m.
DATED CLERK
Finance Committee Meeting Minutes
Monday, November 26, 2001 at 10:00 a.m.
Chair: Councillor Holland
That the Finance Committee of the City of Pickenng having met on November 26,
third report to Council and recommends:
2001, presents its
CORPORATE SERVICES REPORT CS
~,~-01
CLOSURE OF THE MILLENNIUM ACCOUNT
That Report CS 32-01 of the Director, Corporate Set,rices & Treasurer, concerning the Closure
of the Millennium Account, be received for information and as there are no outstanding cash
balances or bills due in the Millennium Account the matter be considered closed.
CORPORATE SERVICES REPORT CS 43-01
ESTABLISHMENT OF :k'ORKERS COMPENSATION RESERVE FUND
1. That Report CS 43-01 from the Director, Corporate Services & Treasurer, concerning the
Establishment of Workers' Compensation Reserve Fund, be received; and
2. That Council approve the establishment of a Workers' Compensation Reserve Fund; and
3. That the attached Bv-la~v be read three times and passed: and
4. That the appropriate officials of the City of Pickering be authorized to take the necessary
actions to give effect thereto.
CORPORATE SERVICES REPORT CS 44-01
VACATION PAY RESERVE AND RESERVE FOR INVENTORY
That Report CS 44-01 of the Director, Corporate Services & Treasurer regarding Vacation
Pay Reserve and Reserve for InventoD', be received; and
That the Vacation Pav Reserve be closed and the estimated balance of $441,350 be
transferred to the Self-Insurance Reserve; and
That the Reserve for Inventory be closed and the estimated balance of $245,271 be
transferred to Reserve for Rate Stabilization; and
That the appropriate officials of the City of Picketing be authorized to take the necessary
actions to give effect thereto.
CORPORATE SERVICES REPORT CS 41-01
VERIDIAN - INTER-CREDITOR AGREEME.NT
That Report Number CS 41-01, of the Director, Corporate Services & Treasurer, regarding
Veridian - Inter-Creditor Agreement, be received:
That the Mayor and Clerk be authorized to execute an Inter-Creditor Agreement in a form as
attached hereto between the Bank of Nova Scotia, the Town of Ajax, the City of Belleville,
the Municipality of Clarington, the City of Picketing, Veridian Corporation and Veridian
Connections Inc. confirming the subordinated ranking of municipality held Promissory Notes
to the senior debt financing to be issued by Veridian Corporation:
Finance Committee Meeting Minutes
Monday, November 26, 2001 at 10:00 a.m.
Chair: Councillor Holland
The Chief Administrative Officer and the Director. Corporate Services & Treasurer be
authorized to undertake anv discussions, negotiations or amendments to agreements
necessary in order to put into effect he wishes of Council as expressed under these and
previous Resolutions regarding this matter; and
4. That appropriate officials of the City of Picketing be given authority to give effect thereto.
CORPORATE SERVICES REPORT CS 36-01
SECTION 442/443 OF THE MUNICIPAL ACT - ADJUSTMENT TO TAXES
That Report CS 36-01. regarding Section 442/443 of the Municipal Act - Adjustment to
Taxes; be received
That write-offs of taxes due to change in assessment as provided under Section 442 of the
Municipal Act RS.O. 1990 as amended, be approved; and
That appropriate officials of the City of Picketing be authorized to take the necessary actions
to give effect thereto.
CORPORATE SERVICES REPORT CS 38-01
BEAUBIEN COMMISSION
That Report CS 38-01 of the Director, Corporate Services & Treasurer, regarding Beaubien
Commission. be received ibr information.
CORPORATE SERVICES REPORT CS 39-01
2002 INTERIM SPENDING AUTHORITY
That Report CS 39-01 of the Director, Corporate Services & Treasurer, regarding 2002
Interim Spending Authority, be received: and
That the 2002 Interim Operating Expenditures be approved at 50% of the prior years' budget
including exceptions as contained in Attachment 1, pending approval of the formal 2002
Current Budgets by' Council: and
That the appropriate City of Picketing officials be authorized to take the necessary actions to
give effect thereto.
CORPORATE SERVICES REPORT CS 40-01
2002 TEMPORARY BORROWING BY-LAW
That Report CS 40-01 of the Director, Corporate Services & Treasurer, regarding 2002
Temporary Borrowing By-law, be received; and
That the temporary borrowing limit to meet 2002 current expenditures pending receipt of
taxes and other revenues be established at $21,000,000 for the period January 1, 2002 to
September 30, 2002 inclusive, and $10,000,000 thereafter until December 31, 2002; and
That the temporary borrowing limit for capital purposes for 2002 be established at
$12,000,000; and
Finance Committee Meeting Minutes
Monday, November 26, 2001 at 10:00 a.m.
Chair: Councillor Holland
4. That the attached Bv-taw be read three times and passed: and
5. That the appropriate officials of the City of Picketing be authorized to take the necessary
actions to give effect thereto.
CORPORATE SERVICES REPORT CS 45-01
ACQUISITION OF BUSES
That Report CS 45-01 from the Director, Corporate Services & Treasurer; concerning
Acquisition of Buses. be received: and
That Council approve the acquisition of one refurbished GMC bus from Eastway Ontario
Inc. at a cost of approximately $42.250 (plus applicable taxes) to replace the Orion VI
bus that is undergoing extended repairs: and
b) That this bus be leased to the Ajax/Pickering Transit Authority (APTA) until
approximately October. 2002 and then a buvout provision be included in that lease; and
c)
That all terms and conditions of the purchase, lease and disposition of bus to be leased to
APTA be subject to the approved of the Chief Administrative Officer and the Director,
Corporate Services & Treasurer of the City of Pickering; and
A second 1983 GMC bus be purchased from Eastway Ontario Inc. with the cost to be split
50/50 with the Town of Ajax: and
The appropriate officials of the City of Picketing be authorized to take the necessary actions
to give effect thereto.
Finance Committee Meeting
Monday, November 26, 2001
10:00 a.m.
ADOPTION OF MINUTES
Meeting of October 22, 2001
MATTERS FOR CONSIDERATION
CORPORATE SERVICES REPORT CS 32-01
CLOSURE OF THE MILLEN~qUM ACCOUNT
PAGE
1-3
Referred to the Finance Committee from the
Audit Committee Meetin of Se tember 25~ 2001.
,~ i'/ t~;" ~ i~,~ ~ ?<' .' ' ' , ' ,.' ',
CORPORATE SERvICF-~ REPORT' CS 43-01
ESTABLISHMENT OF WORKERS' COMPENSATION RESERVE FUND
4-7
CORPORATE SERVICES REPORT CS 44-01
VACATION PAY RESERVE AND RESERVE FOR INWENTORY
8-10
CORPORATE SERVICES REPORT CS 41-01
VERIDIAN - INTER-CREDITOR AGREEMENT
11-25
CORPORATE SERVICES REPORT CS 36-01
SECTION 442/443 OF THE MUNICIPAL ACT - ADJUSTMENT TO TAXES
26-29
CORPORATE SERVICES REPORT CS 38-01
BEAUBIEN COMMISSION
30-40
CORPORATE SERVICES REPORT CS 39-01
2002 INTERIM SPENDING AUTHORITY
41-44
CORPORATE SERVICES REPORT CS 40-01
2002 TEMPORARY BORROWING BY-LAW
45-49
STAFF ITEMS FOR DISCUSSION
OTHER BUSINESS
(V) ADJOURNMENT
PICKERING
RE} ORI
TO COUNCIL
FI~.OM: (Jill is A. Patel;son
Director, Corporate Services & Treasurer
Rt:A'()RT NUMBI~R: ('S 45-01
8Ut3.IECT: Acquisition of Buses
R 1ZCOM M I~NI)ATION:
I)ATE: November 26, 2001
1. 'lhat Report ('S 454)1 l'rolll tile l)ircctor, Corporate Scl-vices & Treasurer be received;
a) Council approve the acquisition of one rcl'u~ bishcd GMC bus fi:om Eastway Ontario Inc.
al a cost otTapproximatety $42.25(){plus at)plicable taxes) to replace the Orion VI bus that
is under~oi~hA,extended repairs:
b) ~l'hat this bus be leased to the ,Njax;Pickering Transit Aut}lority (APTA) until
approximately October, 2002 and then a buvout provision be incluclcd in that lease;
c)
That all terms and conditions ot7 tile purchase, lease and (tisposition of bus to be leased to
AF'TA be subject to the approved ol-tl~e Ch/cf Administrative Of liter and thc Director,
Corporate Services & Treastn'cr of lhe City of Pickering;
3. A second 1983 GMC bus be I3urchased llrom Eastway Ontario Inc. with the cost to be split
50/50 wilh the Town of Aja×: aud.
4. The appropriate officials of the (,iitv of l'ickcring be aulhorized to take the necessary actions
Io give el'feet therelo.
O RIG IN:
Aj ax/Pickeril~g Trm mit A u thorJ ty
AU~I'ttORH'Y:
The Municipal Act
Transit Merger Agreement daled August S. 2( u)l
FIN A NCtA L IM PLACATIONS:
The purclmse, lease and evcnltlal sale 1o ~\P't'A of the first bus is intended to bo structured in
such a way it has no long tern~ linancial inq~lications on the City of Picketing. The (¢ity would in
eftbct finance the purchases, tkw one year. to be repaid by APTA. The purchase of thc second btm
is esseutiallva pre-budget approval and will cost the City of Picketing approximately $213)00
l)lus al)plicable taxes.
EXI~(;UTIVI~ ,. UMMAR~:
Not applicable
Reporl to Council CS 45-01
Subject: Acquisition oFBuscs
Date:
November 26, 2001
Page 2
BACKGRO U N D:
Attached is a memo fFom thc Deputy Xlmmgcr, Ajax,PickcFing Transit AuthoFity, on thc
replacement of thc two Orion buses that xvcFc involved in separate engine compartlnCnt llres in
May and September of this year. One of thc buses is expected to bo back in service by
approximately year cad. HowevcF, as it will bo :qepFoximatcly one vcaF bctbre the second bus is
returned to service, APTA has FCClttCstcd that the City of l)ickcl-ing pFovictc alternate
alTangemcnts so that it continue with its pFcscnt level of scFvico. ThciF recommendation is that
thc City oFPickeFing purchase a bus, lease il to APTA who would Fecoxcr the leasing costs fi-om
our insurers. It is intended that should this be nt~provoct, it will cost thc City virtually nothing
financially and APTA wilt be able to mai~atain its loyal of'soFxico.
The purchase ot' the second bus is lbr backup tottl'l>OScs and essentially a pre-budget approval lbr
thc 2002 budget, tuthc~ details can be lbtmd in lbo attz~chmcnt.
[ have boca advised that tine txvo ('o-(%liFs ol'tlqe .,\PTA Board are aware oFtlle contents of' the
attached memo and support thc Fccommendalions.
117approved bv Picketing CTotmcil, then it is intended lllitl lhis ll~allor xxitl bc put beliorc the AP~I'A
Board For their cousideration. It is coming to PickcFing Fil-St simply duc to timing at year end o£
the meeting dates of Council and the Board.
ATTAC}IM ENTS:
1. Memorandum t?om I)cputy ManagoF, :X~j~x t'ickcring 'FFansit AutlnoFity dated NovcmbeF
19, 2001.
Prcpal'ed,,;\toproved [indorsed By':
(iillis ,\. l>aterson
Dircctoi', Corporate Services & Treasurer
GAP:vw
Attachment
Copy: ChieFAdministrative Ol'liccF
General Manager, Ajax/PickeFing Transit Authority
Recommended fi)r tile consideration of' PickeFing ]
CityCoulncil ',~ i I
~ ~,?~.~'~l ~"'.~ .... ~~1~ ~ .....
AUTHORITY
i
To: Gillis Paterson, Director, Corporate Ser~qces, APTA Treasurer
Date: November 19, 2001.
Subject:
Replacement of Orion VI Buses # 2004 and #2005
Executive Summarv:
APTA experienced an engine compartment fire involving Orion VI bus #2005 on May 1, 2001
and a second engine compartment fire involving Orion VI bus #2004 on September 10, 2001.
Fire damage to both buses was extensive. These buses are the property of the City o£ Pickering
and therefore, Pickering is be responsible for financing and administering replacement buses.
Aanounts paid by Pickering to replace the fire damaged buses m'e recoverable and will form a
part of our insurance claim.
We have been advised that repairs to Orion VI bus .=2005 are expected to be completed within
two (2) months (January 2002 targe0. Repairs to Orion VI bus #2004 are not expected to be
completed until the October 2002. Upon entering the winter season, passenger loads will
increase and APTA will no longer be able to acconm~odate studem passenger loads without the
benefit of a minimum of one (1) 40' bus ro replace Orion VI bus #2004.
APTA staff have contacted local transit properties in rt~e GTA to enquire about the possibility of
leasing buses. Although several local properties have leased buses to Picketing in the past, no
buses are cun-ently available for lease tocalh'.
Eastway, a Burlington bus re£urbishing company, has provided APTA with the option to lease or
buy up to two (2) 1982/1983 refurbished GMC buses. Maintenance staff have completed an
inspection of'these vehicles and deemed ti~em to be in good condition.
