Loading...
HomeMy WebLinkAboutJune 17, 2019DICKERING Executive Committee Meeting Agenda Monday, June 17, 2019 Council Chambers — 2:00 pm Chair: Councillor McLean Page 1. Disclosure of Interest 2. Delegations 2.1 Jason Hunt, Director of Legal Services, Corporate Services, Durham Region, Audrey Andrews, Manager of Strategic Partnerships and Initiatives, Social Services Department, Region of Durham, and Christina Henderin, Associate Solicitor, Legal and By -Law Services, Town of Whitby Re: Introduction to the Access to Justice Hub 2.2 Stan Karwowski, Director, Finance & Treasurer and Mike Jones, Supervisor, Taxation Re: Farm Taxation 3. Matters for Consideration 3.1 Director, Community Services, Report CS 06-19 Beverage Supply Agreement Renewal — Coca-Cola Canada Bottling Limited Recommendation: 1. That the Mayor and City Clerk be authorized to execute a Beverage Supply Agreement with Coca-Cola Canada Bottling Limited as set out in Attachment 1 to this report, subject to minor revisions as may be required by the Director, Community Services and the Director, Corporate Services & City Solicitor; and, 2. That the appropriate City officials be authorized to take the necessary actions as indicated in this report. 3.2 Director, Community Services, Report CS 08-19 Quotation No. Q-7-2019 Supply and Delivery of Road Grader with Attachments Recommendation: 1 10 For information related to accessibility requirements please contact: Linda Roberts 905.420.4660 Extension 2928 Iroberts@pickering.ca DICKERING Executive Committee Meeting Agenda Monday, June 17, 2019 Council Chambers — 2:00 pm Chair: Councillor McLean 1. That Quotation No. Q-7-2019 submitted by Toromont CAT in the amount of $361,823.10 (HST excluded) be accepted; 2. That the total gross project cost of $410,555.00 (HST included), including the amount of the quotation, optional equipment (Automated Grade Control system) and other associated costs, and the total net project cost of $369,717.00 (net of HST rebate) be approved; 3. That the Director, Finance & Treasurer be authorized to finance the total net project cost in the amount of $369,717.00 as follows: a) the sum of $350,000.00, as provided for in the 2019 Capital Budget, be increased to $369,000.00, to be financed by the issue of debentures by the Regional Municipality of Durham over a period not to exceed five years; b) the balance sum of $717.00 to be funded from property taxes; c) the annual repayment charges in the amount of approximately $81,150.00 be included in the annual Current Budget for the City of Pickering commencing 2019, or such subsequent year in which the debentures are issued, and continuing thereafter until the debenture financing is repaid, and any financing cost to be paid out of the Current Budget; d) the Treasurer be authorized to make any changes, adjustments, and revisions to amounts, terms, conditions, or take any actions necessary in order to effect the foregoing; 4. That the draft By-law attached to this report be enacted; and, 5. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. For information related to accessibility requirements please contact: Linda Roberts 905.420.4660 Extension 2928 Iroberts@pickering.ca DICKERING Executive Committee Meeting Agenda Monday, June 17, 2019 Council Chambers — 2:00 pm Chair: Councillor McLean 3.3 Director, Community Services, Report CS 24-19 Gingerbread Co-operative Nursery School (Pickering) Inc. License Agreement Renewal Recommendation: 1. That the Mayor and City Clerk be authorized to execute a License Renewal Agreement with Gingerbread Co-operative Nursery School (Pickering) Inc. as set out in Attachment 1 to this report, subject to minor revisions as may be required by the Director, Community Services and the Director, Corporate Services & City Solicitor; and, 2. That the appropriate City officials be authorized to take the necessary actions as indicated in this report. 3.4 Director, Community Services, Report CS 30-19 Community Festivals and Events — Approval of Christmas Market in Esplanade Park Recommendation: 1. That Council authorize staff to issue a park permit for the use of Esplanade Park by Graymatter Marketing Solutions from Friday, November 29 to Saturday, November 30, 2019 (inclusive) for a Christmas Market, on terms and conditions satisfactory to Director, Community Services and Chief Administrative Officer; and, 2. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. 3.5 Director, Engineering Services, Report ENG 07-19 Amendment to Traffic and Parking By-law 6604/05 Inclusion of New Roads and Traffic Controls, Kindwin Subdivision Recommendation: 18 26 29 For information related to accessibility requirements please contact: Linda Roberts 905.420.4660 Extension 2928 Iroberts@pickering.ca DICKERING Executive Committee Meeting Agenda Monday, June 17, 2019 Council Chambers — 2:00 pm Chair: Councillor McLean 1. That the attached draft by-law be enacted to amend Schedule "2", Schedule "5", Schedule "6", Schedule "7", Schedule "9" and Schedule "10" to By-law 6604/05 to provide for the regulation of stopping and parking on highways or parts of highways under the jurisdiction of the Corporation of the City of Pickering, specifically to provide for the inclusion of new roads and traffic controls into the Traffic and Parking By-law; and, 2. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. 3.6 Director, Engineering Services, Report ENG 08-19 Amendments to Traffic and Parking By-law 6604/05 — Various Locations Recommendation: 1. That the attached draft by-law be enacted to amend Schedule "1", Schedule "2", Schedule "6", Schedule "7", and Schedule "14", to By-law 6604/05 to provide for the regulation of stopping and parking on highways or parts of highways under the jurisdiction of the Corporation of the City of Pickering, specifically to provide for stopping restrictions on Sheppard Avenue, parking restrictions on Bainbridge Drive, an all -way stop at the intersection of Pine Grove Avenue and Woodview Avenue, and Community Safety Zones on Toynevale Road and on Rosebank Road; and, 2. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. 40 3.7 Director, City Development & CBO, Report PLN 15-19 55 Sustainable Pickering Year -in -Review Recommendation: That Report PLN 15-19 be received for information. For information related to accessibility requirements please contact: Linda Roberts 905.420.4660 Extension 2928 Iroberts@pickering.ca DICKERING Executive Committee Meeting Agenda Monday, June 17, 2019 Council Chambers — 2:00 pm Chair: Councillor McLean 3.8 Director, Finance & Treasurer, Report FIN 08-19 69 2018 Year End Recommendation: 1. That the Report to the Executive Committee on the 2018 audit as submitted by Deloitte LLP (Deloitte) be received for information; 2. That the 2018 draft Audited Consolidated Financial Statements for the City of Pickering be approved; and, 3. That Deloitte LLP be reappointed to provide external auditing services to the City of Pickering for a 3 year term. 3.9 Director, Finance & Treasurer, Report FIN 09-19 Investment Portfolio Activity for the Year Ended December 31, 2018 Ontario Regulation 438/97 under the Municipal Act, 2001 Recommendation: It is recommended that report FIN 09-19 of the Director, Finance & Treasurer, regarding Investment Portfolio Activity for the Year Ended December 31, 2018, be received for information. 3.10 Director, Finance & Treasurer, Report FIN 11-19 Annual Indexing — Development Charges and Seaton Financial Impacts Agreement Recommendation: 1. That Report FIN 11-19 of the Director, Finance & Treasurer be received; 2. That effective July 1, 2019 as provided for in By-law No. 7595/17, the Development Charges (the "DCs") referred to in Schedule "C" of that By-law be increased by 5.2 percent; 147 165 For information related to accessibility requirements please contact: Linda Roberts 905.420.4660 Extension 2928 Iroberts©pickering.ca DICKERING Executive Committee Meeting Agenda Monday, June 17, 2019 Council Chambers — 2:00 pm Chair: Councillor McLean 3. That effective July 1, 2019 as provided for in By-law No. 7595/17, the DCs referred to in Schedule "D" of that By-law be increased by an annual indexing of 5.2 percent; 4. That effective July 1, 2019 the payments related to "10 per cent Soft Services" as provided for by the Seaton Financial Impacts Agreement (FIA) dated November 26, 2015 be increased by an annual indexing of 5.2 per cent; and, 5. That the appropriate City of Pickering officials be authorized to take the necessary actions as indicated in this report. 3.11 Director, Finance & Treasurer, Report FIN 12-19 Universal City One Developments Inc. — Request to Defer Payment of Development Charges Recommendation: 1. That Report FIN 12-19 of the Director, Finance & Treasurer be received; 2. That, pursuant to By-law 7595/17: a) the request by Universal City One Developments Inc. to defer the payment of the City's share of Development Charges in the amount of approximately $1,739,400 to the earlier of: (i) six months after the commencement of foundation construction at 1474 Bayly Street, Pickering or (ii) when above grade construction at the said address is commenced, be approved; b) that the requirements of Section 14(2) of By-law 7595/17 be waived accordingly and that the date of issuance of the final building permit will determine the applicable Development Charge rate and, if the final building permit is issued before July 1, 2019, that the payment of Development Charges will be based on the current rate plus interest, be approved; c) that Universal City One Developments Inc., be required to enter into a Development Charge Deferral Agreement with 173 For information related to accessibility requirements please contact: Linda Roberts 905.420.4660 Extension 2928 Iroberts@pickering.ca DICKERING Executive Committee Meeting Agenda Monday, June 17, 2019 Council Chambers — 2:00 pm Chair: Councillor McLean the City on terms satisfactory to the Director, Finance & Treasurer and the Director, Corporate Services & City Solicitor; and, 3. That the appropriate officials of the City of Pickering be authorized to give effect thereto. 3.12 Director, Finance & Treasurer, Report FIN 13-19 2019 Final Tax Due Date for Commercial, Industrial, and Multi - Residential Realty Tax Classes Recommendation: 1. That Report FIN 13-19 of the Director, Finance & Treasurer be received; 2. That the Director, Finance & Treasurer be authorized to issue the final 2019 Tax Bills for Commercial, Industrial and Multi - Residential properties with a due date of September 26, 2019; 3. That the Director, Finance & Treasurer be authorized to make any changes or undertake any actions necessary, including altering the due date, in order to ensure that the tax billing process is completed and in order to comply with Provincial Regulations; 4. That the draft By-law attached to this report be enacted; and, 5. That the appropriate City of Pickering officials be authorized to take the necessary actions as indicated in this report. 4. Other Business 5. Adjournment 178 For information related to accessibility requirements please contact: Linda Roberts 905.420.4660 Extension 2928 Iroberts@pickering.ca DICKERING Cd, 6.6 Report to Executive Committee Report Number: CS 06-19 Date: June 17, 2019 From: Marisa Carpino Director, Community Services Subject: Beverage Supply Agreement Renewal - Coca-Cola Canada Bottling Limited - File: A-1440 Recommendation: 1. That the Mayor and City Clerk be authorized to execute a Beverage Supply Agreement with Coca-Cola Canada Bottling Limited as set out in Attachment 1 to this report, subject to minor revisions as may be required by the Director, Community Services and the Director, Corporate Services & City Solicitor; and, 2. That the appropriate City officials be authorized to take the necessary actions as indicated in this report. Executive Summary: Coca-Cola Canada Bottling Limited has an expired Beverage Supply Agreement with the City of Pickering to provide beverage vending services throughout City owned facilities. In recent months, Coca-Cola Canada Bottling Limited has proposed a four year renewal agreement, beginning on July 1, 2019 and ending on June 30, 2023. The Community Services Department recommends that a renewal agreement be initiated with Coca-Cola Canada Bottling Limited. Financial Implications: The revenue to be generated from Coca-Cola Canada Bottling Limited during each year of the term includes a $5,750 exclusivity bonus, $500 marketing fund and commissions sales of 20 percent estimated to total $9,600 annually. Year one will also include a signing bonus of $1,500. Discussion: On June 5, 2013, Coca-Cola Refreshments Canada Company extended its Beverage Supply Agreement with the City of Pickering (dated September 1, 2003) in order for the City to reach the minimum volume of sales commitment specified within the agreement. On November 1, 2018, the minimum volume sale commitment was met allowing for a new beverage supply agreement to be negotiated. The proposed renewal agreement is for a four year term beginning July 1, 2019 and ending June 30, 2023 and provides exclusivity to Coca-Cola Refreshments Canada Company for beverages sold in City owned and operated facilities including Pickering Civic Complex & Library, Pickering Recreation Complex & Arena, Don Beer Arena, George Ashe Library & Community Centre, East ▪ 1 - CS 06-19 June 17, 2019 Subject: Beverage Supply Agreement Renewal Page 2 Shore Community Centre, and the Operations Centre. As part of the Beverage Supply Agreement, Coca-Cola Refreshments Canada Company will also provide Full Service Vending machines equipped with state of the art technology, canteen/concession cooler equipment and fountain machine at no additional cost. Furthermore, repair service calls can be made 24/7 with the goal of repairing the equipment within 24 hours. As most City owned facilities do not include concession stand or snack bar type services, beverage vending machine services are vital to maintain customer health, wellness, and enjoyment while in City facilities. Healthy options are available within the vast product range of Coca-Cola Refreshments Canada Company which includes water, vitamin water, sports drinks, juices, and soft drinks. With an aim of sustainable packaging, Coca-Cola Refreshments Canada Company produces lightweight packaging which can be reused or recycled and in some cases, as with bottled water, the packaging integrates plant bottle technology (up to 30 percent plastic derived from plants). Waste Diversion bins are available by vending machines in our facilities to support recycling. In an effort to encourage and support reusable plastics as an alternative, the City offers water bottle drinking fountains at Don Beer Arena, Pickering Recreation Complex Arena, Pickering Recreation Complex (Gym and Fitness Studios), and George Ashe Library & Community Centre. Additional water bottle filling stations will be installed at the Pickering Recreation Complex as part of the new renovation project and in all newly constructed community centres. Coca-Cola Refreshments Canada Company is prevalent in the municipal marketplace and, as staff understand it, has similar Beverage Supply Agreements with Ajax, Oshawa, and Clarington. In our case, staff have found the services of Coca-Cola Refreshments Canada Company to be reliable and professional with regularly stocked and serviced vending machines and a diverse product range affording healthy options to our customers. As such, the Director, Community Services recommends that a renewed Beverage Supply Agreement be initiated with Coca-Cola Canada Bottling Limited for a four year term, beginning July 1, 2019 and ending June 30, 2023. Attachments: 1. Beverage Supply Agreement between Coca-Cola Refreshments Canada Company and the City of Pickering 2 CS 06-19 June 17, 2019 Subject: Beverage Supply Agreement Renewal Page 3 Prepared By: Kevin Hayes Supervisor, Facilities Operations MC:nm Approved/Endorsed By: Marisa C rpino, MA Director, ommunity Services Recommended for the consideration of Pickering City Council Tony Prevedel, P.Eng. Chief Administrative Officer 3, 2_0(7 3 BEVERAGE SUPPLY AGREEMENT BETWEEN: COCA-COLA CANADA BOTTLING LIMITED ("CCCBL") Legal Department, 335 King Street East TORONTO, Ontario, M5A 1L1 OF THE FIRST PART; -and- THE CORPORATION OF THE CITY OF PICKERING (the "Customer") Pickering Civic Complex One the Esplanade PICKERING, Ontario, L1V 6K7 OF THE SECOND PART. THIS BEVERAGE SUPPLY AGREEMENT (the "Agreement") witnesses that the Customer desires to retain the services of CCCBL for the supply of non-alcoholic beverages of any kind or type in all packages and formats ("Beverages") and CCCBL agrees to provide such services to the Customer under the terms and conditions as follows: 1. Term The term of this Agreement shall commence on July 1, 2019 and continue until June 30, 2023 (the "Term"), subject to the termination rights of the parties as set out in this Agreement. "Year of the Term" as used in this Agreement shall mean each twelve-month period from July 1 to June 30 in the Term. 2. Exclusivity During the Term of this Agreement, the parties agree that the Customer shall be obligated to purchase Beverages manufactured, sold or distributed from time to time by or for CCCBL, and/or The Coca-Cola Company (together with their respective wholly owned subsidiaries) and their respective affiliates and licensors ("CCCBL Beverages") as the exclusive Beverages sold, dispensed, served, sampled and advertised at (i) the buildings and facilities existing as at the commencement of the Term as described in Schedule B, and (ii) any other future buildings and facilities opened after the first day of the Term that are operated, owned, managed or controlled by the Customer, as determined by CCCBL, including any area or retail outlet of such current or future buildings and facilities that is subject to a concession agreement, leasehold, licensing, franchising or any other tenancy interest to or with any third party (collectively, the "Premises"). 3. Payment Terms, Price Increases and Adjustments 3.1. Payment Terms The Customer agrees, subject to credit approval by CCCBL, to i) pay for CCCBL Beverages and other products at the prices as set out in Schedule A, exclusive of all applicable taxes, levies and deposits ("Prices"), and ii) pay for services supplied by CCCBL in accordance with CCCBL's standard 4 Attachment 1 to Report #CS 06-19 trade terms. The Customer agrees that all consideration provided by CCCBL pursuant to this Agreement is contingent on CCCBL receiving payments as they are due for all CCCBL Beverages supplied by CCCBL throughout the Term. 3.2. Price Increases The Prices shall be subject to increase once per Year of the Term by three and one-half percent (3.5%) effective on or about June 30 each calendar year. 3.3. Extraordinary Price Adjustment Prices are also subject to an extraordinary price adjustment at any time during the Term, in the event of significant demonstrable increase in cost to CCCBL including without limitation, energy/utility costs (e.g. oil, gas, hydro), direct production, distribution costs, ingredient change, new formulation or raw materials (e.g. aluminium, plastic, sweetener) as determined by CCCBL and shall be effective on thirty (30) days' notice (provided increases are the same as charged to similar customers purchasing similar volumes under similar circumstances). 3.4. Vend Prices Prices for CCCBL Beverages sold through machines which store, chill and vend Beverages (the "Vending Equipment"), if applicable, shall be as discussed and notified by CCCBL to the Customer, and shall be subject to change if, as and when deemed necessary by CCCBL. 4. Other Business and Financial Terms 4.1. Lump Sum Exclusivity and Performance Allowance Provided the Customer is in full compliance with the terms and conditions of this Agreement, CCCBL shall pay to the Customer a one-time lump sum exclusivity and performance allowance for the Term in the amount of one thousand and five hundred dollars ($1,500.00) (the "Lump Sum Exclusivity Allowance") within thirty (30) days of the later of the commencement or the execution of this Agreement by the parties. Notwithstanding the foregoing, regardless of the timing of payment, the Lump Sum Exclusivity Allowance will be deemed earned evenly throughout the Term. 4.2. Annual Exclusivity and Performance Allowance Provided the Customer is in full compliance with the terms and conditions of this Agreement, CCCBL shall pay to the Customer an annual exclusivity and performance allowance in the amount of five thousand seven hundred and fifty dollars ($5,750.00) for each Year of the Term (the "Annual Exclusivity and Performance Allowance"). The first payment of the Annual Exclusivity and Performance Allowance will be made within thirty (30) days of the later of the commencement or the execution of this Agreement by the parties, and thereafter payments will be made within thirty (30) days of the commencement of each Year of the Term. Notwithstanding the foregoing, regardless of the timing of payment, the Annual Exclusivity and Performance Allowance will be deemed earned evenly throughout the Term. 4.3. Marketing Fund Provided the Customer is in full compliance with the terms and conditions of this Agreement, CCCBL shall pay to the Customer an annual marketing fund (the "Marketing Fund") in the amount of five hundred dollars ($500.00) to support various marketing and/or advertising activities developed collaboratively by the parties to promote the sale of CCCBL Beverages at the Premises during each Year of the Term, including but not limited to point of sale signage and banners, menu boards, publicity contests and other consumer -facing advertising copies or activities. 4.4. Full Service Vending Commissions In accordance with the exclusive rights of advertising and supply of Beverages granted herein by the Customer, CCCBL shall have the exclusive right to sell Beverages through Vending Equipment and to install, service, stock and collect revenues from such Vending Equipment ("Full Service Vending"). The content of the coin containers in the Vending Equipment shall remain the sole and exclusive property of CCCBL. CCCBL shall collect and be entitled to all revenue obtained in dispensing CCCBL Beverages through the use of the Vending Equipment. Notwithstanding the foregoing, provided the Customer is in full compliance with the terms and conditions of this Agreement, CCCBL shall pay, on a quarterly basis, a vending commission to the Customer on all CCCBL Beverages sold through the Vending Equipment at the rate of twenty percent (20%) of the revenues derived by CCCBL through Full Service Vending at the Premises, including all electronic card sales (as applicable), less goods and services taxes, any other applicable sales taxes and environmental deposit charges (the "Vending Commissions"). CCCBL shall keep accurate books of accounts and records of the revenue figures from the Vending Equipment, in accordance with generally accepted accounting principles, and shall allow the Customer access to these records upon reasonable request. 5. Equipment The type, quantity and location of the equipment to be provided by CCCBL during the Term and used in the distribution, sale and advertising of CCCBL Beverages at the Premises during the Term, including Vending Equipment (the "Equipment"), shall be as mutually agreed upon by the parties. The Customer shall sign CCCBL's standard Equipment loan agreement for each piece of Equipment. In the event of a conflict or 5 inconsistency between the terms of this Agreement and the terms of CCCBL's standard Equipment loan agreement, then the terms of this Agreement shall prevail. Except for malfunctions of deficiencies of the Equipment caused by the Customer's negligence, willful misconduct or unlawful conduct, as determined by CCCBL, acting reasonably, the Customer undertakes no obligation with respect to the costs of any repairs or replacement of parts, attachments or accessories for the Equipment. CCCBL shall be responsible for, and shall bear the expense of, all labour, parts or other materials required to return the Equipment to good operating order or perform any part of the maintenance or repair obligations of CCCBL hereunder. The Customer shall promptly notify CCCBL of any need for service or repairs using the toll-free telephone number located on the Equipment and shall allow CCCBL to enter the Premises on reasonable notice during regular business hours for the purpose of inspection or performance of maintenance and repair, or necessary replacement or return of the Equipment, as applicable. The Customer acknowledges that the Equipment shall at all times remain the sole and exclusive property of CCCBL and no person other than CCCBL shall be authorized to repair, service, maintain, replace or relocate any of the Equipment during the Term. The Customer shall maintain control of the Equipment and administer or manage the operations of the Equipment at all times while it is in the Premises. CCCBL disclaims any and all express and implied warranties, including without limitation, those of merchantability and fitness for intended use, and CCCBL shall not be liable for any consequential, incidental or indirect damages. Customer shall use the Equipment solely to refrigerate the CCCBL Beverages, and no other product, perishable or otherwise, shall be placed in such Equipment. Equipment must be available for use during normal hours of operation. Without prejudice to CCCBL's other rights under this Agreement, the Customer acknowledges that CCCBL may, at its sole discretion, remove any Equipment which is being used in contravention of this Agreement. In addition, CCCBL reserves the right to remove the Vending Equipment when the volumes do not justify its presence at the Premises, at CCCBL's discretion. The parties acknowledge and agree that at all times during the Term, a dedicated outlet connection must be maintained within three (3) feet of the Equipment. Equipment must be connected to an electrical wall socket with required 120 volts/15 amps. The use of an extension cord is strictly prohibited and not authorized under any circumstances. The parties also acknowledge and agree that any cooler Equipment must be maintained free of obstruction (beside or behind) allowing for ventilation to occur. 6. Insurance The Customer shall obtain and maintain throughout the Term public liability insurance/commercial general liability insurance in the minimum amount of two million dollars ($2,000,000) per occurrence and two million dollars ($2,000,000) in the aggregate. The Customer will name CCCBL as an additional insured. The Customer shall furnish to CCCBL a certificate of insurance and shall notify CCCBL without delay of any loss or damage to the Equipment. 7. Confidentiality The parties agree to take all necessary precautions to maintain the confidentiality of the terms and conditions contained herein. The parties acknowledge that this Agreement may be released pursuant to the provisions of the Municipal Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c.M.56, as amended. This acknowledgement shall not be construed as a waiver of any right to object to the release of this Agreement. 8. Notices Any notice pursuant to this Agreement, shall be in writing and addressed at the addresses indicated above. Furthermore, the Customer consents to the sending of electronic communications by CCCBL to the Customer and such consent shall continue during and after the expiry of the Term. 9. Representations and Warranties The Customer represents and warrants, and understands that CCCBL is relying upon such representations and warranties, that: a. it is in good standing under the laws of its jurisdiction of incorporation, and has all requisite authority to perform all its obligations under this Agreement; and b. there are no agreements, contracts, arrangements, terms or conditions, written or otherwise that would prevent the Customer from entering into and complying with the terms of this Agreement. 10. Assignment of Agreement Neither party may assign this Agreement without the prior written consent of the other party, which consent cannot be unreasonably withheld, conditioned or delayed. A change in the corporate control of either party shall be deemed to be an assignment requiring the consent of the other party. 11. Force Majeure Neither party shall be liable hereunder for failure to perform so long as such failure occurs for a reason beyond the reasonable control of the non-performing party (i.e. strike, fire, storm, flood, act of any governmental authority, etc.). Performance by either party is suspended for the period of the force majeure event. 6 12. Taxation The parties acknowledge that each party shall pay the GST/HST/QST and any other taxes eligible that apply to any payments made under this Agreement. The parties represent that their respective GST/HST/QST registration number(s), as applicable, are as follows: a. For the Customer: GST/HST number: R108078593 b. For CCCBL: GST/HST number: QST number: 13. Entire Agreement 121928881 RT0001 1003286416 TQ0001 This Agreement, together with its schedules and the recitals, constitutes the entire agreement of the parties and supersedes all prior communications, understandings and agreements relating to the subject matter hereof, whether oral or written. 14. Termination If either party shall fail to perform or observe any covenant, condition or agreement to be performed or observed herein and such default continues unremedied for a period of ten (10) days after notice thereof from the other party, then such party may, at its option, terminate this Agreement in its entirety forthwith without prejudice to any other rights it may have in law or equity. Notwithstanding anything in this Agreement to the contrary, the Customer agrees that if for any reason, including but not limited to any governmental board or regulatory body's legislation, regulations, guidelines, recommendations or similar announcements or significant changes in the nature or size of the Customer's business: (i) CCCBL's advertising and supply rights under this Agreement are affected and CCCBL is requested to limit the sale or availability of any of its Beverages, or (ii) CCCBL is prohibited or prevented from making available or selling any of its Beverages, or (Hi) the volume of CCCBL Beverages being purchased and paid for is materially affected, CCCBL shall be entitled, in its sole discretion, to propose to the Customer a reasonable adjustment of CCCBL's financial obligations to the Customer for the remainder of the Term (and if necessary a refund of a portion of unearned payments). The parties will negotiate such proposed adjustment in good faith for a period of sixty (60) days, but if they are unable to agree, CCCBL shall have the right, at its option, to terminate this Agreement. In the event this Agreement is terminated for any reason, the following provisions will apply as of the effective date of such termination: i. the Customer shall surrender the Equipment and allow CCCBL to promptly remove such Equipment; and ii. the parties shall forthwith calculate, determine and pay all accounts between the parties relating to this Agreement up to the effective date of termination, including, if applicable, a pro -rata reimbursement to CCCBL of all consideration paid in advance to the Customer including, without limitation, any payment made to the Customer pursuant to Section 4. The rights and remedies of the parties as set forth in this Agreement are cumulative and shall in no way be deemed to limit any of the other provisions of this Agreement or otherwise to deny the parties any right or remedy at law or in equity. 15. Miscellaneous Brands and package formats of CCCBL Beverages are subject to availability and change from time to time, at CCCBL's sole discretion. The Customer agrees that it shall not use trademarks of CCCBL Beverages without first obtaining specific written permission from CCCBL. IN WITNESS WHEREOF the parties hereto, by their respective representatives duly authorized in that behalf, have caused this Agreement to be executed. THE CORPORATION OF THE CITY OF PICKERING Per: Name: Title: Date signed: Authorized to sign COCA-COLA CANADA BOTTLING LIMITED Per: Name: John Stiefelmeyer Title: VP, Operations Authorized to sign Date signed: Approved for execution: Sales rep.: Jamie Collins - Mullen Initials of sales rep. Legal Department 7 Schedule A Prices Brands/ Product description Package SPC Units/ Case Price/ Case Conversion Rate/ Case •v -r- h-- . n -r :-v-r.g- (.. k.g-. gods) All brands (carbonated soft drinks) All brands (carbonated soft drinks) All brands (carbonated soft drinks) Fanta Monster Java Monster/ NOS/ Full Throttle Nestea Powerade Powerade Dasani Evian Glaceau smartwater Glaceau smartwater sparkling Glaceau vitaminwater Minute Maid Core Power 355 ml cans 355 ml cans 500 ml bottles 473 ml bottles 444 ml cans 473 ml cans 500 ml bottles 591 ml bottles (flat cap) 710 ml bottles (sport cap) 591 ml bottles 500 ml bottles 591 ml bottles 591 ml bottles 591 ml bottles 355 ml bottles 340/414 ml bottles 12 24 24 12 12 12 12 24 12 24 24 24 24 12 12 12 $5.16 $10.33 $26.50 $13.25 $24.50 $24.50 $16.50 $25.00 $17.00 $14.00 $30.00 $30.00 $30.00 $18.50 $16.50 $29.00 0.5 1 1 0.5 0.5 0.5 0.5 1 0.5 1 1 1 1 0.5 0.5 0.5 Post -Mix Syrup (Fountain) All brands (carbonated soft drinks) All brands (carbonated soft drinks) Nestea/ Fruitopia 10 L bag -in -box 20 L bag -in -box 20 L bag -in -box 1 1 1 $32.68 $65.41 $65.41 2.642 5.284 5.284 Other Products CO2 20 lbs. 1 $26.49 1 APPLICABLE TAXES, LEVIES OR DEPOSITS ARE NOT INCLUDED IN THE PRICE FOR CCCBL BEVERAGES AND SUCH ITEMS ARE SUBJECT TO INCREASE BY CCCBL. BRANDS AND PACKAGE FORMATS SUBJECT TO AVAILABILITY AND CHANGE DURING THE TERM. CCCBL RESERVES THE RIGHT TO CHANGE PRODUCT AND/OR CASE SIZES OR SELL OTHER CCCBL BEVERAGES TO THE CUSTOMER, RESULTING IN POSSIBLE CHANGES TO THE SPC CONVERSION. 