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HomeMy WebLinkAboutCS 06-10 48 City o~ Report To Council PICKERING Report Number: CS 06-10 Date: March 8, 2010 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Federal Gas Tax Revenues Amending Agreement Recommendation: 1. That Report CS 06-10 from the Director, Corporate Services & Treasurer be received: 2. That the Mayor and City Clerk be authorized to execute the Amending Municipal Funding Agreement and any subsequent agreements required for the Transfer of Federal Gas Tax Revenues Under the New Deal for Cities and Communities with the Association of Municipalities of Ontario in order to facilitate the transfer of gas tax revenues from the Government of Canada to the City of Pickering; 3. That the Director, Corporate Services & Treasurer be authorized to submit any required expenditure or compliance reports, forms, statements, including authorization of other documentation or agreements required of the City; 4. That the attached By-law be read three times and passed; and, 5. That the appropriate officials of the City of Pickering be authorized to take the necessary actions to give effect thereto. Executive Summary: The Association of Municipalities of Ontario (AMO) is administering the gas tax funding program on behalf of the Federal Government for all municipalities in Ontario with the exception of the City of Toronto. As administrator, AMO has provided municipalities with an Amending Municipal Funding Agreement that implements the main elements of the agreement between the Government of Canada, the Province of Ontario and AMO. The original agreement provided for the transfer of funds for the period 2005-2009 during which time $7.1 million was transferred to the City. The Amending Agreement covers the period 2010 to 2014 during which time it is anticipated approximately $10.8 million will be transferred to the City. Report CS 06-10 March 8, 2010 49 Subject: Federal Gas Tax Revenues Amending Agreement Page 2 Financial Implications: The City received $7.1 million over five years 2005-2009 on a semi-annual basis. All monies must be expended on eligible infrastructure projects by December 31, 2012. All monies from the extension period must be expended on eligible infrastructure projects no later than December 31, 2016. In 2010 payment will be made as soon as AMO receives the fully executive Amending Funding Agreement and the By-law authorizing the agreement as provided for in the report and the completion of the 2009 Gas Tax reporting requirements. Schedule of Funding Payments Year Jul November 2010 $1,347,215.33 $1,347,215.33 2011 1,347,215.33 1,347,215.33 2012 1,347,215.33 1,347,215.33 2013 1,347,215.33 1,347,215.33 The'City is required to submit an "Annual Expenditure Report", "Outcomes Report" and Compliance Audit Report or Municipal Treasurer's Certificate by March 31 st each year, following the municipal fiscal year to account for the funds received, expenditures made and progress achieved on an annual basis. Sustainability Implications: Continuation of this grant program contributes significantly to the City's infrastructure and financial sustainability. Background: In February 2005, the Federal Government announced that in 2005- 06 Canada's cities and communities would receive a share of the Federal gas tax revenues for environmentally sustainable municipal infrastructure. On June 17, 2005, in fulfillment of this budgetary commitment, the Governments of Canada and Ontario, and AMO signed the Agreement for the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities. This agreement provided a framework for the transfer of gas tax funds to Ontario communities for investment in environmentally sustainable infrastructure. Over $1.8 billion in funds flowed to Ontario's municipalities over the next five years Eligible Investments This program is not application based, but allows municipalities to make investments within the guidelines as established by the Federal Government. Environmentally sustainable municipal infrastructure projects are eligible within one of the following categories: public transit, water, waste water including storm water systems, community energy systems, local roads bridges and tunnels. For local roads and bridges projects, municipalities must submit in writing to AMO appropriate documentation, prior to spending the funds, outlining the impact of such investments on Report CS 06-10 March 8, 2010 Subject: Federal Gas Tax Revenues Amending Agreement Page 3 5 sustainability outcomes. Spending in other eligible project categories does not require pre-approval. Incremental Principle A key condition of the agreement is that the funding either enabled a project's implementation, enhanced its scope or accelerated its timing. This condition was placed so that municipalities would not reduce,other infrastructure funding and not to displace current capital. investments or use the funding to' reduce municipal taxes. Senior. levels of government (Federal & Provincial) both recognize that there is an "infrastructure deficit" and they want this program to help address this deficit. Eligible Costs The Municipal Funding Agreement permits incurred eligible costs after April 1, 2005 for eligible projects that contribute to environmentally sustainable infrastructure. A full discussion of eligible and ineligible costs can be found in Report CS 92-05. The Federal Gas Tax Revenue Agreement is an important recognition by the Federal Government of the challenges faced by municipalities in addressing infrastructure needs. The intent of this program is -to provide Ontario municipalities with a source of stable, predictable and long-term funding towards environmentally sustainable municipal infrastructure projects which support environmental outcomes of cleaner air, water and reduced greenhouse emissions. Under the program's guidelines, the City was required to establish a Federal Gas Tax Reserve Fund-for the purpose of "receipt, maintenance and disbursement of Federal Gas Tax revenues". In addition, the City will be required to submit an "Annual Expenditure Report",. "Outcomes Rep.ort" and Compliance Audit Report or Municipal Treasurer's Certificate by March 31 s following the fiscal year to account for the funds received, expenditures made and progress achieved on an annual basis. Amending Agreement The major components of the Amending Municipal Funding Agreement, for example eligible project categories, eligible costs and expenditure reporting requirements, remain the same. New in the extension, however is a change to the municipal audit requirements: If Gas Tax Funds were not used during the municipal fiscal year, the Treasurer is now required to submit a signed Treasurer's Certificate to that effect. Attachment: 1. By-law to Enter into an Amending Municipal Funding Agreement between AMO and the City of Pickering for the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities Reps t CS 06-10 March 8, 2010 Subject: Federal Gas Tax Revenues Amending Agreement Page 4 Prepared By: Approved / Endorsed By: Caryn Kong Gillis A. Paterson Senior Financial Analyst - Capital Director, Corporate Services & Treasurer & Debt Management Copy: Chief Administrative Officer Recommended for the consideration of Pickering City Council T,,h maw Quinn D , CMM III Chief Administrative Officer THE CORPORATION OF THE CITY OF PICKERING 52 BY-LAW NO. /10 Being a By-law to authorize the execution of an Amending Municipal Funding Agreement for the Transfer of Federal Gas Tax Revenues WHEREAS in order to facilitate the transfer of gas tax revenues from the Government of Canada to the City of Pickering it is necessary to execute an Amending Municipal Funding Agreement. WHEREAS the City of Pickering enacted By-law No. 6608/05 to provide for the execution of the original funding agreement. WHEREAS the City of Pickering has established a Federal Gas Tax Reserve Fund under By-law No. 6609/05 and met all other requirements of this program. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. The Mayor and Clerk are hereby authorized to execute the Amending Municipal Funding Agreement and any subsequent agreements for the Transfer of Federal Gas Tax Revenues with the Association of Municipalities of Ontario. BY-LAW read a first, second and third time and finally passed this 8t" day of March, 2010. David Ryan, Mayor Debbie Shields, City Clerk