The Eastway bus is available to lease at a fixed :'ate of 53.500 per month. The lease provides a
full powertrain warranty and requires a minimum leasing te~ of one year at a tomi cost of
$42,000.00 (plus GST). Eastway has quoted a purchase price of $42.250.00 (plus applicable
taxes). Thus, the cost to lease an Easm'ay bus (based on a minimum one year term) is
comparable to the purchase pr/ce.
Recommendation:
That the City of Pickering purchase one (1) used t982 GMC New Look bus for a sum of
$42,250.00 (plus applicable taxes) from Eastway Ontario Inc.; and that
APTA lease-to-buy the used GMC bus from the City of Picketing for a sum of $3.500
each per month (plus GST) until such time as fire repairs are completed on buses #2004
in October 2002; and that
The City of Picketing notify Cowan Insurance Company by letter, of APTA's intent to
claim approximately $42,000.00 in leasing costs for the replacement bus; and that
Upon the return of bus #2004, the City of Picketing sell the used GMC bus to APTA for
the sum of $250.00 (plus GST), representing the difference between the purchase cost
and the quoted cost of one (1) year of leasing.
That the City of Picketing Finance Committee consider the purchase a second used 1983
GMC New Look bus for a sum of $42,000.00 (plus applicable taxes) from Eastway
Ontario Inc., the cost to be split 50/50 with the Town of Ajax.
Financial Implications:
Cost: Purchase one (1) used 1982/1983 GMC reconditioned 40' bus: $42,250.00 (plus taxes)
Recovery: Estimate Insurance Claim Recovery (12 mth. lease to APTA) :$42,000.00 (plus GST)
Net Cost to Picketing: $250.00
B ack gro un d:
Between June and October 2001, APTA staff have contacted the following transit authorities and
refurbishing companies concerning bus leasing.
Mississauga Transit (4 buses ~vere ]eased to Picketing in 1998/99)
Toronto Transit Commission
Brampton Transit
Whitby Transit
Oshawa Transit (1 bus was leased by Picketing in 1998)
Cobourg Transit (2 buses were leased by Picketing in 1998)
Peterborough Transit
Mississauga Truck and Bus
Transit International Leasing, California, US
Mecano, Quebec
Eastway Ontatio inc.
The transit authorities contacted have not been able to expand their fleets to meet growth demand
or more frequent mechanical repair requirements on aging fleets. Consequent]y, these properties
no longer haVe the flexibility to lease buses.
Page 3
For Discussion - The need for a second used 40' Bus:
APTA has been advised that repairs to Orion VI bus ~2005 are expected to be completed with/n
two (2) months. Thus far, APTA has been able to replace our dannaged buses with existing
.~jax/Pickering spare inventou~. Upon entering the winter season, passenger loads will increase
and the need for larger vehicles will become more critical. Even with the return of our bus #
2005 and the addition of the used Eastway bus to replace bus ~ 2004. :KPTA would like the City
of Picketing and the Town of Ajax to consider purchasing a second used bus.
in earlier discussions with Eastway, APTA staff were preparing for the need to replace both of
our damaged Orion VI buses for an extended period of time. During these discussions, ,~kPTA
was offered two (2) used GMC buses. The need for one (1) replacement bus is critical, however
Picketing and Ajax may want to consider purchasing a second used bus for the following
reasons:
There will be a significant deliveu' delay on new bus orders.
Used buses are cost-effective "insurance" aga/ns~ future major mechanical breakdowns.
Used 40' buses provide needed scheduling flexibility for planned fleet maintenance.
APTA xvill be removing a minimum of six (6) buses from service for short periods of
time in the next several months to complete needed engine rebuilds.
As an alternative to the cost of additional winter "overflow" buses, used 40' used buses
are a cost-effective means to ease winter crush-load conditions on our heavier school
service routes.
Temporary increase to fleet capacity to supplement service harmonization and expansion
logistics.
Deputy Manager, APTA
Recommendations Approved:
Attachments:
!. 1993 GMC New Look photograph
2. Eastway purchase quote - i 953 GMC Nexx Look \~2GHTT~2W5D3500142.
3. Eastway purchase quote- i982 GMC~ New Look \ .'X~-,GH~;'~ ~ v'-~: $,W5D3500101 '~ .
4. Eastway leasing quote (vehicles identified above).
Copy:
Regional Councillor Maufice Bre~mer. Co-Cinair. APT.a.
Regional Councillor Jim McMaster. Co-Chair.
Stan Karwowski, Manager Financial Services. City
Gary Moskalyk, Operations Manager,
Oct 24. 2001
Customer: Picker~ax Transit
Model: GMC New Look 5307
VN#: 2GHYT82WSD3500142
Unit: 25082
Specifications
Engine - 6\:71
Transm:ssion - V 730
Air Ride Driver's seat
Power Steering
Tilt-telescopic steering column
47 seats
Srructm-e repairs & replace as necessao'
Panel replaced as necessary
Painted to spec
Safety Certificate
Clean Air Certificate
Pvmbrokc. ON KgB
Bus 1613) 735-4593
Fax: (013 735-()74'
89173 t (Ontario) }.nc.
ATT/ UHMEbJT TO REPORT
Oct 24. 2001
Customer: Pickering.~_jax Transit
ModeL: GMC New Look 5307
VN#: 2GHYT82W2D3500101
Unit: 25055
Specifications
Engine - 6V7 I
Transmission - V 730
Air Ride Driver's seat
Power Steering
· Tilt-telescopic steering column
· 47 seats
· Structure repairs & replace as necessary
· Panel replaced as necessary
Painted to spec
° Safety Certificate
· Clean Air Certificate
965 Mackay Street
Pcn'..broke. ON KgB I A2
Bus: t613) 735-4593
};ax: (613) 735-074.7
2591 Edinburgh Place
Ottawm ON K1B 5M1
Bux: (613) 745-6123
Fax: (615) 747-91_33
1815 Ironstone Drive
Burlington, ON LTl. 5B8
Bus: {9055 331-5877
Fax: (.905) 331-9124
f ATTAOHMENT#.__~ 'J'O F:tFPO~iT ~
Eastwa y
89i T? i ,~Omario) Inc,
Aug 22, 2001
Gary' Moskalyk
Supervisor
Transportation Division
Cit! of- Picketing
Dear Mr, Moskalyk:
As per your inquiry for rental of'a 40 foot transit bus.
The price per month is S3.S00 per month for a 1 year fixed lease and q~
~-,.000 per month for an open
rental with no time limit requirement.
Terms and conditions are listed irt the enclosed document.
Sincerely
Jerrv Kucheran
VP Sales and Marketing
lax: ,'( 3
Finance Committee Meeting
Monday, November 26, 2001
10:00 a.m.
ADOPTION OF MINUTES
Meeting of October ~ 2001
MATTERS FOR CONSIDEI~TION
CORPORATE SERVICES REPORT CS 32-01
CLOSURE OF THE MILLENNIUM ACCOUNT
Referred to the Finance Committee from the
Audit Committee Meetine of September 25, 2001.
PAGE
1-3
CORPORATE SERVICES REPORT CS 43-01
ESTABLISHMENT OF WORKERS' COMPENSATIO__~_N RESERVE FUND_~
4-7
CORPORATE SERVICES REPORT CS 44-0l
VACA___TION__PAY .RESERVE AND____~SER3q5 F_OR INVENTORY
8-10
CORPORATE SERVICES REPORT CS 41-01
yERI~DIAN - INTER-CREDITOR AGREEMENT
11-25
CORPORATE SERVICES REPORT CS 36-01
O MUNICIP ~L ACT - ADJUSTMENT TO TAXES
SECTION 442/443 OF THE MU? , _ - .~ '-
26-29
CORPORATE SERVICES REPORT CS 38-01
BEAUBIEN COMMISSION
30-40
CORPORATE SERVICES REPORT CS 39-01
2002 INTERIM SPE_NDING AUTHORITY
41-44
CORPORATE SERVICES REPORT CS 40-01
2002 TEMPORARY BORROWING BY-LAW
45-49
(m)
STAFF ITEMS FOR DISCUSSION]
OTHER BUSINESS.
(V) ADJOURNMENT_
01
RECOMMENDATION OF THE FINANCE COMMITTEE
DATE
MOVED BY
It is recommended that Report CS 32-01 of the Director, Corporate Services & Treasurer,
concerning the Closure of the Millennium Account, be received for information and as there are
no outstanding cash balances or bills due in the Millennium Account the matter be considered
closed.
Or)
PICKERING
REPORT TO
COUNCIL
FROM:
Gillis A. Paterson
Director, Corporate Services & Treasurer
DATE: September 20, 2001
REPORT NUMBER: CS 32-01
SUBJECT: Closure of the Millennium Account
RECOMMENDATION:
It is recommended that Report CS 32-01 of the Director, Corporate Services & Treasurer be
received for information and as there are no outstanding cash balances or bills due in the
Millennium Account the matter be considered closed.
ORIGIN:
Director. Corporate Services & Treasurer
· y
AUTHOR1T :
Audit Committee Meeting of June 18, 2001
FINANCIAL IMPLICATIONS:
Not applicable.
EXECUTIVE SUMMARY:
Not applicable.
BACKGROUND:
At its meeting of June 18, 2001 the Committee suggested that the Chair of the Millennium
Committee regarding the status of certain assets. At the direction of the Chair of the Audit
Committee it was suggested I write the City Solicitor which was done. In subsequent discussions
with the Solicitor it was determined and agreed upon that the above recommended course of
action would be put before the Committee.
Report to Council CS 32-01
Subject: Closure of the Millennium Account
Date:
September 20, 2001
Page 2
ATTACHMENTS:
Not applicable.
Prepared Approved Endorsed By:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Copy: T.J. Quinn. ChiefAdmildstrative Oflicer
J. Reble, Solicitor
GAP:w,'
Recommended for the consideration of Pickering
City Council
O4
RECOMMENDATION OF THE FINANCE COMMITTEE
DATE
MOVED BY
1. That Report CS 43-01 from the Director, Corporate Services & Treasurer, concerning the
Establishment of Workers' Compensation Reserve Fund, be received; and
2. That Council approve the establishment of a Workers' Compensation Reserve Fund; and
3. That the attached By-law be read three times and passed; and
4. That the appropriate officials of the City of Pickering be authorized to take the necessary
actions to give effect thereto.
PICKERING
REPORT TO
COUNCIL
0,5
FROM:
Oillis A. Paterson
Director, Corporate
DATE' November 19,2001
REf'()RTNUMBER: CS43-()1
SUBJECT: Establishment ol'\Vorkcrs' Compensation Reserve Fund
R ECOM M ENDAT1ON:
1. That Report CS 43-01 fi-om tiao Director, (_'o~]~o~'atc Services ~ Treasurer be received:
2. Council approve the establishment o/'a XVorkcrs' Compensation Reserxc Fund be approved:
3. Thc attached By-Law be read fin'cc times and passed: and,
4. Thc appropriate officials of thc Citx of Picketing bo authorized to take thc necessary actions
to ~ivc effect thereto.
ORIGIN:
Director. Corporate Services
AUTHORITY:
?he MunicipalAcL RSO 1990. as ameladcd, Section 103 (2) and 252
Report to Council CS 34-01
FINANCIAL IMPLICATIONS:
Based on Report to Council CS 34-01. the approval to transfer the \Vorkplacc' Safety [nsurance
Board (WSIB) funding from Schedule ] to 2 will result ira savings starting in the year 2001 and
each year thereafter. These projected savings arc estimated ira excess of S190,000 per annum. The
savings in 2001 will pay for the costs associated x~ith the transfer and savings for 2002 and 2003
would be directed to tiffs Reserve Fund to build up capital to pay tbr any catastrophic claim-
related costs which may occur.
EXECUTIVE SUMMARY:
Not applicable
BACKGROUND:
As discussed ira Report CS 34-01, xxitb increasing premiums of Schedule 1, there was a need to
look into Schedule 2 as an alternative. Schedule 2 allox~s employers to more effectively control
their WS1B costs and risks by implementing cflkctix c WSIB claims manaaemcnt and healttn and
sal~tv programs. With the present Schedule 1 plan, thc City premiums pasqnent to tine
Workplace Salktv and Insurance Board (WSIB) is based upon a percentage of payroll expenses to
cover pooled accident costs. Witln thc conversion to Schedule 2 , thc ('itv will pay lbr individual
accidents. The WSIB recommends tho establishment of eno or more rosorx'o funds ibr it
pm])oscs. Therefore, it is also a good policy ICr thc Council of thc City of Picketing to establish
Report to Council CS
Subject: Establishment of \\ orkers' Compensation Reserve Fund
Date: November 19, 2001
Page 2
a Workers Compensation Reserve Fund. In the event of a catastrophic claim, thc City will rely'
upon reserves and appropriate insurance policies to off'set the excess costs of the claim. The
anticipated savings from converting from Schedule 1 to Schedule 2, will be deposited in this fund
for 200l, 2002 and 2003.
By 2004, once the reserve if fully funded, the savings will be transferred to departmental budgets.
A more rigorous emphasis on pro-active health and safety measures and efficient disability
management, to be paid tbr out of the savings, will enable the City to minimize the frequcncy
and severity of accidents and illness on the job.
This reserve fund will also finance the annual costs of insurance purchased and contribute
towards the expanded health and safety program detailed in Report to Council CS 34-01. Costs
of transfers incurred in 2001 will also be paid from this reserve fired.