8 Schedule B Premises ■ Pickering Civic Complex — One the Esplanade, Pickering, Ontario, L1V 6K7 ■ Delaney Arena —1867 Valley Farm Rd., Pickering, Ontario, L1V 3Y7 ■ Don Beer Arena — 940 Dillingham Rd., Pickering, Ontario, L1W 1Z6 ■ Eastshore Community Centre — 910 Liverpool Rd., Pickering, Ontario, L1W 1S6 ■ City of Pickering Library — One the Esplanade, Pickering, Ontario, L1V 6K7 ■ O'Brien Arena —1867 Valley Farm Rd., Pickering, Ontario, L1V 3Y7 ■ George Ashe Community Centre —470 Kingston Rd., Pickering, Ontario, L1V 1A4 ■ City of Pickering Recreation Centre —1867 Valley Farm Rd., Pickering, Ontario, L1V 3Y7 ■ City of Pickering Work Centre — 2570 Tillings Rd., Pickering, Ontario, L1V 2P8 CGo 0,/ DICKERING Report to Executive Committee Report Number: CS 08-19 Date: June 17, 2019 From: Marisa Carpino Director, Community Services Subject: Quotation No. Q-7-2019 - Supply and Delivery of Road Grader with Attachments - File: A-1440-001-19 Recommendation: 1. That Quotation No. Q-7-2019 submitted by Toromont CAT in the amount of $361,823.10 (HST excluded) be accepted; That the total gross project cost of $410,555.00 (HST included), including the amount of the quotation, optional equipment (Automated Grade Control system) and other associated costs, and the total net project cost of $369,717.00 (net of HST rebate) be approved; 3. That the Director, Finance & Treasurer be authorized to finance the total net project cost in the amount of $369,717.00 as follows: a) the sum of $350,000.00, as provided for in the 2019 Capital Budget, be increased to $369,000.00, to be financed by the issue of debentures by the Regional Municipality of Durham over a period not to exceed five years; b) the balance sum of $717.00 to be funded from property taxes; c) the annual repayment charges in the amount of approximately $81,150.00 be included in the annual Current Budget for the City of Pickering commencing 2019, or such subsequent year in which the debentures are issued, and continuing thereafter until the debenture financing is repaid, and any financing cost to be paid out of the Current Budget; d) the Treasurer be authorized to make any changes, adjustments, and revisions to amounts, terms, conditions, or take any actions necessary in order to effect the foregoing; 4. That the draft By-law attached to this report be enacted; and, 5. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. - 10 - CS 08-19 Subject: Quotation No. Q-7-2019 June 17, 2019 Page 2 Executive Summary: The Public Works Section, within the Community Services Department, currently utilizes two road graders with attachments for the approximate 100 km of unpaved roads in the northern rural areas of Pickering. The 2009 road grader with attachments (unit #100) was approved for life -cycle replacement in the 2019 Capital Budget. An advertisement was placed on the City's website. Two companies responded by the closing date of Tuesday, April 9, 2019. The quotation submitted by Toromont CAT for one Caterpillar 140 road grader, has received the highest score from the Evaluation Committee, meets the required specifications, and is recommended for approval. In accordance with the Purchasing Policy Item 06.11(c), where the compliant quotation or tender meeting specifications and offering best value to the City is acceptable or where the highest scoring proposal is recommended and the estimated total purchase price is over $250,000.00, the Manager may approve the award, subject to the approval of the Director, Treasurer, CAO and Council. Financial Implications: 1. Quotation Amount Supply and Delivery of Road Grader Automated Grade Control System Total HST (13%) Total Gross Quotation Cost $339,869.18 21,953.92 361, 823.10 47,037.00 $4085860.10 2. Estimated Project Costing Summary Quotation No. Q-7-2019 and Automated Grade Control System GPS/2 Way Radio (Optional price) Total HST (13%) Gross Project Cost HST Rebate (11.24%) Total Net Project Cost $361,823.00 1 500.00 363,323.00 47,232.00 $410,555.00 ($40,838.00) $369,717.00 CS 08-19 Subject: Quotation No. Q-7-2019 June 17, 2019 Page 3 3. Approved Source of Funds 2019 Roads Equipment Capital Budget Description Account Code Source of Funds Available Required Budget Supply and Delivery 5319.1901.6178 Debt - 5 years $350,000.00 $369,000.00 of Road Grader with Attachments Property Taxes 717.00 Total Funds $350,000.00 $369,717.00 Net Project Cost under (over) Approved Funds ($19,717.00) Discussion: The Public Works Section, within the Community Services Department, currently uses two road graders with attachments. These road graders are used year round to maintain over 100 kms of unpaved roads in north Pickering. One existing road grader, unit #100, was approved for life -cycle replacement in the 2019 Capital Budget. An Evaluation Committee consisting of Public Works staff met on April 24, 2019 and each committee member evaluated the quotations based on the rated criteria. A combined average score for each quotation was determined as part of Stage II of the evaluation process. Toromont CAT received the highest score. It has been determined that the optional equipment quoted in the quotation for an Automatic Grade Control system (AGC) be purchased. The AGC system is an essential piece of equipment that will assist the operator in maintaining gravel roads to a higher standard than at present. City staff have done their due diligence to ensure that the AGC system would be a benefit to the City by conversing with other municipalities that currently utilize the system. During these discussions, the benefits of an AGC system included being able to complete the work in a more timely manner with reduced material usage due to the accuracy of the grade control; and, better fuel efficiency with the reduction in work hours and down pressure on the grader required to carry out the task. After careful review of all submissions received, Public Works staff recommends acceptance of the Quotation No. Q-7-2019 submitted by Toromont CAT for one new road grader with attachment in the amount of $339,869.18 (plus HST) as well as optional pricing for an AGC system for $21,953.92 (plus HST) and that the total net project cost of $369,717.00 (net of HST rebate) be approved. - 12 - CS 08-19 June 17, 2019 Subject: Quotation No. Q-7-2019 Page 4 Attachments: 1. Supply & Services Memorandum dated May 3, 2019 2. By-law to authorize the Supply and Delivery of Road Grader with Attachments project and the issuance of debentures in the amount of $369,000.00 Prepared By: ,. Approved/Endorsed By: tt C u rre r Marisa Cno, MA Supervisor, Municipal Garage Director, Community Services Rob Burlie, P. Eng. Manager, Public Works MC:nw Stan Karwowski, MBA, CPA, CMA Director, Finance & Treasurer Ray Rjdrigues, CPPB Manager, Supply & Services Recommended for the consideration of Pickering City Council Tony Prevedel, P. Eng. Chief Administrative Officer cfria - 13 - ..,ACHMEN i 3`a n._ .. '`..+ REP•Rf cty.,/ PICKERING Memo To: Marisa Carpino April 26, 2019 Director, Community Services From: Lisa Chang Buyer, Supply & Services Copy: Administrative Assistant, Community Services Manager, Supply & Services Supervisor, Roads Operations Subject: Quotation No. Q-7-2019 Supply & Delivery of Road Grader with Attachments Closing Date: Tuesday, April 16, 2019 at 12:00 Noon. File: F-5300-001 Quotation Q-7-2019 was advertised on the City's website on March 19, 2019 of which two (2) company(ies) have responded. Stage I — Mandatory Submission Requirements — determines which submissions satisfy all the mandatory submission requirements and provides Respondents the opportunity to rectify deficiencies. Two (2) proposals proceed to Stage II — Evaluation. A summary of the Stage 11 and 111 evaluation results for each quotation is attached. Toromont CAT is the top ranked respondent with a submitted price of $339,869.18 (HST Excluded). A budget of $350,000.00 was provided to Supply & Services for this procurement. In accordance with Appendix D — Request for Quotation Particulars, Item 16 — Insurance, the following documents will be requested from Toromont CAT: (a) The City's certificate of insurance or approved alternative form shall be completed by the bidder's agent, broker or insurer. Please advise if•Supply & Services is to proceed with this task. In accordance with Purchasing Policy Item 06.04, the authority for the dollar limit as set out below excludes HST. In accordance with Purchasing Policy, Item 06.11, where the compliant quotation or tender meeting specifications and offering best value to the City is acceptable or where the highest scoring proposal is recommended and the estimated total purchase price is: (c) Over $250,000, the Manager may approve the award, subject to the approval of the Director, Treasurer, CAO and Council. - 14 Subject to receipt of approvals on Health & Safety and insurance documents, please provide your recommendation in report form. After receiving Council's approval, an approved "on-line" requisition will be required to proceed. Please direct all enquiries to Supply & Services. Respondents will be advised in due course. If you require further information or assistance, do not hesitate to contact me or a member of Supply & Services. LC Attachments (2) - 15 - Page 2 of 2 TACHiviEiF c...� TO P.''QRT# L cJ c - )CI The Corporation of the City of Pickering By-law No. Being a by-law to authorize the Supply and Delivery of One New Latest Model Year Road Grader with Attachments project in the City of Pickering and the issuance of debentures in the amount of $369,000.00 Whereas Section 11 of the Municipal Act, 2001, as amended, provides that a lower -tier municipality may pass by-laws respecting matters within the spheres of jurisdiction described in that Section; and, Whereas Subsection 401(1) of the Municipal Act, 2001, as amended, provides that a municipality may incur a debt for municipal purposes, whether by borrowing money or in any other way; and, Whereas Subsection 401(3) of the Municipal Act, 2001, as amended, provides that a lower -tier municipality in a regional municipality does not have the power to issue debentures; and, Whereas The Regional Municipality of Durham has the sole authority to issue debentures for the purposes of its lower -tier municipalities including The Corporation of the City of Pickering (the "City"); and, Whereas the Council of the City wishes to proceed with debenture financing for the Supply and Delivery of One New Latest Model Year Road Grader with Attachments project; and Whereas before authorizing the Supply and Delivery of One New Latest Model Year Road Grader with Attachments project, the Council of the City had the Treasurer update the City's Annual Repayment Limit, the Treasurer calculated the estimated annual amount payable in respect of such project and determined that such annual amount would not cause the City to exceed the updated limit and therefore, the Local Planning Appeal Tribunal approval is not required as per Section 401 of the Municipal Act, 2001, as amended, and the regulations made thereunder; And whereas after determining that the Local Planning Appeal Tribunal approval is not required, the Council of the City approved report CS 08-19 on the date hereof and awarded Quotation No. Q-7-2019 for the Supply and Delivery of One New Latest Model Year Road Grader with Attachments project; - 16 - BY-LAW NO Page 2 Now therefore the Council of The Corporation of the City of Pickering hereby enacts as follows: 1. That the City proceed with the project referred to as "Supply and Delivery of One New Latest Model Year Road Grader with Attachments"; 2. That the estimated costs of the project in the amount of $369,717.00 be financed as follows: a) the sum of $369,000.00 be financed by the issue of debentures by the Regional Municipality of Durham over a term not to exceed five years; and b) the sum of $717.00 be funded from property taxes; 3. That the funds to repay the principal and interest of the debentures be provided for in the annual Current Budget for the City commencing in 2019 or such subsequent year in which the debentures are issued and continuing thereafter until the debenture financing is repaid. By-law passed this 24th day of June, 2019 David Ryan, Mayor Susan Cassel, City Clerk - 17 - DICKERING od Report to Executive Committee Report Number: CS 24-19 Date: June 17, 2019 From: Marisa Carpino Director, Community Services Subject: Gingerbread Co-operative Nursery School (Pickering) Inc. - Licence Agreement Renewal - File: A-1440 Recommendation: 1. That the Mayor and City Clerk be authorized to execute a License Renewal Agreement with Gingerbread Co-operative Nursery School (Pickering) Inc. as set out in Attachment 1 to this report, subject to minor revisions as may be required by the Director, Community Services and the Director, Corporate Services & City Solicitor; 2. That the appropriate City officials be authorized to take the necessary actions as indicated in this report. Executive Summary: Gingerbread Co-operative Nursery School (Pickering) Inc. has an existing Licence Agreement with the City of Pickering to provide a cooperative nursery program at West Shore Community Centre, for a five year term beginning September 1, 2014 and ending June 30, 2019. Gingerbread Co-operative Nursery School (Pickering) Inc. has requested to renew this agreement for a further five year term beginning September 1, 2019 and ending June 30, 2024. The Community Service's Department recommends that a renewal agreement be initiated with Gingerbread Co-operative Nursery School (Pickering) Inc. Financial Implications: The revenue to be generated from Gingerbread Co-operative Nursery School (Pickering) Inc. during the five year renewal term is as follows: • September 1, 2019 to June 30, 2020: $4,850 incl. HST ($485 incl. HST per month) • September 1, 2020 to June 30, 2021: $4,960 incl. HST ($496 incl. HST per month) • September 1, 2021 to June 30, 2022: $5,070 incl. HST ($507 incl. HST per month) • September 1, 2022 to June 30, 2023: $5,180 incl. HST ($518 incl. HST per month) • September 1, 2023 to June 30, 2024: $5,300 incl. HST ($530 incl. HST per month) This represents an approximate two percent increase in annual licence fees. - 18 - CS 24-19 June 17, 2019 Subject: Gingerbread Co-operative Nursery School (Pickering) Inc. Page 2 Discussion: On July 14, 2014, Council approved Resolution #260/14 authorizing the execution of a Licence Agreement with Gingerbread Co-operative Nursery School (Pickering) Inc. for the purposes of operating a cooperative nursery program for a minimum of three half days per week from September to June annually at West Shore Community Centre for a five year term beginning September 1, 2014 and ending June 30, 2019. The use of the West Shore Community Centre for the provision of a cooperative nursery program is a positive and proactive use of this facility and is consistent with the City's mandate to support children and families and to build community. As such, the Director, Community Services recommends that a renewal agreement be initiated with Gingerbread Co-operative Nursery School (Pickering) Inc. to renew the Licence Agreement for a further five year term, beginning September 1, 2019 and ending June 30, 2024. Attachments: 1. Draft Licence Agreement for Gingerbread Co-operative Nursery School (Pickering) Inc., 2019-2024 Prepared By: Kevin Hayes Supervisor, Facilities Operations MC:nm Approved/Endorsed By: Marisa rpino, MA Director, Community Services Recommended for the consideration of Pickering City Council Tony Prevedel, P.Eng. Chief Administrative Officer 2.312.0/7 - 19 - ATTACHMENT #1_,To REPORT # C5 A- ICI This Licence Agreement is made as of July 1, 2019 Between: The Gingerbread Co-operative Nursery School (Pickering) Inc. (the "School") - and - The Corporation of the City of Pickering (the "City") Whereas the City owns the community centre known as the West Shore Community Centre at 1011 - 1015 Bayly Street in the City of Pickering (the "Community Centre"); and Whereas the School wishes to use the Community Centre and associated facilities for the purpose of operating a co-operative nursery school; and Whereas the City is prepared to grant a licence to the School to permit the School to use the Community Centre and associated facilities for such purpose; Now Therefore the City and the School agree as follows: Licence 1. The City grants to the School a licence to occupy and use the Community Centre and associated facilities for the purpose of operating a co-operative nursery school on the terms and conditions set out in this Licence (the "Purpose"). 2. The School shall also be permitted to use the Community Centre one (1) evening or weekend day in each year of the Term for fundraising efforts, provided such dates are requested in advance in writing to the City and are subject to availability and approval by the City. Term 3. The City grants to the School the right to use the Community Centre and associated facilities for the Purpose during the months of September to June, both inclusive, each year throughout the term of this Licence commencing on September 1, 2019 and ending on June 30, 2024 (the "Term"). -20- Gingerbread Co-op Nursery School Licence Agreement Page 2 4. Either the School or the City may terminate this Licence without cause prior to the expiry of the Term by giving 90 days written notice to the other. Fees 5. During the first year of the Term (September 1, 2019 to June 30, 2020), the School shall pay to the City the fixed sum of $4, 850.00 (including HST) in ten (10) equal monthly payments of $485.00 (including HST) payable on the 1st day of each month of September to June, both inclusive. During each subsequent year of the Term, the School shall pay to the City the fixed sums listed below in ten (10) equal monthly payments payable on the 1st day of each month of September to June, both inclusive. Year Two (September 1, 2020 - June 30, 2021) Year Three (September 1, 2021 - June 30, 2022) Year Four (September 1, 2022 - June 30, 2023) Year Five (September 1, 2023 - June 30, 2024) $4,960.00 (including HST) $5,070.00 (including HST) $5,180.00 (including HST) $5,300.00 (including HST) 6. The School shall provide ten (10) post-dated cheques prior to the start of each year of the Term, payable to the City, in the amounts set out in Section 5. Operation 7. The School shall, (a) comply strictly with all applicable laws, by-laws, rules and regulations governing the operation of the School; (f) operate the school for a minimum of three (3) days and a maximum of five (5) days per week from 8:00 am to 12:30 pm during the months of September to June, both inclusive, each year throughout the Term; ensure that its operations conclude by 12:30 pm on any given operating day to facilitate the use of the Community Centre and associated facilities for other purposes; prior to September 1st each year of the Term, notify the City in writing of which three (3) to five (5) days of the week it will operate during the ensuing year of the Term; in the event that the School elects to operate for more than three (3) days per week within a given year during the Term, pay an additional fee in the amount of $150 per month (including HST) for each additional day of operation (over and above the minimum of three (3) days per week); provide and pay for all personnel and supplies required by it for the Purpose; Gingerbread Co-op Nursery School Licence Agreement Page 3 (g) obtain all necessary permits, licenses and approvals that may be required in connection with the operation of the school; and (h) maintain the Community Centre in a clean, sanitary and attractive condition satisfactory to the City throughout the Term and, at the end of the Term, repair or replace any damages to the Community Centre save and except reasonable wear and tear, at its sole cost and expense. 8. The City shall provide, (a) all necessary electrical power, heat and other utilities; (b) equipment storage cupboards; and (c) a kitchenette facility for the purpose of providing light snacks for School staff and children. 9. The City assumes no responsibility to the School and shall not be liable for any loss or damage incurred by the School arising from temporary or unavoidable interruption of the supply of electrical power, heat or other utilities due to any cause whatsoever. The City shall use reasonable diligence to restore any such services whenever they are interrupted. Insurance 10. The School, at its own expense, shall provide, (a) comprehensive general public liability insurance, identifying the City as an additional insured, including coverage for personal injury, contractual liability, tenant's legal liability, non -owned automobile liability, death and property damage, on an occurrence basis with respect to the business carried on at the Community Centre and the School's use and occupancy of the Community Centre, with coverage for any one occurrence or claim of not less than $5,000,000, which insurance shall protect the City in respect of claims by the School as if the City was separately insured; and (b) a certificate of insurance coverage in a form satisfactory to the City, which insurance coverage shall be kept in full force and effect throughout the Term. 11. The School shall not do or omit or permit to be done anything that causes any insurance premium of the City to be increased, and if any insurance premium shall be so increased, the School shall pay to the City forthwith upon demand the amount of such increase. If notice of cancellation or lapse shall be given respecting any insurance policy of the City or if any insurance policy shall be Gingerbread Co-op Nursery School Licence Agreement Page 4 cancelled or refused to be renewed by an insurer by reason of the use or occupation of the Community Centre, the School shall forthwith remedy or rectify such use or occupation upon being requested to do so in writing by the City and if the School shall fail to do so the City may, at its option, terminate this Licence forthwith by notice to the School and the School shall immediately vacate the Community Centre. Liability and Indemnification 12. The School shall indemnify and save harmless the City from and against any and all actions, losses, damages, claims, costs and expenses (including, without limiting the generality of the foregoing, all claims for personal injury, death and/or property damage) and also damages arising from any breach of this Licence by the School or from any act or omission of the School or those for whom the School is at law responsible in or around the Community Centre and associated facilities arising from the School's use and occupation of the Community Centre and associated facilities. The City shall not be liable for any loss or damage to any property belonging to the School or to any other persons or for any injury to any person while such person or property is in or around the Community Centre and associated facilities, unless such loss, damage or injury is caused directly by the negligence of the City, or those for whom the City is at law responsible. Default 13. If at any time the School is in default in the performance of any of the obligations under this Licence and such default continues for fifteen (15) days after the receipt by the School of notice from the City setting out the particulars of such default, the City shall have the right to terminate this Licence forthwith and thereupon all the rights of the School under this Licence shall immediately cease and the City shall not be liable for payment to the School of any moneys whatsoever by reason of such termination. General 14. The City shall have the right to enter the Community Centre at any time for any reason provided all reasonable efforts are made to minimize any disruption to the School's use of the Community Centre. 15. The School shall not exhibit or allow to be exhibited on the exterior of the Community Centre any sign, notice, notice board, painting, design or advertisement without the prior consent of the City. 16. The School shall not alter, add to or vary in any way any part of the Community Centre without the prior approval of the City. 17. This Licence shall not be assignable by the School without the consent of the City, which consent may be arbitrarily refused. Gingerbread Co-op Nursery School Licence Agreement Page 5 18. This Licence shall enure to the benefit of and be binding upon the parties and their respective successors and permitted assigns. 19. No amendment to this Licence shall be effective unless it is in writing and signed by both parties. 20. (1) Any notice to the City under this Licence shall be in writing and shall be delivered to the following address: Pickering Civic Complex One The Esplanade Pickering, Ontario L1V 6K7 Attention: City Clerk (2) Any notice to the School under this Licence shall be in writing and shall be delivered to the following address: (3) Gingerbread Nursery School PO Box 427, Stn Main Pickering, ON L1V 2R7 Attention: President Notice shall be sufficiently given if delivered in person or sent by registered mail or sent by facsimile transmission during normal business hours on a business day. (4) Each notice sent shall be deemed to have been received on the day it was delivered or on the third (3rd) business day after it was mailed. (5) The parties may change their address for notice by giving notice to the other in the manner provided in this Section. 21. The recitals to this Licence are true in substance and fact and are incorporated herein. 22. Should any provision or provisions of this Licence be illegal or not enforceable, it or they shall be considered separate and severable from this Licence and its remaining provisions shall remain in force and be binding upon the parties hereto as though the said provision or provisions had never been included. Gingerbread Co-op Nursery School Licence Agreement Page 6 23. The headings in this Licence have been inserted as a matter of convenience and for reference only and in no way define, limit or enlarge the scope of meaning of this Licence nor any of the provisions hereof. 24. This Licence and any information or documents that are provided hereunder may be released pursuant to the provisions of the Municipal Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c.M.56, as amended. This acknowledgement shall not be construed as a waiver of any right to object to the release of this Licence or of any information or documents. In Witness Whereof the City and the School have signed this Licence as of the date first written above. Gingerbread Co-operative Nursery School (Pickering) Inc. The Corporation of the City of Pickering David Ryan, Mayor Susan Cassel, City Clerk ( !y .j DICKERING Report to Executive Committee Report Number: CS 30-19 Date: June 17, 2019 From: Marisa Carpino Director, Community Services Subject: Community Festivals and Events - Approval of Christmas Market in Esplanade Park - File: A-1440-001 Recommendation: 1. That Council authorize staff to issue a park permit for the use of Esplanade Park by Graymatter Marketing Solutions from Friday, November 29 to Saturday, November 30, 2019 (inclusive) for a Christmas Market, on terms and conditions satisfactory to Director, Community Services and Chief Administrative Officer; and, 2. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. Executive Summary: The Community Festivals and Events Policy CUL 070 (the "Policy") outlines the criteria, guidelines and processes by which requests to host private and/or public events in City Parks are received and considered for approval. Prospective applicants are supported by the Community Events staff team and the Community Festivals & Events Manual which provides key information, timelines and required documentation to apply for events in City parks. As per section 05.02(b) in the Policy, the permitting of Esplanade Park for public events is subject to the approval of Council. Therefore, the purpose of this report is to seek Council endorsement of the Christmas Market proposed to take place at Esplanade Park on Friday, November 29 from 6 pm to 9 pm and Saturday, November 30, 2019 from 10 am to 9 pm. The Market will coincide with the Tree Lighting event on Friday, November 29th, and organizers will operate independently on Saturday, November 30th Financial Implications: Applicants are responsible to coordinate and operate all aspects of their events including marketing, event organization and operation, set up, and clean up according to the terms and conditions set out by the City of Pickering. The City of Pickering will work closely with the organizers to plan and execute the event on Friday evening which takes part during the City's Tree Lighting. Applicants are also responsible for all costs associated with application fees including park permit fees, table rentals, garbage/recycling receptacles, etc. (as per the Summary of Fees and Charges Schedule) and the costs associated with paid duty police officers and/or contracted security guards as required by the City. -26- CS 30-19 June 17, 2019 Subject: Community Festivals and Events Page 2 For events with attendance greater than 1,000 guests, City staff are in attendance to oversee weather and emergency operations, check that conditions of the agreements are being met, and to provide a City staff contact during event operations. To be clear, in-kind City staff resources are contributed with each event in order to facilitate and support the event planning, implementation, set up and clean up. Total value of in-kind support for this event is estimated at $5,200.00. Discussion: As per section 05.02(b) of the Policy, staff are required to seek Council approval for event applications proposed to operate in Esplanade Park. Graymatter Marketing Solutions has submitted an application to host a Christmas Market in Esplanade Park on Friday, November 29, 2019 from 6 pm to 9 pm and Saturday, November 30, 2019 from 10 am to 9 pm which includes event set up and clean up. Open to all ages, the Christmas Market will feature a variety of craft vendors, food trucks, alcoholic beverages in enclosed tasting areas, entertainment, games and a horse drawn carriage ride. Organizers are seeking sponsorships in order to offer a light display tunnel through the middle of Esplanade Park. A portion of the proceeds from the festival will be donated to a local charity, Dreams & Wishes. The aim of the charity is to preserve and create childhood memories by fulfilling 'dreams and wishes' made by children and families deemed underprivileged and in need at the holiday season. As part of their two day permit, Graymatter Marketing Solutions is requesting access to electrical, water, picnic tables, restroom facilities, and garbage units. The Coordinator, Community Partnerships has met with the organizer to identify costs based on their event request. City staff from applicable Departments (Community Events Committee) have reviewed this two day event request and also supports the event, in principle, subject to the following event/festival requirements being met by the applicant during the event planning process: • terms and conditions of the City of Pickering Community Events Partnership Agreement • proof of five million dollars in liability insurance • proof of Liquor Licence • City approval of vendor listing • electrician onsite to oversee all electrical hook-ups • adherence to City traffic management plan for event • road occupancy permit • Region of Durham permit for water hook-up and inspection • rentals and event equipment and supplies • fire inspection for all vendors • building permit for all structures exceeding 600 square feet • locates completed for all staked and grounded equipment • Region of Durham community festival coordinator and vendor permits • rental of all required portable restroom and hand -washing stations • rental and installation of all required perimeter fencing • submission of site plan and emergency response plan • adherence to the City's Emergency Weather Standard Operating Procedure • hiring of site security and police officers to monitor event operations - 27 CS 30-19 June 17, 2019 Subject: Community Festivals and Events Page 3 About Graymatter Marketing Solutions — Graymatter Marketing Solutions is a full-service marketing and communications firm, established in Pickering for the past seven years, with experience in all aspects of strategic development including branding of business, print and online strategies, relationship building, event planning, website creation, electronic marketing and social media, all key to strong brand growth. Graymatter has 25 years' experience in the marketing and publishing world working with companies like Avon Canada and Kraft Canada as well as continuing to create and publish custom material such as Durham Region's MOVE magazine, Ontario's Navigate Magazine, and soon to launch, Your City, the City of Pickering's first custom publication. Graymatter Marketing Solutions Event Planning Team strives to make each event a success from beginning planning stages through to execution. They have created successful open house events for multiple businesses in Durham Region to launch their business and showcase their space into the public eye. Graymatter have also organized corporate events and conferences for organizations such as VRA Canada, Emergency Nurses of Ontario and Avon Canada Foundation. Hundreds of people attend these events. Attachments: n/a Prepared By: X Tanya Ryc Supervisor, Cultural Services MC:tr Approved/Endorsed By: Marisa pino Directo , ommunity Services Recommended for the consideration of Pickering City Council AiN49 rJ" Tony Prevedel, P.Eng. Chief Administrative Officer -28- DICKERING 64, Report to Executive Committee Report Number: ENG 07-19 Date: June 17, 2019 From: Richard Holborn Director, Engineering Services Subject: Amendment to Traffic and Parking By-law 6604/05 - Inclusion of New Roads and Traffic Controls, Kindwin Subdivision - File: A-1440 Recommendation: 1. That the attached draft by-law be enacted to amend Schedule "2", Schedule "5", Schedule "6", Schedule "7", Schedule "9" and Schedule "10" to By-law 6604/05 to provide for the regulation of stopping and parking on highways or parts of highways under the jurisdiction of the Corporation of the City of Pickering, specifically to provide for the inclusion of new roads and traffic controls into the Traffic and Parking By-law; and 2. