HomeMy WebLinkAboutFIN 30/98
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REPORT TO COUNCIL
FROM:
Gillis A. Paterson
Director of Finance & Treasurer
DATE: October 27, 1998
REPORT NUMBER: FIN 30-98
SUBJECT:
1998 Capital Budget - Financing
RECOMMENDATION:
That Report No. FIN 30-98 of the Director of Finance & Treasurer be received and that:
(1)
a) Council approve the issuance of debentures for the Sanitary and Storm Sewer
installation, Watermain installation and Road Reconstruction on Rosebank Road in an
amount not to exceed $826,000 for a term of up to 20 years.;
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b) financing costs, including temporary financing of expenditures, be included in the
1999 Current Budget
(2)
the appropriate officials of the Town of Pickering be authorized to give effect thereto.
ORIGIN:
Report FIN 28/98 of the Director of Finance & Treasurer.
AUTHORITY:
The Municipal Act, R.S.O. 1990, as amended.
FINANCIAL IMPLICATIONS:
The Director of Finance and Treasurer of the Town of Pickering, in accordance with provincial
Regulations, certifies that expenditures contained in the recommended approvals can be financed
by the issuance of debentures and/or entering into leases, if required, for a term of up to 20 years
and is within the updated Debt and Financial Obligation Limit.
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Any debt issued will result in annual repayment costs appearing in future Current Budgets.
Issuance of debt under Recommendation 1 will result in annual debt charges of approximately
$91,000 over a IS-year term and onetime financing costs of approximately $10,000.
EXECUTIVE SUMMARY:
This is a housekeeping amendment. The Rosebank Road Reconstruction was originally
approved by the General Manager during Council's summer recess and subsequently confirmed
by Council as a project to be funded from the 1998 Current Budget.
Report to Council FIN 30-98
Date: October 27, 1998
Subject: 1998 Capital Budget - Financing
Page 2
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The Recommendations contained in this Report will provide ror debt linancillg ri)r this project
with the resultant financial "room" in the 1998 Current 13utlget (Capital from Current) being used
for smaller Capital projects and expenditures that should be paid for out of the Current Budget.
BACKGROUND:
Report No. FIN 28/98 of the Director of Finance & Treasurer contained the following
Recommendation, among others:-
"the Director of Finance & Treasurer report back to Council on the final recommended
financing of the 1998 Capital Budget for the Town of Pickering, taking into consideration
the foregoing, any previous relevant recommendations in regards to the 1998 Budgets and
the amount of capital expenditures that can be financed from the Current Budget."
In adopting the 1998 Capital Budget in part in June of 1998, the following recommendations
were passed by Council as part of Report No. TR 25/98:-
"The 1998 Current Operating Budget for the Town of Pickering controlled portion, as
amended, including Capital Expenditures from Current Revenues in the amount of
$1,900,000, resulting in an estimated 3.1 per cent increase, be adopted by Council";
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"Those Capital Projects essential to the operations of the Town not to exceed $1,260,000
as to be determined by the General Manager, be approved";
"The financing of 1998 Capital Expenditures from Current Revenues be presented to
Council at a future meeting when the Director of Finance reports on 1998 Tax Rates."
Since that time, the General Manager has met with a number of Department Heads to discuss
immediate needs and the funding of the expenditures out of current revenues. Gencrnlly, the
amount approved by Council as Capital from Current for 1998 has been spent or committed to be
spent. Since Council's approval in June, approximately $400,000 has been approved in this
manner, excluding $950,000 (now $826,000) for Rosebank Road reconstruction which should be
considered for debt financing. Other than projects financed by Development Charges or financed
from reserves or reserve funds, all future capital expenditures will be considered for debt
financing with repayment to come from future years' current budgets (i.e. tax levy) and will be
dealt with as each one is reported to Council by the appropriate Department Hed.
It should be noted that at least for 1998, approvals to issue debentures will be sought in this
manner. In future years it is anticipated that these approvals will be obtained in conjunction
with Council '.I' consideration of the annual Capital Budget.
It should also be noted that no debt wi// be issued for any projects until a// costs and financing
for 1998 are known, most likely in early 1999. Approvals to issue debt are being sought at this
time to ensure the required flexibility is available.
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Ultimately, the amount to be debt financed, which will most likely not occur until later in 1999 at
the earliest, will depend upon total 1998 capital expenditures, other sources of financing and any
funds available in 1999 for such financing.
Report to Council FIN 30-98
Subject: 1998 Capital Budget - Financing
Date: October 27, 1998
Page 3
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A IT ACHMENTS:
Not applicable
GAP/md
Copy: General Manager
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Recommended for the consideration of
Pickering Town Council
Thomas 1. Quinn, General Manager
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Approved / Endorsed By:
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1 IS A. aterson
Director of Finance & Treasurer