ATTACHMENTS:
1. \Vorkers' Compensation Reserve Fund Bv-Law
Prepared By:
Ca .ryn Kong
Senior Financial Analyst
Approved/Endorsed By:
Coillis A. Paterson
Director. Corporate Services & Treasurer
GAP:vw
Attachment
Recommended for the consideration of Pickering
City Council
Whorf;a~ .1.-(5 cf ~tministra~ Offi~r j
-,'¢"i,-,Ct--;.~,iZ,, *:_L__ '-:" REPORT#C._Q.~3-O/ ;
THE CORPORATION OF TIdE CiTT OF PICKERING
07¸
B'5'- LA\,V NO.
I3cing at bv-iaxv to provide for the establishment of'
a Reserve Fund to be known as ti~e Workers'
Compensation Rcsm'x-c Fund.
\VItEREAS under Thc 31u~ticu~a/.4c.a R.S.O.. 1~)9{) ;is amended. Section 163 (2) and 252, the
Council et!the City oF Picketing may establish and maintain a reserve fund for any puq~ose tbr
which it has authority to expend funds.
WHEREAS under the Workplace Sat'crv and Insurance Act, 1997, Part VII1, S. 97, the
Workplace Salary Insurance Board (WSIB) shall establish and maintain one or more resen,'e
tkmds to pay benetSts in thture years in respect et'claims i~st' accidents that happen in a year.
\VttEREAS it is desirable tbr thc City of Picketing to establish such a reserve thnd for thc
purpose of paying tbr the initial costs oftrans/~rring fi-om Schedule 1 to 2. to meet annual costs
of insurance covcra,,e= . to access lkmds in dxc cxcnt oW a claim, and to fund health and safety
pFogralllS arid other costs.
W}tEREAS lhe (;ouncil of thc ('itv of Picke~-in~ has approved the transt'cr o1' \Vorkplace Safety
Insurance Board coverage Ii'om Schedule 1 to 2.
NOW TtlEREFORE TIlE C'OL:N¢'IL ()f- TItK ('ORP()R:VFION OF TIlE CITY OF
P1CKER1NG [fEREBS' ENACTS :\S t:OIA_O\VS:
The establishment o['a ~'eserx c fund knox\ n as the Workers' Compensation Reserve Fund
is hereby authorized.
The Workers' Compensation Rescrxe I:und shall consist of such annual savings as a
result of the transfer fi-om Schedule 1 to , in 2001. 2002 and ~ '
' _00~ and from time to time
as the Council may approve together w/th thc investments made and earnings derived
there from.
The Workers Compensation Reserve Fund shall be used tbr tile purpose el'paying for the
initial costs of transferring from Schedule 1 to 2. the almual costs of insurance coverage,
contributions towards the expanded health and safety program, and the pa.,,~nent of claims
and other related costs.
This by-law shall come into tbrcc on ti~e date of its enactment.
BT-LAVv' read a first, second and third time and finally passed this 3rd day of' December, 2001.
\Vavne :\rthurs, Nlavor
Bruce Taylor, Clerk
RECOMMENDATION OF THE FINANCE COMMITTEE
DATE
MOVED BY
That Report CS 44-01 of the Director, Corporate Services & Treasurer regarding
Vacation Pay Reserve and Reserve for Inventory, be received;
The Vacation Pay Reserve be closed and the estimated balance of $441,350 be
transferred to the Self-Insurance Reserve;
The Reserve for Inventory be closed and the estimated balance of $245,271 be transferred
to Reserve for Rate Stabilization; and
The appropriate officials of the City of Picketing be authorized to take the necessary
actions to give effect thereto.
PICKERING
REPORT TO
COUNCIL
n9
FROM:
SUBJECT:
Gillis A. Paterson
Director, Corporate Scrx ices & Treasurer
DATE' November 19, 2001
REPORI-NL'MBEP,: CS44-01
Vacation Pay Rcscrxeand Rcscrvcibrlnxontorv
R ECONI M E N DATION:
1.
That Report C$ 44-01 ii'om thc Director. ('orporatc Services & Treasurer toc received:
2. Thc Vacation Pay Reserve bc closed and thc estimated balance of $441,35/) be
transferred to the Self-lnsurance Reset\ c:
Thc Reserve for Inventory t0c closed and thc estimated balance of 5245,271 be transferred
to Reserve for Rate Stabilization: and.
The appropriate officials of thc ('itv of Pickerin~ bo authori×cd lo take the necessary
actions to give effect thereto.
ORIGIN:
Director, Corporate Services ck Treasurer
AUTHORITY:
.Wu~n'cU;al Act, R.S.O 1990 as amended Section 163
Report to Council CS 134)1
FINANCIAL IMPLICATIONS:
Further to tile recommendation on Report to Council CS 13-01, tile Vacation Pa'~ Reserve is no
longer needed as such and it is recommended that it bo closed and the estimated balance of
5441,35~) bc transtb~ed into ScltMnsurancc Rcsc~'c. Duc to a short fall, the SclPlnsurance
Reserve had not been replenish tbr a long time. With this transtL~r, the new balance lbr SoIiZ
Insurance Reserve will be $972,489. This will pro\ idca more appropriate balance Ibr the SeltL
Insurance Resc~7'c.
The Reserve ibr Inventory is no longer needed and as such it bo recommended that it be closed
and thc estimated balance of $~4~ 1 bo translSrrcd to Rosorxo icr Rate Stabilization. Based
on the Current Budget requirement, there is a dcnaand of 54<)~),{~{)(; per year lbr both 2002 and
_0()o. With this transfer, the ncx~ balance Ibr }hate Stabilization Reserve will be 5494,410 and
this will provide For a more appropriate balance to mcct thc C'urrcnt Budget demand for 2002.
EXECUTIVE SUMMARY:
Not applicable
Report to Council CS 44-01
Subject: Vacation Pay Reserve and Reserve for Inventory
Date: November 19, 2001
Page
BACKGROUND:
The Reserve for Vacation Pay was established to ensure that the cost of vacation pay earned, but
not taken, is correctly allocated to the taxpayers of that vear and the Council of that period. The
original Reserve fo'r Vacation Pav was set up m 1993 to comply with Section 3001 of the
Municipal Financial Reporting Handbook of the Ministu' of Municipal Affairs and a
contribution of $430,000 was made to the Reselwe from General Fund. Based on an increase in
accrued vacation pa,x as at Dec 31, 1995, an additional transfer of $11,350 was made in 1996
from General Fund. The total contribution of S441,350 has remained intact since 1996. This
Reserve Fund is no longer needed, as it is no longer necessary to provide for vacation pay earned
in this manner as vacations arc taken in the year earned. In Report to Council CS 13-01 dated
May 28, 2001, it was recommended to transfer the Vacation Pay Reserve to Working Funds
Reserve. However, upon careful consideration by the Treasurer , it is more appropriate to
transfer this Reserve to the Self-Insurance Reserve to build up higher working capital for Self-
insurance. Council approval is needed to close this Reserve and transfcr the funds.
In 1984 the Ministry of Municipal Affairs and Housing issued a list of new changes to the
municipality's year-end financial report which involved Inventory. The Reserve for Inventory
was necessary to ensure that the cost ot7 revolving inventories is correctly allocated to the
taxpayers of the year and the Council of that period. The initial year-end transt'er of $66,204 in
1984 from General Government has been adjusted annually to reflect thc inventories level of the
City. The Treasurer has reviewed inventory activities level over thc last levY' vcars and has
co~cluded that the use or'this reserve is minimal and is no longer required. As of December 31,
2000, the balance on this account is S245,271. As it is no longer necessary to provide
Inventory, it is recommended that the Reserve for lnvcntou' bc closed and thc surplus be
transferred to thc Resetw'e for Rate Stabilization to build-up a higher working capital to meet
Current Budget demand for 2002. Council approval is needed to close this Reserve and transfer
the funds.
ATTACHMENTS:
Not applicable
Prepared By:
Approved/Endorsed By:
Caryn lxong
Senior Financial Analyst
. ~2'~ '5, .- - ~ --~
GB~s A. Paterson
Director, Corporate Services & Treasurer
GAP' vxv
Recommended for the consideration of Picketing
?
/
City Council
Thom~'~s J. Quinn, Chief Administrative Officer
11
RECOMMENDATION OF THE FINANCE COMMITTEE
DATE
MOVED BY
1. That Report Number CS 41-01, of the Director, Corporate Ser¥ices & Treasurer, regarding
Veridian - Inter-Creditor Agreement, be received;
That the Mayor and Clerk be authorized to execute an Inter-Creditor Agreement in a form as
attached hereto between the Bank of Nova Scotia, the Town of Ajax, the City of Belleville,
the Municipality of Clatin~on, the City of Picketing, Veridian Corporation and Veridian
Connections Inc. confirming the subordinated ranking of municipality held Promissory Notes
to the senior debt financing to be issued bv Veridian Corporation:
The Chief Administrative Officer and the Director, Corporate Services & Treasurer be
authorized to undertake any discussions, negotiations or amendments to agreements
necessary in order to put into effect he wishes of Council as expressed under these and
previous Resolutions regarding this matter; and
4. That appropriate officials of the City of Picketing be given authority to give effect thereto.
1¸2
PICKERING
REPORT TO
COUNCIL
FROM:
Gillis A. Paterson
Director, Corporate Services & Treasurer
DATE: November 19, 2001
REPORT NUMBER: CS 41-01
SUBJECT: Veridian Inter-Creditor Agreement
RECOMMENDATION:
It is recommended that Report CS 4t-01 of the Director, Corporate Services & Treasurer
be received;
That the Mayor and Clerk be authorized to execute an Inter-Creditor Agreement in a fom~
as attached hereto between the Bank of Nova Scotia, the Town of Ajax, the City of
Belleville, the Municipality of Clarington, the City of Pickering, Veridian Corporation
and Veridian Connections Inc. confirming the subordinated ranking of municipality held
Promissory Notes to the senior debt financing to be issued by Veridian Corporation;
The Chief Administrative Officer and the Director, Corporate Services & Treasurer be
authorized to undertake any discussions? negotiations or amendments to agreements
necessary in order to put into effect the wishes of Council as expressed under these and
previous Resolutions regarding this matter; and,
That appropriate officials of the City of Picketing be given authority to give effect
thereto.
ORIGIN:
Director, Corporate Services & Treasurer
AUTHORITY:
Report CS 01-99
Resolution No. 226/99
FINANCIAL IMPLICATIONS:
None beyond that indicated in the original Merger and Shareholder Agreements
EXECUTIVE SUMMARY:
The Promissory Notes held by the Shareholders are debt subordinated to any other debt held by
Veridian Corporation and Veridian Connections Inc. Execution of this agreement between all
parties recognizes the fact, in a way that makes the Bank of Nova Scotia a party to the
subordination and ensures any amounts owing the Bank rank before such debt.
Report to Council 41-01
Subject: Veridian Inter-Creditor ,Agreement
Date: November 19, 2001
Page 2
13
BACKGROUND:
Voridian ('oq~oration has arrallged bank financin~ with thc Bank of Noxa Scotia. The five-year
agreement with the Bank ibr up to 54S million in lines of credit and up to 545 million in
guarantees provides re-financing lbr utilitx acquisitions. 15hanGing lbr capital expenditures and
investments and guarantees to be posted x~ it}q thc independent Market Operator in support of
electricity procurement.
Tt~c Bank requires an Inter-Creditor Agreement so that it is party to the agreement with the
municipal shareholders that thc 50().8 million Promissoi-v Notes lncld by thc municipalities arc
subordinated in rank to this Bank senior debt. Ton x~ill rccMl From thc tcnns of thc Promissory
Notes recently passed b~ each C'ouncil. this subordination i~ature was included so that Veridian
could obtain necessary financing.
Municipal shareholder debt is protected by thc Shareholders' Agreement. Yeridian cannot place
debt, including Subordinated Promissory Notes. ~n excess of 70°o of the total capitalization of
Vcridian. Lending institutions doom this to be an acceptable debt to capitalization ratio.
Vcridian's legal counsel has rcx'icxvcd the Inter-Creditor Agreement.
It is requested by Veridian that thc ('oLlncil approx c tlqc Inter-Creditor Agreement and authorize
thc Xlaxor and Clerk to execute this a~rocnlcnt.
ATTACttMENTS:
l. Inter-C'reditor Agreement
Prepared / Approved Endorsed By:
GAP:w',
Director. Corporate Services & Treasurer
Reconnnended lbr the consideration of Picketing
City Council
,/
Thomas J. Quinn, Chief.&dministrativc
ATTACHMENT # I TO REPORT
INTER-CREDITOR AGREEMENT
THIS AGREEMENT made as of the · day of November, 2001.