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. Executive Summary: In an effort to keep the Traffic and Parking By-law 6604/05 up to date and current, Engineering Services staff are proposing updates to Schedule "2", Schedule "5", Schedule "6", Schedule "7", Schedule "9" and Schedule "10", specifically for the inclusion of new roads and traffic controls in the Kindwin subdivision. Financial Implications: The installation of all posts and signs can be accommodated within the Current Roads Budget. There is no direct cost to the Municipality related to the recommendations of this report. Discussion: In an effort to keep the Traffic and Parking By-law 6604/05 up to date and current, Engineering Services staff are proposing updates, specifically for the inclusion of new roads and traffic controls within the Kindwin subdivision. The proposed updates to By-law 6604/05 includes updates to Schedule "2", Schedule "5", Schedule "6", Schedule "7", Schedule "9" and Schedule "10", which are described in detail in the following sections. The roads and traffic controls are shown in Attachment 1. -29- ENG 07-19 June 17, 2019 Subject: Amendment to Traffic and Parking By-law 6604/05 Kindwin Subdivision Page 2 Additions to Schedule "2", No Parking The following locations are new restrictions and are currently signed using temporary "no parking" signs and posts. These parking restrictions are proposed to be added to Schedule "2". • south side of Usman Road from Brock Road (north intersection) to Saffron Drive (north intersection) • south side of Usman Road from Brock Road (south intersection) to Saffron Drive (south intersection) • east side of Usman Road from Saffron Drive (north intersection) to Saffron Drive (south intersection) • north side of Magenta Road along the full limit • both sides of Azure Mews along the full limit • north side of Jade Street along the full limit • south side of Jade Street from Azure Mews to 10 metres east thereof Additions to Schedule "5", Prohibited Turns The following locations have been signed to prohibit turning movements and are proposed to be added to Schedule "5". These locations represent turns onto laneways where the width and design of the roadway presents a challenge for two-way traffic and therefore has been designated as one-way. In addition, these locations were previously requested by the Region of Durham to operate as one-way due to difficulties with garbage pick-up if the road was to remain with two-way traffic. • Magenta Road at Azure Mews, westbound right turn is prohibited • Azure Mews at Magenta Road, northbound through is prohibited Additions to Schedule "6", Through Highways A 'through highway' is defined as a road or portion of road to which vehicular traffic from intersecting roads are required by law to stop before entering or crossing. The following roads are new through highways and are proposed to be added to Schedule "6". • Usman Road — Full Limit • Saffron Drive — Full Limit • Azure Mews — Full Limit -30- ENG 07-19 June 17, 2019 Subject: Amendment to Traffic and Parking By-law 6604/05 Kindwin Subdivision Page 3 Schedule "7", Stop Signs All stop signs are currently placed on the minor street at all intersections and are listed below. There are no all -way stop locations proposed. The following stop locations have been added, are illustrated in Attachment 1, and are listed in the draft by-law amendment in Attachment 2. • Jade Street at Usman Road, stop sign on Jade Street • Magenta Road at Usman Drive, stop sign on Magenta Road • Magenta Road at Azure Mews, stop sign on Magenta Road • Saffron Drive at Usman Road (north intersection), stop sign on Saffron Drive • Saffron Drive at Usman Road (south intersection), stop sign on Saffron Drive • Sunflower Road at Saffron Drive (north intersection), stop sign on Sunflower Road • Sunflower Road at Saffron Drive (south intersection), stop sign on Sunflower Road Schedule "9", Speed Limits and Schedule "10", Heavy Traffic Prohibited Schedule "9", Speed Limits and Schedule 10, Heavy Traffic Prohibited are applicable to all new roads within this development, namely Azure Mews, Usman Road, Magenta Road, Jade Street, Sunflower Road, and Saffron Drive. Posted speed limit signs for 40 km/h are currently installed on these streets. Signs prohibiting heavy vehicles are currently located on Usman Road at both the north and south intersections with Brock Road as these are the only 2 entrance points into the subdivision, no other signs restricting heavy traffic is required. The proposed Traffic and Parking By-law 6604/05 Amendment for Schedule "2", Schedule "5", Schedule "6", Schedule "7", Schedule "9" and Schedule "10" is provided in Attachment 2. Attachments: 1. Area Traffic Controls Kindwin Subdivision 2. Draft By-law Amendments to Schedule "2", Schedule "5", Schedule "6", Schedule "7", Schedule "9" and Schedule "10" to By-law 6604/05. - 31 - ENG 07-19 June 17, 2019 Subject: Amendment to Traffic and Parking By-law 6604/05 Kindwin Subdivision Page 4 Prepared By: 1(.7 Nathan Emery Coordir tor, Traffic Operations CcAl Scott Broker Manager, Capital Projects & Infrastructure NE:mjh Approved/Endorsed By: 44'J/ Richard Hol■orn, P.Eng. DOctor, Engineering Services Recommended for the consideration of Pickering City Council Tony Prevedel, P.Eng. Chief Administrative Officer 3.2017 -32- iflN31411JVlly 0 '4 crs 0 0 0 a> N .. J Ma. en�a. r oad • STOP Jade Street Pickering Islamic Centre Osman Ro4i STOP • Saffron Drive STOP, Saffron Drive QtfrQn 1--2[ivi Legend Parking Restrictions Engineering Services Department SCALE. NTS PLOT DATE. May, 2019 Area Traffic Controls Kindwin Subdivision PICKERING -33- k/\CHNEN`f 1E PC" _EN§ 0 -/Cj The Corporation of the City of Pickering By-law No. Being a by-law to amend By-law 6604/05 providing for the regulating of traffic and parking, standing and stopping on highways or parts of highways under the jurisdiction of the City of Pickering and on private and municipal property. Whereas By-law 6604/05, as amended, provides for the regulating of traffic and parking on highways, private property and municipal property within the City of Pickering; and Whereas, it is deemed expedient to amend Schedule 2, Schedule 5, Schedule 6, Schedule 7, Schedule 9 and Schedule 10 to By-law 6604/05 to provide for the regulation of parking restrictions and stop signs on highways or parts of highways under the jurisdiction of the Corporation of the City of Pickering, specifically to provide for the inclusion of new roads and traffic control into the Traffic and Parking By-law. Now therefore the Council of The Corporation of the City of Pickering hereby enacts as follows: 1. Schedule 2 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Schedule 2 No Parking Column 1 Column 2 Column 3 Column 4 Highway Side Limits (From/To) Prohibited Times or Days Add Azure Mews Both Full Limit Anytime Jade Street North Full Limit Anytime -34- By-law No. ATTACHMENT#�02, TO REP®RT# E1 7 o - of (P Page 2 Column 1 Highway Add Jade Street Schedule 2 No Parking Column 2 Column 3 Column 4 Side Limits (From/To) Prohibited Times or Days South Azure Mews to 10 metres Anytime east thereof Magenta Road North Full Limit Anytime Usman Road South Brock Road (R.R.1) Anytime (north intersection) to Saffron Drive (north intersection) Usman Road South Brock Road (R.R.1) Anytime (south intersection) to Saffron Drive (south intersection) Usman Road East Saffron Drive (north Anytime intersection) to Saffron Drive (south intersection) 2. Schedule 5 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Schedule 5 Prohibited Turns Column 1 Column 2 Column 3 Column 4 Highway or Direction Turns Prohibited Prohibited Intersection Times or Days Add Azure Mews @ Magenta Road Northbound Through Anytime -35- By-law Na. ATTACHMENT#_ fOREPORT# ENS 0 - / 9 3 of %. Page 3 Schedule 5 Prohibited Turns Column 1 Column 2 Column 3 Column 4 Highway or Direction Turns Prohibited Prohibited Intersection Times or Days Add Magenta Road @ Azure Mews Westbound Right Anytime 3. Schedule 6 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Schedule 6 Through Highways Column 1 Column 2 Highway Limits (From/To) Add Azure Mews Full Limit Saffron Drive Full Limit Usman Road Full Limit -36- By-law No. ATTACHMENT# ., TO REPORT# EN3 01- /9 y of (P Page 4 4. Schedule 7 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Schedule 7 Stop Signs Column 1 Column 2 Highway Compulsory Stop Facing Traffic Add Jade Street @ Usman Jade Street, eastbound Road Magenta Road @ Usman Magenta Road, eastbound Drive Magenta Road @ Azure Magenta Road, westbound Mews Saffron Drive @ Usman Saffron Drive, westbound Road (north intersection) Saffron Drive @ Usman Saffron Drive, westbound Road (south intersection) Sunflower Road @ Saffron Sunflower Road, northbound Drive (north intersection) Sunflower Road @ Saffron Sunflower Road, southbound Drive (south intersection) -37- By-law No. ,a`s i'A HMENT# n a- TO REPORT'# EAK7 0 & - l 9 S of Page 5 5. Schedule 9 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Schedule 9 Speed Limits Column 1 Column 2 Column 3 Highway Limits Speed Add Azure Mews Full Limit 40 km/h Jade Street Full Limit 40 km/h Magenta Road Full Limit 40 km/h Saffron Drive Full Limit 40 km/h Sunflower Road Full Limit 40 km/h Usman Road Full Limit 40 km/h 6. Schedule 10 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Column 1 Highway Add Azure Mews Jade Street Magenta Road Saffron Drive Sunflower Road Usman Street Schedule 10 Heavy Traffic Prohibited Column 2 Limits (From/To) Full Limit Full Limit Full Limit Full Limit Full Limit Full Limit -38- By-law No. A LIACHMENU__ TO REPORTU Page 6 By-law passed this 24th day of June, 2019. David Ryan, Mayor Susan Cassel, City Clerk - 39 - DICKERING cdo od - Report to Executive Committee Report Number: ENG 08-19 Date: June 17, 2019 From: Richard Holborn Director, Engineering Services Subject: Amendments to Traffic and Parking By-law 6604/05 — Various Locations - File: A-1440 Recommendation: 1. That the attached draft by-law be enacted to amend Schedule "1", Schedule "2", Schedule "6", Schedule "7", and Schedule "14", to By-law 6604/05 to provide for the regulation of stopping and parking on highways or parts of highways under the jurisdiction of the Corporation of the City of Pickering, specifically to provide for stopping restrictions on Sheppard Avenue, parking restrictions on Bainbridge Drive, an all -way stop at the intersection of Pine Grove Avenue and Woodview Avenue, and Community Safety Zones on Toynevale Road and on Rosebank Road; and 2. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. Executive Summary: In response to concerns by Municipal Law Enforcement staff and area residents, and to promote safety around schools, Engineering Services staff are proposing the following updates to Schedule "1", Schedule "2", Schedule "6",Schedule "7", and Schedule "14" to Traffic and Parking By-law 6604/05. 1. Changing the "No Parking" restrictions to "No Stopping" restrictions on the north side of Sheppard Avenue from Whites Road to 150 metres east thereof due to vehicles stopping in the "No Parking" area while waiting for students at Dunbarton High School 2. Implementation of parking restrictions on Bainbridge Drive along the outer curve due to difficulty maneuvering the curve when vehicles are parked along it. 3. Implementation of an all -way stop at the westerly intersection of Pine Grove Avenue and Woodview Avenue due to complaints of increasing traffic volumes, pedestrians crossing and sightlines. The municipal all -way stop warrant has been met for this intersection. 4. Addition of Community Safety Zones near the existing schools on Toynevale Road and Rosebank Road in the South Rosebank neighbourhood. Financial Implications: The installation of all posts and signs can be accommodated within the Roads Current Budget. -40- ENG 08-19 June 17, 2019 Subject: Amendment to Traffic and Parking By-law 6604/05 Various Locations Page 2 Discussion: In response to concerns by Municipal Law Enforcement staff and area residents, and to promote safety around schools, Engineering Services staff are proposing the following updates to the Traffic and Parking By-law 6604/05: Replacement of a No Parking zone with a No Stopping Zone on a portion of Sheppard Avenue is recommended Municipal Law Enforcement staff contacted Engineering Services staff and requested that a portion of the existing parking restrictions on the north side of Sheppard Avenue east of Whites Road be replaced with stopping restrictions. This was recommended by staff due to many vehicles stopping for pick-up and drop-off of students from Dunbarton High School at this location, which is currently posted as "No Parking" at any time. It is difficult for Municipal Law Enforcement staff to issue tickets for motorists parked but sitting in their vehicle with the engine running in a "No Parking" area. Engineering Services staff investigated this request and found that vehicles that are stopped on the north side of Sheppard Avenue east of Whites Road create many safety concerns, namely: • Sightline concerns as this section of road is on a hill and vehicles stop too close to the intersection with Whites Road • Vehicles travelling westbound (including school buses) have to drive around stopped vehicles and when there is a queue of vehicles on Sheppard Avenue at the signalized intersection with Whites Road the left turn lane often gets blocked. After receiving this request from staff, a secondary complaint from a resident in the area was received by Engineering Services through the Customer Care Centre. Based on the investigation, Engineering Services staff recommend changing the "No Parking" restrictions to "No Stopping" restrictions on the north side of Sheppard Avenue from Whites Road to 150 metres east thereof. This change will not negatively impact surrounding residents as parking restrictions are already in place and the residences on Sheppard Avenue have long driveways that can accommodate at least four vehicles. The proposed change from parking restrictions to stopping restrictions are shown graphically in Attachment 1. The draft by-law amendment to Schedule "1", No Stopping, and Schedule "2", No Parking of By-law 6604/05 is presented in Attachment 5. Staff will continue to monitor this section of road and will bring a recommendation to further extend the stopping restrictions on Sheppard Avenue near Dunbarton High School if required. - 41 - ENG 08-19 June 17, 2019 Subject: Amendment to Traffic and Parking By-law 6604/05 Various Locations Page 3 Addition of a No Parking Zone on Bainbridge Drive at the curve is recommended Municipal Law Enforcement staff contacted Engineering Services staff and requested that parking restrictions be placed along the curve on Bainbridge Drive citing difficulty with maneuvering the bend with vehicles parked along this section of road. Engineering Services staff has previously investigated parking restrictions on Bainbridge Drive, at the request of Durham Region Transit, from Kingston Road south to the curve with a letter being sent to all residents along this section of road back in May 2015. The letter asked for feedback regarding parking restrictions on the east side of the road, from Kingston Road south to the curve. Only 2 residents responded to the survey and they did not feel that this was an issue, specifically stating that residents do not park on the east side of the road, only the west side occasionally, and not around the curve. This information was provided to Durham Region Transit and no further action was taken at that time. After receiving the new request to investigate this from Municipal Law Enforcement staff, Engineering Services staff conducted numerous site visits at various times of the day and different times of the week, and found that there are vehicles parking along the curve, and on the west side of the road at times. Engineering Services staff also agree with Municipal Law Enforcement staff that the curve can be difficult to maneuver when vehicles are parked on it. Therefore based on the investigation, Engineering Services staff recommend implementing parking restrictions on Bainbridge Drive along the outer curve. Engineering Services staff will continue to monitor the parking in the area and, if required, will propose parking restrictions along the inner curve if it proves to be problematic in the future. The proposed addition of parking restrictions are shown graphically in Attachment 2. The draft by- law amendment to Schedule "2", No Parking of By-law 6604/05 is presented in Attachment 5. An all -way stop at the westerly intersection of Pine Grove Avenue and Woodview Avenue is recommended Area residents have requested City of Pickering staff to investigate the installation of an all -way stop control at the westerly intersection of Pine Grove Avenue and Woodview Avenue. Safety concerns have been expressed, specifically in regards to an increase in vehicle traffic, vehicle speed, sightlines at the intersection, and pedestrians crossing the intersection north and south on Pine Grove Avenue. In response to these concerns, Engineering Services staff completed a review of the westerly intersection at Pine Grove Avenue and Woodview Avenue. City staff's review of the intersection included the following: • collection of pedestrian and vehicle volumes and completion of municipal all -way stop warrants at the intersection • observations of vehicle and pedestrian traffic • review of existing signs and pavement ma4n�s - ENG 08-19 June 17, 2019 Subject: Amendment to Traffic and Parking By-law 6604/05 Various Locations Page 4 To determine if an all -way stop control is required at the westerly intersection of Pine Grove Avenue and Woodview Avenue, staff completed municipal all -way stop warrants, in accordance with the City's 2003 Safer Streets Traffic Management Strategy. The City's All -way Stop Warrant calculates whether an all -way stop control is required taking vehicle volumes into consideration. The City's warrants for all -way stop at the westerly intersection of Pine Grove Avenue and Woodview Avenue were met with Warrant 2: Minimum Vehicle Volume being satisfied. This warrant is a reduced standard approved in the City's 2003 Safer Streets Traffic Management Strategy at 70% of the Provincial All Way Stop Warrant. Sightlines at the intersection were also reviewed, and considered to be acceptable, based on the City's all -way stop warrant requiring a minimum of 60 metres for a roadway with a design speed of 50 km/h (posted 40 km/h). Engineering Services staff contacted 11 homeowners on May 21, 2019 in the direct vicinity of the intersection that would be the most impacted of the placement of an all -way stop at this location. Out of the 11 residents contacted, 3 were opposed to the installation of the all -way stop. A letter was sent to residents in the area at the end of May 2019, including the 11 residents that were surveyed on May 21, 2019, giving notification that the recommendation would come before the Executive Committee meeting in June 2019, and if approved would go to the regular Council meeting in June for approval. It is important to note that Engineering Services staff is not recommending the all -way stop to control speeds, but is recommending the all -way stop because it meets the City's warrant, as described in the 2003 Safer Streets Traffic Management Strategy, based on traffic volumes for an all -way stop. Also, it is recognized that the closest all -way stop to this location is approximately 200 metres away centerline to centerline at the intersection of Pine Grove Avenue and Oakburn Street. This distance is considered acceptable between two all -way stops with one intersection not interfering with the operation of the other intersection. In summary, based on the results of the vehicle and pedestrian count with the City's All -way Stop Warrant being met, Engineering Services staff recommend the placement of an all -way stop control at the intersection of Pine Grove Avenue and Woodview Avenue. The proposed all -way stop control at the westerly intersection of Pine Grove Avenue, and Woodview Avenue is shown graphically in Attachment 3. The draft by-law amendment to Schedule "6", Through Highways, and Schedule "7", Stop Signs of By-law 6604/05 is presented in Attachment 5. Addition of Community Safety Zones on Toynevale Road and Rosebank Road are recommended In June of 2018, a review of all schools for the possible implementation of Community Safety Zones was completed by Engineering Services staff. At that time three additional Community Safety Zones were implemented and one was extended. It was noted in the June 2018 report ENG 11-18 that staff would continue to address the need for additional Community Safety Zones, as a tool for addressing traffic safety, and will provide updates to By-law 6604/05 as required. -43- ENG 08-19 June 17, 2019 Subject: Amendment to Traffic and Parking By-law 6604/05 Various Locations Page 5 The purpose of a Community Safety Zone, is to indicate to the motorist that they are within a zone where fines can be increased through a special designation under the Highway Traffic Act. Community Safety Zones are typically placed on sections of roadway where public safety is of special concern. Based on the June 2018 review, Engineering Services staff recommended that Community Safety Zones be installed on collector and local municipal roads where the following criteria is met: • where an existing school zone is present • where, through traffic studies, the 85th percentile speed of vehicles is at least 10 km/h greater than the posted speed limit during the school's peak pick-up and drop-off times, or, in an area where non-compliance of an existing traffic control is recognized Based on this criteria, it is recommended that two Community Safety Zones be added to the following two roads. Road Toynevale Road Rosebank Road Limits Rougemount Drive to Rosebank Road Adjacent School Blaisdale Montessori School Toynevale Road to Dahlia Rosebank Road Public School Crescent/Cowan Circle The South Rosebank Resident Community Group, which makes up this area, has been advised of staff's recommendation to implement Community Safety Zones on these two sections of roads and are supportive of these additions. The proposed Community Safety Zones on Toynevale Road and Rosebank Road are shown graphically in Attachment 4. The draft by-law amendment to Schedule "14", Community Safety Zones of By-law 6604/05 is presented in Attachment 5. Attachments: 1. Proposed Stopping Restrictions, Sheppard Avenue 2. Proposed Parking Restrictions, Bainbridge Drive 3. Proposed All -way Stop Location, Pine Grove Avenue and Woodview Avenue 4. Proposed Community Safety Zones, Toynevale Road and Rosebank Road 5. Draft By-law Amendments to Schedule "1", Schedule "2", Schedule "6", Schedule "7", Schedule "14", to By-law 6604/05. -44- ENG 08-19 June 17, 2019 Subject: Amendment to Traffic and Parking By-law 6604/05 Various Locations Page 6 Prepared By: Approved/Endorsed By: 3/I -7/ Nathan mery Coordirtor, Traffic Operations Sector, Engineering Services Richard Hol orn Scott Booker Manager, Capital Projects & Infrastructure NE:mjh Recommended for the consideration of Pickering City Council 0-(;911,4i J41442 3, ZO/7 Tony Prevedel, P. Eng. Chief Administrative Officer -45- ATTACHMENT# 1 TOREPORT#�! 08-19 1 of 1 -46- Legend(It Proposed Stopping Restrictions • • • • • • (to replace existing parking restrictions) Existing Stopping Restrictions (with days/times) Existing Parking Restrictions • r1,i = 33,, y ,4 i IIII JJ 5 ' 'O , • Orr 5 d 5. e iv�N 11 1y '�� !'15,5 '� I ---I! v est I� • ' * ': _ . �, - IIIA r�. r 7 r ! --• ti _ - -- * - ^� ` 1 l- 1-i7 r.x.0.4+• t 1 fi r■■ ■■�-t ■ i■a■■■MWR-—■if1 imicmi ■'in0 ,11 Sheppard Avenue "V 1 ' - P -Y - r ; - 1 • : ): ' ik r ' , I I ,,, . ... , . . 1 - i11n.arton I-Isch i ' . ;` • Engineering Services CilY4 Department Proposed Stopping Restrictions PICKERING 141.= NTS MTDATMaE,2o,9 Sheppard Avenue -46- ATTACHMENT#a2 ioREPORT#_C^1A08--►� I nf� jige ...------ -7,11r---- , • ~Skog_ % _ .. r �, ip 1 .04 w 4 ' `' ., { 1r k < r \f; • it , # ...� k ¢ 11. _ter... • A ` !` 1T I #'; • Tom+{' S .• it' . .. -t;.�:, >— - – /r It Proposed Parking Restriction L e _ i , r, , ' - y 1 ' - F 4 ' • , ' - . ,- _ — _ .•..Iel' "� - a , j 4 .'+ . ,4 1 u x Engineering Services cdy 4 Department Proposed Parking Restriction DICKERING " "` NTS in. MaY,2o,9 Bainbridge Drive -47- ATTACH MEM # 3 TO RE PORT# .'--f46'7 0 5 - 9 Lof * ---,- . - -„ ' , ti, "•11p P l Tip , v i ik c - • . , -4 ', -"-, 1.. ''' e , '-• v ' • . , ... r. s... - -*t• '4. 1 ' - 1 \ • i • - d i• • t -• • t• • - 4 tt, 14 14).< -1 , 1 a • 1 . `r - ' 14 - ,. , • c ... ,. ,•••.:A. , i ,... - . 4 4 - .. . , • • - 1 ; - r• • itv.0 . .. , ,,, ... -.1. . • 7 •,,, .• -,-..,..,-. , ',,, IclygeFore§t Crscpat .,, • .11, ' ,,. -1-" ' ''4 u • r ' 4 - • • 1- ' ) ' ', .. - ' n • ' 3 1 • ,1' . i - -o .'r • # _ A -‘" 4t. a 11 ' ° ''t ., a • ,4.41 Existing ..,-. • . 34.1., 1 . .. ' .*--',- "`• -. . •1 • , • 4 _. i , 4,,e'_: , ./ '''''s.• 4T. ( , , 1. (43 a All-wa Stop • . ..'- • z. •,..i..-_, • 1,4,_ , , , 1 - - - Proposed All -way Stop • ' • ' . ei• - 4., ' ' 1 " It ' r - A, .„. ', . .., •‘, • r lea cr P . ...; • nue Pin,• <ea• --Ii , _a..» .. . • 4 .,.. ' -. "'.1 ..4-• , e1.- A ) Grove .Av.,.,e- ' (f) , ' • f a) • • . , - • -1. • E ' t - , ,?./.4',.,,, vy : • .. . ‘, ,._-, ._ ...--;... • ..., ' 14,.. • ..1` 3i1.4:.?:.4.:_lt*, , , ii,„, ,.. . . 7 „1, 4 , i , ,:, , '." ' :ItNe:1 It ' • :-- , - - „, - o .., ,..., '4 r • ' '• - ' ss. ' - :'7' _ 0' t--' .4 V1:4. 4. %I., r, 1: ,, . _. Et L'') .- 1 1:11 ' g*.• 'V 6 . ' f ' Engineering Services G/p Department Proposed All -way Stop •ii PICKERING sue NTS piar WE: May, 2019 Woodview Avenue and Pine Grove Avenue - Westerly Intersection - 48 - ATTACHMENT# TOREPORT# &'I 6.1 08 - /9 Lot' I sr' Legend Proposed Community Safety Zone t.r. { #'. • w(i^L P. i eb k P ad ublic hool tAl F �s1i %s.���.ti�R""'i •• Engineering Services Department NTS NAT DUE May, 2019 Proposed Community Safety Zones Toynevale Road and Rosebank Road PICKERING -49- The Corporation of the City of Pickering By-law No. Being a by-law to amend By-law 6604/05 providing for the regulating of traffic and parking, standing and stopping on highways or parts of highways under the jurisdiction of the City of Pickering and on private and municipal property. Whereas By-law 6604/05, as amended, provides for the regulating of traffic and parking on highways, private property and municipal property within the City of Pickering; and Whereas, it is deemed expedient to amend Schedule 1, Schedule 2, Schedule 6, Schedule 7, and Schedule 14 to By-law 6604/05 to provide for the regulation of parking restrictions and stop signs on highways or parts of highways under the jurisdiction of the Corporation of the City of Pickering, specifically to provide for the inclusion of new stopping and parking restrictions, a new all -way stop at the intersection of Pine Grove Avenue and Woodview Avenue and new Community Safety Zones. Now therefore the Council of The Corporation of the City of Pickering hereby enacts as follows: 1. Schedule 1 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Column 1 Highway Add Schedule 1 No Stopping Column 2 Column 3 Side Limits (From/To) Sheppard Avenue North Column 4 Prohibited Times or Days Whites Road (R.R.38) Anytime to 150 metres east thereof -50- MENT By-law No. l'nl(? os -r4 Page 2 2. Schedule 2 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Schedule 2 No Parking Column 1 Column 2 Column 3 Column 4 Highway Side Limits (From/To) Prohibited Times or Days Delete Sheppard Avenue North Whites Road to Anytime Fairport Road Add Bainbridge Drive West and 280 metres south of South Kingston Road to 350 metres south of Kingston Road Sheppard Avenue North 150 metres east of Whites Road (R.R.38) to Fairport Road Anytime Anytime 3. Schedule 6 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Schedule 6 Through Highways Column 1 Column 2 Highway Limits (From/To) Delete Pine Grove Avenue The south limit to Oakburn Street, Oakburn Street to Westcreek Drive, Westcreek Drive to Altona Road - 51 - By-law No. K TACPiMENT#... _ OREPO`ii _ ENCS 05-19 3 of 5- Page 3 Schedule 6 Through Highways Column 1 Column 2 Highway Limits (From/To) Add Pine Grove Avenue The south limit to Woodview Avenue (west intersection), Woodview Avenue (west intersection) to Oakburn Street, Oakburn Street to Westcreek Drive, Westcreek Drive to Altona Road 4. Schedule 7 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Column 1 Highway Add Pine Grove Avenue @ Woodview Avenue (West intersection) Schedule 7 Stop Signs Column 2 Compulsory Stop Facing Traffic Pine Grove Avenue, eastbound and westbound - 52 - By-law No. `iTACHiMENT#,�s TO REPORT# • C7 0 8" 19 Page 4 5. Schedule 14 to By-law 6604/05, as amended, is hereby further amended thereto by the following: Column 1 Highway Add Schedule 14 Community Safety Zones Column 2 Column 3 Limits (From/To) Prohibited Times or Days Rosebank Road Toynevale Road to Anytime Dahlia Crescent / Cowan Circle Toynevale Road Rougemount Drive to Anytime Rosebank Road -53- ACHMENT# S TO REPORT# S of _ w By-Iaw No. Page 5 By-Iaw passed this 24th day of June, 2019. David Ryan, Mayor Susan Cassel, City Clerk -54- Cil �( PJCKER1NG Report to Executive Committee Report Number: PLN 15-19 Date: June 17, 2019 From: Kyle Bentley Director, City Development & CBO Subject: Sustainable Pickering Year -in -Review File: D-7300 Recommendation: 1. That Report PLN 15-19 be received for information. Executive Summary: A Sustainable Pickering Year -in -Review has been created to provide a high level, reader -friendly summary to highlight awards, events, programs and projects. The document promotes the City of Pickering and our partners' effort and serves to inspire others to connect with us and get involved. Going forward, the Year -in -Review will be released annually in the first quarter. The Year -in -Review will be posted online and promoted through social media. Financial Implications: Not applicable. 1. Discussion The City of Pickering's award winning sustainability efforts span many areas of interest from energy, pollinators, waste, local food, sustainable development, community engagement, and more. City staff have developed a comprehensive set of tools to communicate these efforts including the website, social media, eNewsletters, events, Measuring Sustainability Report, Pickering 101, and presentations to external groups. In an era when our community members are busier than ever, it is important to utilize a variety of outreach opportunities. The Sustainable Pickering Year -in -Review provides a reader -friendly synopsis of activities and metrics where applicable. Attachment 1. 2018 Sustainable Pickering Year -in -Review -55- PLN 15-19 June 17, 2019 Subject: Sustainable Pickering Year -in -Review Page 2 Prepared By: Approved/Endorsed By: ( Chantal Whitaker, BESc (Hons), CSR -P Kyle Bentley, P. Eng. Supervisor, Sustainability CW:Id Director, City Development & CBO Recommended for the consideration of Pickering City Council 612 2ez ton Tony Prevedel, P.Eng. Chief Administrative Officer CORP0227-07/01 revised -56- Attachment 1 to Report # PLN 15-19 2018 Sustainable Pickering Year -in -Review Sustainable PICKERING�1., pickering.ca/sustainable 57 (dye/ DICKERING Table of Contents A Message from our CAO 1 Awards and Accolades 2 Enhancing the natural environment 3 Helping our pollinators 4 Engaging with our community 5 Reducing our waste 7 Becoming more energy efficient 8 Looking towards the future 9 Year -in -Review =58- A Message from our CAO Page 1 1 am proud to present the City's first Sustainable Pickering, Year -in -Review for 2018. This opportunity allows us to showcase key sustainability highlights and accomplishments from 2018. Ensuring the long-term social, environmental, economic and cultural health of the City remains a corporate priority, and over time, our sustainability program has evolved to meet the growing needs of our organization and community. am proud to say that we are a recognized leader of many award-winning initiatives, and invite you to reflect on our collective achievements, and be inspired on how together, we are forging a path toward a more sustainable future. Tony Prevedel Chief Administrative Officer Year -in -Review -59- Awards and Accolades Page 1 2 Smart Commute Gold Designation The City was awarded the Metrolinx Smart Commute Gold Workplace Designation for our efforts in promoting and supporting sustainable travel options for staff, such as carpooling and biking to work. Smart Commute Gold Designation Award Ea)Business Network Leadership Award The City received the Leadership Award from Ecobusiness Network for its dedication to environmental leadership and overall impact reduction within community. The City demonstrated leadership in sustainability through various initiatives such as coordinating the Pickering Farmers' Market, undertaking natural environment enhancements and other projects. Leadership Award from Ecobusiness Network Named World's Smart2l Communities of 2017 and 2018 Pickering was named a Smart2l Community for 2017 and 2018 by the Intelligent Community Forum. These awards recognized Pickering's commitment to creating a more connected, engaged, inclusive, and sustainable City. Pickering City Hall Lighting - Largest Savings Award The City proudly accepted the 'Lighting - Largest Savings Award' from Powering Up Durham. This award recognized a number of our sustainable initiatives including the conversion of over 7,000 streetlights to LED, as well as City facility lighting retrofits. Largest Savings Award from Powering Up Durham Year -in -Review -60- Enhancing the natural environment Page I3 Take Pride in Pickering Tree Planting The City of Pickering, in partnership with Ontario Power Generation, Toronto and Region Conservation Authority, and Environmental Stewardship Pickering hosted two tree -planting events in Duffin Heights and the Waterfront Trail. 