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HomeMy WebLinkAboutTR 18/97 ./ >t\~ OF PIC ....0 ~ lu'-1l . ~ :1ii: t5 ~ - REPORT TO COUNCIL FROM: Gillis A. Paterson Director of Finance DATE: December 3, 1997 REPORT NUMBER: TR 18/97 SUBJECT: 1998 Temporary Borrowing By-Law RECOMMENDATION: It is recommended that: 1) the temporary borrowing limit to meet 1998 current and capital expenditures, pending receipt of taxes and other revenues be established at $15,000,000; .- 2) 3) the necessary Bill (by-law attached) be presented to Council; and the appropriate Town of Pickering officials be authorized to take the necessary actions to give effect thereto. AUTHORITY: Municipal Act R.S.O. 1990, as amended. FINANCIAL IMPLICATIONS: At this time, it is difficult to estimate interest costs as it is uncertain how much financing may be required and for how long. An estimate will be provided at a later date in the 1998 Budget. Interest costs of $5,000 - were included in the 1997 Operating Budget for the Town: Costs of any borrowing for capital purposes will be charged to the project. BACKGROUND: - The borrowing of funds for current and capital purposes may become necessary during the normal course of operations during 1998. Under the provisions of Section 187 of the Municipal Act, R.S.O. 1990, (the Act), the Council of the Town of Pickering may pass a by-law authorizing temporary borrowings by the Mayor and the Treasurer to meet current expenditures pending receipt of taxes and other revenues of the Town. The Corporation may also undertake temporary borrowings, under individual project approvals, for capital projects pending financing, including the issuance of debentures by the Region. - 2- - December 3, 1997 Report to Council #TR 18/97 Discussion: The amount of such temporary borrowing outstanding at anyone time is generally limited by the Act, unless otherwise approved by the Ontario Municipal Board, to 50 per cent of the estimated annual revenues from January 1 to September 30 and to 25 per cent thereafter. Until the current year's estimates are adopted, the limitation may be calculated upon the revenues set forth in the estimates adopted for the next preceding year. Based upon the 1997 estimates of the Corporation, the allowable level of temporary borrowings outstanding, under legislation, is estimated at $35,000,000 from January 1 to September 30 and $6,000,000 thereafter. .- While the amount approved by Council in 1997 for all purposes was set at $3,000,000, a higher amount is being requested for 1998. Since the date of the release of information by the Province in regards to downloading and the Ontario Fair Assessment System is unknown at this time, as are the financial effects upon the Town and its inhabitants, it is felt prudent to request a higher amount. It is hoped that this amount will provide more than a sufficient level for temporary borrowings in the event fund inflows are unlike previous years. It should also be sufficient to cover any emergency financing required to meet the ongoing expenditures of the Corporation. Borrowing for capital purposes can only be undertaken on projects approved by Council and will only be undertaken in the event that sufficient funds are not available at the time they are required. . A IT ACHMENTS: By-Law No. ~~~- c...--- i1lis A. Paterson "'::::.--- // - GAP/md Att: . Copy: General.Manager - THE CORPORA nON OF THE TOWN OF PICKERING BY-LAW NO. To authorize the temporary borrowing of moneys to meet the current expenditures of The Town of Pickering for the year 1998. WHEREAS the Municipal Act provides that the Council of The Town of Pickering may by by-law authorize the Mayor and Treasurer of the Municipality to borrow from time to time by way of promissory note such sums as the Council may deem necessary to meet. until the taxes for the current year are received, the current expenditures of the Municipality for 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 it is deemed necessary by the said Council to borrow the sum of Fifteen Million Dollars ($15,000,000.00) to meet. until the taxes for the current year are received, the current expenditures of the Municipality for the year 1998 including the amounts and sums aforesaid; and WHEREAS the said sum of Fifteen Million Dollars ($15,000,000.00) plus any similar borrowings that have not been repaid, is less than 25 per cent of the total amount of the estimated revenues of the Municipality as set forth in the estimates adopted by the said Council for the year 1997 exclusive of revenues derivable from the sale of assets, borrowings or issues of debentures or from a surplus including arrears of levies and proceeds from sale of assets: Now, therefore, the Council of The Town of Pickering HEREBY ENACTS as follows: - 1. The Mayor and Treasurer of The Town of Pickering be and they are hereby authorized to borrow from time to time by way of promissory note a sum or sums not exceeding in all the sum of Fifteen Million Dollars ($15,000,000.00) to meet, until the levies for the year 1998 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, and the sums required by law to be provided by the Council for regional and school purposes and for any local board of the Municipality. 2. Any promissory note made under the authority of section I hereof shall be sealed and signed in accordance with the provision of the Municipal Act and may be countersigned in writing by the Deputy Treasurer of the Corporation in accordance with the provisions of the said Act. ENACTED AND PASSED this 20th day of December, A.D. 1997. WAYNE ARTHURS Mayor BRUCE TAYLOR Clerk - - Estimated Revenues based on 1997 Taxation ($94,074,319) l/\)c Rv J IJ ,_.J /QuJ /1 ... f ~__/"J Uc:. Basis of Information ~( l' rO'I/<; If .J /7 rI... ,.0 . --(' January to September ($94,074,319 x 75%) x 50% Thereafter ($94,074,319 x 25%) x 25% ,- '-. .J .s .", _::.:::-:;;':"'~ ... ...- -