BETWEEN:
THE BANK OF NOVA SCOTIA, a Canadian chartered bank
(herein called the "Senior Creditor")
- and -
THE CORPORATION OF THE MUNICIPALITY OF
CLARINGTON, a municipal corporation existing undcr the laws
of the Province of Ontario
(herein called "Clarington")
- and -
THE CORPORATION OF THE TOWN OF AJAX, a municipal corporation
existing under the laws of the Province of Ontario
(herein called "Aj ax")
- and -
THE CORPORATION OF THE CITY OF PICKERING, a municipal
corporation existing under the laws of the Province of Ontario
(herein called "Picketing")
- and -
THE CORPORATION OF THE CITY OF BELLEVILLE, a municipal
corporation existing under the laws of the Province of Ontario
(herein called "Belleville")
- and -
VERIDIAN CORPORATION, a corporation amalgamated under
the laws of the Province of Ontario
(herein called the "Borrower")
-2 15
- and -
VERIDIAN CONNECTIONS 1NC.. a corporation amalgamated
under thc taws oFthe Province et'Ontario
(herein called ' Connect'ohs")
WItEREAS tile Obligors are or Illav become indebted to each of tile Creditors and the
parties hereto desire to enter into tt~is agreement in order to set out their respective rights and
obligations, including tile respective priorities of the Creditors in connection with the
indebtedness of the Obligors to them:
NOX,¥ THEREFORE Tills AGREESIEN'I' X¥1TNESSES that. in consideration oF the
mutual covenants herein contained and other ?od and valuable consideration, given by each of
tile parties hereto (the receipt and sul'liciencv of which are hereby acknov, ledged by all of the
parties hereto), the parties hereto hereby agree with each other as follows:
ARTICI,E 1
INTERPRET.~\TION
1.01 Delinitious. The tbtloxving defined tertns shall lbr all purposes of this agreement, or
any amel~chncnt hereto, have the tbllowing respective meanings unless tile context othei~dse
specifies or requires or unless othci7vise dciincd tacrcin:
"Business Day" means any day oti~cr than ti Saturduv or Sunday on which banks are generally
open lbr business in Toronto. Ontario.
"Credit Agreement" means tile credit agreement made as of .,, 2001 between the Borrower and
the Senior Creditor, as tile same tnax be amended, nlodified, supplemented or replaced From time
to time.
"Creditors" means the Senior Creditor and thc Subordinated Creditors and "Creditor" means
any of the Creditors.
"Default" means any of the events of default spccified in any l~oan ~\grcemcnt entitling a
Creditor to demand or accelerate payment of any Obligations.
"Demand" means any notification by any of the Creditors to trithcr Obligor o£ a demand for
payment under an.,,' Loan Agreement.
"Insolvency Legislation" means the Ba~tk~'u/~tc3' ,~zrl Dtsolve~cy Act (Canada), the Companies'
Creditors Arr;~tgeme~l Act (Canada). the Ba~zk~'z~/~zcy ('ode (United States) and any similar
statute or law in any jurisdiction.
"l.oan Agreements" means the Senior Loan :\grcements and the Subordinated Loan
Agreements and ~'Loan Agreement" mca~s any one o~' tl2c Loan .~\grcements.
"Obligations" means Senior Obligations and the Subordinated Obligations.
"Obligors" means the Borrower and Connections.
"Senior Loan Agreements" means all documents, instruments and agreements evidencing the
Senior Obligations, including, without limitation, the Credit Agreement.
"Senior Obligations" means all indebtedness, obligations and liabilities, present or future, direct
or indirect, absolute or contingent, matured or not, at any time owing by the Borrower to the
Senior Creditor or remaining unpaid by the Borrower to the Senior Creditor under or in
connection with the Senior Loan Agreements.
"Subordinated Creditors" means Clarington, Ajax, Pickering and Belleville.
"Subordinated Loan Agreements" ineans any agreement entered into from time to time
between either Obligor and any of the Subordinated Creditors evidencing any Subordinated
Obligations, including, without limitation, the following:
(a)
thc first an~cnded and restated term promissory note in the principal amount of
$5,966,000 dated September 28, 200l and made by Connections in favour of
Clarington;
(b)
thc first amended and restated term proImssoO' note in the principal amount of
$5,588,000 dated September 28, 2001 and made by Connections ~n favour of
Belleville;
the first amended and restated term promlssou~ note in the principal alnount of
$14,060,000 dated September 28, 2001 and made by Connections m favour of
Ajax;
(d)
the first amended and restated term promissory note in the principal amount of
$17,974,000 dated September 28, 2001 and made by Connections in favour of
Pickering;
(e)
the first amended m~d restated term promissory note in the principal amount of
$2,206,000 dated September 28, 2001 and made by the Borrower In favour of
Belleville;
the first amended and restated term promissory note in the principal amount of
$5,550,000 dated September 28, 2001 and made by the Borrower m favour of
Ajax;
(g)
the first amended and restated tem~ promissory note in the principal amount of
$7,095,000 dated September 28, 2001 and made by the Borrower in favour of
Pickering; and
-4- 17
(h)
the first amended and restated tem~ promissory note in the principal amotmt of
$2,355,000 dated September 28. 2001 and made by the Borrower in favour of
Clarington.
"Subordinated Obligations" means all indebtedness, obligations and liabilities, present or
£uturc, direct or indirect, absolute or contingent, matured or not, at any time owing by either
Obligor to any of the Subordinated Creditors or remaining unpaid bt.' either Obligor to any of the
Subordinated Creditors under or in connection with thc Subordinated Loan Agreements, but
excluding any indebtedness in respect of municipal debentures of which Sl,380,550.16 of
principal is currently outstanding.
1.02 Other Usages. Rel'crenccs to "this agreement". "tile agreement", "hereof', "herein",
"hereto" and like references refer to this Inter-Creditor :\greement and not to any particular
,,\rticle, Section or other subdivision of this Inter-Creditor Agreement. Any references to "this
agreement". "thc agreemelW', "hereof'. "herein". "hereto" and like references refer to this Inter-
Creditor Agreement as amended, supplcmented or otherwise modified from time to time in
accordance with tile temls hereof.
1.03 Plural and Singular. \Vhcrc the context so requires, words importing the singular
number shall include the plural and vice versa.
1.04 tleadiugs. The division of this agreement into Articles, Sections and the insertion of
headings in this agreement arc Ibr conxcnicnce of rctbrencc only and shall not aftbct the
construction or inte~])rctation of this agreement.
1.1}5 Applicable Law. This agreement shall be governed by iliad construed and interpreted
in accordance xvith the laws of thc th'ox'inet of Ontario and the laws of Canada applicable
therein. Any legal action or proceeding with respect re this agreement may be brought in the
courts of the Province of Ontario and. by execution a~ad dcliveO, of this agreement, the parties
hereby accept lbr themselves and in r-cspect of their property, generally and unconditionally, the
non-exclusive jurisdiction of thc albrcsaid courts. Each [)art>' irrevocably consents to the service
of process out of any of the a['orcmentioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail. postage prepaid, to such part,,,, to the
address prescribed bv Section 6.10, such service to become effective five Business Days after
such mailing. Nothing herein shall limit thc right of any party to serve process in aiav rammer
permitted by law or to commence legal proceedings or otherwise proceed against any other party
in any other jurisdiction.
1.06 Time ofthe Essence. Time shall in all respects be of the essence of this agreement.
1.07 Paramountcy. In the event of any conflict or inconsistency between tile provisions of
this agreement and the provisions of any other agreement which is referred to herein or delivered
pursuant hereto, the provisions of this agreement shall prevail and be paramotmt.
1.08 No Rights Conferred on tile Obligors. Nothing in tills agreement shall be construed
as conferring any rights upon tile Obligors or any third party. Thc terms and conditions hereof
are and shall be tbr the sole and exclusive benefit of tiao Creditors.
ARTICLE 2
CONSENT
2.01 Consent of Creditors. Each Creditor consents to the incurring of the Obligations by
the Obligors and waives any Default that the incurring of the Obligations may have constituted
under the terms of the Loan Agreements.
ARTICLE 3
PRIORITY OF OBLIGATIONS
3.01 Priority of Obligations. Except as otherwise expressly provided in Section 3.03, the
Subordinated Obligations shall be and are hereby postponed and made subordinate in right of
payment to the prior payment in full in cash of the Senior Obligations.
3.02 Prohibited Payments to Subordinated Creditors. Except as otherwise expressly
provided in Section 3.03, the Obligors shall not make nor be entitled to make, and the
Subordinated Creditors shall not accept and shall not be entitled to accept, any payment or
prepayment of principal, interest or other amount under the Subordinated Loan Agreements,
whether in the tbrm of cash, securities or otherwise and whether by way of payment, set off or
otherwise.
3.03 Permitted Payments to the Subordinated Creditors. The Obligors may make, and
the Subordinated Creditors may receive, payments (but not prepayments) on account of interest
owing by the Obligors to the Subordinated Creditors in accordance ;vith the terms of the
Subordinated Loan Agreements at the maximum rate of 7.6 percent per mmum, provided no
Dethutt undcr the Credit Agreement exists at the time of such payment and no Default would
arise as a result et' such payment. Notwithstanding the foregoing, the Senior Creditor
acknowledges that certain prepayments of interest were previously made under the Subordinated
Loan Agreements.
3.04 Certain Covenants of Subordinated Creditors.
and shall not be entitled to:
The Subordinated Creditors shall not
(a)
accelerate the time for payment of any of the Subordinated Obligations or
otherwise enforce or take any action to enforce payment of all or any part of the
Subordinated Obligations, whether by way of set off or otherwise, unless and until
all indebtedness of the Borrower to the Senior Creditor under or in connection
with the Credit Agreement has become immediately due and payable pursuant to
thc terms thereof;
(b)
petition either of the Obligors into bankruptcy or initiate any similar proceeding
under any applicable Insolvency Legislation or, unless and until the Senior
Creditor or any other person files a petition in bankruptcy against the Borrower
and such petition is not stayed or dismissed within 60 days of such filing,
participate in such bankruptcy or any similar proceeding under any applicable
Insolvency Legislation. For certainty, in no event shall any Subordinated Creditor
vote in any proceedings under any applicable Insolvency Legislation except as
directed in writing by the Senior Creditor;
(c) amend, alter or otherwise modify tile Subordinated Loan Agreements; or
(d)
hold or obtain any security from the Obligors or any person on their behalf, Ibc
payment or performance of the Subordinated Obligations.
3.05 Distributions.
(al
To thc extent not otherv,'isc permitted under tile Credit Agreement. the Obligors
shall not make nor be entitled to make. and tile Subordinated Creditors shall not
accept nor be entitled to accept the payment of any dividends or other distribution
on or in respect ofallv shares in thc capital of the Obligors.
The Obligors shall not lnake nor bc entitled to make, ;md tile Subordinated
Creditors shall not accept nor be entitled to accept tile redemption, retraction,
purchase, retirement or ()ti]er acquisition, in whole or in part, of' any shares in the
capital of tile Obligors or any securities, instruments or contractual rights capable
of being converted into, exchanged or exercised Ibc shares in the capital of the
Obligors, including, without limitation, options, wan'ants, conversion or exchange
privileges and similar rights. Notwithstanding tile tbrcgoing, tile Subordinated
Creditors shall be entitled to convert their interest under the Subordinated Loan
Agreements as provided for therein.
3.06 Effect of Non-Compliance.
(al In the event anx prepas'n~ents or other payments arc made to or received by the
Subordinated Creditors in contravention o1' this agreement, thc Subordinated Creditors shall hold
such prepayments or payments in trust Ibc the Senior (freditor and shall not conmfingle such
proceeds with any of their own l-rinds and shall £orthwith pay such prepayments or payments to
tile Senior Creditor for application to t}~c pa?lent or prepayment of the Senior Obligations as the
Senior Creditor sees fit.
(b) Any action taken or thing done by any Subordinated Creditors in contravention
of this agreement shall be null and void and of no effect.
ARTICLE 4
RESIEDIES
4.01 Remedies. The Obligors and the Subordinated Creditors hereby agree that all
covenants, provisions and restrictions contained herein are necessaU- and fundamental in order to
establish the respective priorities of tile Creditors in connection with the Obligations, and that a
breach by any of tile Obligors or the Subordinated Creditors of any such covenant, provision or
restriction would result in damages to tile Senior Creditor that could not adequately be
compensated by moneta~ award. Accordingly, it is expressly agreed by the Obligors and the
Subordinated Creditors that in addition to all other remedies available to it including, without
limitation, any action for damages, the Senior Creditor shall bo entitled to the immediate remedy
of a restraining order, interim injunction, injunction or other form of i~uunctivc or other relief as
may be decreed or issued by any court of competent j uri sdiction to restrain or enjoin thc Obligors
or the Subordinated Creditors from breaching an', such cox chant, provision or restriction.
4.02 Default Notice. Each Creditor agrees to give written notice to each other Creditor
simultaneously with or immediately after the delivery to either of the Obligors of any xvritten
notice of a Demand or a Default. Failure of a Creditor to give notice as providcd in this Section
4.02 shall not affect thc priorities established or other agreements provided for herein, nor shall
such Creditor be liable for failure to give any such notice nor shall any such failure in any way
limit or derogate from the obligations of the other Creditors.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE SUBORDINATED CREDITORS
5.01 Representations and Warranties of the Subordinated Creditors. Each of the
Subordinated Creditors hereby represents and warrants to the Senior Creditor as follows and
acknowledges and confirms that the Senior Creditor is relying upon such representations and
wmTanties in extending credit to thc Borrower under the Senior Loan Agreements:
(a) Each Subordinated Creditor is a municipal corporation duly incorporated and
organized and validly subsisting under the laws of its jurisdiction of
incorporation. Each Subordinated Creditor has all requisite corporate capacity,
power and authority to enter into, and carry out the transactions contemplated by,
this agreement.