100 attendees joined together to plant 600 trees and pick up litter. Educational and interactive displays taught residents about the importance of conservation, biodiversity and keeping the community clean. Planting trees in Duffin Heights Picking up litter in Duffin Heights 20 -Minute Pickering Makeover Over 2,500 people participated in the 14th annual 20 -Minute Pickering Makeover to help beautify the community. Thank you to the many community groups, schools, businesses and residents that picked up litter from City streets and parks. Lake Ontario Atlantic Salmon Release The City of Pickering, in partnership with the Pickering Public Library, Ontario Federation of Anglers and Hunters and Ontario Ministry of Natural Resources, supported a salmon hatchery at the Central Library. Students and library patrons were able to observe and learn about the Atlantic salmon and the importance of biodiversity. The hatchery resulted in the release of 97 Atlantic salmon into Duffins Creek. Atlantic salmon hatchery at Pickering Public Library Year -in -Review Releasing Atlantic salmon into Duffins Creek by the Claremont Nature Centre 61 - Helping our pollinators Page I 4 Mayors' Monarch Pledge As part of the Mayors' Monarch pledge, the City provided garden training workshops to teach people how to maintain healthy pollinator gardens that are designated as Monarch Waystations. A Monarch exhibit was featured at both City Hall and the Pickering Museum Village. The City also helped prepare a butterfly -shaped garden in Claremont, which is now designated as a Monarch Waystation through the International Monarch Waystation Registry. Pollinator garden training session at Rick Hull Memorial Park Designated Monarch Waystation at Pickering Museum Village Year -in -Rev Whitevale Garden Project The City assisted the Whitevale Arts and Culture Centre with expanding a pollinator garden at their Centre using funds from the City of Pickering's Community Grant Program and the Retired Teachers Association Fund. City staff were able to assist with construction of the site, selection of plant material, a landscape plan, and planting. The garden is now designated as an official Monarch Waystation. Local Partnership to Enhance Pollinator Habitat Canada Bread Company Limited funded and planted 300 pollinator -friendly plants in Ernie L. Stroud Park through its Good Neighbour program, to help naturalize a previously mowed area and help local pollinator species. Dunbarton High school students helped plant the garden. Canada Bread Company Limited funds pollinator -friendly planting Engaging with our community Page 1 5 Sustainable Pickering Day The 13th annual Sustainable Pickering Day, in partnership with the Pickering Town Centre, brought the community together to raise awareness about sustainability in Pickering. The event focused on local food, natural environment, and gardening. Over 400 visitors shopped the indoor Farmers' Market, and spoke with experts on gardening, trees and energy. They also had the opportunity to recycle unwanted garments and e -waste. Toronto and Region Conservation Authority's interactive booth at Sustainable Pickering Day Attendees speaking to City's energy expert at Sustainable Pickering Day Year -in -i• Environment Day The City of Pickering, in partnership with Ontario Power Generation and Toronto and Region Conservation Authority, celebrated Environment Day at St. Elizabeth Seton Catholic School. Over 100 students and parents enjoyed an educational, fun -filled day with nature -related crafts, an interactive display from Parks Canada, and the viewing of the award winning film, `Backyard Wilderness' to end the night. Pickering Farmers' Market The Pickering Farmers' Market provided an opportunity for residents to purchase fresh produce, baked goods, meats, and handcrafted jewelry from local farmers and businesses. The market helped support the local community, while encouraging healthy and environmentally friendly foods and goods. Residents enjoyed weekly live entertainment and themed event days such as Healthy Living, 55+, and Energy Awareness, and Mutts at the Market. Residents buying fresh produce at Pickering Farmers' Market Engaging with our community Page 1 6 Enhancement project through Celebrating Sustainable Neighbourhoods program The Celebrating Sustainable Neighbourhoods program is about connecting with members of the community to spark a positive change - environmentally, socially or economically. In 2018, SoRo Good Neighbours won the $10,000 community enhancement prize and revitalized Rick Hull Memorial Park through interpretive signs, tables, pollinator plantings and trees. Dunbarton High School won the $3,500 runner- up prize and enhanced Alex Robertson Park and Ernie L. Stroud Park with interpretive signs about Shinrin-Yoku and invasive species. The City was proud to have the Hon. Elizabeth Dowdeswell, Lieutenant Governor of Ontario take part in celebrating the outstanding contributions of its community members. Shinrin-Yoku interpretive sign at Alex Robertson Park Accessible tables with shade cover at Rick Hull Memorial park Pickering Blooms Garden Celebration As part of the City of Pickering Blooms program, Pickering residents were invited to celebrate the art of gardening and a season of beautiful gardens in Pickering. Attendees were able to learn helpful tips on how to maintain a healthy garden. Pickering WI The Pickering 101 program provided an opportunity to present the City's sustainability efforts to participants, highlight opportunities to get involved, and help build a culture of community engagement. The program educated residents on how municipal government works and gave them an opportunity to build relationships with City staff. Pollinator garden, interpretive sign and reclaimed ash tree bench at Rick Hull Memorial Park -64- Reducing our waste Dog Waste Diversion Program As of 2018, the Dog Waste Diversion Program was available in 16 parks across Pickering. A total of 5.2 tonnes of dog waste was collected and delivered to a facility that converted it into electricity, heat, and nutrient dense fertilizer. Dog waste diversion station in Millennium Square Household Hazardous Waste and Electronic Waste Collection During the 2018 collection event, in partnership with the Region of Durham, Pickering residents dropped off 10.49 tonnes of electronic and hazardous waste, free of charge. Residents were also able to drop off non-perishable food items for the local food bank. Page 1 7 Compost Giveaway In partnership with the Region of Durham, Pickering hosted its annual compost giveaway. At this popular event, 1,100 residents were able to pick-up free compost made from the organics collected through Durham's curbside green bin and yard waste programs. Battery Recycling Program This program allows residents to drop off their batteries at the Pickering Recreation Complex, Pickering Central Library, George Ashe and East Shore Community Centres. The batteries are stored and then picked up to be responsibly recycled. Batteries collected at Pickering Recreation Complex Milk Bag recycling program Pickering's staff -driven Milk Bag program collects clean milk bags from Pickering staff for delivery to local community groups that collect, weave, and send completed bed mats to poverty-stricken areas throughout the world. -65- 1 Becoming more energy efficient Page 1 8 Street Light Conversion to LED The City of Pickering converted over 7,000 streetlights to Light Emitting Diode (LED) lighting, through its light conversion project. The new street lights consume less energy, have a longer lifetime, and offer increased safety. A $642,282.35 cheque was presented to the City from Veridian as part of the Save on Energy Rebate program. The City will also save $690,000 per year in combined electricity and maintenance costs. LED streetlights initiative Encouraging Residential Participation The City's energy conservation initiatives align with its' Corporate Energy Management Plan. Actions have resulted in financial savings, as well as a reduction in greenhouse gas emissions. However, upon learning of the limited residential participation in the utilities' energy and money saving programs, the City partnered to develop and implement a comprehensive promotional strategy to increase awareness to households, including low-income. Energy Retrofit Projects As part of Pickering's commitment to energy efficiency, LED lighting retrofits were completed in three Pickering facilities: Pickering Recreation Complex, Pickering City Hall, and the Eastshore Community Centre. The Pickering Recreation Complex also added building automation systems and upgraded their boilers to help save energy. New Electric Vehicles & Charging Stations The City added two electric vehicles to our fleet as well as four electric vehicle charging stations. Benefits of the new electric vehicles include improved air quality, cost savings, low maintenance, and reduced greenhouse gas emissions. Electric vehicle charging stations City of Pickering electric vehicle at charging station -66- Looking towards the future Measuring progress towards sustainability The Measuring Sustainability Report updated statistics on key indicators of sustainability in the City. A total of 52 indicators were grouped into five categories of Healthy Environment, Healthy Economy, Healthy Society, Responsible Development, and Responsible Consumption. These measurements help drive future progress in meeting our evolving sustainability objectives. Durham Community Climate Adaptation Plan Pickering joined in the development of the Durham Community Climate Adaptation Plan to help Durham Region identify the impacts of climate change and how these changes relate to the vulnerability of specific areas in the region. The Region of Durham, local municipalities, and other organizations are now participating in program implementation. 2017 Measuring Sustainability Report Reporting on key indicators of sustainability in Pickering Measuring Sustainability Report Page 1 9 Durham Community Energy Plan Pickering participated in the development of a Durham Community Energy plan. The plan strives to improve energy efficiency, reduce energy use and greenhouse gas emissions, while encouraging green energy solutions at the local level. This will establish groundwork for future growth and development, energy generation, delivery and use. The plan is expected to be complete in late 2019. In 2019, the City of Pickering will continue its longstanding commitment to create a more sustainable community. Join us on the journey to become one of the most sustainable cities in Canada. There are many fun and inspiring ways to make Pickering a better place environmentally, socially and economically. To learn how you can get involved visit: pickering.ca/sustainable Year -in -Review -67- We welcome your comments, questions, and suggestions. Please contact the City's Sustainability staff at sustainability@pickering.ca. Alternate formats available upon request at 905.683.7575 or customercare@pickering.ca. -68- 64 DICKERING Report to Executive Committee Report Number: FIN 08-19 Date: June 17, 2019 From: Stan Karwowski Director, Finance & Treasurer Subject: 2018 Year End Recommendation: 1. That the Report to the Executive Committee on the 2018 audit as submitted by Deloitte LLP (Deloitte) be received for information; 2. That the 2018 draft Audited Consolidated Financial Statements for the City of Pickering be approved; and 3. That Deloitte LLP be reappointed to provide external auditing services to the City of Pickering for a 3 year term. Executive Summary: Attached to this report is the auditor's Report to Executive Committee on the 2018 audit and the draft Audited Consolidated Financial Statements for the year ended December 31, 2018. The auditor has provided an unmodified audit report on the financial statements. This means that the financial statements present fairly, in all material respects, the financial position of the City and its operations, changes in its net financial assets and its cash flows in accordance with Canadian public sector accounting standards. The auditor did not identify any significant deficiencies during the audit to formally report to Council. Under section 296 of the Municipal Act, 2001, Council must appoint an auditor, licensed under the Public Accounting Act, 2004, for a period not to exceed 5 years. The current auditor, Deloitte, was last appointed in 2016 for a 3 year term. As the term ends with the 2018 year end audit, it is recommended the firm be reappointed for a 3 year term. Financial Implications: The Balance Sheet has net financial assets increasing by approximately $2.1 million which means that the City is capable of meeting its financial commitments. The accumulated surplus increased by $21.6 million over prior year primarily due to an increase in the net book value for tangible capital assets. Again this year, total expenditures came in under budget as staff continue to maintain tight control over their operating budgets. -69- FIN 08-19 June 17, 2019 Subject: 2018 Year End Page 2 The revenues reported in the Consolidated Statement of Operations are the combined revenues for operating and capital purposes. As a result, variances between budget and actual may arise due to the timing of approval in the capital budget as compared to the actual receipt of funds/recognition of revenue. Overall, the City's financial position is healthy and strong and the City is able to meet its financial commitments. In regards to the reappointment of the auditors, there will be no additional costs beyond the budgeted amount included in the 2019 Current Budget as the auditor has indicated they would be willing to hold their audit fees at the 2018 level for the 3 year term. Discussion: The audit of the consolidated financial statements for the year ended December 31, 2018 has been completed. The auditor's Report to Executive Committee is included as Attachment 1. This Report, prepared by Deloitte, summarizes its findings from the December 31, 2018 audit and comments on significant matters regarding the audit. Appendix 1 provides a summary of communication requirements which Deloitte is required to bring to Council's attention. The independence letter in Appendix 2 confirms that Deloitte is independent from the City. Appendix 3 is the draft management representation letter which is provided by the City to the auditors. This letter indicates that the financial statements are management's responsibility and that management has provided and disclosed all necessary information to ensure that the financial statements are not materially misstated. This letter will be signed by the appropriate authorities upon approval of the financial statements. The scope of the audit does not include an in-depth evaluation of all systems or internal controls, however, the auditors may report on matters that come to their attention during the course of their review. No significant matters came to their attention to report and therefore a management letter has not been issued. During the course of any audit, auditors may find misstatements that may or may not be adjusted due to materiality. For 2018, there is an uncorrected misstatement related to the overstatement of the amortization expense. As part of the implementation of asset management, some of the useful life estimates for tangible capital assets were identified to be adjusted. For example, the vehicles' useful life was adjusted from 5 to 7 years to better reflect the City's actual retention period. This has been an ongoing process and as at December 31, 2018 there are still a few asset categories remaining to be completed which resulted in an overstatement of the amortization expense. The draft Audited Consolidated Financial Statements are included as Attachment 2. These statements are the responsibility of management and have been prepared by City accounting staff under the direction of the Director, Finance & Treasurer. The auditors are responsible to express an opinion on these Consolidated Financial Statements based on their audit. An unmodified audit report has been issued which means the auditors have indicated that in t�oopinion, the consolidated financial FIN 08-19 June 17, 2019 Subject: 2018 Year End Page 3 statements are fairly presented, in all material respects. In other words the City has a clean report. The Consolidated Financial Statements include the activities of the City of Pickering Public Library Board. The City's investment in Veridian Corporation is accounted for on a modified equity basis, which means the City includes its share of Veridian's income or loss in the Consolidated Financial Statements. The Consolidated Financial Statements are prepared on the full accrual basis in accordance with Canadian Public Sector Accounting Standards (PSAS), which includes reporting tangible capital assets. Tangible capital assets, such as land, building, infrastructure and equipment are capitalized (recorded) at cost on the Statement of Financial Position (Balance Sheet) and amortized (depreciated, except for land) over their estimated useful lives in current operating expenses. The Statement of Financial Position includes tangible capital assets under the non-financial asset section and shows in Accumulated Surplus. This is different than the City's budget, which notes these capital items as expenditures. Statement of Financial Position (Balance Sheet) Financial assets are those assets which could provide resources to discharge existing liabilities or finance future operations. The City's financial assets increased by approximately $15.9 million which is offset by an increase in liabilities of $13.8 million. This resulted in an increase in net financial assets of $2.1 million over the prior year which means the City is able to meet its financial commitments. Non-financial assets include tangible capital assets which is the net book value (cost less accumulated amortization) of City -owned assets including land, buildings, roads, bridges and sidewalks infrastructure, storm sewer infrastructure, furniture and fixtures, vehicles and equipment. Non-financial assets are not available to discharge existing liabilities and are held for use in the provision of services. They have useful lives extending beyond the current year and are not intended for sale in the ordinary course of operations. Note 10 of the Financial Statements provide a summary of the City's tangible capital assets. The December 31, 2018 gross book value of assets is $492.6 million and, after adjusting for amortization, the net book value of the assets is $259.9 million. In other words, the City has consumed a substantial amount of the life of its assets. Future capital budgets have taken into consideration the investment into and the maintenance of the City's infrastructure base as a financial priority. Statement of Operations (Income Statement) Revenue reported includes both operating and capital. Therefore, variances between budget and actual may arise due to the timing of approval in the capital budget as compared to the actual receipt of funds/recognition of revenue. This is clearly illustrated with development charges and contributions earned line item. - 71 - FIN 08-19 June 17, 2019 Subject: 2018 Year End Page 4 The budget amount primarily represents development charge (DC) funding of 2018 capital projects. The actual amounts reported reflect DC funding for capital projects approved in prior year budgets because of the timing difference between when a project is approved in the budget and when it actually commences. Actual expenses are under budget in most of the functional areas, which illustrates City staff's commitment to controlling expenditures. However the General Government line shows a significant underage as a result of the timing of budget to actual for the new Financial System. The budget approval was received in 2018 however the implementation is occurring in 2019. The capital budget expenditures do not show on the Statement of Operations as capital expenditures. For those expenditures that meet the definition of a tangible capital asset (TCA), the cost is reported on the Statement of Financial Position (Balance Sheet). Only a portion of the asset's cost is included as an amortization expense each year over the life of the asset in the operating expenses reported on the Statement of Operations. The amortization expense is included in operating expenses for the asset's respective functional category. For example, amortization on a fire truck is included under the Protection to Persons and Property category. Capital budget expenditures that do not meet the TCA definition are included as operating expenses under the appropriate functional category. The budget figures reported need to reflect the change in reporting for capital budget expenditures to be compliant with Public Sector Accounting Standards. Note 18 of the City's consolidated financial statements reflect the changes made to the 2018 Council approved budget to put it on a basis consistent with the full accrual basis of accounting. This means excluding capital expenditures that are deemed tangible capital assets and including amortization. Accumulated Surplus The components that make up the Accumulated Surplus are disclosed in Note 11 of the City's consolidated financial statements and are summarized below. An accumulated surplus is the amount by which all assets (financial and physical) exceed all liabilities. It must be emphasized that these amounts are not surplus funds in the traditional sense. In other words, there is no City bank account that has a balance of $403.3 million. An accumulated surplus indicates that the City has net resources (financial and physical) that can be used to provide future services. What primarily contributes to this balance are the net tangible capital assets of approximately $259.9 million and the City's equity in Veridian Corporation of approximately $84.6 million. - 72 - FIN 08-19 June 17, 2019 Subject: 2018 Year End Page 5 The accumulated surplus is comprised of the following: 2018 2017 Operating fund $ 125,247 $ 125,237 Capital fund 20,701,530 25,169,415 Reserves and reserve funds 73,871,965 73,136,645 Equity in Veridian Corporation 84,628,856 81,505,144 Tangible capital assets 259,879,354 240,256,987 Note Receivable 3,530,086 3,796,946 Post employment benefits liability (6,081,194) (5,430,656) WSIB benefit liabilities (1,917,179) (1,862,876) Internal loans (1,986,799) (3,595,241) Net long-term liabilities (29,418,973) (31,412,982) $403.332.893 $381.688.619 Reappointment of Auditors Deloitte was last appointed to conduct the statutory audits for the 2016 to 2018 fiscal years. Experience in the public sector, specifically municipalities, range of other services available and knowledge of the client are important considerations for appointment of an auditor. Deloitte is one of the largest public accounting firms in Canada and has vast experience within the municipal sector. They provide a variety of auditing, accounting and advisory services to a number of municipalities including 6 of the 8 local municipalities and the Regional Municipality of Durham. The services provided by Deloitte have clearly demonstrated proficiency in the municipal environment, particularly Public Sector Accounting Board (PSAB) standards and guidelines. Their comments and assistance is always relevant and practical. Based on experience to date, the firm has provided an excellent level of service at a reasonable cost. Deloitte has agreed to hold their fee at the 2018 level for the full 3 year term. Staff is recommending that Deloitte be reappointed for a 3 year term. Attachments: 1. Auditor's Report to Executive Committee on the 2018 Audit 2. 2018 Draft Audited Consolidated Financial Statements -73- FIN 08-19 Subject: 2018 Year End June 17, 2019 Page 6 Prepared By: vl� Kristine Senior, CPA, CA Manager, Accounting Services Approved/Endorsed By: Stan Karwowski, MBA, CSA, CMA Director, Finance & Treasurer Recommended for the consideration of Pickering City Council Tony Prevedel, P.Eng. Chief Administrative Officer -74- Deloitte The Corporation of the City of Pickering Report to the Executive Committee on the 2018 Audit June 17, 2019 Deloitte-. May 29, 2019 Private and confidential To the Members of Executive Committee The Corporation of the City of Pickering 1 The Esplanade Pickering ON L1V 6K7 Report on audited annual financial statements Dear Executive Committee Members: Deloitte LLP 400 Applewood Crescent Suite 500 Vaughan ON L4K 0C3 Canada Tel: 416-601-6150 Fax: 416-601-6151 www.deloitte.ca We are pleased to submit this report on the results of our audit of the consolidated financial statements of the City of Pickering (the "City") and the financial statements of related City entities for the 2018 fiscal year. This report summarizes the scope of our audits, our findings and reviews certain other matters that we believe to be of interest to you. We expect to issue our Independent Auditor's Reports on the financial statements of the City, the City of Pickering Library Board (the `Library") and the City of Pickering Trust Funds (The `Trust Funds"), upon approval of the financial statements. Our audits were conducted in accordance with the Audit service plan dated September 11, 2018. This report is intended solely for the information and use of the Executive Committee, management, and others within the City and is not intended to, and should not be, used by anyone other than these specified parties. Accordingly, we disclaim any responsibility to any other party who may rely on it. We would like to express our appreciation for the cooperation we received from management and the employees of the City with whom we worked to discharge our responsibilities. We look forward to discussing this report summarizing the outcome of our audit with you and to answering any questions which you may have. Yours truly, -D LLP Chartered Professional Accountants Licensed Public Accountants -76- The Corporation of the City of Pickering Table of contents Table of contents Our audits explained 1 Areas of audit risk 4 Significant accounting practices, judgments and estimates 6 Other reportable matters 8 Appendix 1 - Communication requirements 9 Appendix 2 - Independence letter 11 Appendix 3 - Draft management representation letter 13 © Deloitte LLP and affiliated entities. - 77 - The Corporation of the City of Pickering 1 Our audits explained Our_ audits explained This report summarizes the main findings arising from our audits. Audit scope and terms of engagement We were engaged to perform the audits of the City's, Library's, and Trust Fund's Financial Statements as at, and for the year ended, December 31, 2018 (the "Financial Statements") prepared in accordance with Canadian Public Sector Accounting Standards ("PSAS") for the City and the Library Board and Canadian Accounting Standards for Not -For -Profit Organizations for the Trust Funds. Our audits were conducted in accordance with Canadian Generally Accepted Auditing Standards ("Canadian GAAS"). The terms and conditions of our engagement are described in the Master Services Agreement dated October 28, 2016 and confirmation of changes letter dated August 23, 2018. Audit risks Through our risk assessment process, we have identified the audit risks. These areas of risk of material misstatement and our related audit responses are described in the `Areas of audit risk' section of this report. Materiality We are responsible for providing reasonable assurance that your financial statements as a whole are free from material misstatement. Our materiality was determined as follows: • Consolidated financial statements for the City — approximately 3% of expenses, • City of Pickering Public Library Board — approximately 3% of expenses, and • City of Pickering Trust Funds — approximately 3% of fund balances. We agreed to inform you of any uncorrected misstatements detected during the audit which were greater than a clearly trivial amount of 5% of materiality and any misstatements that are, in our judgment, qualitatively material. In accordance with Canadian GAAS, we asked that any misstatements be corrected. 1 -78- © Deloitte LLP and affiliated entities. The Corporation of the City of Pickering I Our audits explained Status and outstanding matters We expect to be in a position to render our Independent Auditor's Reports on the financial statements of the City, the Library Board, and the Trust Funds following their approval, and the completion of the following procedures: • Receipt of signed management representations letters • Receipt of legal responses, and • Update of our subsequent events procedures. Status and outstanding matters Going concern Going concern Management has completed its assessment of the ability of the City, the Library Board and the Trust Funds to continue as a going concern and in making its assessment did not identify any material uncertainties related to events or conditions that may cast significant doubt upon the City's, the Library Board's or the Trust Funds' ability to continue as a going concern. We agree with management's assessment. 2 Uncorrected misstatements The only misstatement aggregated by us during the current year's audit results from revised estimates related to the useful lives of tangible capital assets. Some capital assets' useful lives were updated, however, some asset classes still made use of old useful life estimates in the determination of current year amortization. This is consistent with our finding in the prior year and the continuation of management's efforts towards updating useful lives of all tangible capital assets. This has resulted in an overstatement of amortization expense and understatement of the net book value of tangible capital assets by approximately $920,133 in the current year ($1.27 million in the prior year). Internal controls Uncorrected misstatements Internal controls During the course of our audits, we examined certain of the accounting procedures and internal controls related to the financial reporting processes at the City and the Library Board. As a result of this examination, we did not identify any significant deficiencies in internal control. -79- Uncorrected disclosure misstatements Uncorrected disclosure misstatements In accordance with Canadian GAAS, we request that all disclosure misstatements be corrected. There are no significant disclosure misstatements aggregated by us during the current engagement and pertaining to the latest period presented to report. © Deloitte LLP and affiliated entities. The Corporation of the City of Pickering 1 Our audits explained Fraud risk A summary of the results of our audit procedures designed to address the risk of material misstatement in the financial statements relating to fraud is provided in the 'Areas of audit risk' section of this report. Fraud risk Significant accounting practices, judgments and estimates Significant accounting practices, judgments and estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. These judgments are normally based on knowledge and experience about past and current events, assumptions about future events and interpretations of the financial reporting standards. See pages 6 and 7 for further details. 3 Independence We have developed appropriate safeguards and procedures to eliminate threats to our independence or to reduce them to an acceptable level. We confirm that we have complied with relevant ethical requirements regarding independence. Our annual independence letter is included in Appendix 2. Independence Conclusion Conclusion In accordance with Canadian GAAS, our audits were designed to enable us to express an opinion on the fairness of the presentation of the financial statements prepared in accordance with Canadian Public Sector Accounting Standards ("PSAS") for the City and the Library Board and Canadian Accounting Standards for Not -For -Profit Organizations for the Trust Funds. No restrictions have been placed on the scope of our audits. In performing the audits, we were given full and complete access to the accounting records, supporting documentation and other information requested. We expect to issue unmodified Independent Auditor's Reports on the financial statements of the City, Library Board and Trust Funds for the year ended December 31, 2018 once the outstanding items, referred to previously in this report, are completed satisfactorily and the financial statements are approved. 80 - Deloitte LLP and affiliated entities. The Corporation of the City of Pickering 1 Areas of audit risk Areas of audit risk Revenue recognition* Audit risk Canadian GAAS includes the presumption of a fraud risk involving improper revenue recognition. (Revenue/deferred revenue). Management override of controls* Audit risk Under Canadian GAAS, it is the responsibility of the management, with the oversight of those charged with governance, to place a strong emphasis on fraud prevention and detection. Oversight by those charged with governance includes considering the potential for override of controls or other inappropriate influence over the financial reporting process. Management override of controls is present in all entities. It is a risk of material misstatement resulting from fraud and therefore is considered as a significant risk. Our audit response • Certain revenue streams are a presumed area of audit risk. We tested the design and implementation of controls in these revenue streams and performed substantive analytic procedures and detailed testing in these areas, and • Substantive testing to determine if restricted contributions (i.e., development charges), and government transfers had been recognized as revenue in the appropriate period. (Revenue vs. deferred revenue). Our audit response • Engaged in periodic fraud discussions with certain members of senior management and others • Considered the potential for bias in judgments and estimates, including performing retrospective analysis of significant accounting estimates • Evaluated the business rationale for any significant unusual transactions • Evaluated the City's fraud risk assessment and consider entity - level internal controls and internal controls over the closing and reporting process, and • Tested journal entries that exhibit characteristics of possible management override of controls *These areas were identified as areas of significant risk, as required by Canadian Auditing Standards. Audit results We obtained sufficient audit evidence in this area and are satisfied with the results of audit procedures performed. Audit results Our procedures did not indicate any evidence of management override of controls. 