(b) All necessary action, corporate or otherxvise, has been taken to authorize the
execution, d~livcrv and performance of this agreement by each Subordinated
Creditor and each' Subordinated Creditor has duly executed and delivered this
agreement. This agreement is a legal, valid and binding obligation of the
Subordinated Creditor, enforceable against each Subordinated Creditor by the
Senior Creditor in accordance with its terms.
ARTICLE 6
MISCELLANEOUS
6.01 Consent of the Obligors. Each Obligor, by its execution hereof, hereby agrees to be
bound by, and shall act in accordance with, the terms, provisions and intent of this agreement.
6.02 Information Exchange. Each Creditor agrees to disclose to each other Creditor upon
reasonable request from time to time the aggregate amounts then owing by the Obligors to it and
whether it has any actual knowledge of any Default. Each Obligor hereby consents to each
Creditor providing the other Creditor with such information, financial or otherwise, regarding the
Obligors and the Creditors' respective Obligations as may be deemed advisable by the Creditors
from time to time.
6.03 Non-Impairment of the Senior Creditors' Rights. No right of the Senior Creditor to
enforce its rights hereunder shall at any time or in any way be prejudiced or impaired by any act
or failure to act on the part of the Obligors or by any act or failure to act by the Senior Creditor,
or by any non-compliance by the Obligors or the Subordinated Crcditors with the terms of this
agreement, regardless of any knowledge thereof which the Senior Creditor may have or be
otherwise charged with. Without the Subordinated Creditors' consent, the Senior Creditor may
extend, renew, modify, or increase the Senior Obligations or amend or waive the terms of the
Senior Loan Agreements and otherwise deal freely v,'ith the Borrower, all without affecting the
liabilities and obligations of the Obligors and the Subordinated Creditors hereunder and without
causing or constituting a breach of or default under any of the Subordinated Obligations.
6.04 V~'aivers and Amendments. No failure or delay by the Senior Creditor in exercising
any right hereunder shall operate as a waiver of' such right nor shall any single or partial exercise
of any power or right preclude its further exercise or the exercise of any other power or right.
Any term, covenant? condition or obligation of this agreement may only be amended with the
written consent of all of' the parties hereto or compliance therewith may only be waived (either
Generally or in a particular instance and either retroactively or prospectively) by the Senior
Creditor in writing and in any such event tile failure to observe, perlbnn or discharge any such
term, covenant, condition or obligation, so amended or xxaivcd {wtacther such amendment is
executed or such consent or waiver is given be2~rc or at-tot such failure), shall not be construed
as a breach of such temL covenant, condition or ohligatiou.
6.05 Severability. Each provision of this agreement is intended to be severable and it' any
provision is illegal, invalid or unenlbrceable, such illegality, unent'orceability or invalidity shall
not affect the validity o£this agreement or the remaining provisions.
6.06 Counterparts. This agreement may be executed in any number of counterparts, all of'
which shall be deemed to be an original and such counterparts taken together shall constitute one
agreement, and any of tiao parties hereto may execute this agreement by signing any such
co unterpart.
6.07 Further Assurances. Thc parties hereto agree to execute and deliver such further and
other documents and perlbrm and cause to bc pertbrmed such thrthcr and other acts and things as
may bc necessary or desirable in order to give full effect to this agreement and every part thereof.
No party to this agreement shall take any action whereby the priorities and rankings set out in
this agreement might be impaired or defeated.
6.08 Assignmeut. This agreement shall chute to tile benciSt of and shall be binding upon the
respective successors (including. without limitation, any trustee in bankruptcy or liquidator) and
permitted assigns of the parties hereto. Thc Subordinated Creditors shall not assign any of their
rights and obligations hereunder or under the Subordinated Loan Agreements. The rights and the
obligations of the Senior Creditor hereunder naav be assigned bv the Senior Creditor in whole or
in part without thc consent of the other parties hereto but only ira connection with or as part o£an
assignment by the Senior Creditor of its rights under tile Credit :\greement.
6.09 Entire Agreement. This agreement contains tile entire understanding of the parties
with respect to the priority of the Obligations and supersedes any prior' agreements, undertakings,
declarations, representations and understandings, both written and verbal, in respect of the
priority of the Obligations. There are lie restrictions, agreements, promises, warranties,
covenants or' undertakings relating to the priority of thc Obligations other than those set forth in
this agreement.
6.10 Notices. Except as otherwise provided herein, all notices and other communications
provided tbr herein shall be in writing and shall bc personally delivered to an officer or other
responsible employee of the addressee or sent by telefacsimile, charges prepaid, at or to the
applicable addresses or telefacsimile numbers, as the case may be, set out opposite the relevant
party's name below or at or to such other address or addresses, telefacsimile number or numbers
as any party hereto may from time to time designate to the other parties in such manner. Any
communication which is personally delivered as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business Day and such
delive~ was made during normal business hours of the recipient; otherwise, it shall be deemed
to have been validly and effectively given on the Business Day next following such date of
delivery. Any communication which is transmitted by telefacsimile as aforesaid shall be deemed
to have been validly and effectively given on the date of transmission if such date is a Business
Day and such transmission was made during normal business hours of the recipient; otherwise, it
shall be deemed to have been validly and effectively given on the Business Day next lbllowing
such date of transmission.
In thc case of the Senior Creditor:
The Bank of Nova Scotia
Corporate Banking
44 King Street West, 16th Floor
Toronto, Ontario M5H 1H1
Attention:
Telefax:
Director, Corporate Banking
(416) 933-7399
in the case of the Obligors:
Ve~Sdian Corporation/Veridian Connections Inc.
55 Taunton Road East
Ajax, Ontario
LIT 3V3
Attention: Vice President, Corporate
Secretary Treasurer
Telefax: (905) 619-0210
Afl;airs
and
In the case of Clarington:
The Corporation of the Municipality of Clarington
40 Temperance Street
Bowmanville, Ontario
L1C 3A6
Attention: Mayor
Telefax: (905) 623-5717
in the case of Ajax:
Thc Corporation of the Town of Ajax
65 Harwood Avenue South
Ajax, Ontario
L1S 2H9
Attention: Mayor
Telefax: (905) 683-1061
-lo- .9.3
In the case of Pickering:
The Corporation of the City of Pickering
1 The Esplanade
Pickering, Ontario
1.1V 3P4
Attention: Mayor
Telct'ax: (905) 420-9695
In the case of Belleville:
Tile Corporation et'the City of Belleville
459 Sidney Street
}3clteville, Ontario
KSN 25'7
Attention: Mayor
l'clefax: (013 ) 907-3209
6.11 Termination of Agreement. Tiffs agreement simli tcnninate and shall be of no further
tbrce or efl'cct upon the earlier to occur oi':
all Senior Obligations being repaid in full and all commitments ot' the Senior
Creditor under thc Senior Loan Documents having been terminated: and
(b) the written agrccmen! oi'the Senior Creditor to such efl'cct.
IN WITNESS ~'~'i:t I:REO[ the parties hereto have executed this agreement.
'FHE BANK OF NO\'A SCOTIA
Nallle:
Title:
Nanlo:
Title:
THE CORPORATION OF THE
MUNICi PALITY OF CLARINGTON
.lohn Mutton
Mayor
Patti Barrie
Clerk
-11 -
THE CORPORATION OF THE TOWN
OF AJAX
By:
By:
Steve Parish
Mayor
Marry de Rond
Clerk
THE CORPORATION OF THE CITY
OF PICKERING
By:
By:
Wayne Arthurs
Mayor
Bruce Taylor
Clerk
THE CORPORATION OF THE CITY
OF BELLEVILLE
By:
By:
George Zcgouras
Mayor
Jary Plamondon
Clerk
VERIDIAN CORPORATION
By:
By:
John Wiersma
President
James I Mason
Director
VERIDIAN CONNECTIONS INC.
John
Prcsidc~x
.l~_llll~S I. Nlkl. SOI1
Director
::()DBI,,\ ,I'CI)()(.'S ,I)OCS~1093447
RECOMMENDATION OF THE FINANCE COMMITTEE
DATE
MOVED BY
1. That Report CS 36-01, regarding Section 442/443 of the Municipal Act - Adjustment to
Taxes; be received
2. That write-offs of taxes due to change in assessment as provided under Section 442 of the
Municipal Act R.S.O. 1990 as amended, be approved; and
3. That appropriate officials of the City of Pickering be authorized to take the necessary actions
to give effect thereto.
PICKERING_
REPORT TO
COUNCIL
?7
FROM:
Gillis A. Paterson
Director, Corporate Scr-xices ok: Frcasurer
D.ATE: November 19, 200l
REPORTNUNIBER: (7S30-01
SL;BJIZCT: Section 442/443oFthcNIunicipalAct ,qdiustn~cnt to Taxes
RECOMMEND~TION:
1.
That Report CS 36-01 of the Director. ('orporatc Scm'ices & Treasurer be received:
The write-offs of taxes duc to chan2c ~n assessment as provided under Section 442 of thc
Municipal Act R.S.O. 1990 as anqcndcd, be approx ed: and.
The appropriate officials of thc C'itx off Picketing bc authorized to take the necessary actions
to give cl'l~ct thereto.
ORIGIN:
Director, Corporate Sera'ices & Trcasurcx
AL!THORITS':
The Municipal Act, R.S.O. 1990, as amended. Section 442
FINANCIAL IMPLICATIONS:
If approved, the write-off of taxes as contained in this report represents a gross cost of
$109,654.15, with a net cost to the city oI'approximatel> 522,569.56, the balance being charged
back to the Region of Durham and thc School Boards. Pickering's share of' the cost xviI1 be
charged to tile 2001 Current Budget allocation under General Government - Provision for
Uncollectable Taxes.
EXECUTIVE SUMMARY:
Not applicable
BACKGROUND:
Thc reduction of taxes due to fire, demolition, exemption, assessment change or error is provided
Ibr under Section 442 of the Municipal .&ct. \Vritc-oFi's o~'this nature are considered normal in
the conduct of busir~ess.
The write-oFlk tbr tile years 1997 to 2tt01 and the taxation loss will be charged to thc 2001
budget account 2134, Provision tbr L'ncollcctable Taxes.
The outstanding taxes for the years 1997 arc fbr business taxes however, these businesses arc no
longer operating. The majorits' el' the 1999 to 2001 tax x~ritc offs arc due to demolition or
Report to Council CS 36-01 Date:
Subject: Section 442/'443 of the Municipal Act - Adjustment to Taxes
November 19, 2001
Page
assessment error. There is one property' that has changed from regular taxable to exempt
because the property is now occupied by a religious organization that has resulted in a tax write-
offof$32,103.63.
ATTACHMENTS'
1. Section 442 ,Adjustment to Taxes dated November 19, 2001
Prepared By:
Susan Aitkenhea
Tax Analyst
Approved / Endorsed By:
-Gillis A. Paterson
Director, Corporate Set,rices & Treasurer
GAP:vw
Attachment
Recommended Ibc the consideration of Picketing
City' Council
71'he'as J. Quinn, Chief AdminiT{rative Officer
ATTACHMENT# J~TO REPORT# C~ ~ -O /
29¸
CITY OF PICKERING
APP #
NAME
SECTION 442 ADJUSTMENTS TO TAXES
November 2001
REASON FOR ADJUSTMENT YEAR CODE
ROLL NUMBER
AMOUNT
52/01
53101
01/01
06/01
71/00
65/01
82~00
68/01
40/01
42/01
43/01
45/01
46101
48/01
66/01
67/01
00/00
00/00
24101
23/01
15/01
50/01
00/00
37/01
19/01
35/01
36/01
47/01
44/01
41/01
10/01
11/01
17/01
02/01
28/01
29/01
31/01
30/01
18/01
04/01
56/01
57/01
27/01
13/01
51/01
01/01
20/01
12/01
49/01
62.01
69/01
70/01
32/01
58/01
59/01
73/01
76/01
77/01
80/01
71/01
54/01
HANNAFORD, RICHARD/MARY
HANNAFORD, RICHARD/MARY
CITY OF PICKERING
WHITE, CAROL ANN
MENDRYCKI, GERTRUD
GIGLIO, VITO & BEVERLEY
WORD OF TRUTH CHRISTIAN
WHITE CAROL ANN
METROPOLITAN TORONTO
METROPOLITAN TORONTO
METROPOLITAN TORONTO
METROPOLITAN TORONTO
METROPOLITAN TORONTO
STEINWALL STAN & DELORES
MOREIRA/MCNAIR
MOREIRA~MCNAIR
SHUN SUM INVEST INC
SHUN SUM INVEST INC
SADRY ARDAVIRAF/DHUN
MANFRED/CARSON
SYPHUS NORMA
MOLINARO, LUIGI/ANNA
WHITE CAROL ANN
BRASS PETER ERIC
ONTARIO REALTY CORP
ONTARIO REALTY CORP
CHRIST ALEXANDER
METROPOLITAN TORONTO
METROPOLITAN TORONTO
METROPOLITAN TORONTO
VALLEYTRAIL DEVELOPMENT
CITY OF PICKERING
CAMARA VlCKIE/EMANUEL
CITY OF PICKERING
CITY OF PICKERING
CITY OF PICKERING
CITY OF PICKERING
CITY OF PICKERING
CITY OF PICKERING
EGERTON-JONES lAN
CITY OF PICKERING
CITY OF PICKERING
CARRERA HOMES
CITY OF PICKERING
CITY OF PICKERING
CITY OF PICKERING
VICTORY KINGSGATE LTD
SlMAS MANUEL\BRAULIA
STEINWALL STAN & DELORES
LIBICH
BRANEY
BRANEY
WORD OF TRUTH CHRISTIAN
Marshall Homes
Marshall Homes
DE LA TORRE/COPP
SAGERMANN
OPPEDISANO
BELFRY
BRANEY
HANNAFORD
ASSESSMENT DEPT CLERICAL ERROR 1999 RTP
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
EXEMPT 2000 RTP
ASSESSMENT DEPT CLERICAL ERROR 2000 FTP
Trs
CTN TO CUN 2000 CTN
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
EXEMPT 2000 CTN
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
ASSESSMENT DEPT CLERICAL ERROR 1999 RTP
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
ASSESSMENT DEPT CLERICAL ERROR 1999 RTP
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
ASSESSMENT DEPT CLERICAL ERROR 1999 RTP
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
UNCOLLECTABLE BUS TAXES 1997 CTN
UNCOLLECTABLE BUS TAXES 1997 CTN
FIRE 2001 RTP
FIRE 2001 RTP
FIRE 2001 RTP
DEMOLITION 2001 RTS
ASSESSMENT DEPT CLERICAL ERROR 2001 RTP
ASSESSMENT DEPT CLERICAL ERROR 2001 RTP
NOW PAYMENT IN LiEU 2001 RTP
ASSESSMENT DEPT CLERICAL ERROR 2001 RPEP
ASSESSMENT DEPT CLERICAL ERROR 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
ASSESSMENT DEPT CLERICAL ERROR 2001 RTP
EXEMPT 2001 RTP
DEMOLITION 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
POOL REMOVAL 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
ROLL# DELETED 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
EXEMPT 2001 RTP
ROLL# DELETED 2001 RTP
ASSESSMENT DEPT CLERICAL ERROR 2001 RTP
DEMOLITION 2001 RTP
POOL REMOVAL 2001 RTS
ASSESSMENT DEPT CLERICAL ERROR 1999 RTP
ASSESSMENT DEPT CLERICAL ERROR 2000 RTP
EXEMPT 2001 CTN
DEMOLITION 2000 RTEP
DEMOLITION 2001 RTEP
DEMOLITION 2001 RTEP
INDOOR POOL CLOSED 2001 RTEP
DEMOLITION 2001 RTEP
POOL REMOVAL 2001 RTEP
CLERICAL ERROR 2001 RTEP
CLERICAL ERROR 2001 RTEP
010-039-09704
010-039-09704
010.039-09688
030.004-28500
020.022-05842
010-019-18710
020.022-07600
030-004-21800
030.009-16300
030.009-13300
030-009-13300
030-008-28300
030-008-28300
010-040-02900
010-021-02702
010-021-02702
020-017.09700.0025
020-017-09700-0030
020-017-10724
010-019-40583
010-026-55820
010-038-05800
030-004-21800
030-004-22410
030-004-28600
030-004-38700
030-007-28700
030-008-28300
030-009-13300
030-009-16300
020-017-01122
010-019-13200
010-019-18200
010-019-36484
010-019-36915
010.019-36916
010-019-36917
010.019-36918
030-020-18709
020-024-88100
020-025-50050
020-025-50500
010-038-00275
010-038-20520
010-039-09525
010-039-09688
010-039-11700
010-040-04405
010.041-02900
010-019.44398
010-039-09650
010-039-09650
020-022-07600
010.040.07900
010.040.07900
010-039-14000
010-026-13700
010-021-16000
030-020-09110
010-039-09650
010-039-09704
34.39
67.79
150.62
59.82
828.82
484.64
7,064.19
1,443.32
427.61
1,571.62
1,561.28
2,304.76
2,289.53
218.94
474.00
700.63
1,894.28
24.02
3,299.32
2,023.49
1,580.70
486.31
721.13
85.51
0.00
2,109.23
7,034.20
3,105.41
2,117.78
989.84
11,287.21
2,665.04
441.80
142.52
142.52
142.52
142.52
142.52
142.52
114.01
14.25
4,802.70
4,432.23
356.28
142.52
142.52
2,878.81
185.27
1,410.91
78.40
23.18
271.13
32,103.63
244.96
498.80
355.31
27.88
655.96
171.02
270.78
71.25
109,654.15
3O
RECOMMENDATION OF THE FINANCE COMMITTEE
DATE
MOVED BY
That Report CS 38-01 of the Director, Corporate Services & Treasurer, regarding Beaubien
Commission, be received for information.
PICKERIN_G
REPORT TO
COUNCIL
31
FROM'
GiIlis A. Paterson
Director, Corporate Serx ices & ']'rcasLn'cr
SUBJECT:
Beaubicn Commission
RECOMbiENDATION'
DATE: November 19,
REPORTNL'.",IBER: CS3S-O1
It is recommended that Report ('5 38-01 oFthe Director, Corporate Services & Treasurer
be received Ibr information.
ORiGiN:
Director, Corporate Services & Treasurc~-
AUTHORITY:
Not applicable
FINANCIAL IMPLICATIONS:
Not applicable
EXECUTIVE SUMMARY:
Not applicable
BACKGROLND
On October I 1. 2001 the Director, ('orporatc Services & Trcas~rer. as Chair of the Municipal
Finance Ofricers Association of Ontario made a submission to the Xlarcel Beaubien, M.P.P. for
Lambton-Kent-Middlesex. Attached Ibr your intWmation is a cop> of that submission.
As v,c were provided more time than was ISp~caJlx made axailablc, i took the opportunity to
expand upon thc presentation to coxcr those additional items of particular interest to Pickering.
These subjects included assessment of Ontario Pox; er Generation properties { Mr. Beaubicn was
aware of our appeal of' certain assessments): the legislated rate of assessment for power
generation Facilities of approximately S$6 per square metre which has remained unchanged For
many years; the Large industrial class: and. the assessment o~' mobile homes and watercraft used
as permanent or seasonal residences.
Report to Council 38-01
Subiect: Beaubien Commission
Date: November 19, 2001
Page 2
The attachment is self explanatory and is presented here for the information of the Committee
and Council. Many of the suggestions are an effort to streamline the assessment process and
minimize disruptions to municipalities and taxpayers.
ATTACHMENTS:
1. Presentation to Mr. Marcel Beaubien, M.P.P.
Prepared / Approved / Endorsed By:
'--'~illis A. Paterson
Director, Corporate Services 8: Treasurer
GAP
Attachment
Recommended for the consideration of Picketing
City Council
Thon~Ss J. Quinn, Chief Administrative Officer
PRESENTATION TO MR. MARCEL BEAUBIEN, M.P.P.
In the Final Report submitted bv Mr. Beaubien to the Honourable James Ftaherty, Minister of Finance, on April 2, 2001,
a number of issues were identi~ed tbr further review. On July 18, 2001 the Finance Minister announced an extension
of the appointment of Mr. Beaubien ms a special advisor to continue a review of the regulation that defines property.'
classes under tile assessment system. '1 o assist in this work, Mr. Bcaubien invited N",ArOA, and other interested parties,
to submit proposals and recommendations.
Although many of the issues identified for further review are technical in nature, we nevertheless feel that there are
general principles or observations that should guide the review of these issues. We identify these iii Part 1. Part 2
consists ora brief discussion on the specific issues identified in tile original report as needing further review. Part 3
identifies a number of issues that have conic to our attention but were not explicitly identified in tim origina} Beaubien
Report.
PART 1: Principles or Observations
Io Understand the Tax Shij[s' Produced by An), New Recommendations
Changes to assessment practices or property class definitions will result in tax shifts among property classes.
Tax shifts associated with proposals must be clearly understood by the Province before they become
recommendations. Recommendations should be accompanied by a tax impact analysis that identifies affected
municipalities and the degree of inter-class and/or inter-municipal tax shifting resulting from the
recommendations.
Implement Change on a 'Go Forward"Basis Only
Any recommendations put fbrxvard that affect assessment or tax policy should be implemented for the 2003
tax year. In the past, too many tax changes have been made part way through the year. This leads to delays
m billing and confusion for ratcpayers and municipal councils and staff. The Province should state, as a
fundamental principle, that it will no longer permit retroactive changes to the property tax system.
3. Avoid Changing Tax Policy Through the Assessment System
The Province should be cautious about recommendations that assist narrowly defined groups of ratepayers.
Special tax treatment for special interest groups will only encourage fragmentation of the Ontario Fair
Assessment System. Band aid approaches might bring tax relief to some groups but at the expense of
encouraging others to seek special treatment and ultimately undermining the tax system altogether. Tax
reductions should take place through policy tools available to municipalities. The Province should avoid the
temptation to provide tax relief to special groups by altering assessment definitions or valuation techniques
unless a very sound case can be made that existing definitions and/or valuation techniques are inadequate.
4. Maintain Local Accountabilio' fi~r Tax' Polio'
Nothing should be done to reduce the level of local responsibility for local tax policy. Proposals that call for
the elimination of local control, such as mandatory tax ratio reducuons, are inconsistent with he principles
captured in current property tax legislation and should be rejected.
Promote Consistent Application of Policies Province- Wide
Every effort should be made to encourage consistent application of valuation techniques and practices among
the field offices of the Municipal Property Assessment Corporation.
Do Not Provide Tax Relief Based on a '~enefits Received" Test
Tax relief should not be considered simply because ratepayers feel that they do not receive services
commensurate with the taxes paid. The property tax is a general purpose tax for financing the full range of
municipal services and is not a user charge. While MFOA supports reductions in taxation for business classes
in many municipalities, it does not support reductions for property owners simply on the basis that their taxes
are high relative to the services they consume.
PART 2: Issues Identified in the Original Beaubien Report
1o Industrial Property Class
We understand that some property owners have questioned why their property is in the industrial class
when it used to be assessed as commercial. These include groups such as denturists and software
developers. (Paragraph 6(I)1 ii of O. Reg. 282/98 states that industrial properties include lands used
for "research or development in connection with manufacturing... ').
It is our understanding that the definition of industrial property is broader than it once was and there
may be a case for revisiting the definition in light of what was originally intended to be captured.
We also understand that there is a "scale" issues in the industrial class, ttome hobby shops, for
example, can be classified as industrial where something is being produced (e.g. crafts such as bird
feeders, pottery). Prior to tax reform, these types of properties were assigned to a tax class based on
the predominant use of the property. For example, a residential property with a garage that is
equipped with a kiln for making pottery would have been classified as fully residential and subject
to a residential tax rate because the predominant use was residential. Under tax reform, properties
with multiple uses have their various uses assigned to the appropriate tax class. Under this approach,
the pottery shop in the garage would be classified as industrial (manufacture of pottery items) and the
rest of the house classed as residential. The industrial CVA would generally attract a higher tax rate
such that the overall taxation on the property would be higher, all other things being equal. Generally,
this approach produces greater equity in that properties with similar uses pay the same tax rates rather
than the tax rate associated with the predominant use.
Position/Concern:
Any change that removes small scale properties from the industrial class has the
potential to adversely affect the tax base of municipalities. Such a change should
only be adopted ifa detailed tax impact analysis suggests that tax shifting would
have minor impacts on other property classes.
2. Small Business Property Class
For a variety of reasons, many municipal councils would have liked to be able to offer tax relief to
truly small scale commercial enterprises. None of the current tax tools allows municipalities to target
small business for special tax treatment. Efforts have been made to define a small business class to
permit targeting of tax relief, but definitional problems have been significant. Definitions of small
o
business that rely on square footage, for example, have the problem that some small properties might
actually be part ora very large business (e.g. local branch ora bank).
MFOA is supportive ofeflbrts to give municipalities greater options related to the taxation of small
business. However, we are also aware that, to date, etI0rts on this issues have not resulted m
consensus positions. In addition, with four possible commercial property classes now (i.e.
commercial, shopping, office, parking), MFOA is concerned about further fragmenting the class. It
is useful to remember that prior to tax refbrm, all commercial properties were subject to the same tax
rate. Overly fragmenting the commercial class into more subclasses will take us further from a
keystone principle of taxation that all properties in the same cia,ss pay tile same tax. Furthermore, the
willingness to fragment the class x~ill doubtless lead to further requests to create additional classes
for special properties (e.g. golf course class, heritage class, etc.).
Finally, it should be recognized that lowering taxes for one commercial sub-class results in higher
taxes for the other commercial sub-classes or for properties in other classes. Such reductions merely
redistribute the tax burden, they do not reduce the municipality's overall levy requirements.
Position~Concern:
MFOA feels that caution is needed when considering the creation of new classes.
We could not fully endorse the creation ora small business class without knowing
how such a class would be defined.
Farm Lands and Buildings
it is our understanding that the main issue being raised with Mr. Beaubien on this matter deals with
the tax treatment ofancillao' buildings on a farm. Ifa farmer has an apple orchard, and has a building
to store apples, this is integral to the operation of the farm and all elements of the property are
classified as farm property. Assessors refer to this tls value retention. However, ifa building is being
used to process what is grown into a sellable product (e.g. produce cider, pies, wine, etc.), then this
is what assessors call value added, and such buildings will be assessed as industrial.