4 © Deloitte LLP and affiliated entities. - 81 - The Corporation of the City of Pickering 1 Areas of audit risk Proposed merger of Veridian Corporation and Whitby Hydro Energy Corporation Audit risk The shareholders of Veridian Corporation and Whitby Hydro Energy Corporation have approved a merger. There is a risk that the status of the merger and the impact is not appropriately disclosed or accounted for in the financial statements. Our audit response • Engage in regular discussions with management to remain abreast of merger status • Review merger agreements, if any, and monitor approval process by the Ontario Energy Board, to ensure disclosures in the financial statements are appropriate and adequate Audit results We noted that the merger was finalized on April 1, 2019 and Veridian Corporation officially amalgamated with Whitby Hydro Energy Corporation to form Elexicon Corporation. This subsequent event has been disclosed in Note 4(f) to the financial statements. 5 © Deloitte LLP and affiliated entities. -82- The Corporation of the City of Pickering I Significant accounting practices, judgments and estimates Significant accounting practices, judgments and estimates The accounting policies of the City, the Library Board and the Trust Funds are set out in Note 1 of their respective financial statements. In the course of our audits of the financial statements, we considered the qualitative aspects of the financial reporting process, including items that have a significant impact on the relevance, reliability, comparability and understandability of the information included in the financial statements. Significant accounting policies In the current year, the City adopted the following accounting standards: • PS 2200 Related party disclosures • PS 3210 Assets • PS 3320 Contingent assets • PS 3380 Contractual rights • PS 3420 Inter -entity transactions The adoption of these standards had no impact on the financial statements. There were no other changes to previously adopted accounting policies or their application at the City, the Library Board or the Trust Funds. In our judgment, the significant accounting practices and policies, selected and applied by management are, in all material respects, acceptable under PSAS for the City and the Library Board, under Accounting Standards for Not For Profit Organizations for the Trust Funds and are appropriate to the particular circumstances of the City, the Library Board and the Trust Funds. Management judgment and accounting estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. These judgments are normally based on knowledge and experience about past and current events, assumptions about future events and interpretations of the financial reporting standards. 6 © Deloitte LLP and affiliated entities. -83- The Corporation of the City of Pickering 1 Significant accounting practices, judgments and estimates During fiscal 2017, management completed a preliminary draft capital management plan (CMP), resulting in the adjustment of useful lives for many tangible capital assets. At that time, management updated the useful lives for many of its tangible capital assets to reflect the best estimate of useful lives at the time; however, this had not been updated for all tangible capital assets in the City's subledger, which resulted in an uncorrected misstatement of $1.27 million for the fiscal 2017 audit. In the current year, management made progress towards the update of useful lives; however, some assets were still amortized based on legacy useful life information. The impact of this is an uncorrected misstatement of $920,133 as reflected in page 2 of this report. There were no other significant changes in accounting estimates or in judgments relating to the application of the accounting policies. In our judgment, the significant accounting estimates made by management (with assistance from the City's actuary as appropriate) are, in all material respects, free of possible management bias and of material misstatement. The disclosure in the consolidated financial statements with respect to estimation uncertainty is in accordance with PSAS and is appropriate to the particular circumstances of the City. Significant estimates include: 2018 2017 Post -employment benefits liability $6,260,194 $5,609,656 WSIB benefits liability $1,917,179 $1,862,876 Allowance for doubtful accounts $5,000 $5,000 Provision for property tax assessment appeals $1,330,418 $743,671 7 © Deloitte LLP and affiliated entities. -84- The Corporation of the City of Pickering 1 Other reportable matters Other reportable matters The following summarizes the status and findings of key aspects of our audits. In the appendices to this report, we have provided additional information related to certain matters we committed to report as part of the audit service plan. Comment Changes to the audit service plan The audits were conducted in accordance with our Audit service plan, which was communicated to the Executive Committee. We confirm that there have been no significant amendments to the audit scope and approach communicated in our Audit service plan. Significant difficulties encountered in performing the audit We did not encounter any significant difficulties while performing the audits. There were no significant delays in receiving information from management required for the audits nor was there an unnecessarily brief timetable in which to complete the audits. Related party transactions Related party transactions or balances have been properly disclosed in the financial statements. We have not identified any related party transactions that were not in the normal course of operations and that involved significant judgments by management concerning measurement or disclosure. Disagreements with management During the course of our audits, we did not have any disagreements with management about matters that individually or in the aggregate could be significant to the financial statements. Consultation with other accountants Management has informed us that the City and the Library Board have not consulted with other accountants about auditing or accounting matters. Legal and regulatory compliance Management is responsible for ensuring that the City's operations are conducted in accordance with the laws and regulations applicable to the City. The responsibility for preventing and detecting non-compliance rests with management. The auditor is not and cannot be held responsible for preventing non-compliance with laws and regulations Our limited procedures did not identify any areas of material non-compliance with laws and regulations by the City, the Library Board and the Trust Funds. Subsequent events At the date of finalizing this report, other than the merger of Veridian Corporation and Whitby Hydro Energy Corporation disclosed in Note 4 to the City's financial statements, we are not aware of any significant subsequent events that would require adjustment or disclosure in the financial statements at December 31, 2018. 8 © Deloitte LLP and affiliated entities. -85- The Corporation of the City of Pickering I Appendix 1 — Communication requirements Appendix 1 -Communication requirements The table below summarizes our communication requirements under Canadian GAAS. Required communication Comments Audit service plan . Our responsibilities under Canadian GAAS, including forming and expressing an opinion on the financial statements Master Services Agreement dated October 28, 2016 and confirmation of changes letter dated August 23, 2018 2. An overview of the overall audit strategy, addressing: a. Timing of the audit b. Significant risks, including fraud risks, and c. Planned responsibilities of other independent public accounting firms or others that perform audit procedures in the audit. Audit service plan presented to the Executive Committee on September 11, 2018 We received the reporting requested from the independent auditor of Veridian Corporation 3. Significant transactions outside of the normal course of business, including related party transactions Note 4 - Veridian Corporation Enquiries of those charged with governance 4. How those charged with governance exercise oversight over management's process for identifying and responding to the risk of fraud and the internal control that management has established to mitigate plan these risks Covered when presenting the Audit service 5. Any known suspected or alleged fraud affecting the City None noted 6. Whether the City is in compliance with laws and regulations Refer to `Other reportable matters' section of this report Year end communication 7. Fraud or possible fraud identified through the audit process None noted 8. Significant accounting policies, practices, unusual transactions, and our related conclusions See pages 6 and 7 9. Alternative treatments for accounting policies and practices that have been discussed with management Nothing of significance during the current audit period 10. Matters related to going concern None noted 9 -86- © Deloitte LLP and affiliated entities. The Corporation of the City of Pickering 1 Appendix 1 — Communication requirements Required communication Comments 11. Management judgments and accounting estimates See pages 6 and 7 12. Significant difficulties, if any, encountered during the audit None 13. Material written communications between management and us, including management representation Management representation letter is letters attached in Appendix 3 14. Other matters that are significant to the oversight of the financial reporting process None 15. Modifications to our Independent Auditor's Reports. None 16. Our views of significant accounting or auditing matters for which management consulted with other We are not aware of any such consultations accountants and about which we have concerns 17. Significant matters discussed with management None 18. Illegal or possible illegal acts that come to our attention None noted 19. Significant deficiencies in internal control, if any, identified by us in the conduct of the audit of the No significant deficiencies noted financial statements 20. Uncorrected misstatements and disclosure items See page 2 for uncorrected misstatement 21. Any significant matters arising during the audit in connection with the City's related parties None noted 10 © Deloitte LLP and affiliated entities. -87- The Corporation of the City of Pickering 1 Appendix 2 — Independence letter Appendix 2 -Independence letter Deloitte.: May 21, 2019 Private and confidential The Members of the Executive Committee The Corporation of the City of Pickering 1 The Esplanade Pickering ON L1V 6K7 Dear Executive Committee Members, Deloitte LLP 400 Applewood Crescent Suite 500 Vaughan ON L4K 0C3 Canada Tel: 416-601-6150 Fax: 416-601-6151 www.deloitte.ca We have been engaged to audit the consolidated financial statements of The Corporation of the City of Pickering (the "City") for the year ended December 31, 2018. You have requested that we communicate in writing with you regarding our compliance with relevant ethical requirements regarding independence as well as all relationships and other matters between the City, our Firm and network firms that, in our professional judgment, may reasonably be thought to bear on our independence. You have also requested us to communicate the related safeguards that have been applied to eliminate identified threats to independence or reduce them to an acceptable level. In determining which relationships to report, we have considered relevant rules and related interpretations prescribed by the appropriate provincial regulator/ordre and applicable legislation, covering such matters as: a. Holding a financial interest, either directly or indirectly, in a client. b. Holding a position, either directly or indirectly, that gives the right or responsibility to exert significant influence over the financial or accounting policies of a client. c. Personal or business relationships of immediate family, close relatives, partners or retired partners, either directly or indirectly, with a client. 11 © Deloitte LLP and affiliated entities. _88- The Corporation of the City of Pickering 1 Appendix 2 — Independence letter d. Economic dependence on a client. e. Provision of services in addition to the audit engagement. We confirm to you that the engagement team and others in the firm as appropriate, the firm and, when applicable, network firms have complied with relevant ethical requirements regarding independence. We have prepared the following comments to facilitate our discussion with you regarding independence matters arising since May 30, 2018, the date of our last letter. We are not aware of any relationships between the Deloitte Entities and the City and its affiliates, or persons in financial reporting oversight roles at the City and its affiliates, that, in our professional judgment, may reasonably be thought to bear on independence, that have occurred from May 30, 2018 to May 21, 2019. We hereby confirm that we are independent with respect to the City in accordance with the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario as of May 21, 2019. This letter is intended solely for the information and use of the Executive Committee, management, and others within the City and is not intended to be and should not be used for any other purposes. Yours truly, LLP Chartered Professional Accountants Licensed Public Accountants 12 © Deloitte LLP and affiliated entities. -89- The Corporation of the City of Pickering I Appendix 3 — Draft management representation letter Appendix 3 -Draft management representation letter June 17, 2019 Deloitte LLP 400 Applewood Crescent Suite 500 Vaughan ON L4K 0C3 Subject: Consolidated financial statements of The Corporation of;the City ofts ,ickering for the year ended December 31, 2018 Dear Ms. Colavecchia: This representation letter is provided in connection with,,,t Corporation of the City of Pickering (the "City" or "yyg"ff policies and other explanatory information (the "F Statements present fairly, in all material respects Sector Accounting Standards ("PSAS"). e audit Deloitte LLP ("Deloitte" or "you") of the consolidated financial statements of The `us ")for tie year ended December 31, 2018, and a summary of significant accounting u ncial Statements") forthe purpose of expressing an opinion as to whether the Financial NIP the financial `position, results of operations, and cash flows of the City in accordance with Public We confirm that, to the best of our knowledge and be informing ourselves: �e made such inquiries as we considered necessary for the purpose of appropriately Financial statements 1. We have fulfilled our responsibilities as set out in the terms of the engagement letter between the City and Deloitte dated October 28, 2016 and subsequent confirmation of changes letter dated August 23, 2018 for the preparation of the Financial Statements in accordance with PSAS. In particular, the Financial Statements are fairly presented, in all material respects, and present the financial position of the City as at December 31, 2018 and the results of its operations and cash flows for the year then ended in accordance with PSAS. 2. Significant assumptions used in making estimates, including those measured at fair value, are reasonable. In preparing the Financial Statements in accordance with PSAS, management makes judgments and assumptions about the future and uses estimates. The completeness and appropriateness of the disclosures related to estimates are in accordance with PSAS. The City has 13 © Deloitte LLP and affiliated entities. -90- The Corporation of the City of Pickering 1 Appendix 3 — Draft management representation letter appropriately disclosed in the Financial Statements the nature of measurement uncertainties that are material, including all estimates where it is reasonably possible that the estimate will change in the near term and the effect of the change could be material to the Financial Statements. The measurement methods, including the related assumptions and models, used in determining the estimates, including fair value, were appropriate, reasonable and consistently applied in accordance with PSAS and appropriately reflect management's intent and ability to carry out specific courses of action on behalf of the entity. No events have occurred subsequent to December 31, 2018 that require adjustment to the estimates and disclosures included in the Financial Statements. There are no changes in management's method of determining significant estimateShin The City has identified all related parties in accordance with Section PS 2200 appropriate disclosures with respect to its related party transactions in accor factors, including those listed in paragraph 16 of PS 2200. 3. Relate ncein the current year. 'arty Disclosures ("PS 2200"). Management has made the ith S 2200. This assessment is based on all relevant 4. We have determined that the Financial Statements are complete as of the date ois letter as this is the date when there are no changes to the Financial Statements (including disclosures) planned or expected. The Financial Statements have been approved in accordance with our process to finalize financial statements. 5. We have completed our review of events after December 31, 2018 and up too the date of this letter. All events subsequent to the date of the Financial Statements and for which PSAS requires adjustment orOisclosure have been adjusted or disclosed. Accounting estimates and disclosures included in the Financial Statements that are impacted by subsequent events have been appropriately adjusted. 6. The Financial Statements are free of material errors and omislsions We believe that the effects of any uncorrected Financiaatement Misstatements pertaining to the current period presented, are immaterial, both individually and in the aggregate, to theiFiYnancial Statements taken as a whole. A list of the uncorrected misstatements aggregated by you is attached in Appendix A. Internal Controls 7. We acknowledge our responsibility for the design ,'tmplementation and maintenance of internal control to prevent and detect fraud and error. 8. We have disclosed to you all known deficiencies in the= design or operation of internal control over financial reporting identified as part of our evaluation, including separately disclosing to you all such deficiencies that we believe to be significant deficiencies in internal control over financial reporting. Information provided 9. We have provided you with: a. Access to all information of which we are aware that is relevant to the preparation of the Financial Statements, such as records, documentation and other matters. b. All relevant information as well as additional information that you have requested from us for the purpose of the audit; and, 14 © Deloitte LLP and affiliated entities. - 91 - The Corporation of the City of Pickering 1 Appendix 3 — Draft management representation letter c. Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. 10. Except as listed in Appendix A, all transactions have been properly recorded in the accounting records and are reflected in the Financial Statements. 11. We have disclosed to you the results of our assessment of the risk that the Financial Statements may be materially misstated as a result of fraud. 12. We have disclosed to you all information in relation to fraud or suspected fraud that we are aware of and that affects the entity and involves: mip a. Management; b. Employees who have significant roles in internal control; or c. Others where the fraud could have a material effect on the Financial State 13. We have disclosed to you all information in relation to allegations of actual, suspected or alleged fraud, or illegal or suspected illegal acts affecting the City. 14. We have disclosed to you all communications from regulatory agencies concerning non-compliance with or deficiencies in financial reporting practices and all known instances of non-compliance or suspected non compliance with laws and regulations whose effects should be considered when preparing the Financial Statements. 15. We have disclosed to you the identity of the entity's related parties and all` the`' related party relationships and transactions of which we are aware, including guarantees, non -monetary transactions„and transactions for no consideration and participation in a defined benefit plan that shares risks between group entities. •�� -lt�� 16. We have disclosed to you all known, actual`or, possible litigatten and claims, whether or not they have been discussed with our lawyers, whose effects should be considered when preparing Financial Statements. As appropriate, these items have been disclosed and accounted for in the Financial Statements in accordance with P Independence matters For purposes of the following paragraphs, "Deloitte” shall';n%ean Deloitte LLP and Deloitte Touche Tohmatsu Limited, including related member firms and affiliates. 17. Prior to the City having any substantive employment conversations with a former or current Deloitte engagement team member, the City has held discussions with Deloitte and obtained approval from the Executive Committee of the Council. 18. We have adhered to all regulatory requirements regarding the provision of non -audit services by Deloitte to the City in accordance with applicable laws, regulations and rules that apply to the City, including the Executive Committee approval requirements. 19. We have ensured that all services performed by Deloitte with respect to this engagement have been pre -approved by the Executive Committee in accordance with its established approval policies and procedures. 15 © Deloitte LLP and affiliated entities. -92- The Corporation of the City of Pickering I Appendix 3 — Draft management representation letter Communications with taxation and regulatory agencies 20. We have disclosed to you all communications from: a. Taxation authorities concerning assessments or reassessments that could have a material effect on the Financial Statements; and b. Regulatory agencies concerning noncompliance with or potential deficiencies in, financial reporting requirements. Deficiencies in internal control 21. We have communicated to you all deficiencies in internal control of which we are aw,,,,are.zyle have disclosed to you any change in the City's internal control over financial reporting that occurred during the current year that has raterially affected, or is reasonably likely to materially affect,' the City's internal control over financial reporting. Y 4 t Work of management's experts 22. We agree with the work of management's experts in evaluating the valuation of post -employment benefits liability and WSIB benefits liability and have adequately considered the capabilities of the experts in determining amounts and disclosures used in the Financial Statements and underlyingaccounting records. We did not give any, nor cause any, instructions to beigiven to management's experts with respect to values or amounts derived in an attempt to bias their work, and we are not aware of any matters that have impacted the independence or objectivity of the experts. Liabilities and contingencies 23. We have disclosed to you all liabilities provisions,continent Ii bilities and continent assets,includingthose associated with guarantees, ,9 s 9 9 , whether written or oral, and they are appropriately reflected in the Financial Statements. Loans and receivables 24. The City is responsible for determining andtmaintaining the dequacy of the allowance for doubtful notes, loans, and accounts receivable, as well as estimates used to determine such amounts`Managementbelieves the allowances are adequate to absorb currently estimated bad debts in the account balances. Employee future benefits 25. Employee future benefit costs, assets, and obligations ave been properly recorded and adequately disclosed in the Financial Statements including those arising under defined benefit plans as well as termination arrangements. We believe that the actuarial assumptions and methods used to measure defined benefit plan assets, liabilities and costs for financial accounting purposes are appropriate in the circumstances. Government transfers 26. We have disclosed to you all correspondence relating to government transfers that the City has had with the funding body. 27. We have assessed the eligibility criteria and determined that the City is an eligible recipient for the government transfers received. 28. We have assessed the stipulations attached with the funding and have recognized the revenue in accordance with meeting the stipulations required. 16 -93- © Deloitte LLP and affiliated entities. The Corporation of the City of Pickering I Appendix 3 — Draft management representation letter 29. All government transfers that have been recorded as deferred revenue give rise to an obligation that meets the definition of a liability. Those liabilities have been properly recorded and presented in the Financial Statements. Tax Revenues 30. We have appropriately recorded tax assets and revenues when they meet the definition of an asset in accordance with Section PS 1000, Financial Statement Concepts, when they are authorized and when the taxable event occurs. These amounts have been appropriately measured in accordance with PS 3510, Tax Revenue, and have not been grossed up for any amount of tax concessions. Tangible capital assets 31. Tangible capital assets have been recorded properly and consistently according to the$standards in Section PS 3150, Tangible Capital Assets. 32. Contributed tangible capital assets have been appropriately recorded at fair' Vue, unless fair value is not reasonably determinable, and in such case, have been recorded at an appropriate nominal value. All contributed tangibl capital as" e3 have been appropriately disclosed. 33. We have assessed the useful lives of tangible capital assets and have determined all tangible capital assets contribute to the City's ability to provide goods and services and therefore do not require a write down.,. Environmental liabilities/contingencies' 34. We have considered the effect of environmental matters on the City and shave disclosed to you all liabilities, provisions or contingencies arising from environmental matters. All liabilities, provisions, contingencies and commitments arising from environmental matters, and the effect of environmental matters on the carrying values of the relevan assets are recognized, measured and disclosed, as appropriate, in the Financial Statements. Government Business Enterprises and Gov'ernmen tPartn�e ships 35. The City has appropriately classified its investments in Veridian Corporation as a Government Business Partnership. With regard to the City's investment in Veridiorporationx u,e have disclosed to you any events that have occurred and facts that have been discovered with respect to such investment thatkwould affect the investment's value as reported in the financial statements. Liabilities for contaminated sites 36. We have evaluated all of our tangible capital assets that we have direct responsibility for or accept responsibility for, and have not identified any sites in which contamination exceeds an environmental standard. Other matters 37. We have disclosed to you all the documents that we expect to issue that may comprise other information, in the context of CAS 720, The Auditor's Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements. 38. The City has satisfactory title to and control over all assets, and there are no liens or encumbrances on such assets. We have disclosed to you and in the Financial Statements all assets that have been pledged as collateral. 17 -94- © Deloitte LLP and affiliated entities. The Corporation of the City of Pickering 1 Appendix 3 — Draft management representation letter 39. We have disclosed to you, and the City has complied with all aspects of contractual agreements that could have a material effect on the Financial Statements in the event of non-compliance, including all covenants, conditions or other requirements of all outstanding debt. Yours truly, The Corporation of the City of Pickering Stan Karwowski Director of Finance and Treasurer Tony Prevedel Chief Administrative Officer 18 © Deloitte LLP and affiliated entities. -95- The Corporation of the City of Pickering 1 Appendix 3 — Draft management representation letter Appendix A The Corporation of the City of Pickering Summary of uncorrected financial statement misstatements Year ended December 31, 2018 Amortization Expense is overstated DR. Accumulated Amortization $920,133 CR. Depreciation Expense $920,133 To correct overstatement of amortization expense for the year as a result of rev the year. estimates; of useful lives of tangible capital assets for 19 © Deloitte LLP and affiliated entities. -96- ATTACHMENT # TO REPORT HELO„.....0 DRAFT AS AT 05/29/2019 Consolidated financial statements of The Corporation of the City of Pickering December 31, 2018 DRAFT AS AT 05/29/2019 Independent Auditor's Report 1-2 Consolidated statement of financial position 3 Consolidated statement of operations. 4 Consolidated statement of change in net financial assets 5 Consolidated statement of cash flows 6 Notes to the consolidated financial statements 7-28 Deloitte:, Independent Auditor's Report To the Members of Council of The Corporation of the City of Pickering D RAFTp@iSitULQ6/29/2019 400 Applewood Crescent Suite 500 Vaughan ON L4K 0C3 Canada Tel: 416-601-6150 Fax: 416-601-6151 www.deloitte.ca Opinion We have audited the consolidated financial statements of The Corporation of the City of Pickering (the "City"), which comprise the consolidated statement of financial position as at December 31, 2018, and the consolidated statements of operations, change in net financial assets and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the "financial statements"). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the City as at December 31, 2018, and the results of its operations, changes in net financial assets, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards ("PSAS"). Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We are independent of the City in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with PSAS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the City's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the City or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the City's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. -99- DRAFT AS AT 05/29/2019 As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the City's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the City to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the City to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Chartered Professional Accountants Licensed Public Accountants June 17, 2019 - 100 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Consolidated statement of financial position As at December 31, 2018 Notes 2018 2017 Financial assets Cash and cash equivalents 100,619,531 89,766,742 Investments 3 78,380,565 82,226,068 Taxes receivable 19,340,620 16,571,391 Accounts receivable 4,192,551 4,780,330 Note receivable 17 3,530,086 3,796,946 Investment in Veridian Corporation 4 (b) 56,516,836 53,393,124 Promissory notes receivable 5 25,069,000 25,069,000 Land held for resale 10(v) 4,144,903 294,531 291;794,092 275,898,132 Liabilities Accounts payable and accrued liabilities Other current liabilities Deferred revenue Long-term liabilities Post -employment benefit liability WSIB benefit liabilities Net financial assets Non-financial assets Tangible capital ass', Prepaid expenses Inventory Accumulated surplus 324,63 6 26,414,563 1,30032 4,694,538 6 77,482,928 65,194,413 ►9,418,973 31,412,982 6,260,194 5,609,656 1,917,179 1,862,876 148,944,242 135,189,028 142,849,850 140,709,104 10 259,879,354 240,256,987 231,462 295,196 372,227 427,332 260,483,043 240,979,515 11 403,332,893 381,688,619 The accompanying notes to the consolidated financial statements are an integral part of this consolidated financial statement. - 101 - Page 3 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Consolidated statement of operations Year ended December 31, 2018 Revenue Residential and farm taxation Commercial and industrial taxation Taxation from other governments User charges Government grants and fees Other contributions and donations Development charges and developer contributions earned Contributed tangible capital assets Investment income Penalties and interests on taxes Fines Interest on promissory notes Sale of land Equity share of Veridian Corporation earnings Other Gain on disposal of tangible capital assets Expenses General government Protection to persons and property Transportation services Environmental services Social and family services Recreational and cultural services Planning and development Loss on disposal of tangible capital assets Annual surplus Accumulated surplus, beginning of year Accumulated surplus, end of year Notes 10(i) 4 (c) 2018 2017 Budget (Note 18) Actual Actual $ 49,425,675 11,053,425 8,312,581 11,009,646 6,798,272 1,129,925 31,930,574 301,2 50,047,871 11,088,267 8,460,282 15,190,523 5,554,251 5,230,490 3,334,550 995,033 1,875,542 2,568,6 2 884_,224 1,229,138 5,050,712 900,306 47,468,880 10,793,717 8,644,938 11,082,163 6,356,344 2,189,348 1,468,880 5,014,463 941,197 2,362,493 855,391 1,229,138 4,179,608 358,861 22,927,289 131,547,476 112,409,881 125,872,710 23,458,467 25,890,304 13,184,660 3,781,485 833,586 28,472,510 3,858,162 17,065,742 24,761,169 12,728,165 3,452,661 780,850 28,680,931 3,050,084 246,005 16,298,488 23,979,527 12,296,200 3,624,256 765,708 27,190,180 2,583,253 99,479,174 32,068,302 381,688,619 413 756 921 90,765,607 21,644,274 381,688,619 403 332 893 86,737,612 39,135,098 342,553,521 381 688,619 The accompanying notes to the consolidated financial statements are an integral part of this consolidated financial statement. - 102 - Page 4 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Consolidated statement of change in net financial assets Year ended December 31, 2018 Annual surplus Acquisition of tangible capital assets Amortization of tangible capital assets Loss (gain) on disposal of tangible capital assets Proceeds on disposal of tangible capital assets Transfer of assets under construction to tangible capital assets Assets under construction expensed Acquisition of inventory of supplies Use of inventory of supplies Acquisition of prepaid expenses Use of prepaid expenses 2018 2017 Budget (Note 18) Actual Actual 32,068,302 (62,755,373) 10,392,202 21,644,274 (37,520,480) 12,480,087 246,005 /'.137,444 39,135,098 (31,772,704) 10,800,559 (22,927,289) 23, 501,156 (20,294,8M, 012,670) 18,736,820 Change in net financialfassets Net financial assets, beginning of year Net financial assets, endvof year (2(1;294,869) 140,709,104 120,414,235 82,345 5,034,577 (700,163) 755,268 (231,462) 295,196 3,762,471 215,451 3,977,922 (818,222) 613,402 (295,196) 248,303 118,839 (251,713) 2,140,746 140,709,104 142,849,850 22,463,029 118,246,075 140, 709,104 The accompanying notes to the consolidated financial statements are an integral part of this consolidated financial statement. - 103 - Page 5 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Consolidated statement of cash flows Year ended December 31, 2018 Operating transactions Annual surplus Non-cash items Amortization of tangible capital assets Loss (gain) on disposal of tangible capital assets Equity share of Veridian Corporation Contributed tangible capital assets recorded in revenue Change in non-cash operating items Taxes receivable Accounts receivable Accounts payable and accrued liabilities Other current liabilities Deferred revenue Post -employment benefit liability WSIB benefit liabilities Inventory Land held for resale Prepaid expenses Capital transactions Acquisition of tangible capital assets (net of transfers and contributions) Proceeds on disposal of tangible�ca ital asse Investing transactions Decrease (increase) in investments Dividends received from *Won Corpo' ion Financing transactions Proceeds from debentures issued Principal repayment of debentures Decrease in note receivable Increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Cash and cash equivalents consists of Cash Cash equivalents 2018 2017 21,644,274 39,135,098 12,480,087 10, 800, 559 246,005 (22,927,289) (5,050,712) (4,179,608) (995,033) (5,014,463) (2,769,229) (837,961) 587,779 (1,690,700) 6150,073 6,731,036 ;394,206) 4,561,231 288,515 4,692,846. 