Position/Concern:
In cases where there is a "value added" activity, it is appropriate to classify affected
buildings as industrial and tax them accordingly.
Ifa farmer leases storage to other framers, such facilities are classed as commercial since they are not
integral to the farm operation of the owner. This raises problems for farm co-ops where storage
facilities are being provided by the co-op and classified as commercial, if own site storage would be
taxed as farmland, then the assessment system should not discriminate against cooperative ventures
by taxing co-op storage facilities as commercial enterprises.
Position/Concern:
Farm co-ops that provide storage space for legitimate farm purposes should be
classified as farmland.
Managed Forests
We understand that there are a number of administrative issues with the Ministry of Natural Resources
regarding the identification and administration of lands designated as managed forests. In addition,
there are issues related to tile x~ay that these lands are assessed when forests are near bodies of water.
Forests near bodies of water tend to have higher valuations.
3
To our knowledge, no suggestion has been made that managed forests be exempt in the same way that
conservation lands are.
Position/Concern:
MFOA would strongly oppose any attempt to exempt managed forests from
taxation.
o
Linear Properties
a. Pipeline
In the case of pipelines, the CVA is established by applying a fixed value to each section of pipe
according to the size of the pipe. The tax rate for the class is determined in the same fashion that all
other class tax rates are determined, by using the municipality's overall levy requirements, its total
weighted CVA and its class tax ratios.
In 2000, there was confusion among field offices about the appropriate rates to apply to pipelines to
determine their CVA. In some cases, pipeline CVAs changed quite dramatically. We understand that
the industry is seeking clarification on the proper approach and greater predictability for their tax
burdens in the future.
Position~Concern:
Generally, the AMO/MFOA suppoms the objective of consistent assessment
practices and predictability of tax burdens. However, any changes to current
assessment practices for pipelines should be the focus of further consultation with
affected parties and should be accompanied by a tax impact report.
Position/Concern:
Railroad and Hydro Rights of Way
Under tax reform, railroad and hydro fights of way are to be taxed by applying standardized rates in
nine geographic areas to the area of the right of way. The standardized tax rates were calculated to
yield the same tax that the fragmented system of rates previously produced. Across a broad
geographic area, some municipalities are experiencing tax revenue losses (they had high rates that are
moving to a lower average rate for their area) and some are experiencing tax revenue gains (they had
low rates that are moving to a higher average rate for their area). All municipalities were moving
toward the standardized rate over time. All municipalities are supposed to be at the standard rate by
2005.
In 2001, the Province has frozen rates for municipalities where rates were increasing but allowed rates
to fall for those moving down to the average rate. The Province has undertaken to compensate
municipalities that were moving to higher rates for any tax losses. It is not clear what impact this
change will have on achieving the prescribed 2005 standardized rates.
MFOA supports the move to standardized rates and opposes any move to reduce
taxes paid by railroads in the nine geographic areas.
Co
Cable
Abandoned pipelines are not subject to taxation. In some cases, cable lines are being run through
abandoned pipelines and no tax is being paid.
37
o
o
ge
Position~Concern:
If cable or Internet infrastructure is run through pipelines, these pipes should be
assessed and taxed. Consultation is required to determine the appropriate value to
be attached to the pipelines in this case.
Hotels
Hotel owners have raised issues related to the income approach used by the assessment corporation
in determining values for hotels. Precise details of the issues involved are not known at this time.
Obviously, assessment methodologies favoured by hotel owners would lead to lower hotel
assessments. MFOA ,,,,'ill not comment on the appropriateness of current assessment methodologies
in accurately assessing hotels. However. MFOA is concerned about the potential impacts of any
change to the way that hotels are assessed.
Position~Concern:
No changes should be made to hotel assessments, or to the assessments of other
properties in the service sector, without detailed tax impact analysis.
Rooming Houses, Co-operative and Co-ownership Buildings
The regulation currently uses the term "self contained units" in numerous points in section 3 which
sets out the definition of residential/fhrm property. This reference to self-contained units has created
a degree of confusion with regard to some types of specialized residential buildings such as rooming
houses and co-operatives and co-ox~nership buildings. This issues is mainly a concern in Toronto.
Position/Concern:
MFOA supports an5 necessaD~ change to the definition of tile residential/farm
property' class to ensure that the full range of living arrangemenks is captured as
residential including rooming housings and co-operative buildings.
Vacant Lands with High-Density Residential Zoning
Vacant land that is zoned as high-density residential is often coded on the roll as multi-residential,
which carries a higher tax rate than the residential class. Developers argue that m most municipalities,
high-density residential can include condominiums and townhouses, both of which are included in
the residential/farm class and not the multi-residential class.
tn many cases, tile exact nature of tile future buildings is not known. Tile argument from developers
is that these lands should be taxed at the lower residential rate since condominiums and townhouses
are much more commonly developed than multi-residential rental units. At the very least, developers
say, the lower "new multi-residential" rate should apply in municipalities that have adopted it.
Position~Concern:
MFOA supporks current approaches with respect to file coding of vacant lands with
high density residential uses.
Multi-residential Property Class
Owners of multi-residential units have been asking the government for mandatory reductions in tax
ratios for the multi-residential class. A key principle of tax reform was that municipalities were to
have authority over tax ratio adjustments. We continue to support the notion that tax ration reductions
for multi-residential properties should continue to be a matter of local discretion.
Tax Relief for the multi-residential class to date:
10.
The education tax rate for the multi-residential class is equal to the rate for the residential
class. This led to a reduction in education taxation for multi-residential properties.
Some municipalities have created a "new multi-residential" class with lower tax ratios for
new multi-residential buildings for up to 25 years. This is often coupled with a phased
approach to lowering ratios for existing multi-residential buildings so that the ratios for new
and old buildings are the same at the end of the 25 year phase-in period.
The application of the "levy restriction" in the capping legislation means that a municipality
cannot pass on a tax increase to the multi-residential class if the tax ratio for that class is
greater than 2.7400. Ifa municipality has a tax increase, and the multi-residential class tax
ratio is greater than 2.7400, this is equivalent to a mandatory reduction in the ratio for that
class under existing legislation.
Position/Concern:
MFOA strongly supports the notion of municipal control over the movement of tax
ratios for all classes, including the multi-residential class.
Lands
Being Farmed Pending Development
· Mr. Beaubien will "evaluate the effectiveness of the current structure of the sub-classes of farmland
pending development." The precise nature of the issues related to farmland pending development are
not clear.
· Currently, there are two sub-classes, which are taxed at lower rates, for farmland pending
development in each of four property classes: residential/farmland; multi-residential; commercial; and
industrial. The lower tax rates apply to farmland in the early stages of development. The property
is not taxed at the full class rate until it is developed and occupied. This confers an advantage on the
developer who does not have to pay the full class tax rate while the lands are being developed or
while approvals are being obtained.
· At the moment, as property passes from one stage of development to another, the taxes on the
property increase as a result of a higher CVA as well as the application of a higher tax rate. The
higher CVA represents the greater value attached to the property as a result of its more advanced state
of development.
The current approach to farmland pending development confers significant benefits on developers
who do not face the full class tax rate nor the full CVA on the property until it is developed.
Position/Concern: The current treatment of farmland pending development be continued.
11.
Environmental Protection
· Mr. Beaubicn will review the tax treatment of lands designed to protect and rehabilitate the
environment.
· Generally, municipalities are cautious about proposals to reduce taxes for specialized properties since
the general erosion of the base that this can create can be quite significant. Such erosion merely
causes other classes to absorb more of the tax burden. However, in the case of lands that require
environmental rehabilitation, tax concessions may well contribute to the restoration of significant
6
39
13.
tracts of urban land that can result in increased tax revenues and possibly the elimination of urban
blight and stimulation of local employment. These are laudable goals.
Bill 56, the Brown~fields Statute Law,4mendment Act, received second reading on June 28, 2001.
The bill gives powers to municipalities to pass by-laws providing for municipal tax assistance to assist
with the environmental rehabilitation of properties that do not meet the standards prescribed fbr filing
a record of site condition in the Environmental Site Registry in accordance with the amendments
made to the Environmental Protection Act by Part II of the Bill. With the approval of the Minister
of Finance, these by-taws may also apply to education taxes.
Position~Concern:
Municipalities should have discretion to provide tax assistance to properties that
require environmental rehabilitation.
With respect to environmentally sensitive lands, the tax treatment depends on the situation.
Conservation authority lands are exempt from taxation. }towever, no one would suggest that ail the
lands embraced by the Oak Ridges Moraine should be exempt or taxed at a lower rate. Most,
however, would agree to more stringent development controls for such lands. Them are many policy
levers available to protect environmentally sensitive lands and any attempt to alter the property tax
system in this regard should be subjected to further consultation and economic impact analysis before
being enshrined in law.
Position/Concern:
Any changes to the tax treatment of environmentally sensitive lands should be the
subject of separate consultation process and economic impact studies.
Technical and Procedural Issues
Mr. Beaubien proposes to continue to review O. Reg. 282/98 to ensure that:
all provincial policy objectives are being met;
ambiguities are clarified; and,
inconsistencies are rectified.
Position/Concern:
The Province should ensure that O. Reg 282/98 meets objectives a, b and c above.
Part 3:
ISSUES NOT IDENTIFIED IN TIlE BEAUBIEN REPORT
1. Mobile Homes
Some seasonal campgrounds in Ontario contain mobile homes that serve as full time residential units
but are not currently assessed. Mobile homes in one jurisdiction might be assessed while those in
another are not.
Position/Concern:
Mobile honles used as full time residential units should be assessed and taxed at the
residential/farm rate. The Municipal Property Assessment Corporation should
ensure that rules tbr assessing mobile homes should be applied consistently across
the Province,
4
o
o
Boats
A float house is a house-like structure built on a floating foundation that is not generally intended for
use in navigation. It is essentially a floating version of the mobile home issue identified above.
Currently, marinas pay taxes for the overall site as a commercial enterprise. Where a boat or float
house is used as a residential home for people on a year round basis, there is a case for having a
separate assessment as a residential unit.
Position/Concern:
The assessment and taxation of boats and float houses should be reviewed with a
view to taxing such properties as residential units where there is evidence that they
are occupied on a year round basis.
Commercial Uses on School Board Lands
In some cases, School Board have permitted commemial activity to take place on property owned by
a Local Board of Education. In Vaughan, for profit daycare facilities located on School Board
property have not been assessed. Another municipality has identified a fast food outlet on exempt
School Board lands that is also not assessed and not taxed.
In the OPAC quarterly Newsletter of April 2000, OPAC identified the issue of"the assessment of day
care centres attached to schools" as a matter requiring legislative/regulatory change.
Position/Concern:
For profit activities taking place on exempt School Board lands should be assessed
as commercial and taxed appropriately.
Mine Tailings
Mining companies obtain the right to mine lands from all levels of government. One of the conditions
attached to the right to mine is that the company must develop a rehabilitation plan to dispose of any
waste materials. In many cases mining companies have built large containment structures to store
mine tailings costing millions of dollars. Under the Assessment Act, these structures are assessable
and taxable. The assessing authority has historically treated mi¢e tailing sites as vacant land with
little or no assessment. In some cases, the mining operations have ceased and the mine tailing
structures are all that remain of the mine operation and municipalities in this situation face financial
hardship from lost tax revenues.
Position/Concerns:
The assessment of structures built for the storage of mine tailings should be
reviewed. Nominal assessments on structures costing millions of dollars seems
inappropriate and unduly penalizes municipalities where mining operations have
ceased.
RECOMMENDATION OF THE FINANCE COMMITTEE
DATE
MOVED BY
That Report CS 39-01 of the Director, Corporate Services & Treasurer, regarding 2002
Interim Spending Authority, be received; and
That the 2002 Interim Operating Expenditures be approved at 50% of the prior years' budget
including exceptions as contained in Attachment 1, pending approval of the formal 2002
Current Budgets by Council; and
That the appropriate City of Picketing officials be authorized to take the necessary actions to
give effect thereto.
41_
47
PICKERING
REPORT TO
COUNCIL
FROM:
Gillis A. Paterson
Director, Corporate Services & Treasurer
DATE: November 19, 2001
REPORT NUMBER: CS 39-01
SUBJECT: 2002 interim Spending Authority
RECOMMENDATION:
1. It is recommended tbat Report CS 39-01 of the Director, Corporate Services & Treasurer
be receive&
2. The 2002 Interim Operating Expenditures be approved at 50% of the prior years' budget
including exccptions as contained in Attachment 1, pending approval of the formal 2002
Current Budgets by Council7 and,
3. The appropriate City of Picketing officials be authorized to take the necessary actions to
give effect thereto.
ORIGIN:
Director, Corporate Services & Treasurer
AUTHORITY:
The Municipal Act, RSO 1990, as amended
FINANCIAL IMPLICATIONS:
Adoption of interim current operating appropriations does not constitute approval of a formal
budget but rather is required to provide funding authorization for the payment of salaries and
wages and such other accounts as may be necessary for normal day-to-day operations of the City.
At the conclusion of the Budget process, all interim current operating appropriations are nullified
and replaced with the detail appropriations as approved by Council.
EXECUTIVE SUMMARY:
Not applicable
BACKGROUND:
Each year, pending approval by City Council of the annual Operating Budget, it is necessary to
provide expenditure authority respecting the payment of accounts for the interim period from
January 1 until the Budgets are adopted by Council. Such authority is in the form of interim
current operating appropriations to meet estimated expense requirements of the individual
departments, agencies and boards.
Report to Council 39-01
Subject: 2002 Interim Spending Authority
Date: November 19, 2001
Page 2
The 2001 Current budget was considered by Council in Max', 2001. Fiscal year 2002 may prove
to be as challenging as 2000 and or 2( t 1 due mainly to Bill 14() and its impact on taxation.
Thcrctbrc. we are seeking approxal to provide lbr interim spending authority Ibr up to the first
six months of 2002 or xvt, eh COUNCIl. APPROVES THE 2002 BUDGET, whichever occurs
first.
At the conclusion of the budget process, all interim appropriations are nullified and replaced xvittn
tile detail appropriations as approx ed by Council.
Appropriate adjustments have been made in the departmental appropriations listed as Attachment
1 where tile spending patterns indicates that something,4 greater than 012's will be necessary for
the f'irst six months of 2002 such as snoxv clearing (Roads). The Interim Appropriations as listed
are based upon the Former administratix e structure of tile City and being the basis upon which the
2001 Budget was presented and approved.
Any capital projects proposed prior to the approval of 21)1)2 Capital budget v, ill require specific
approval by Council.
M T
.ATTACH, ENTS:
I. 2002 Interinl Appropriations Ibr Curt'tnt Operating Expenditures
Prepared By:
CaLyn Kong
Senior Financial Analyst
GAP:vw
Attachment
Copy:
Chief Administrative Officer
Department Heads
Chief Executive Officer, Librarx
Prepared Approxeci Endorsed By:
------~-- /, 5/ 5:-'~' -
'Gillis A. Paterson
Director. Co~orate Se~'ices & Treasurer
Recommended lbr tile consideration of Picketing
City Council
Tho~(J. Quinn,[~hief A~inis~(>f~er
Account
2111
2113
2121
2122
2124
2125
2127
2129
2132
2133
2139
2141
2191
2192
2196
2197
2198
2199
2220
2230
2240
2241
2290
2293
2315
2320
2325
2350
2360
2430
2572
2610
2611
2612
2613
2710
2711
2712
2713
2715
2718
2719
2731
2733
2735
2743
2744
2745
ATTACHMENT# f TOP, EPOi~l-#..~._~5 Dc/-C)l
CITY OF PICKERING
2002 INTERIM CURRENT OPERATING APPROPRIATIONS
Department
2002
2001 (Jan. I - June 30)
Approved INTERIM
Bud_clet APPROPRIATION
Mayor
Council
Chief Administrative Officer
Clerk
Civic Complex
Legal Services
Finance
Customer Care Centre
City Property Maintenance
Supply and Services
Human Resources
Safety & Training
Elections
Economic Development
Information System
City/Corporate Efficiency & Exp.
Microfiching
Print Shop/Mail Room
By-Law
Crossing Guards
Fire Protection
Emergency Operations Control
Public Works
Animal Control
Municipal Garage
Roads
Street Lights
Transit
Transit - Specialized Services
Solid Waste
Senior Citizens Centre
Planning Development Admin.
Planning
Building Services
Development Control
Parks & Facilities-Admin.
Culture & Recreation -Admin.
C.S. & F.- Programs
C.S. & F. - Dunbarton Pool
C.S. & F.- Don Beer Arena
C.S. & F. - Parks
C.S. & F. - Community Centres
Rec. Complex - Central Core
Recreation Complex - Pool
Recreation Complex - Arenas
L.A.C.A.C.
Museum
Libraries
Various - General Government
TOTAL
$141,545
353,460
3OO ,43O
377,262
340,214
320,266
1,315,340
114,667
323,154
308,360
516,196
82,300
0
421,145
546,624
278,451
15,000
358,991
398,633
240,000
7,358,354
8,553
865,062
249,100
126,000
3,111,275
506,000
3,329,343
580,752
1,430,557
175,976
574,497
945,217
574,617
403,862
298,113
648,583
1,414,948
224,006
568,294
1,866,262
352,349
1,637,388
572,634
566,784
10,150
302,218
3,084,844
4,537,377
43,075,153
$70,773
176,730
150,215
188,631
170,107
160,133
657,670
57,334
161,577
154,180
258,098
41,150
0
210 573
273 312
139 225
7 500
179 496
199 317
120 000
3,679,176
4,277
432,531
124,550
63,000
1,897,877
253,000
1,664,671
290,376
715,278
87,988
287,249
472,609
287,309
201,931
149,057
324 292
707 473
112 003
284 147
933 130
176 175
818 694
286,317
283,392
5,075
151,109
1,542,421
1,926,448
21,537,576
45
RECOMMENDATION OF THE FINANCE COMMITTEE
DATE
MOVED BY
1. That Report CS 40-01 of the Director. Corporate Services & Treasurer, regarding 2002
Temporary Borrowing By-law, be received; and
That the temporary borrowing limit to meet 2002 current expenditures pending receipt of
taxes and other revenues be established at $21,000,000 for the period January 1, 2002 to
September 30, 2002 inclusive, and S10,000,000 thereafter until December 31, 2002; and
3. That the temporary borrowing limit for capital purposes for 2002 be established at
$12,000,000; and
4. That the attached By-law be read three times and passed; and
5. That the appropriate officials of the Ciw of Pickering be authorized to take the necessary
actions to give effect thereto.
PICKERING
REPORT TO
COUNCIL
FROM:
Gillis A. Paterson
Director, Corporate Sen, ices & Treasurer
DATE: November 19, 2001
REPORT NUMBER: CS 40-01
SUBJECT: 2002 Tempora~ Borrowing By-Law
RECOM M ENDATION:
1. It is recommended that Report CS 40-01 of the Director, Corporate Services &Trcasurer be
received;
2. The temporary borrowing limit to meet 2002 current expenditures pending receipt of taxes
and other revenues bc established at $21,000,000 for the period January, 1,2002 to September
,-, 7'3 '~.
_~0, 2002 inclusive, and $10,000,000 thereafter until December 31 _00~,,
3. Thc temporary borroxving limit for capital purposes for 2002 be established at Sl 2,000,000;
4. The attached By-Law bc read three times and passed; and,
5. The appropriate officials or' thc City of Pickering be authorized to take the necessary actions
to give effect thereto.
ORIGIN:
Director, Corporate Services & Treasurer
AUTHORITY:
The Municipal Act, RSO 1990. as amended, Section 187 and 188
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 lbr how long. An estimate will be provided at a later date in the
2002 Current Budget. In past years no external temporary borrowings have been necessary,
however, there have been internal borrowings. For current purposes, the $18 million limit for
2001 has been increased to $21 million for 2002 and the $9 million has been increased to $10
million. The limit for Capital purposes has been maintained as in last year at S12 million. This
may have to be adjusted once 2002 Capital budget has been approved.
EXECUTIVE SUMMARY:
Not applicable
Report to Council CS 40-01
Subject: 2001 TemperaU, Borrovdng Bv-La;v
Date: November 19, 2001
Page
AC KGROL ND:
The borrowing of funds Ibc CUtTent and capital F)[li~OSCS may become necessan' during the
nomaal course of operations durim$ 2 )~;2 L'nder thc provisions oFSection 187 ortho Municipal
Act, R.S.O. 1990, (the Act), thc Council ortho City of Picketing may pass a by-law to provide
For the temporary bedewing of lkmds to meet cum-em operating expenditures pending receipt of
taxes and other revenues of the City. ['nder Section I SS of thc Act the Co~oration may also
undc~qake temperaU, bo~owings, under individual prqjcct approvals. Ibc capital projects pending
permanent financing, including the issuance of debentures by thc Re,ion.
Curt'cat Bud2et Financin,a:
Thc amount of such temporao,' borroxving outstanding at any one time is generally limited by the
Act, unless otherwise approved by the Ontario Municipal Board, to 50 per cent of thc estimated
annual revenues from January 1 to September 30 and to 25 per cent thereafter.
Until the current year's estimates arc adopted, the limitation may bc calculated upon the revenues
set tbrth in the estimates adopted Ibc thc next preceding >car. Based upon thc 2001 estimates of
thc Corporation, the allowable lcxcl of tclnporaU botToxxing outstanding under legislation is
estimated al 521,000,000 fl'Olll J allU:li-; 1 to September 3~) and S 1 ~L< ~()~ ).{){ )~) tlnereallcr.
The requested S21,()0(L()()O should bo SLlI'i]CiOnt to meet thc CUtTCnt expenditures of the City until
the levies Ibc 2002 are reccixcd, h is hoped that this amount will provide a sufficient level of
temporary bo~owings taking into accoumt the potential cFt~cts of Taxation Legislation and its
impact on cash floxvs.
Capital Budget Financim2:
Borrowing for capital purposes under Section 188 of the Act can only be undertaken on projects
approved by Council and will calx be undertaken in thc event that sufficient l~nds are not
available at the time they arc required. Recommendation 2 provides the authority Ibc the
Treasurer to obtain additional temporary interim financing (internal or extemaI) for capital
projects approved by Council. Tho S l2 million capital bedewing limit would provide sufficient
funds to cover prior years and estimated 2002 capital expenditures.
ATTACHMENTS:
1. Temporary Borrowing Bv-Laxv
Prepared By:
Approved Endorsed By:
Caryn Kong
Senior Financial :\nalvst
GAP:vw
Gillis A. Paterson,
Director, Corporate Services & Treasurer
Recommended ibc the consideration of Pickerin,,
City Council
T1~2~5 ~Ouinn~Chicf ,~nainis~c OI'~er
47
~TTACHMENT# t~ TOREPOR,T# Q<~ ¥0-01
THE CORPORATION OF THE CITY OF PICKERiNG
BY-LAW NO.
Being a by-law to authorize the temporary
bon'owing of moneys to meet the current and
capital expenditures of the City of Pickering for
the year 2002.
WHEREAS Section 187 of the Municipal Act provides that the Council of the City of Pickering
may by by-law authorize the Mayor and Treasurer of the Municipality to bon'ow from time to
time by way of promissory note such sums as the Council may deem necessary to meet, until the
taxes tbr the current vear are collected and other revenues are received, the cun-ent expenditures
of the Municipality f~r the year, including the amounts required for principal and interest falling
due within the year upon any debt of the Municipality, and the sums required by law to be
provided by the Council for any local board of the Municipality; and,
WHEREAS Section 187(2) tirnits the total of such borroxvings to not exceeding 50 per cent of
the estimated ammal revenues fi'om January 1, 2002 to September 30, 2002 and 25 per cent
thereafter; and,
WHEREAS it is deemed necessary by the said Council to borrow the sum of twenty-one million
dollars ($21,000.000) to meet, until the taxes for the current year are received, the current
expenditures of the Municipality for the year 2002, including the amounts and sums aforesaid;
ailS,
WHEREAS the said sum of twenty-one million dollars ($21,000,000) plus any similar
borrowings that have not been repaid, is less thml 50 per cent of the total amount of the estimated
revenues of the Municipality from January 1 to September 30 as set forth in the estimates
adopted by the said Council for the year 2001 exclusive of revenues derivable from the sale of
assets, borrowings or issues of debentures or from a surplus including arrears of levies and
$10,000,000 is less than 25 per cent thereafter; and,
WHEREAS Section 188 of the Municipal Act 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 said Council to borrow the sum of twelve million
dollars ($12,000,000) to meet the capital expenditures approved by Council.
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF
PICKER[NG HEREBY ENACTS AS FOLLOWS:
The Mayor and Treasurer of the City of Pickering be and they are hereby authorized to
borrow from time to time by way of promissory notes a sum or sums not exceeding
twenty-one million dollars ($21,000,000) to meet, until the levies for the year 2002 are
received, the current expenditures of the Municipality for such year, including the
amounts required for principal and interest falling due within the year upon any debt of
the Municipality for the period January 1, 2002 to September 30, 2002 inclusive and
$10,000,000 thereafter until December 31, 2002.
Tt~e Mayor and Treasm'er of' tile ('ltv oC Picketing be a~d they are hereby authorized to
borrow from time to time by way of promissou' ~aotes a sum or sums not exceeding in all the
stlm of twelve mil lio~ ctolla~-s ($12,1)()(),t)()()) to meet tl~e capital expenditures as approved by
Council, of thc Municit>ality mcluditlg tt~e amaotmts required I-or principal and interest.
Any promissoI?~ llOleS made [mcic~' tt~c a[ltt~oritv oC tI~is Bv-L~w st~atl 13e sealed and signed in
accordance with tile provisio~as of tt~c Nlumcipal ,~Xct and may be countersigned in writing by
tile Manager, AccoLmtmg Services of tile ('orporatio~ i~ a~ccorda~lce xvitl~ thc provisions of
tt~e said
4. 'l't~is Bx,'-L~aw sl~all come i~2to cffi'ect o~ tt~e iirst dav o/'Ja~L~zirx' 2(~t)£.
B¥-I~AW read a first, seceded a~d third time al~d l]~lallx' passed tlais 3'u cia>.' of December, 2001.
\\'av~ae ~X~'tlaurs. Nlavor
[3rucc '['z~vlor. Clerk