50,538rx 650,156 5A,03 56,776 557'1175 (204,820) 3,850,372) (294,531) 63,734 (46,893) 38,160,861 31,431,437 (31,490,870) 137,444 (22,780,319) 23,501,156 (31,353,426) 720,837 3,845,503 1,927,000 (33,368,104) 2,093,870 5,772,503 (31,274,234) 3,604,000 (5,598,009) 266,860 12,941,000 (2,983,834) 258,330 (1,727,149) 10,215,496 10,852,789 89,766,742 11,093,536 78,673,206 100,619,531 89 766 742 16,110,036 84,509,495 11,376,673 78,390,069 100,619,531 89.766.742 The accompanying notes to the consolidated financial statements are an integral part of this consolidated financial statement. - 104 - Page 6 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 1. Significant accounting policies The consolidated financial statements ("the financial statements") of The Corporation of the City of Pickering (the "City") are the representations of management prepared in accordance with accounting standards established by the Public Sector Accounting Board ("PSAB") of Chartered Professional Accountants of Canada (CPA Canada). Significant accounting policies adopted by the City are as follows: (a) Reporting entity (1) Consolidated financial statements The consolidated financial statements reflect the assets, liabilities, revenues and expenses of the reporting entity. The reporting entity is comprised of the activities of all committees of Council and the City of Pickering Public Library Board which is controlled by the City. All material inter -fund transactions and balances are eliminated on consolidation. (ii) Investment in Veridian Corporation The City's investment in Veridian Corporation is accounted for on a modified equity basis, consistent with Canadian public sector accounting standards for investments in government business partnerships. Under the modified equity basis, Veridian Corporation's accounting policies are riot adjusted to conform to those of the City and inter -organizational transactions andrbalarnces.are not eliminated. TheCityrecognizes its equity interest in the annual earnings or loss of Veridian Corporation in its consolidated statement of operationstwith a corresponding increase or decrease in its investment asset account D idends that the City may receive from Veridian Corporation and other capital transactions are reflected as adjustments in the investment asset account ter' (iii) Operationsof School Boards and the Region of Durham The taxation, other revenues, expenditures, assets and liabilities with respect to the operations of the school boards and the Region of Durham (the "Region") are not reflected in these consolidated financial statements. (iv) Trust funds Trust funds and their related operations administered by the City are not consolidated, but are reported separately on the Trust Funds Statement of Financial Activities and Statement of Financial Position. (b) Basis of accounting (i) Accrual basis of accounting Revenue and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenues as they are earned and measurable; expenses are recognized as they are incurred and measurable as a result of the receipt of goods and services and the creation of a legal obligation to pay. (ii) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash. Cash equivalents have a short-term maturity of three months or less from the date of acquisition. - 105 - Page 7 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 1. Significant accounting policies (continued) (b) Basis of accounting (continued) (iii) Investments Long-term investments are recorded at cost and any loss in value which is considered other than temporary is recorded as incurred. Any premium or discount at the purchase of an investment is amortized over the life of the investment. (iv) Tangible capital assets ("TCA") Tangible capital assets are recorded at cost less accumulated amortization. Cost includes all costs directly related to acquisition or construction of the tangible capital asset including transportation costs, installation costs, design and engineering fees, legal fees and site preparation costs. During fiscal 2018, the City performed a review of its tangible capital assets and updated estimated useful lives for certain tangible capital assets. Amortization is recorded on the straigh fine basis over the estimated useful life of the tangible capital asset commencng once the asset is available for use as follows; Buildings Machinery and Vehicles Infrastructure Infrastructure Infrastructure Infrastructure equipment - Roads - Storm sewers - Sidewalks - Parks Information technology hardware Library collection materials Furniture and fixtures 5' to 50 various 7 to 15 years :0475 years 50 to_100 years 15 to 75 years 10 to 100 years 4 to 10 years 4 to 7 years various e One half of the annual amo ization is charged in the year of acquisition and in the year of disosa Asses under construction are not amortized until the tangible capital asset is available for productive use. Land is not amortized. Tangible capital assets received as contributions are recorded at their fair value at the date contributed, with the corresponding amount recorded as revenue. Ir (v) Accounting fo roperty`Tax Capping Provisions resulting from the Ontario Fair Assessment System ` The net impact on property taxes as a result of the application of the capping provisions does not affect the Consolidated Statement of Operations as the full amounts of the property taxes were levied. However, the capping adjustments are reported on the Consolidated Statement of Financial Position as a receivable/payable from/to the Region. (vi) Deferred revenue Deferred revenues represent contributions, user charges and fees which have been collected but for which the related services have yet to be performed. These amounts will be recognized as revenues in the fiscal year the services are performed. In addition, any contributions received with external restrictions are deferred until the related expenditures are made. (vii) Post -employment benefits The present value of the cost of providing employees with future benefit programs is recognized as employees earn these entitlements through service. Actuarial gains and losses are amortized over the average remaining service period ("ARSP"). The actuary determined ARSP to be between 11 to 13 years, depending on the employee group. For WSIB benefit obligations that arise from specific events that occur from time to time, the cost is recognized immediately in the period the events occur. Actuarial gains and losses are amortized over the average remaining service period of 15 years. - 106 - Page 8 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 1. Significant accounting policies (continued) (b) Basis of accounting (continued) (viii) Inventory Inventory is valued at the lower of cost and replacement cost. Cost is determined on a weighted -average basis. (ix) Government transfers Government transfers are recognized as revenue by the City in the period in which the transfers are authorized and any eligibility criteria are met, unless they are restricted through stipulations that require specific actions to be carried out in order to keep the transfer or discharge the liability. For such transfers, revenue is recognized when the stipulation has been met. (x) Tax revenue Tax revenue is recognized on all taxable properties within the City that are included in the tax roll provided by the Municipal Property Assessment Corporation, using property tax values included in the tax roll or property tax4al es that can be reasonably estimated by the City as it relates to supplementary or omitted assessments, at tax rates authorized by Council for the City's own purposes"in theperiod for which the tax is levied. (xi) Intangible assets Intangible assets are not recogni 3d's assets in the financial statements. (xii) Contaminated sites Contaminated sites are the result of contamination being introduced into air, soil, water or sediment of a chemical, organic, or radioactive material or live organism that exceeds an environmental standard. A liability for remediation of contaminated sites is recognized, net of any expected ,recoveries, when all of the following criteria are met: (a) an environmental standard ejsts; (b) contamination exceeds the environmental standard; (c) the City is directly responsible or accepts responsibility for the liability; (d) future economic benefits will be given up; and (e) a reasonable estimate of the liability can be made. A liability is recorded only for sites that are not in productive use or if there was an unexpected event that resulted in contamination. Changes in estimates are recorded in the City's statement of operations. The City does not have any liability for contaminated sites recorded in the consolidated financial statements. (xiii) Land held for resale Land permanently removed from service that meet the criteria for inventory held for resale are recorded as "land held for resale" on the Consolidated Statement of Financial Position and is recorded at the lower of cost and net realizable value. Those that do not meet these criteria continue to be recorded as part of "tangible capital assets" on the Consolidated Statement of Financial Position. - 107 - Page 9 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 1. Significant accounting policies (continued) (b) Basis of accounting (continued) (xiv) Use of estimates The preparation of financial statements in conformity with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Accounts involving significant estimates include allowance for doubtful accounts, certain accrued liabilities, post -employment benefits liability, WSIB liabilities and estimates relating to the useful lives of tangible capital assets. Actual results could differ from these estimates. 2. Operations of school boards and the Regional Municipality of Durham Further to Note 1 (a) (iii) requisitions are made by the ional Municipality of Durham and School Boards requiring the City to collect property,fixes and payments in lieu of property taxes on their behalf. The amounts collected and remitted pre summarized as follows: X2018 w 2017 Region School board egion School board Taxation 111,062,44 Payments in lieu of taxes 6,260,851 3. Investments Investments 7$-„ 6 80AZ6 106,559,478 6,457,366 45,352,981 381,700 117,32 47,70072 113,016,844 45,734,681 2018 2017 tCost Market value Cost Marlet value $ 10380,565 78,041,001 82,226,068 81,919,658 Investments are comprised of deposit notes, bonds, and guaranteed investment certificates. 4. Investment in Veridian Corporation (a) Veridian Corporation is owned by the City of Pickering, Town of Ajax, Municipality of Clarington and the City of Belleville. The City has a 41 per cent interest in Veridian Corporation. Veridian Corporation, as a government business partnership, is accounted for on the modified equity basis in these consolidated financial statements. Veridian Corporation serves as the electrical distribution utility for a number of communities including the four noted above and conducts non-regulated utility service ventures through its subsidiaries. - 108 - Page 10 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 4. Investment in Veridian Corporation (continued) (a) (continued) The following table provides condensed supplementary consolidated financial information for Veridian Corporation and its subsidiaries for the year ended December 31. All amounts in tables are disclosed in thousands of dollars: 2018 2017 (000's) (000's) $ $ Assets Current 70,908 77,555 Capital and intangibles 291,057 269,380 Other 166 1,097 362,131 Regulatory balances 17,217 Liabilities Current Long-term debt Other 348,032 2,852 350,884 152,979 37,132 33,310 116,129 65,021 29,765 223,421 210,915 Shareholders' equity Share capital � 67,260 67,260 Contributed capital 25 25 Accumulated other comprehensiveJoss (53) (316) Retained earnings 70,537 63,258 Regulatory balani 137,769 130,227 8,158 9,742 369,348 350,884 Comprehensive income Commodity revenue 266,543 280,206 Commodity expenses (269,157) (277,975) Distribution revenue 54,254 52,225 Other income 3,555 2,630 Operating expenses (42,200) (41,620) Other expense (3,827) (2,593) Other comprehensive income 263 24 Net movements in regulatory balances, net of tax 5,949 965 Income tax expense (3,061) (3,668) - 109 - 12,319 10,194 Page 11 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 4. Investment in Veridian Corporation (continued) (b) City of Pickering's investment represented by: Promissory notes receivable (Note 5) Investments in Veridian Corporation Initial investment in shares of the Corporation Accumulated earnings Accumulated dividends received Adjustment to value of investment (c) Equity in Veridian Corporation Balance, beginning of year Equity share of net earnings for the year" Dividend received from Veridia Corporation 2018 2017 $ $ 25,069,000 25,069,000 30,496,196 55,630,394 (30,425,462) 81,5,708 S<6,5;36,836 53,393,124 30,496,196 50, 579, 682 (28,498,462) 815,708 2017 31,505,144 5,050,712 (1,927,000) 79,419,406 4,179, 608 (2,093,870) Balance, end of year (Note 1 84,628,856 81,505,144 (d) Contingencies and guarantees;of Veridian Corporation (the "Corporation") as disclosed in their consolidated financial st`atements`are as follows: (i) Insurance claims ry The Corporation'1s a member of the Municipal Electric Association Reciprocal Insurance Exchange ("MEARI'E") which was created on January 1, 1987. A reciprocal insurance exchange may be def fled as a group of persons formed for the purpose of exchanging reciprocal contracts of indemnity or inter -insurance with each other. MEARIE provides general liability insurance to member electric utilities. MEARIE also provides vehicle and property insurance to the Corporation. Insurance premiums charged to each member utility consist of a levy per $1,000 of service revenue subject to a credit or surcharge based on each electric utility's claims experience. The maximum coverage is $30,000,000 per occurrence for liability insurance, $21,000,000 for vehicle insurance and $119,736,000 for property insurance, plus $10,000,000 excess coverage on top of the regular liability and vehicle coverage. - 110 - Page 12 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 4. Investment in Veridian Corporation (continued) (d) Contingencies and guarantees of Veridian Corporation (the "Corporation") as disclosed in their consolidated financial statements are as follows: (continued) (ii) Contractual obligation - Hydro One Networks Inc. ("HONI") (continued) The Corporation's subsidiary, Veridian Connections Inc. ("VCI"), is party to a connection and cost recovery agreement with HONI related to the construction by HONI of a transformer station designated to meet VCI's anticipated electricity load growth. Construction of the project was completed during 2007 and VCI connected to the transformer station during 2008. To the extent that the cost of the project is not recoverable from future transformation connection revenues, VCI is obligated to pay a capital contribution equal to the difference between these revenues and the construction costs allocated to VCI. The construction costs allocated to VCI for the project are49,975,000. The Corporation has recorded a liability and a corresponding intangible asset for $1,484,000 as at December 31, 2018 (2017 $1, 12,000), based on management's best estimate of the future transformationconnectionfrevenue shortfall. HONI is in the process of performing a true -up based on actual load at t to erid of the tenth anniversary of the in-service date and is expected to perform another true -up based on actual load at the end of the fifteenthannivery of the in-service date. (iii) General claims From time to time, the Corporation is Waive in various lawsuits, claims and regulatory proceedings in the"normali'Course of business. In the opinion of management, the outcome of such matters will not have a material adverse effect on the Corporation's consolidated financial position and results of operations or cash flows. (e) Lease commitments Future minimum lease paymei (f) 2019 2020 2021 2022 2023 Thereafter ;obligations under operating leases are as follows: (000's) 6 2 2 2 2 50 64 Subsequent event On April 1, 2019, Veridian Corporation amalgamated with Whitby Hydro Energy Corporation to form Elexicon Corporation. The predecessor shareholders of Veridian Corporation being the City of Pickering, the Town of Ajax, the City of Belleville and the Municipality of Clarington will collectively own 68% of the newly formed Elexicon Corporation. This will result in the City having a 27.88% interest in Elexicon Corporation. The financial impact of the amalgamation to the City's investment and accumulated surplus balances will be reported in the City's consolidated financial statements for the December 31, 2019 year end. Page 13 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 5. Promissory notes receivable Promissory note receivable from Veridian Corporation which matured on December 31, 2018 and bearing interest at the greater of 6% or the Ontario Energy Board deemed long term debt rate on an annual basis to maturity (See (a) and (c) below) Promissory note receivable from Veridian Connections Inc. maturing November 1, 2039 and bearing interest at the Ontario Energy Board deemed Tong -term debt rate for each successive five year period thereafter (4.47% effective January 1, 2015) .7X974,000 17,974,000 2018 2017 7,095,000 7,095,000 69,000 25,069,000 (a) The promissory note receivable from Veridian Corporation matured on December 31, 2018 and was extended to the earlier o December 31, 20.9 or the closing date of the merger between Veridian Corporation and Nhitby Hydro knergy Corporation, as defined in the Merger Participation Agreement between the Town of Ajax, City of Belleville, the Municipality of Clarington, City of'Pickering, Town of Whitby, Veridian Corporation, Veridian Connections"Inc., Whitby Hydro. Energy Corporation and Whitby Hydro Electric Corporation Alf other termsof the promissory note remain the same. (b) Interest revenue,,earned from these notes receivable totaled $1,229,138 (2017 - $1,229,138). The $7095,000 promissory note from Veridian Corporation is convertible into common shares at tFe rate of one common share for every $1,000 of principal amount, at the option of the City The note from Veridian Connections Inc. is no longer convertible but the City may demand full ;or partial repayment with six months' notice with certification that the funds are required for'municipal purposes. The City has signed an inter -creditor agreement confirming the subordinated ranking of these promissory notes to the senior debt financing issued by Veridian. (c) On November 20, 2014, the Ontario Energy Board's deemed Tong -term rate was established for the five year period commencing January 1, 2015 until December 31, 2019 at 4.47%. This rate will be reset on January 1, 2020. - 112 - Page 14 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 6. Deferred revenue Obligatory reserve funds Development charges Parkland Federal gas tax Third party/Developer's contributions reserve fund Public benefits Other unearned revenues Continuity of deferred revenue is as follows: Balance, beginning of year Restricted funds received General funds received Interest earned (restricted funds Earned restricted Earned revenue 2018 2017 58,789,415 6,463,242 5,310,843 2,790,108 73,353,608 4,129,320 48,100, 585 4,532,056 5,654,549 2,957,593 141,387 61, 386,170 3,808,243 4;82,928 65,194,413 evenue transferred to operations ransferred to oblations t Balance, end of year - 113 - 4,413 W 20,092,304 896,508 1,064,773 22,053,585 9,189,639 575,431 2017 60, 501, 567 9,169, 370 2,900,813 830,571 12, 900, 754 7,151, 044 1,056,864 9,765,070 8,207,908 77,482,928 65,194,413 Page 15 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolislateil financial statements December 31, 2018 7. Interfund loans As a means of funding various capital acquisitions, funds are borrowed by the Capital Fund from Development Charges deferred revenue (obligatory reserve funds). These funds are secured by promissory notes with interest rates ranging from 1.83% to 2.64% and various payment terms ranging from 5 years to 10 years. The financing arrangements and ultimate repayment are approved by Council through the current budget process. Although these notes have payment terms as noted above, they are repayable on demand. The following is a summary of the related interfund loans: 2018 2017 Roads and streetlights 564,296 1,226,910 Community facilities, libraries and parks 815,139 1,385,745 f Protection services�296,535 337,226 Stormwater system £10,829 645,360 6,799 ;=, 3,595,241 8. Post -employment benefits liability (a) Post -employment benefits liability The City makes available to qualifying employees who -retire before the age of 65, the opportunity to continue their coverage forrbenef tssuch as post-retirement extended healthcare benefits. Coverage eases at the ag of 65. The City also provides full time and permanent part-time employees nick time entitlement and any unused entitlement is accumulated year toyear chis accumulated entitlement is not vested and is forfeited at the time of retirement or termination. The most recent actuarial valuation of the post- employmentrlbenefits was performed atDecember 31, 2017, with a projection to December 31, 2018. Information about the City's benefits liability is as follows: 2018 2017 Accrued benefits liability, beginning of year 5,609,656 4,959,500 Plan amendment — 384,991 Current service costs 535,285 416,276 Interest on accrued benefits 411,606 223,108 Amortization of actuarial losses 538,856 186,200 Benefits paid during the year (835,209) (560,419) Accrued benefits liability, end of year 6,260,194 5,609,656 Accrued benefit obligation 11,237,755 11,126,073 Unamortized actuarial losses (4,977,561) (5,516,417) Accrued benefits liability, end of year 6,260,194 5,609,656 - 114 - Page 16 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 8. Post -employment benefits liability (continued) (a) Post -employment benefits liability (continued) The main actuarial assumptions employed in the actuarial valuations for the post - employment benefits are as follows: (i) Discount rate The present value as at December 31, 2018 of the future benefits was determined using a discount rate of 3.75% (2017 - 3.75%). (ii) Dental costs The dental cost trend rate was 3.75% (2017 - 3.75%) increase per annum. (iii) Health costs Health costs were assumed to increase at 6 42%,(2017;.,- 6.75%) and decrease by 0.33% (2017 - 0.33%) increments per year to an ultimate rate of 3.75% per year in 2027 and thereafter. (b) Workplace Safety and Insurance Board (WSIB) benefit liabilities Effective January 1, 2001, the City became a ScheduleII employer7under the Workplace Safety & Insurance Act and follows a policy of self insurance for the risk associated with paying benefits for workplace injuries for 1l its employees. The WSIB administers the claims related to workplace injuries and is reimbursed byte City. The most recent actuarial valuation of the WSIB benefits/was j rformed at December 31, 2016, with a projection to December 31, 2018.E Information about the City's V SIB benefit liability is as follows: Accrued W Current service=i Interest on accrued Jenefit Amortization of actUaria Benefits paid during the liability, beginning of year :ost losses Year 2018 2017 1,862,876 1,806,100 128,519 124,773 90,135 89,144 30,254 30,254 (194,605) (187,395) 1,917,179 1,862,876 Accrued benefit obligation 2,310,476 2,286,427 Unamortized actuarial losses (393,297) (423,551) Accrued benefits liability, end of year 1,917,179 1,862,876 The main actuarial assumptions employed in the actuarial valuations are as follows: (i) Discount rate The present value as at December 31, 2018 of the future benefits was determined using a discount rate of 4.0% (2017 - 4.0%). (ii) Inflation rate The rate of inflation was assumed to be 1.75% (2017 - 1.75%) per annum. - 115 - Page 17 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 8. Post -employment benefits liability (continued) (b) Workplace Safety and Insurance Board (WSIB) benefit liabilities (continued) (iii) WSIB Administration Rate Liabilities for WSIB benefits have been increased 38% to reflect the administration rate charged by WSIB. A WSIB Reserve Fund was established in 2001. The Reserve Fund balance at December 31, 2018 (Note 11) was $3,548,321 (2017 - $3,209,349). In addition, the City purchased two insurance policies that protect the City against significant claims. The occupational accident insurance pays loss claims up to $500,000 per work related accident. The excess workers compensation indemnity insurance has a $500,000 deductible and will pay for claims up to and including $15,000,000 per work related accident. 9. Long-term liabilities (a) The balance of long-term liabilities is made up* 2017 The City is responsible for the paymen of principal and interest charges,on°lon P liabilities issued by the Regional;Municipa'lity of Durham on the City's beha[f At the er the year the outstanding pri pal amounto this liability is,,: 29,418,973 31,412,982 (b) The above longterm liabilities have maturity dates of July 12, 2021 and 2022, October 15, 2020, Septembe"tr29, 2021, October 16, 2023, July 2, 2019 and 2029, October 17, 2021, 2026 and 2031, October 13, 2022, 2027, 2032 and 2037 and September 14, 2023, 2028, 2033 and 2038 with ariousAnterest rates ranging from 1.10% to 5.12%. Principal repayments are summarized s follows: 2019 2020 2021 2022 2023 Thereafter 3,129,986 3,164, 344 3,338,385 2,372,998 2,172, 597 15,240,663 29,418,973 (c) Long-term liabilities include principal sums of $952,000 (2017 - $2,415,000) which may be refinanced by the issuance of debentures over a further period not to exceed 5 years. (d) The above long-term liabilities have been approved by Council by-law. The annual principal and interest payments required to service these liabilities are within the annual debt repayment limit prescribed by the Ministry of Municipal Affairs and Housing. (e) Interest expense recorded in the year relating to these long-term liabilities is $935,509 (2017 - $715,544). - 116 - Page 18 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 10. Tangible capital assets Information relating to tangible capital assets is as follows: (i) Contributed tangible capital assets The City records tangible capital assets contributed by an external party at fair value on the date contributed. Typical examples are roads, storm sewers and sidewalks installed by a developer as part of a subdivision or development agreement. Contributions of tangible capital assets in 2018 amounted to $995,033 (2017 - $5,014,463). (ii) Tangible capital assets recognized at nominal value Land under roads are assigned a nominal value of one Canadian dollar because this land only supports or is intended to support road infrastructure and the majority of land acquired supporting road allowances was acquired at no cost. (iii) Works of art and historical treasures The City has a museum which holds various hist ical tre sures and historical buildings pertaining to the heritage and history of the City of P� k�g. These items are not recognized as tangible capital assets in the financial statemer because a reasonable estimate of the future benefits associated with ssuuck�ropertycannot be made. Any acquisition or betterment of these assets is recognized as an expense in the financial statements.. (iv) Other The net book value of tangible capital.'assets not b`tng amortized because they are under construction is $31,236,184 (201T4318,9,6 During the year, there were no r-ite-downs sets (2017 - $Nii) and no interest was capitalized during the year (20'17 ,$Nil). (v) Land held for resa During the year, the City acquired a land parcel along the 407 corridor from Infrastructure Ontario for the purpose of resale for economic development. As a result, this land was not capitalized as a tangible capita asset but instead recorded as land held for resale. The value reported onktFe Consolidated Statement of Financial Position reflects the purchase price and other related servicing costs recoverable on the sale of land. Subsequent to year end, this parcel of land7140sold to Kubota Inc. in January 2019. - 117 - Page 19 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 10. Tangible capital assets (continued) Cost Balance, ' beginning of year 55,662,991 81,644,369 9,149550 13,343558 280 938',295 1785,121 2,358,369 730508 18,379,602 463592,863 Add Additions during the year 484572 3519,321 1,621535 494571 12;241 933 45,475 366512 153502 17591,159 37520,480 Less Disposals/transfers during the year 150 A07 1540544 332,029 530,797 749,729 119,205 474519 — 5534577 8531,707 Balance, end of year 55,997,456 83523,046 10,439,756 13507,132 .„4292;450599 399 2,092,391 2,250,862 884,410 31,236,184 492,581,636 Machinery Information Library Furniture Assets and technology collection and under Land Buildings equipment Vehicles Infrastructure hardware materials fixtures construction 2018 $ Accumulated amortization Balance, beginning of year — 44,034,616 4,980,437 Add Amortization — 3,508,849 750,557 Less Accumulated amortization on disposals Balance, end of year Net book value of tangible capital assets 55.997.456 37.908.211 012,589 /5.712,213 121.685.917 718.141 + 1.095.179 513.464 31.236.184 259.879.354 — 1,528,630V 303,827 — 46.014,835?... 5,427,167 1,229,914 1,224,942 320,954 — 223,735,876 227,779 405,060 49,992 — 12,480,087 530,797/ 592,665 83,443 474,319 — — 3,513,681 X7,594,919 170,764,482 1,374,250 1,155,683 370,946 — 232,702,282 Page 20 - 118 - GRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 10. Tangible capital assets (continued) Cost Balance, beginning of year Add Additions during the year Less Disposals/transfers during the year Balance, end of year Accumulated amortization Balance, Machinery Information Library Fumiture Assets and technology collection and under Land Buildinas eauioment Vehicles Infr9structure hardware materials figtures construction $ $ $ $ $ $ $ $ $ 7017 55,691,303 80,777,919 9,045,684 13,167,746 2602 915 ,1 ,565,764 2,466,112 646,134 11,233,428 441,867,005 470,067 1,275,576 973,931 768,350 347,502 84,674 11,124,096 31,772,704 498.379 409.126 869,665 592.738-.2,820 701 :° , 23.070 455,245 — 3,977,922 9.646,846 55,662.991 81,644.369 9.149.950 13,343.35 280'938,295 >.785.121 2,358.369 730.808 18,379,602 463,992,863 beginning of year — 42,337,115 5,143,393 ,m 931,337 Add Amortization Less Accumulated amortization on disposals Balance, end of year Net book value of tangible capital assets 55,662,991 37,609,753 4. `91v 6.064.238 116.272.402 555,207 1.133.427 409,854 18,379,602 240256.987 1,220 1,052,167 1,252,263 282,879 — 218,030,374 — 2,095,387 0521 6,439,400 200,817 427,924 38,075 — 10,800,559 - 397,83 . 821.391 1 592.738 2.804,727 23.070 455,245 — — 5,095,057 — 44,034.61 4,980,437 7,279,120 164,665,893 1,229,914 1,224,942 320,954 — 223.735,876 Page 21 - 119 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 11. Accumulated surplus The City's accumulated surplus is comprised of the following: 2018 2017 Capital fund 20,701,530 25,169,415 Operating fund 125,247 125,237 Equity in Veridian Corporation 84,628,856 81,505,144 Tangible capital assets 259,879,354 240,256,987 Post -employment benefits liability (6,081,194) (5,430,656) Intemal loans (1,986,799) (3,595,241) Net long-term liabilities (29,418,973) (31,412,982) Note receivable soccer facility 3,530,086 3,796,946 WSIB benefit liabilities / (1, 7,179) (1,862,876) Reserves set aside for special purposes by Council Working capital � � , � 00,000 400,000 Self insurance912,642 869,293 Replacement of capital equipment 2,316, 3 1,804,790 Contingencies 1,702,591 1,632,591 Rate stabilization 17,962,479 16,823,997 City's share for development charge y ,384,927 6,884,793 Continuing studies � �- 703,285 448,190 Vehicle replacement 1,612,757 1,426,438 t, Easement settlement 390 390 Land purchase 14,403 99,403 Seaton development review 1,437,822 1,641,805 Financial systems 43,647 1,068,647 Senior centre 700,000 45.0,000 Accessibility initiatives 31,944 31,944 Winter control 700,000 700,000 Sustainabilityinitiative 294,455 51,376 Duffin Heights ' 3,430,925 3,660,177 Facilities 119,345 258,645 Accelerated infrastructure program 519,500 519,500 Fence 150,000 150,000 Minor buildings replacement 300,000 100,000 Financial Impact Agreement - 210,745 Tennis Courts 111,100 - Reserve funds set aside for special purpose by Council Recreation programs and facilities 377,363 174,873 Acquisition of tangible capital assets 297,686 293,371 WSIB 3,548,321 3,209,349 Animal shelter 522,608 417,706 Men's slow pitch 144,127 152,227 Operations Centre 18,375,610 25,773,590 Roads & bridges 3,456,460 2,417,954 Ston-nwater management 2,683,162 1,354,597 Ontario Community Infrastructure Fund 616,668 55,761 Seaton infrastructure 223,816 54,493 Seaton Financial Impact Agreement 777,597 - 403,332,893 381,688,619 Page 22 - 120 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 12. Pension agreement The City makes contributions to the Ontario Municipal Employees Retirement Fund (OMERS), which is a multi-employer plan, on behalf of the members of its staff. The plan is a defined benefit plan which specifies the amount of the retirement benefit to be received by the employees based on the length of service and rates of pay. OMERS provide pension services to over 496,000 active and retired members and about 1,000 employers. Each year an independent actuary determines the funding status of OMERS Primary Pension (the "Plan") by comparing the actuarial value of the invested assets to the estimated present value of all pension benefits that members have earned to -date. The most recent actuarial valuation of the Plan was conducted as at December 31, 2018. The results of this valuation disclosed total actuarial liabilities as at that date of $100,081 million in respect of benefits accrued for service with actuarial assets at that date of $95,890 million indicating an actuarial deficit of $4,191 million. Because OMERS is a multi-employer plan, any pension plan surpluses or deficits are a joint responsibility of Ontario municipal organizations and their employers. As a result, the City does not recognize any share ofthe OMERS pension surplus or deficit. Contributions made by the City to OMERS on accort of cservice for 2018 were $3,985,649 (2017 - $3,834,325). 13. Trust Funds Trust funds administered by the City amounting to 36 148 (2017 - $361,263) have not been included in the Consolidated Statement of Financial Position nor have their operations been included in the Consolidated Statemeof Operations. 14. Related party transactions Veridian Corporatio The City of Pickering is aprincipal sh reholder in Veridian Corporation (Note 4). The City an receives electricity d services from Veridian Corporation and its subsidiary. 2018 2017 Transactions Revenues Interest on promissory notes 1,229,138 1,229,138 Property taxes levied 45,172 49,993 Expenses Electrical energy and services 2,077,577 2,153,292 Balances Accounts payable and accrued liabilities 403,117 468,782 Promissory notes receivable 25,069,000 25,069,000 Page 23 - 121 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 15. Guarantees In the normal course of business, the City enters into agreements which contain guarantees. The City's primary guarantees are as follows: (1) The City has provided indemnities under lease agreements for the use of various facilities or land. Under the terms of these agreements the City agrees to indemnify the counterparties for various items including, but not limited to, all liabilities, loss, suits, and damages arising during, on or after the term of the agreement. The maximum amount of any potential future payment cannot be reasonably estimated. (ii) The City indemnifies all employees and elected officials including Library employees and board members for various items including, but not limited to, all costs to settle suits or actions due to association with the City, subject to certain restrictions. The City has purchased liability insurance to mitigate the cost of any potential future suits or actions. The term of the indemnification is not explicitly defined, but is limited to the period over which the indemnified party served as an employee or elected official of the City. The ca maximum amount of any potential future payment ne ottbe reasonably estimated. (iii) The City has entered into agreements that ma yin lude indemnities in favour of third parties, such as purchase and sale agreements confidentiality agreements, engagement letters with advisors and consultants, outsourcing agreements, leasing contracts, information technology agreements and service Theseindemnification agreements may require the City to compensate counterparties for losses incurred by the counterparties as a result of breaches in, representation and regulations or as a result of litigation claims or statutory sanctions that may~be suffered" by the counterparty as a consequence of the transaction. The tears of,these indemnities are not explicitly defined and the maximum amount of any,potentialereimbursernent cannot be reasonably estimated. The nature of these indemnification a-eements pj-events the City from making a reasonable estimate of the maximum exposure dale to the difficulties in assessing the amount of liability which stems from the unpredictability of future events and the unlimited coverage offered to counterparties. Histol rc Ily,,the yry has not made any significant payments under such or similar indemnificati"agreemetherefore no amount has been accrued in the balance sheet with respect to these agreements rql 16. Contingent Iiabilitie`s� Litigation The City has been named as a defendant in certain legal actions in which damages have been sought. The outcome of these actions is not determinable as at the date of reporting and accordingly, no provision has been made in these consolidated financial statements for any liabilities which may result. 17. Contractual arrangement The City entered into a provisional license agreement with the Pickering Soccer Club (PSC) for the PSC to occupy and operate the Pickering Indoor Soccer Facility (the "Facility"). The term of the agreement is 15 years from November 5, 2014 to November 4, 2029. Under the terms of the agreement, the PSC will repay 52.25% of the City's total cost of purchasing the land, constructing the Facility and the related improvements. In 2015, the City recorded a receivable from PSC in the amount of $4,550,000 based on preliminary project cost figures, with a 15 year repayment term at a variable interest rate ranging from 1.2% to 3.8%. This amount will be adjusted for the total project construction costs, once the agreement is finalized. The City has received all of the required payments to date based on the preliminary figures. Page 24 - 122 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 17. Contractual arrangement (continued) PSC has commenced its soccer program operations and is operating the Facility at its own expense including all repairs and maintenance. Once a final form of agreement is executed the total amount of the PSC's obligation will be re -calculated, as agreed, to reflect any adjustments to the total project construction costs. 18. Budget figures The 2018 Budget adopted by Council on February 26, 2018 was not prepared on a basis consistent with that used to report actual results. The budget was prepared on a modified accrual basis while Canadian Public Sector Accounting Standards require a full accrual basis of accounting. The budget figures treated all tangible capital asset acquisitions as expenditures and did not include amortization expense on tangible capital assets or post -employment benefits expenses on a full accrual basis. As a result, the budgefigures presented in the Consolidated Statements of Operations and Change in Ne m inaheial Assets represent the budget adopted by Council on February 26, 2018 with adjustmenollows: 2018 >., 2018 Revenue Taxation Capital Other e � Post- Council on TCA employment approved expenditures benefits/ budget from capital"'_, amortization Budget presented in statements 68 791,681' 45,0 24,104 17 ,731,691 $ - 68,791,681 - 45,024,104 - 17,731,691 1,54;74476 - 131,547,476 Expenditures General government Protection to persons andtproperty Transportation services Environmental services Social and family services Recreational and cultural services Planning and development Annual surplus (deficit) Capital expenditures Transfers from reserve and reserve funds Dividend from Veridian Corporation Principal repayment of debt Principal repayment of PSC note Debt proceeds Prior year operating fund surplus 17,599,920 24,969,354 9,353,516 1,653,105 833,586 24,663,788 3,856,353 5,230,000 12,000 245,000 290,000 628,547 908,950 3,586,144 2,128,380 3,518,722 1,809 23,458,467 25,890,304 13,184,660 3,781,485 833,586 28,472,510 3,858,162 82,929,622 5,777,000 10,772,552 99,479,174 48,617,854 (5,777,000) (10,772,552) 32,068,302 (68,532,373) 5,777,000 — (62,755,373) 12,555,317 1,927,000 (4,629,768) 219,000 9,717,970 (125,000) - 123 - Page 25 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 19. Segmented information The City of Pickering is a diversified municipal government that provides a wide range of services to its residents. Distinguishable functional segments have been separately disclosed in the segmented information. The nature of the segments and the activities they encompass are as follows: General government This item relates to revenues and expenses of the City itself and cannot be directly attributed to a specific segment. Protection to persons and property Protection includes fire services, animal control, bylaw services, building inspection and enforcement of the building code to ensure the safety and protection of all citizens and their property. Public works services Public works includes construction and maintenanceCity's roadw ys, including snow removal, sidewalk repairs, street lighting and maintenance of the storm water system. Social and family services Social services for assistance or service Recreation and culture services Recreation and cultural services include recreation programs, maintenance and rental of facilities and parks, operation Planning and development Planning and development provides number of services including municipal planning and review of all property development plans. Segmented information has been provided in the following pages. useum and library services. Page 26 - 124 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 19. Segmented information (continued) 2018 Protection to persons and property Revenue Grants 56,957 3,111,935 2,161, User charges 7,104,411 35,961 5,977,3 Tax related revenues - - Developer revenue 1,011,037 4,301,437 Public works services $ Recreational and cultural Social and Planning and family General deye1opment services government Consolidated $ $ $ $ Contributed tangible capital assets Equity share of Veridian Corporation Other revenues Expenses Salaries and wages 20,770,883, 5,10629 16,103,489 2,541,302 347,132 9,688,495 54,594,930 Materials and supplies 2 2,235,1*N, 30,702 6,492,757 203,914 137,433 5,160,551 17,623,493 Contracted services 834,843 (21,867 739,832 292,664 137,692 1,073,558 4,000,456 Amortization 753,343 76,258,094 4,571,384 2,359 - 894,907 12,480,087 Other 166,964 463,534 773,469 9,845 158,593 248,231 1,820,636 Loss on disposal of tangible capital assets - 510 976,8905 9,149,295- 1,192,459 151,084 107,487 116,304 5,554,251 58,984 821,329 15,190,523 - 72,165,112 72,165,112 2,475 1,138,128 8,565,040 - 484,871 995,033 - - 5,050,712 5,050,712 74,033 - - 3,838,287 4,889,210 .959 w ;a, 10,173,859 1,343,543 168,946 83,614,743 112,409,881 Annual (deficit) surplus (17,671) 120,498 93,412 - - 49,766 246,005 24,743,498 16,301,324 28,774,343 3,050,084 780,850 17,115,508 90,765,607 (15,594,203) (8,341,829) (18,600,484) (1,706,541) (611,904) 66 499 235 21,644,274 - 125 - Page 27 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Notes to the consolidated financial statements December 31, 2018 19. Segmented information (continued) Revenue Grants 9,877 5,489,553 58uw0 159,605 114,264 6,356,344 User charges 3,848,727 45,432 5,6 ' 7111 ,' 54,457 765,965 11,082,163 Tax related revenues - - - - 69,270,028 69,270,028 gym, Developer revenue 199,275 741431 '43,006 � 17,700 - 86,468 1,468,880 Contributed tangible capital assets - 4,5644,43 450020 - - - 5,014,463 Equity share of Veridian Corporation - 7ur, - - - - 4,179,608 4,179,608 Gain (loss) on disposal of tangible capital assets 3 31,646 - - 22,883,018 22,927,289 410 Other revenues ,1, 0 633 4220 2 597,655 54,598 - 2,495,839 5573,935 ,243,702 111693,504 7,742,112 784,140 214,062 99,795,190 125,872,710 2017 Protection Social and to persons Public works Recreational Planning and family General and property services and cultural development services government Consolidated Expenses Salaries and wages 20,074 ;771,298 15,744,394 2,220,477 349,285 9,692,750 52,853,051 Materials and supplies 2,194,30 3,606,212 6,481,518 214,166 149,187 4,817,022 17,462,408 Contracted services 808,517 1,273,691 731,558 136,700 90,440 990,566 4,031,472 Amortization 731,859 6,042,866 3,480,211 2,065 - 543,558 10,800,559 Other 170,001 226,389 752,499 9,845 176,796 254,592 1,590,122 23 979 527 15 920 456 27 190 180 2,583,253 765 708 16,298,4_88 86,737,612 Annual (deficit) surplus (18,735,825). 13,826,9521 (19,448,068) (1,799,113) (551,646) 83496,702 39,135,098 Page 28 - 126 - Financial statements of DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Trust Funds December 31, 2018 DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Trust Funds December 31, 2018 Table of contents Independent Auditor's Report 1-2 Statement of financial activities and fund balances 3 Statement of financial position 4 Notes to the financial statements ... 5 - 128 - Deloitte., Independent Auditor's Report To the Members of Council of The Corporation of the City of Pickering D RA FTD@l6itALQ5/29/2019 400 Applewood Crescent Suite 500 Vaughan ON L4K 0C3 Canada Tel: 416-601-6150 Fax: 416-601-6151 www.deloitte.ca Opinion We have audited the financial statements of The Corporation of the City of Pickering Trust Funds (the "Trust Funds"), which comprise the statement of financial position as at December 31, 2018, and the statement of financial activities and fund balances for the year then ended, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the "financial statements"). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Trust Funds as at December 31, 2018, and the results of its operations changes in fund balances for the year then ended in accordance with Canadian accounting standards for Not -for -Profit Organizations. Basis for Opinion We conducted our audit in accordance with Canadian generally; accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We are independent of the Trust Funds in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian accounting standards for Not -for -Profit Organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Trust Funds' ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Trust Funds or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Trust Funds' financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. - 129 - DRAFT AS AT 05/29/2019 As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust Funds' internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Trust Funds' ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Trust Funds to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. (To be signed Deloitte LLP) Chartered Professional Accountants Licensed Public Accountants , 2019 - 130 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Trust Funds Statement of financial activities and fund balances year ended December 31, 2018 2018 2017 Revenue Interest Fund balance, beginning of year Fund balance, end of ear 5,885 6,114 361,263 355,149 367,148 361,263_ The accompanying notes to the financial statements are an integral part of this financial statement. Page 3 - 131 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Trust Funds Statement of financial position as at December 31, 2018 2018 2017 Assets Cash and investments 356,700 356,700 Interest receivable 10,448 4,563 367,148 361,263 Trust Fund position 367,148 361 263 The accompanying notes to the financial statements are an integral part of this financial statement. Page 4 - 132 - DRAFT AS AT 05/29/2019 The Corporation of the City of Pickering Trust Funds Notes to the financial statements December 31, 2018 1. Significant accounting policies The financial statements of The Corporation of the City of Pickering Trust Funds are the representations of management prepared in accordance with Canadian accounting standards for Not -for -Profit Organizations. Significant accounting policies adopted include: Revenue recognition Interest revenue is recorded as earned. Investments Investments are recorded at amortized cost. The cost of investments plus accrued interest approximates their fair value. 2. Dorothy Card Estate The City of Pickering administers a trust fund for the Dorothy Car, destitute elderly. The fund balance is comprised of investment "and accumulated interest amounting to $367,148 (2017 $361,263). state for the care and upkeep of the 3. Statement of cash flows A statement of cash flows has not been presented as the; information is readily determinable from the financial statements presented. Page 5 - 133 - Financial statements of DRAFT AS AT 05/29/2019 City of Pickering Public Library Board December 31, 2018 - 134 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board December 31, 2018 Table of contents Independent Auditor's Report 1-2 Statement of financial position 3 Statement of operations 4 Statement of change in net debt 5 Statement of cash flows 6 Notes to the financial statements 7-11 - 135 - Deloitte. Independent Auditor's Report To the Board of Directors of The City of Pickering Public Library Board, and Members of Council of the Corporation of the City of Pickering D RAFTDAS tRdL45/29/2019 400 Applewood Crescent Suite 500 Vaughan ON L4K 0C3 Canada Tel: 416-601-6150 Fax: 416-601-6151 www.deloitte.ca Opinion We have audited the financial statements of City of Pickering Public Library Board (the "Library Board"), which comprise the statement of financial position as at December 31, 2018, and the statements of operations, change in net debt and cash flows, for the year then ended, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the "financial statements"). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Library Board as at December 31, 2018, and the results of its operations, changes in net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards ("PSAS"). Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We are independent of the Library Board in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and•Those charged with governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with PSAS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Library Board's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Library Board or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Library Board's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. - 136 - DRAFT AS AT 05/29/2019 As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Library Board's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Library Board's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Library Board to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that ...., identify during .,..r -,..alit (To be signed Deloitte LLP) Chartered Professional Accountants Licensed Public Accountants , 2019 - 137 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Statement of financial position as at December 31, 2018 2018 2017 Financial assets Cash 1,225 1,225 Accounts receivable 2,294 1,333 Due from the Government of Canada 11,335 14,927 Due from City of Pickering 138,181 162,706 153,035 180,191 Liabilities Accounts payable and accrued liabilities Deferred Revenue Post -employment benefits liability (Note 2) 198,723 464,078 662,801 202,851 14,793 452,568 670,212 Net debt %(509,766) (490,021) Non-financial assets Tangible capital assets (Note 4) 1,494,063 1,494,740 Prepaid expense = 45,688 37,453 1,539,751 1,532,193 Accumulated surplus (Note 5) 1,029,985 1,042,172 The accompanying notes to the financial statements are an integral part of this financial statement. Page 3 - 138 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Statement of operations year ended December 31, 2018 2018 2017 Budget (Note 6) $ $ $ Revenue City of Pickering grants 5,964,138 5,882,770 5,781,879 Federal grants - 9,234 - Province of Ontario grants 138,050 138,049 210,280 Fines and other receipts 176,500 136,720 152,398 6,278,688 6,166,773 6,144,557 Expenses Operating Salaries Salaries and wages Fringe benefits 3,440,087 3,483,038 916,264 970,148 4,356,351 4,453,186 Material, supplies and utilities Books Utilities Other supplies Services Repairs and maintenance Insurance Travel Consulting and professional Advertising Conference Postage Telephone Seminars and education Software/hardware maintenance Vehicle repairs and maintenance Minor capital purchases Miscellaneous 225,000. 294,028,'. 3,250 234,355 208,582 219,266 • 227,402 52,556 54,963 506,177 490,947 22,533 284,079 394,908 25,918 23,918 25,918 6,000 7,358 7,308 103,850 112,978 41,951 23,500 27,107 20,782 10,000 13,106 15,594 2,800 2,823 3,078 70,466 65,597 60,431 17,500 18,602 32,187 115,785 150,008 123,405 5,143 3,816 3,527 46,000 119,775 79,757 15,230 20,636 21,950 764,725 849,803 830,796 Amortization of tangible capital assets 463,283 466,629 473,083 6,391,027 6,178,960 6,248,012 Annual deficit Accumulated surplus, beginning of year (112,339) (12,187) (103,455) 1,042,172 1,042,172 1,145,627 Accumulated surplus, end of /ear 929,833 1,029,985 1,042,172 The accompanying notes to the financial statements are an integral part of this financial statement . Page 4 - 139 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Statement of change in net debt year ended December 31, 2018 2018 2017 Budget (Note 6) Annual deficit $ $ $ (112,339) (12,187) (103,455) Acquisition of tangible capital assets Amortization of tangible capital assets (420,944) (465,952) (440,096) 463,283 466,629 473,083 42,339 677 32,987 Acquisition of prepaid expenses (45,688) (37,453) Usage of prepaid expenses - 37,453 80,195 Change in prepaid expense (8,235) 42,742 Change in net debt (70,000) (19,745) (27,726) Net debt, beginning of year 490,021 ) 490,021) (462,295) Net debt, end of year (560,021) (309,766) (490,021) The accompanying notes to the financial statements are an integral part of this financial statement. Page 5 - 140 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Statement of cash flows year ended December 31, 2018 2018 2017 Operating transactions Annual deficit (12,187) (103,455) Non-cash items Amortization of tangible capital assets 466,629 473,083 454,442 369,628 Change in non-cash operating items Increase in accounts receivable (961) (962) Decrease in due from Government of Canada 3,592 477 Decrease (increase) in due from City of Pickering 24,525 (53,627) Decrease in accounts payable and accrued liabilities (4,128) (4,423) (Decrease) increase in deferred revenue � (14,793) 14,793 Increase in post -employment benefits liability ." 11,510 70,468 (Increase) decrease in prepaid expense x(8,235) 42,742 1,510 69,468 465,952 439,096 Capital transactions Net acquisition of tangible capital assets (465,952) (440,096) Net change in cash Cash, beginning of year (1,000) 1,225 2,225 Cash, end of year 1,225 1,225 TThe accompanying notes to the financial statements are an integral part of this financial statement. Page 6 - 141 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Notes to the financial statements December 31, 2018 1. Significant accounting policies The financial statements of the City of Pickering Public Library Board (the "Library Board") are the representations of management prepared in accordance with Canadian public sector accounting standards established by the Public Sector Accounting Board ("PSAB") of Chartered Professional Accountants of Canada. Significant accounting policies adopted by the Library Board are as follows: Basis of accounting a) Accrual basis of accounting Revenues and expenses are reported on the accrual basis of accounting. The accrual basis of accounting recognizes revenues as they are earned and measurable; expenses are recognized, as they are incurred and measurable as a result of the receipt of goods and services and the creation of a legal obligation to pay. b) Non-financial assets " (i) Tangible capital assets Tangible capital assets are recorded at cost lessmaccumulated amortization. Cost includes all amounts that are directly attributable to acquisition development or betterment of the asset. The cost of the tangible capital asset is amortized on a straight-line basis over the estimated useful life as follows:` Machinery and equipment Information technology hardware Library collection materials Furniture and fixtures ,>25 years to,', years to'7 years 0 50 years One-half of the annual amortization is charged in the year of acquisition and in the year of disposal. Other major assets includin these finaficial statements. e Library'=buildings are owned by the City and are not reflected in (11) Contribution/donation of taggib e capital assets Tangible capital assets received as contributions or donations are recorded at their fair value at the date of receipt, an at fair value is also recorded as revenue. (iii) Intangible assets Intangible assets are not recognized as assets in the financial statements. c) Post -employment benefits The present value of the cost of providing employees with future benefits programs is recognized as employees earn these entitlements through service. Any actuarial gains or losses are amortized on a straight-line basis over the average remaining service period (ARSP) of employees. The actuary estimated the ARSP to be 13 years for retirement and 12 years for sick leave benefits. d) Government transfers Government transfers are recognized as revenue by the Library Board in the period in which the transfer is authorized and any eligibility criteria are met, unless they are restricted through stipulations that require specific actions to be carried out in order to keep the transfer. For such transfers, revenue is recognized as the stipulation has been met. Page 7 - 142 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Notes to the financial statements December 31, 2018 1. Significant accounting policies (continued) Basis of accounting (continued) e) Use of estimates The preparation of financial statements in conformity with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Balances which require significant estimates include amortization expense of tangible capital assets, which are based on estimated useful lives, and post -employment benefits. 2. Post -employment benefits liability The Library Board makes available to qualifying employees who retiefore the age of 65 the opportunity to continue their coverage for benefits such as post et pioyment extended healthcare benefits. Coverage ceases at the age of 65. The Library Board also provides full-time and permanent part-time employees a sick time entitlement, with any unused entitlement accumulated year to year. This accumulated entitlement is not vested and therefore is forfeited at the t m of reetirement or termination. The post -employment benefits obligation at December 312018 and the changes in the accrued benefit obligation for the 2018 fiscal year was determined by actuarial valuation prepared as at December 31, 2017, with projection to December 31, 2018. Information about the Library Board's post-emplq me enefits liability is as follows: Post -employment benefits Jability, beginning of year Current service costs Amortization of act ar I (gains) fosse Interest expense Benefits paid during theear Post -employment benefits=liability 2018 2017 452,568 382,100 30,062 44,147 (262) 18,900 13,157 19,458 (31,447) (12,037) 464,078 452,568 2018 2017 Accrued post -employment benefits obligation 363,305 351,533 Unamortized actuarial gains 100,773 101,035 .Post -employment benefits liability 464,078 452,568 The main actuarial assumptions employed in the actuarial valuation are as follows: a) Discount rate The present value as at December 31, 2018 of the future benefits was determined using a discount rate of 3.75% (2017 - 3.75%). b) Dental cost The dental cost trend rate was 3.75% (2017 - 3.75%) per annum. Page 8 - 143 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Notes to the financial statements December 31, 2018 2. Post -employment benefits liability (continued) c) Health costs Health costs were assumed to increase at 6.42% (2017 - 6.75%) and decrease by 0.33% (2017 - 0.33%) increments per year to an ultimate rate of 3.75% per year in 2027 and thereafter. 3. Pension agreement The Library Board makes contributions to the Ontario Municipal Employees Retirement Fund (OMERS), which is a multi-employer plan, on behalf of eligible members of its staff. The Plan is a defined benefit plan that specifies the amount of the retirement benefit to be received by the employees based on the length of service and rates of pay. OMERS provide pension services to over 496,000 active and retired members and about 1,000 employers. Each year an independent actuary determines the funding status of OMERS Primary Pension ("the Plan") by comparing the actuarial value of the investedsets to the estimated present value of all pension benefits that members have earned to -date iThe m'assets recent actuarial valuation of the Plan was conducted as at December 31, 2018.re The sults ofWt valuation disclosed total actuarial liabilities as at that date of $100,081 million in respect of ene fits accrued for service with actuarial assets at that date of $95,890 million indicating an actuarfal deficit of $4,191 million. Because OMERS is a multi-employer plan, any pension plan surpluses or deflOit#OKe a joint responsibility of Ontario municipal organizations and their employers. As a result, the Library Board does not recognize any share of the OMERS pension surplus or deficit. Contributions in the amount of $288,959 (2017w278,1) were paid to OMERS on behalf of its members during the year. 4. Tangible capital assets (TCA) Machinery Information Library Furniture Assets technology collection and under ardware materials fixtures construction 2018 $ $ $ $ Cost Balance, beginning of year Additions during the year Disposals/transfers to TCA during the year Balance, end of year 23,681 255,350 2,358,369 350,759 20,290 3,008,449 46,498 366,812 72,932 486,242 474,319 - 20,290 494,609 23,681 301,848 2,250,862 423,691 . 3,000,082 Accumulated amortization Balance, beginning of year 10,546 129,978 1,224,942 148,243 - 1,513,709 Amortization 2,368 41,741 405,060 17,460 466,629 Accumulated amortization on disposals 474,319 474,319 Balance, end of year 12,914 171,719 1,155,683 165,703 . 1,506,019 Net book value 10,767 130,129 1,095,179 257,988 . 1,494,063 Page 9 - 144 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Notes to the financial statements December 31, 2018 4. Tangible capital assets (TCA) (continued) Machinery Information Library Furniture Assets and technology collection and under equipment hardware materials fixtures construction 2017 Cost Balance, beginning of year Additions during the year Disposals/transfers to TCA during the year Balance, end of year 23,681 204,157 2,466,112 329,648 - 3,023,598 51,193 347,502 21,111 20,290 440,096 455,24 - - 455,245 23,681 255,350 2 0,759 20,290 3,008,449 Accumulated amortization Balance, beginning of year Amortization Accumulated amortization on disposals Balance, end of year Net book value 8,178 2,368 10,546 13,135 98,883 1,252,2 31,095 427,9 136,547 1,696 29,978 1,224,942 148,243 25,372 1,133,427 202,516 5. Accumulated surplus yf Accumulated surplus consists of the following: Invested in tangible capital assets Post -employment benefits liability - 1,495,871 473,083 - 455,245 - 1,513,709 20,290 1,494,740 2018 2017 1,494,063 1,494,740 (464,078) (452,568) 1,029,985 1,042,172 Page 10 - 145 - DRAFT AS AT 05/29/2019 City of Pickering Public Library Board Notes to the financial statements December 31, 2018 6. Budget figures The 2018 budget was not prepared on a basis consistent with that used to report actual results. The budget was prepared on a modified accrual basis while Canadian public sector accounting standards require a full accrual basis of accounting. The budget figures treated all tangible capital asset (TCA) acquisitions as expenditures and did not include amortization expense on tangible capital assets or post - employment benefits expenses on a full accrual basis. The following provides a reconciliation from the approved budget to the budget numbers presented in the financial statements. Revenue City of Pickering Federal and provincial grants Fines and other receipts Expenditures Salaries and benefits Material, supplies and utilites Services Amortization 2018 Post -employment Council approved benefits / budget • Amortization/ City Assets 2018 budget presented in statements $ $ $ Annual surplus (defic Capital expenditures/ additions ;278 764,725 (30,000) 70,000 463,283 5,964,138 138,050 176,500 6,278,688 4,590,741 572,278 764,725 463,283 5,857,744 533,283 6,391,027 450,944 (563,283) (112,339) (450,944) 30,000 420,944 - 146 - Page 11 DICKERING Od Report to Executive Committee Report Number: FIN 09-19 Date: June 17, 2019 From: Stan Karwowski Director, Finance & Treasurer Subject: Investment Portfolio Activity for the Year Ended December 31, 2018 Ontario Regulation 438/97 under the Municipal Act, 2001 Recommendation: It is recommended that report FIN 09-19 of the Director, Finance & Treasurer regarding Investment Portfolio Activity for the Year Ended December 31, 2018 be received for information. Executive Summary: The following report and attachments represent a summary of the investment activity and year end balance in the portfolio. Investment activity for the year 2018 was based on a portfolio of approximately $165.5 million. Current Fund investments are limited to one year or Tess and Reserve Funds to 10 years or less under the Council approved policy. Overall returns on the City's portfolio compare favourably to market benchmarks. Financial Implications: Total investment income, including bank account interest for 2018 was $2.85 million (2017 - $1.77 million) of which $1.30 million (2017 - $751,000) was for Current (Operating) Funds. The balance of the income was allocated to the various reserve funds. Discussion: The City's investment portfolio is comprised of two main components: (i) Reserve Funds; and (ii) Balances available in the Current Fund, when not required to meet current operating expenditures. This latter balance can vary greatly depending upon many factors including the timing of the receipt of property taxes and levy payments to the School Boards and the Region. Investments are undertaken as one consolidated pool of funds and interest earned is credited back to the appropriate funds. - 147 - FIN 09-19 June 17, 2019 Subject: Investment Portfolio Activity for the Year Ended December 31, 2018 Page 2 Ontario Regulation 438/97 under the Municipal Act, 2001 The Treasurer of the City of Pickering is required under Provincial Regulation 438/97 to report certain information and opinions to Council. The schedules to this report are included as part of that Regulation's information requirements. The portfolio balance at December 31, 2018 of $165.5 million (2017 - $164.1 million) has increased nominally over the prior year. The return on the portfolio maintained with Nesbitt Burns increased in 2018 with a weighted yearly rate of return of 1.56 per cent (2017 — 0.89 per cent) on the combined short-term and long-term investments. This was a result of a steady increase in interest rates throughout 2018. The net performance on TD Wealth's portion of the portfolio for 2018 was 1.79 per cent (2017 — 1.83 per cent). This slight increase is attributed to the types of investments being held. The portion of the portfolio invested with TD Wealth primarily consists of one year Guaranteed Investment Certificates (GIC). Interest rates are higher than the interest rates for Banker's Acceptances and the one year term protects the City from fluctuations in interest rates, but GIC's are less liquid than these other investment instruments. Investment parameters are narrow due to the Municipal Act and regulations limiting the selection of qualified investments for municipal entities. Furthermore, staff's approach tends to be conservative, given that they are investing public money. Notwithstanding these restrictions, the annual returns from both Nesbitt Burns and TD Wealth outperformed the annual returns for the CIBC World Markets 91 -Day T -Bill Index (1.15 per cent) and the Morningstar Canadian Money Market Mutual Fund Index (1.20 per cent). These indices are deemed to be comparative benchmarks for reviewing the portfolio's performance and are considered the standard for analysis of investment funds in the industry. The average return on interfund investments (internal loans) was 2.42 per cent (2017 — 2.32 per cent). At year end 2018, the total portfolio of approximately $165.5 million, consisted of approximately $63.8 million or 38.5 per cent in external long-term investments and approximately $2.0 million or 1.2 per cent in interfund investments (internal loans). The balance of approximately $99.7 million is short-term investments due within the year. All investments were made in accordance with the Investment Policy approved by Council. In the future, staff will be considering the inclusion of credit unions in the pool of investment options, that meet the investment criteria as stated in Ontario Regulation 438/97. - 148 - FIN 09-19 June 17, 2019 Subject: Investment Portfolio Activity for the Year Ended December 31, 2018 Page 3 Ontario Regulation 438/97 under the Municipal Act, 2001 Attachments: 1. Investment Activities for 2018 2. Outstanding Investments as at December 31, 2018 3. Portfolio Performance Review - Correspondence from BMO Nesbitt Burns 4. Portfolio Performance - Correspondence from TD Wealth Prepared By: Kristine Senior Manager, Accounting Services Approved/Endorsed By: Stan Karwowski Director, Finance & Treasurer Recommended for the consideration of Pickering City Council Tony Pre e Chief Administrative Officer - 149 - CITY OF PICKERING INVESTMENT ACTIVITIES FOR 2018 Financial Purchase Maturity Institution Instrument Cost Principal Yield Term Date Date Short Term Nesbitt Burns Toronto Dominion Bank Bdn Discount Note 7,474,050 7,500,000 1.196% 106 25 -Sep -17 9 -Jan -18 Firstbank Bankers Acceptance 5,373,318 5,389,000 1.158% 92 4 -Oct -17 4 -Jan -18 Firstbank Bankers Acceptance 7,170,784 7,192,000 1.200% 90 10 -Oct -17 8 -Jan -18 Firstbank Bankers Acceptance 3,689,714 3,700,000 1.183% 86 25 -Oct -17 19 -Jan -18 Firstbank Bankers Acceptance 6,397,971 6,416,000 1.143% 90 24 -Nov -17 22 -Feb -18 Bank of Nova Scotia Bankers Acceptance 6,263,476 6,281,000 1.122% 91 27 -Nov -17 26 -Feb -18 Bank of Nova Scotia Bankers Acceptance 6,036,475 6,053,000 1.148% 87 1 -Dec -17 26 -Feb -18 Bank of Nova Scotia Bankers Acceptance 8,401,002 8,424,000 1.148% 87 1 -Dec -17 26 -Feb -18 Toronto Dominion Bank Bankers Accept. 6,049,978 6,068,000 1.236% 88 4 -Dec -17 2 -Mar -18 Toronto Dominion Bank Bankers Accept. 6,306,706 6,326,000 1.241% 90 5 -Dec -17 5 -Mar -18 Firstbank Bankers Acceptance 7,701,593 7,725,000 1.233% 90 27 -Dec -17 27 -Mar -18 Firstbank Bankers Acceptance 14,999,052 15,038,000 1.231% 77 28 -Dec -17 15 -Mar -18 Toronto Dominion Fixed Rate Deposit Note 10,065,202 10,026,000 2.171% 181 3 -Oct -17 2 -Apr -18 Bank of Nova Scotia 10,008,891 10,015,000 1.330% 210 3 -Oct -17 1 -May -18 Firstbank Bankers Acceptance 5,431,509 5,449,000 1.336% 88 4 -Jan -18 2 -Apr -18 Firstbank Bankers Acceptance 7,191,335 7,215,000 1.397% 86 8 -Jan -18 4 -Apr -18 Toronto Dominion Bank Bankers Accept. 7,538,749 7,565,000 1.428% 89 17 -Jan -18 16 -Apr -18 Firstbank Bankers Acceptance 3,699,305 3,712,000 1.392% 90 19 -Jan -18 19 -Apr -18 Firstbank Bankers Acceptance 6,453,917 6,476,000 1.403% 89 22 -Feb -18 22 -May -18 Royal Bank of Canada Bankers Acceptance 6,808,196 6,833,000 1.461 % 91 26 -Feb -18 28 -May -18 CIBC Bankers Acceptance 6,974,590 7,000,000 1.461% 91 26 -Feb -18 28 -May -18 Bank of Nova Scotia Bankers Acceptance 6,974,590 7,000,000 1.461 % 91 26 -Feb -18 28 -May -18 Firstbank Bankers Acceptance 6,453,917 6,476,000 1.403% 89 22 -Feb -18 22 -May -18 Firstbank Bankers Acceptance 6,067,528 6,090,000 1.438% 94 2 -Mar -18 4 -Jun -18 Firstbank Bankers Acceptance 6,327,077 6,350,000 1.437% 62 5 -Mar -18 6 -May -18 Firstbank Bankers Acceptance 7,604,754 7,632,000 1.453% 90 15 -Mar -18 13 -Jun -18 Firstbank Bankers Acceptance 7,605,445 7,633,000 1.453% 91 15 -Mar -18 14 -Jun -18 Firstbank Bankers Acceptance 7,760,680 7,787,000 1.491 % 83 29 -Mar -18 20 -Jun -18 Bank of Nova Scotia 1/4 Bankers Acceptance 5,979,480 6,000,000 1.456% 86 4 -Apr -18 29 -Jun -18 Firstbank Bankers Acceptance 5,431,431 5,451,000 1.461% 90 4 -Apr -18 3 -Jul -18 FirstbankBankersAcceptance 5,431,158 5,451,000 1.465% 91 4 -Apr -18 4 -Jul -18 Firstbank 1/4 Bankers Acceptance 5,977,920 6,000,000 1.465% 92 4 -Apr -18 5 -Jul -18 Bank of Nova Scotia Bankers Acceptance 7,599,319 7,628,000 1.514% 91 16 -Apr -18 16 -Jul -18 Toronto Dominion Bank Bankers Accept. 3,711,599 3,724,000 1.452% 84 19 -Apr -18 12 -Jul -18 Firstbank Bankers Acceptance 5,131,254 5,150,000 1.482% 90 1 -May -18 30 -Jul -18 Firstbank Bankers Acceptance 4,882,801 4,900,000 1.478% 87 1 -May -18 27 -Jul -18 Firstbank Bankers Acceptance 6,621,476 6,646,000 1.519% 89 23 -May -18 20 -Aug -18 Royal Bank of Canada Bankers Acceptance 3,986,160 4,000,000 1.457% 87 28 -May -18 23 -Aug -18 CIBC Bankers Acceptance 7,074,369 7,100,000 1.453% 91 28 -May -18 27 -Aug -18 Bank of Nova Scotia Bankers Acceptance 9,771,808 9,808,000 1.486% 91 28 -May -18 27 -Aug -18 Firstbank Bankers Acceptance 6,349,779 6,374,000 1.530% 91 5 -Jun -18 4 -Sep -18 Firstbank Bankers Acceptance 6,114,246 6,138,000 1.541% 92 5 -Jun -18 5 -Sep -18 Firstbank Bankers Acceptance 7,696,039 7,724,000 1.490% 89 13 -Jun -18 10 -Sep -18 Bank of Nova Scotia Bankers Acceptance 7,697,337 7,726,000 1.494% 91 14 -Jun -18 13 -Sep -18 Bank of Nova Scotia Bankers Acceptance 5,450,052 • 5,467,000 1.474% 77 3 -Jul -18 18 -Sep -18 Bank of Nova Scotia Bankers Acceptance 7,786,612 7,816,000 1.531% 90 20 -Jun -18 18 -Sep -18 ATTACHMENT# I TO REPORT# jl ac-Ii CITY OF PICKERING INVESTMENT ACTIVITIES FOR 2018 Financial Purchase Maturity Institution Instrument Cost Principal Yield Term Date Date Firstbank Bankers Acceptance 5,999,505 6,021,000 1.469% 89 29 -Jun -18 26 -Sep -18 Firstbank Bankers Acceptance 19,379,494 19,402,000 1.514% 28 30 -Aug -18 27 -Sep -18 Firstbank Bankers Acceptance 5,999,450 6,023,000 1.628% 88 5 -Jul -18 1 -Oct -18 Bank of Montreal Bankers Acceptance 5,494,212 5,516,000 1.626% 89 5 -Jul -18 2 -Oct -18 Firstbank Bankers Acceptance 1,069,693 1,074,000 1.651% 89 12 -Jul -18 9 -Oct -18 Firstbank Bankers Acceptance 3,784,572 3,800,000 1.653% 90 12 -Jul -18 10 -Oct -18 Royal Bank of Canada Bankers Acceptance 7,651,958 7,684,000 1.698% 90 17 -Jul -18 15 -Oct -18 Bank of Nova Scotia Bankers Acceptance 4,915,861 4,936,000 1.661% 90 27 -Jul -18 25 -Oct -18 Bank of Nova Scotia Bankers Acceptance 5,150,161 5,171,000 1.641% 90 31 -Jul -18 29 -Oct -18 Firstbank Bankers Acceptance 6,645,574 6,673,000 1.693% 89 22 -Aug -18 19 -Nov -18 Firstbank Bankers Acceptance 3,999,414 4,016,000 1.701% 89 23 -Aug -18 20 -Nov -18 Firstbank Bankers Acceptance 6,373,248 6,400,000 1.702% 90 4 -Sep -18 3 -Dec -18 Firstbank Bankers Acceptance 6,138,543 6,164,000 1.701% 89 6 -Sep -18 4 -Dec -18 Firstbank Bankers Acceptance 7,723,192 7,756,000 1.704% 91 10 -Sep -18 10 -Dec -18 Toronto Dominion Bank Bankers Accept. 7,725,507 7,757,000 1.691% 88 13 -Sep -18 10 -Dec -18 Bank of Nova Scotia Bankers Acceptance 4,999,368 5,020,000 1.674% 90 19 -Sep -18 18 -Dec -18 Firstbank Bankers Acceptance 6,027,005 6,052,000 1.701 % 89 26 -Sep -18 24 -Dec -18 Firstbank Bankers Acceptance 19,401,839 19,453,000 1.604% 60 27 -Sep -18 26 -Nov -18 Firstbank Bankers Acceptance 19,452,799 19,475,000 1.736% 24 27 -Nov -18 21 -Dec -18 Royal Bank Of Canada 4,942,868 4,915,000 2.980% 225 24 -Sep -18 7 -May -19 Toronto Dominion Bank Dep. Note 3,370,646 3,361,000 2.447% 190 24 -Sep -18 2 -Apr -19 Firstbank Bankers Acceptance 6,022,324 6,049,000 1.738% 93 1 -Oct -18 2 -Jan -19 Firstbank Bankers Acceptance 5,515,569 5,540,000 1.738% 93 2 -Oct -18 3 -Jan -19 Firstbank Bankers Acceptance 1,073,623 1,078,000 1.771% 84 12 -Oct -18 4 -Jan -19 Firstbank Bankers Acceptance 3,799,629 3,816,000 1.808% 87 12 -Oct -18 7 -Jan -19 Toronto Dominion Bank Bankers Accept. 7,784,345 7,819,000 1.817% 92 15 -Oct -18 15 -Jan -19 Firstbank Bankers Acceptance 4,938,331 4,962,000 1.922% 91 25 -Oct -18 24 -Jan -19 Toronto Dominion Bk Bdn Disc. Note 5,170,592 5,196,000 1.929% 93 29 -Oct -18 30 -Jan -19 Toronto Dominion Bank Bankers Accept. 5,438,823 5,465,000 1.952% 90 21 -Nov -18 19 -Feb -19 Bank of Nova Scotia Bankers Acceptance 5,438,889 5,466,000 1.956% 93 21 -Nov -18 22 -Feb -19 Firstbank Bankers Acceptance 6,399,298 6,429,000 1.970% 86 3 -Dec -18 27 -Feb -19 Firstbank Bankers Acceptance 6,163,269 6,192,000 1.978% 86 4 -Dec -18 28 -Feb -19 Toronto Dominion Bank Bankers Accept. 7,820,491 7,859,000 1.997% 90 11 -Dec -18 11 -Mar -19 Bank of Nova Scotia Bankers Acceptance 7,820,151 7,857,000 2.000% 86 11 -Dec -18 7 -Mar -19 Bank of Nova Scotia Bdn Disc. Note 5,073,860 5,097,000 2.030% 82 19 -Dec -18 11 -Mar -19 Firstbank Bankers Acceptance 6,051,302 6,080,000 1.990% 87 24 -Dec -18 21 -Mar -19 T -D Wealth Royal Bank Of Canada GIC 2,097,480 2,097,480 1.300% 365 26 -Jan -17 26 -Jan -18 Royal Bank Of Canada GIC 2,071,618 2,071,618 1.250% 365 23 -Feb -17 23 -Feb -18 .TD MTG GIC 2,148,679 2,148,679 1.410% 367 25 -Aug -17 27 -Aug -18 Royal Bank Of Canada GIC 2,124,747 2,124,747 1.850% 367 26 -Jan -18 28 -Jan -19 Royal Bank Of Canada GI C 2,097,513 2,097,513 1.850% 367 23 -Feb -18 25 -Feb -19 Royal Bank Of Canada GIC 2,179,141 2,179,141 2.150% 365 27 -Aug -18 27 -Aug -19 Total Short-term 564,997,223 566,767,178 CITY OF PICKERING INVESTMENT ACTIVITIES FOR 2018 Financial Purchase Maturity Institution Instrument Cost Principal Yield Term Date Date Long Term Nesbitt Burns CIBC Senior Deposit Note 1,890,580 1,908,000 1.660% 727 23 -Jan -18 20 -Jan -20 Bank Of Nova Scotia 5 Yrs. Senior Dep. Note 1,955,045 1,952,000 2.270% 671 13 -Mar -18 13 -Jan -20 Province Of Ontario 1,961,809 1,951,000 2.100% 544 13 -Mar -18 8 -Sep -19 Royal Bank Of Canada 3,146,255 3,135,000 2.350% 623 26 -Mar -18 9 -Dec -19 Bank Of Montreal Fixed Rate Dep. Note 1,842,607 1,832,000 2.840% 631 12 -Sep -18 4 -Jun -20 Bank Of Nova Scotia 7 Yrs. Senior Dep. Note 2,696,047 2,662,000 3.270% 851 13 -Sep -18 11 -Jan -21 CIBC Deposit Note 3,920,425 4,008,000 1.900% 924 15 -Oct -18 26 -Apr -21 Bank Of Montreal Fixed Rate Dep. Note 3,649,702 3,684,000 2.100% 662 14 -Dec -18 6 -Oct -20 Toronto Dominion Bank Dep. Note 2,729,146 2,733,000 2.621% 1,094 24 -Dec -18 22 -Dec -21 Royal Bank Of Canada Sr. Dep. Note 2,478,472 2,497,000 1.920% 571 24 -Dec -18 17 -Jul -20 Bank Of Nova Scotia 5 Yrs. Senior Dep. Note 2,484,711 2,502,000 2.090% 625 24 -Dec -18 9 -Sep -20 Bank Of Montreal Fixed Rate Dep. Note 2,487,941 2,505,000 2.100% 652 24 -Dec -18 6 -Oct -20 CIBC Global Social Dep. Notes 2,708,251 2,694,000 2.900% 995 24 -Dec -18 14 -Sep -21 Royal Bank Of Canada Sr. Dep. Note 2,485,531 2,516,000 2.030% 812 24 -Dec -18 15 -Mar -21 CIBC Deposit Note 1,984,265 2,036,000 1.640% 931 24 -Dec -18 12 -Jul -21 Bank Of Montreal Deposit Note 1,993,874 2,053,000 1.610% 1,039 24 -Dec -18 28 -Oct -21 Total Long-term 40,414,662 40,668,000 Total External Investments Interfund Investments (Internal Loans) Total Investment Activity 605,411,885 607,435,178 607,435,178 Long Term Dispositions Bank of Nova Scotia Senior Dep. Notes 1,899,454 ,1,892,000 2.370% 121 12 -Sep -17 11 -Jan -18 Matured Cdn Imperial Bk Of Commerce 1,497,976 1,482,000 2.220% 1,807 26 -Mar -13 7 -Mar -18 Matured Province of Ontario Debenture 2,641,622 2,444,000 4.200% 2,711 5 -Oct -10 8 -Mar -18 Matured Bank of Nova Scotia 5 Yr.Senior Dep. Notes 1,327,128 1,320,000 2.242% 1,745 11 -Jun -13 22 -Mar -18 Matured Bank of Nova Scotia 5 Yr. Senior Dep. Notes 1,890,060 1,848,000 2.242% 1,053 4 -May -15 22 -Mar -18 Matured RBC Sr Dep Note 1,126,569 1,116,000 2.820% 265 20 -Oct -17 12 -Jul -18 Matured Bank of Nova Scotia Senior Dep. Notes 2,518,250 2,437,000 2.750% 970 17 -Dec -15 13 -Aug -18 Matured Province of Ontario Series DMTN218 2,791,841 2,712,000 2.100% 906 16 -Mar -16 8 -Sep -18 Matured Bank of Montreal Fixed Rate Dep. Note 1,938,875 1,857,000 3.210% 911 16 -Mar -16 13 -Sep -18 Matured CIBC Deposit Note 3,995,264 3,957,000 1.700% 676 2 -Dec -16 9 -Oct -18 Matured Royal Bank of Canada 3,808,338 3,665,000 2.770% 1,058 18 -Jan -16 11 -Dec -18 Matured Total Dispositions 25,435,378 24,730,000 CITY OF PICKERING OUTSTANDING INVESTMENTS AS AT DECEMBER 31, 2018 Financial Institution Instrument Short-term Current & Reserve Fund Investments Nesbitt Burns TD Wealth Royal Bank of Canada TD Deposit Note Firstbank Bankers Acceptance Firstbank Bankers Acceptance Firstbank Bankers Acceptance Firstbank Bankers Acceptance TD Bankers Acceptance Firstbank Bankers Acceptance TD Bond Discount Note TD Bankers Acceptance BNS Bankers Acceptance Firstbank Bankers Acceptance Firstbank Bankers Acceptance TD Bankers Acceptance BNS Bankers Acceptance BNS Bond Discount Note Firstbank Bankers Acceptance RBC GIC RBC GIC TD MTG GIC Total Short-term Long-term Reserve Fund Investments Nesbitt Burns TD Deposit Note CIBC Deposit Note BNS 5 yr Sr Deposit Note RBC Province of Alberta BNS Sr Dep Note Province of Ontario CIBC Sr Deposit Note BNS 5 yr Sr Deposit Note Province of Ontario RBC BMO Fixed Rate Deposit Note BNS 7 Yr Deposit Note CIBC Deposit Note BMO Fixed Rate Deposit Note RBC Sr Deposit Note BNS 5 Yr Sr Deposit Note BMO Fixed Rate Dep Note Purchase Maturity Cost Principal Yield Term Date Date 4,930,729.97 4,915,000.00 2.98% 225 24 -Sep -18 7 -May -19 3,365,670.73 3,361,000.00 2.45% 190 24 -Sep -18 2 -Apr -19 6,022,323.91 6,049,000.00 1.74% 93 1 -Oct -18 2 -Jan -19 5,515,568.60 5,540,000.00 1.74% 93 2 -Oct -18 3 -Jan -19 1,073,623.32 1,078,000.00 1.77% 84 12 -Oct -18 4 -Jan -19 3,799,629.36 3,816,000.00 1.81% 87 12 -Oct -18 7 -Jan -19 7,783,345.36 7,819,000.00 1.82% 92 15 -Oct -18 15 -Jan -19 4,938,331.26 4,962,000.00 1.92% 91 25 -Oct -18 24 -Jan -19 5,170,591.56 5,196,000.00 1.93% 93 29 -Oct -18 30 -Jan -19 5,438,822.65 5,465,000.00 1.95% 90 21 -Nov -18 19 -Feb -19 5,438,888.64 5,466,000.00 1.96% 93 21 -Nov -18 22 -Feb -19 6,399,298.02 6,429,000.00 1.97% 86 3 -Dec -18 27 -Feb -19 6,163,269.12 6,192,000.00 1.98% 86 4 -Dec -18 28 -Feb -19 7,820,490.90 7,859,000.00 2.00% 90 11 -Dec -18 11 -Mar -19 7,820,150.67 7,857,000.00 2.00% 86 11 -Dec -18 7 -Mar -19 5,073,859.62 5,097,000.00 2.03% 82 19 -Dec -18 11 -Mar -19 6,051,302.40 6,080,000.00 1.99% 87 24 -Dec -18 21 -Mar -19 2,124,747.00 2,164,270.20 1.85% 367 26 -Jan -18 28 -Jan -19 2,097,513.00 2,136,529.62 1.85% 367 23 -Feb -18 25 -Feb -19 2,179,141.00 2,225,992.53 2.15% 365 27 -Aug -18 27 -Aug -19 99,207,297.09 99,707,792.35 1,795,585.45 1,790,000.00 2.45% 868 15 -Nov -16 3,538,781.74 3,522,000.00 2.35% 927 9 -Dec -16 3,569,574.98 3,543,000.00 2.40% 1053 9 -Dec -16 2,307,158.28 2,294,000.00 2.98% 788 10 -Mar -17 2,442,797.85 2,439,000.00 2.00% 614 25 -Sep -17 3,668,771.12 3,663,000.00 2.46% 455 14 -Dec -17 1,846,898.77 1,825,000.00 4.40% 534 15 -Dec -17 1,898,774.81 1,908,000.00 1.66% 727 23 -Jan -18 1,953,715.43 1,952,000.00 2.27% 671 13 -Mar -18 1,955,987.03 1,951,000.00 2.10% 544 13 -Mar -18 3,141,196.38 3,135,000.00 2.35% 623 26 -Mar -18 1,840,758.15 1,832,000.00 2.84% 631 12 -Sep -18 2,691,686.09 2,662,000.00 3.27% 851 13 -Sep -18 3,927,723.10 4,008,000.00 1.90% 924 15 -Oct -18 3,650,582.73 3,684,000.00 2.10% 662 14 -Dec -18 2,478,699.40 2,497,000.00 1.92% 571 24 -Dec -18 2,484,904.81 2,502,000.00 2.09% 625 24 -Dec -18 2,488,124.10 2,505,000.00 2.10% 652 24 -Dec -18 - 153 - Interest Payable Dates 2 -Apr -19 Apr 2 & Oct 2 24 -Jun -19 Jun 24 & Dec 24 28 -Oct -19 Apr 28 & Oct 28 7 -May -19 May 7 & Nov 7 1 -Jun -19 Jun 1 & Dec 1 14 -Mar -19 Mar 14 & Sept 14 2 -Jun -19 Jun 2 & Dec 2 20 -Jan -20 Jan 20 & Jul 20 13 -Jan -20 Jan 13 & Jul 13 8 -Sep -19 Mar 8 & Sept 8 9 -Dec -19 Jun 9 & Dec 9 4 -Jun -20 Jun 4 & Dec 4 11 -Jan -21 Jan 11 & Jun 11 26 -Apr -21 Apr 26 & Oct 26 6 -Oct -20 Apr 6 & Oct 6 17 -Jul -20 Jan 17 & Jul 17 9 -Sep -20 Mar 9 & Sept 9 6 -Oct -20 Apr 6 & Oct 6 ATTACHMENT# _,_TOREPORT # L!j CITY OF PICKERING OUTSTANDING INVESTMENTS AS AT DECEMBER 31, 2018 Financial Institution Instrument CIBC Global Social Dep Notes RBC Senior Note CIBC Deposit Notes BMO Deposit Note TD Deposit Note TD Wealth National Bank Extendible Step Up CIBC Deposit Note Total Long-term Total External Investments Purchase Cost Principal Yield Term Date 2,708,151.00 2,694,000.00 2.90% 995 24 -Dec -18 2,485,793.90 2,516,000.00 2.03% 812 24 -Dec -18 1,984,654.22 2,036,000.00 1.64% 931 24 -Dec -18 1,994,271.95 2,053,000.00 1.61% 1039 24 -Dec -18 2,729,171.13 2,733,000.00 2.62% 1094 24 -Dec -18 2,000,000.00 2,000,000.00 2.70% 3653 6 -Nov -15 2,099,000.00 2,099,000.00 2.50% 3653 18 -Nov -15 Interfund Investments (Internal Loans) Development Charge Reserve Fund 63,682,762.42 162,890,059.51 63,843,000.00 163,550,792.35 Maturity Interest Date Payable Dates 14 -Sep -21 Mar 14 & Sept 14 15 -Mar -21 Mar 15 & Sept 15 12 -Jul -21 Jan 12 & Jul 12 28 -Oct -21 Apr 28 & Oct 28 22 -Dec -21 Jun 22 & Dec 22 6 -Nov -25 Nov 6 18 -Nov -25 May 18 & Nov 18 1,986,799.00 1.83% to 2.64% various various various Total as at December 31, 2018 165,537,591.35 - 154 - ATTACHMENT #_70 REPORT #01- t� BMO Wealth Management BMO Nesbitt Burns Mr. Stan Karwowski Division Head, Finance and Treasurer Corporate Services Department, City of Pickering 1 The Esplanade, Pickering, ON L1V 6K7 Dear Stan, May 10, 2019 Account Reference: The Corporation of the City of Pickering Account # 365-13206-10 The following is an overview of City of Pickering Investment Account at BMO Wealth Management, BMO Nesbitt Burns. The review includes the rates of return for the account for Calendar 2018 as well as historical annual ' rates of return for the previous 14 years dating back to 2004. Additionally I have also included both Economic and Capital Markets commentary for 2018 and comments and discussion looking forward in 2019 from some of BMO Capital Markets top analysts and strategists. The Big Fade Canada Sal Guatieri, Senior Economist January 4, 2019 The Canadian economy performed largely as expected in 2018 with estimated annual growth of around 2.1% falling just shy of our call at the start of the year. This would mark a sharp slowdown from the prior year's 3.0% pace as three driving forces—the oil price recovery, supportive financial conditions and enhanced child benefit payments— all faded. Rising interest rates corralled household credit to the slowest pace since 1983, slicing the rate of consumer spending almost in half to around 2%. New auto sales reversed 8% in 2018 from record highs. After bolting out of the gate, business investment slowed, initially due to mounting uncertainty about NAFTA and then to rising concern about a global trade war. Tougher mortgage rules also took the wind out of the previous high -flying Vancouver and Toronto housing markets. On the plus side, exports benefitted from stronger U.S. demand and a weaker currency, while the federal government kept the spending taps open, despite a sizeable budget deficit. Moreover, the recent Business Outlook Survey showed surprisingly positive sentiment and intentions to increase spending and hiring. Growth is expected to ebb further to 1.8% in 2019 owing to depressed oil prices, Alberta's mandatory crude output cuts, a slower. U.S. and global economy, and GM's Oshawa plant closure. While Alberta's output cuts have helped shrink the discount on Western Canadian Select crude to a more normal $16 from a record above $50, the main issue is that WTI prices fell 25% in 2018 amid a whopping 40% plunge in the last three months of the year to $46 a barrel. OPEC reductions should supporta partial recovery in WTI prices this year to an average of $59. Led by weakness in the energy sector, growth in business spending is expected to slip below 2% in 2019 from an estimated 5% in 2018, despite support from the accelerated depreciation allowance and (the assumed) approval of the USMCA by the new U.S. Congress. Consumer spending growth will downshiftfurther to below 2%. Home sales and prices are unlikely to rise this year, while housing starts should decelerate from elevated levels that have been supported by the fastest population growth in 27 years. The good news is that the economy should expand enough to keep the jobless rate hovering near its four -decade low of 5.6%. - 155 - After raising rates 75 basis points in 2018, the Bank of Canada has turned cautious as it tries to discern the impact of lower oil prices and tighter financial conditions on the economy. Low inflation -all three of the Bank's core measures stood at 1.9% in November -provides the luxury of time. Assuming some recovery in oil prices and financial markets, the Bank could raise policy rates in April and October, with a final move in 2020 to the low end of a neutral range (2.5% -to -3.5%). Under this scenario, the 10 -year Canada yield, which ended 2018 below where it started, could climb from 1.9% recently to 2.3% by year-end. The Canadian dollar fell 8% against the mighty greenback in 2018, undercut by the downturn in oil prices and ongoing competitiveness issues, such as the lack of pipeline capacity. The currency will struggle to get off the ground in 2019, though a partial recovery in oil prices could prod it toward 75 cents (C$1.34) by year-end from 73.3 cents (C$1.364) at the start of the year. Our key forecasts for the Canadian economy May 10, 2019 :.2018 -:2019 x2020 Q1 Q2 Q3 - Q4 g1 Q2 Q3 g4 Q1_ Q2 ".Q3 g4 2017"_2018 2019 ; 2020, P roduction q/q % chug : a.r. Real GDP (Chain -weighted) 13 2.6 2.0 0.4 0.2 2.3 `- 2.2 1.5 ..==1.6`- 1.5 -= 1.6 .;;13 3.0 1.8 - -1.4 1.7 Final Sales 0.1 3.9 3.8 -13 -1.1 3.9 2.0 1.4 1.6 1.5 ' 1.6 1.5 2.1 2.0 1.3 1.7 Final Domestic Demand 15 1.2 -0.5 -1.5 2.5 1.9 + 1.7 1.5 117= 1.6 1.6 1.5 3.1 1.9 1.0 1.6 Consumer Spending 15 1.7 1.3 0.7 2.2 1.6 1.6 1.4 1.4 1.4 -. 1.4 1.4 3.6 2.1 1.5 1.4 Durables 0.7 -1.4 -1.8 -2.0 2.3 1.7 - 15 1,5 1.3 - 1,3 '= 1.3 -- 1.3 7.1 1.1 0.4 - 1.4 Nondurables 0.5 0.8 1.9 0.0 2.6 1.6 1.6 .1.3 1.4 13. `; 1.3 1.3 2.7 1.6 1.5 1.3 Selvlces 2.4 2.7 1.5 2.0 2.1 1.6 1.6 1:4 1.5 15 .; 1.5 1.5 3.3 2.6 - ':1.8 - .1.5 Government Spending 1.9 0.9 1.6 -0.6 3.3 2.1 2.0 2.0 2.2 1.8 2.0 1.8 2.7 2.7 1.7 2.0 Business Investment 7.0 -1.4 -10.8 -10.9 2.2 3.8 3.2 2.9 2.8 23 :: 2.3 ` 2.0 2.5 1.7 -1.9 2.7 Non-residential Construction -2.2 -3.2 -8.0 -15.0 2.5 4.0 35 3.0 3.0 2.5 2.5 •-2.0 1.1 -0.9 -23 2.9 Machinery and Equipment 22.7 1.3 -14.7 -4.8 1.7 3.5 2.8 2.8 2.5 2.0 2.0 2.0 4.7 5.8 -1.3 2.5 Residential Construction -9.7 0.6 -55 -14.7 2.0 1.5 > 05 0.0 1.0 1.0 1.0 1.0 2.4 -23 =2.8 : -0 8 Exports 1.0 14.6 33 -0.2 -4.7 5.7 2.7 1.6 2.0 2.0 _ 2.0 2.0 1.1 3.3 1.5 2.2 Imports 4.7 5.2 -8.6 -1.1 63 -0.4 2.0 2.0 2.1 2.0 2.0 2.0 4.2 2:9 0.8 '1.9 2007$ bins (contribution in ppts: at) Inventory Change 21.3 15.4 5.4 13,4 19.9 11.8 r 12.9 13.4 135 13.5 13.5 13.6 17.6 13.9 14.5 13.5 Contribution to GDP Growth 1.0 -1.1 -1.9 1.5 13 -1.6 0.2 0.1 0.0 0.0 • 0.0 0.0 0.8 -0.2 0.1 -0.1 Net Exports -25.6 -12.0 8.2 9.6 -8.4 1.4 2.6 '_1.9 1.7: 1.7 ---.-- 1.7 --.1.7 -7.3 -4.9 -0.6 1.7 Contribution to GDP Growth -1.3 2.8 4.0 03 -3.6 1.9 0.2 -0.2 -0.1 0.0 s 0.0 0.0 -1.1 0.1 0.2 0.1 $ bins : a.r. (growth in q/q ^b chug : a r-) Nominal GDP 2,194 2,214 2,238 2,223 2,243 2,268 2,291 2,310 2,331 2,351 2,371 2,391 2,142 2,218 2,278 2,361 Growth 3.0 3.7 4.4 -2.7 3.6 4.6 4.0 3.4 3.6 3.5 3.5 3.5 5.6 3.6 2.7 3.6 Real GDP y(y s chng 2.2 ' 1.7 1.9 1.6 1.3 1.3 13 1.6 1.9 1.7 - 1.6 1.6 Inflation q/q '.b chng : a.r- 6DPPrice Index 1.9 1.1 2.2 -3.3 3,6 2.2 1.8 1.9 1.9 . 1.9 `1.9;,1.9 2.5 1.7 1.4 1.9. CPI All items 33 1.2 2.6 1.1 1.5 2.9 " ' 2.3 2.1 2.0` 1.9 2.0 = 2.1 1.6 2.3 1.9 2.1 Ex. Food and Energy 2.7 0.9 2.5 2.0 1.9 2.2 2.0 2.1 2.1 1.9 2 0 2.1 1.6 1.9 2.0 2.0 Food Prices 1.0 1.6 33 3.7 4.1 2.4 1.8 2.1 -.2.0'' 2.1 1.8 2.1. 0.1 1.8 3.0 - -2.0 Energy Prices 16.1 6.6 1.6 -17.9 -7.1 25.9 - 6.7 2.0 1.4 2.3 2.4 2.0 5.4 7.5 0.3 3.8 Services 4.2 2.7 4.8 0.2 1.9 3.0 ` 2.3 1.5 1.9 - 2.4 -` 2.3 1.5 2.2 2.5 -:-2.2 2.1 CPI All Items y/y 'o :hng 2.1 23 2.7 2.0 1.6 2.0 1.9 2.2 2.3 2.1 ` 2.0 2.0 CPIX8 y/y 4a chng 13 1.4 1.6 1.6 1.6 1.7 `- 1.8 : 1.9 1.9' 2.1 X1.9 2.0 1.1 1.4 . _- i=1.8 . 2.0 New Core CPIs v/', hna: avg. 1.9 1.9 2.0 1.9 1.9 1.8 1.9 ::1.9 1.9 . ` 2.1 ' 1.9 -- 2,1 1.5 1.9 --1.9 --2.0 Financial as : quarterly avg. Overnight Rate 1.25 1.25 1.50 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75 ;: 1.75 0.71 1.44 1.75 1.75 3 -Month T -Bill 1.14 1.21 1.47 1.66 1.65 1.65 1.65 1.65 1.65 '1.65 .1.65 1.65 0.69 1.37 1.65 1.65 90-035' BAs 1.67 1.74 1.95 2.20 2.14 2.00 2.00 2.00 2.00. 2.00 -`'2.00 2.00 1.15 1.89 2.05 2.00 10 -Year Bond Yield 2.24 2.28 . 2.28 2.32 1.86 1.70 1.75 --1.85 1.85 1.80 --:1.75 1.70 1.78 2.28 =-1.80 1.75 10 -Year BBB Corporate Spread ppts Canada/US Spread 1.68 bps 1.80 1.83 2.07 2.20 2.10 2.20.- 2.30 2.30 230 - 230 -: `2.30 1.83 1.85 2.20 x.2.30 90 Day -44 -66 -61 -70 -79 -76 -76 -76 -75 -74 -72 -71 -26 -60 -77 -73 10 Year -52 -64 -65 -72 -80 -78 -77 -76 -75 I -74 - --73 -72 -55 -63 -78 -73 Foreign Trade $ bins : a.r. Current Account Balance -69.0 -63.4 -40.4 -61.9 -72.9 -61.7 61.8 -:--63.6 -62.8 -61.6-.-60.4 -59.1 -60.1 -58.7 -`-65.0 --61.0--i Share of GDP -3.1 -2,9 -1.8 -2.8 -3.2 -2.7 -2.7 -2.8 -2.7 -2.6 , -2.5 -2.5 -2.8 -2.6 -2.9 -2.6 Merchandise Balance -33.2 -20.1 -3.8 -28.9 -41.0 -30.7 -30.2 -31.2 -31.8 i -32.1 ' -32.4 -32.7 -24.6 -21.5 - -33.3 -32.2 Non -Merchandise Balance -35.8 -43.3 -36.6 -33.0 -31.9 -31.0 -31.6 -32.4 -31.0 -29.5 -28.1 -26.4 -35.5 -37.2 -31.7 -28.8 US$ Yen Euro Incomes quarterly avg. !Sr/CS 79.1 77.5 76.5 75.7 t$/us$ 1.265 1.291 1.307 1321 v/c$ 85.7 84.6 853 85.3 c5/€ 1.55 1.54 1.52 1.51 y/y !b chng Corporate Profits Before Tax -3.4 4.6 14.9 -16.6 Corporate Profits After Tax -1.5 1.7 20.7 -2.9 Personal Income 5.4 4.7 3.7 3.2 Real Disposable Income 3.6 2.6 0.6 03 Savings Rate 55: Quarterly am 1.5 1.2 0.7 1.1 Other Indicators quarterly avg. (000: and mins are a.r Unemployment Rate percent 5.8 5.9 5.9 5.7 Housing Starts goon 224 218 197 217 Existing Home Sales y/y 4b chng 14.5 -13.8 -2.8 -12.4 MIS Home Price Index y/y w chng 5.8 0.9 2.3 1.6 Motor Vehicle Sales mins 2.11 2.04 2.02 1.97 q/q % chng : a.r. Employment Growth 0.3 1.0 1.3 2.2 Industrial Production 5.0 2.6 2.5 -2.0 Federal Budget Balance 96 of FY GDP Shaded values represent orecasts 75.2 <74.5 74.8 753 1329 1342 1336 1328 82.9 '82.6 ' 82.5 82.9 151 1.50'. - 150 -=1.49 75.7 76.1 , 76.4 76.8 1.321 1.315 _ 1.308 1.302 83.2 83.4 - 83.6 83.8 1.48 - .1.48 1.48 1.48 77.1 77.2 75.0 76.3 1.298 1.296 . 1.334 _ 1.311 86.5 85.2 ----82.7. 83.5 1.46 1.53 =-1.50 =1.48 -14.9 -6.3 -3.5 283 0.1 13.1 13.9 28.5 3.4 3.7 4.1 3.9 13 1.4 2.0 1.9 1.3 1.5 : 1.6 1.6 28.5 12.2 _e 48 3.5 28.5 12.2 4.8 3.5 3.9 3.6 35 3.5 1.9 1.6 15 1.5 2.0 1.9 1.9 -=_1.9 34.0 -0.4 ,-0,3 11.4 15.8 4.1 13.9 11.4 4.5 4.2 3.7 3.6{ 3.4 1.8 1.7 1.6 1.6 1.1 1.5 1.9 5.8 5.7 5.7, 188 218 209 -1.0 2.6 `-- -1.1 -0.5 -1.0 0.5 2.01 1.95 1.91 7 8 =17 1.6 1.91 2.9 2.4 0.5 0.9 -1.9 2.3 3.0 2.3 5.7 5.6 - . 5.6 " 5.5, 202 200 200 200 2.0 1.9 1.0 . 1.1 1.1 12 '' 1.5 2.0 1.91 1.90 -----1.89 1.89 6.3 5.8 .,57 5,6 220 214 2.05 200 -4.7 -10.9 - 0.0 2.0 13.2 2.8 0.0 15 208 2.04 `'1.95 1.90 1.5 2.2 ` 1.6 1.1 1.9 1.3 1.9 1.4 1.8 1.5 1.6 1.6 4.9 2.6 0.5 - 2.0 -0.9 -0.7 '•_-0.9 -0.8 - 156 - Brian Belski - Chief Investment Strategist January 7, 2019 Caution Remains Prevalent Heading Into 2019 2018 was a difficult year to say the least with the S&P/TSX declining 11.6% marking the worst annual performance since 2008. In fact, there were very few areas to hide, with only Technology and Consumer Staples posting positive returns on the year. Furthermore, the S&P/TSX declined 5.8% in December, the worst December price return since 1931. On the bright side, fundamentals have remained resilient throughout 2018, with the bulk of the decline being driven by multiple contraction. In fact, both the 12 -month forward and 12 -month trailing price -to -earnings ratios contracted by 3.8x in 2018, the largest contraction since 2011. Indeed, sentiment remains clearly negative as global and domestic concerns continue to weigh heavily on Canadian equities heading into 2019. Ultimately, we believe barring a broad global recession, which we do not expect, the market has already priced in a significant economic and earnings slowdown. As such, we believe investors should view the current weakness as an opportunity to add to preferred high-quality Canadian names that should and will outperform in a rebound. Performance Shifts Suggest Investors Hedging Against Recession Since the S&P 500 peak on September 20, 2018, Canadian sector rotation has clearly favoured the traditional recession play book. In fact, while the broad market has experience a significant multiple compression, there has been little to no multiple compression within the traditional defensive sectors since the start of the correction. Furthermore, since the end of July, investors have shown a clear preference for lower risk fundamentals, as only our Low Risk and High Quality factor profile categories have outperformed. Indeed, not only are recent flows moving to more traditionally defensive sectors from the more cyclicals, but also investors are shifting to lower volatile names and stronger profitability, and away from companies with high growth expectations. Analysts Shifting to More Cautious Tone With equities deep in correction territory, a hawkish fed, elevated US -China trade war rhetoric and government shutdown concerns, analysts have taken a more cautious tone. In fact, the percent of upward revisions have now fallen back the long-term historical average after remaining elevated for over a year. Global Index and Commodity Returns: December 31, 2018 Major Global Indices & Commodities index 1M 3M 6M 12M YTD S&P/TSX -5.8 -10.9 -12.0 -11.6 -11.6 S&P/TSX 60 -5.9 -9.8 -11.0 -10.5 -10.5 S&P/TSX Small Cap -3.9 -15.0 -17.9 -20.1 -20.1 S&P 500 -9.2 -14.0 -7.8 -6.2 -6.2 DJ Industrial Average -8.7 -11.8 -3.9 -5.6 -5.6 NASDAQ Composite -9.5 -17.5 -11.7 -3.9 -3.9 STOXX Europe 50 -5.9 -10.0 -9.3 -13.1 -13.1 FTSE 100 -3.6 -10.4 -11.9 -12.5 -12.5 Japan Nikkei 225 -10.5 -17.0 -10.3 -12.1 -12.1 ASX All Ordinaries -0.7 -9.7 -9.2 -7.4 -7.4 MSCI EM (Emerging Markets) -2.8 -7.8 -8.7 -12.3 -12.3 Crude Oil WTI (NYM $/bbl) Continuous Gold (NYM $/ort) Continuous -10.8 -38.0 -38.8 -24.8 -24.8 4.5 7.1 2.1 -2.1 -2.1 - 157 - EQUITIES REBOUND (indices : as of May, 6, 2019) Equities 3000 2500 2000 1500 1000 - 500 07 09 11 TSX (rhs) 13 15 17 19 LOONIE LANGUISHES (USe : as of May 6r 2019) Canadian Dollar 30000 110 - 75000 100 _.._ Parity 20000 90 15000 80 10000 70 5000 60 03 OS 07 09 11 13 15 GROWTH TO MODERATE 'I (y/y Ws change) Real GDP 6 4 2' -6 U.S. Canada 00 it\ifk i 17 18 19 20 Canada 3.0 1.8 1.5 1.7 U5 2.2 2.9 2.5 1.7 (()recast 02 04 06 08 10 12 14 16 18 • 20 FULLY EMPLOYED (percent) Unemployment Rate 2 ! -r 70 75 80 U.S. forecist -,- • - 85 90 95 00 05 10 15 20 74.36C forecast 17 19 CONSUMER SPENDING DOWNSHIFTS (y/y % change) Real Personal Consumption Expenditures U.S. forecast -4 J -r - f —r ----r 00 02 04 06 08 10 12 14 16 18 • 20 INFLATION ON MUTE Consumer Price Index (y/y % change Canada Headline tore' cast 1.94 1.6^� 6 United States forecast -3 17 01 core = CPI ex 8 most volatile components 5 Indirect taxes :core =CPI ex food 6 energy 12 17 - 158 - NATURAL GAS FIZZLES, CROPS DROP Commodity price range since start of 2019 Materials & Foodstuffs (as of May 6, 2019) Lumber 1, (055/ 1000 sq ft) 314.90 Soybeans E7 (US$/bu) 7.79 300 lifet 439.50 6.71 Wheal (U5$/bu) 3.99 Corn (USS/bu) 3.27 Metals fr Energy (as of May 6, 2019) Gold12' (us$/oz) -- 1209.50 Oil (US$/bbl) 45.41 Natural Gas (u5$/mmbtu) 5.31 7.46 3.57 Copper (us$/Ib) 264 OIL PRICES RECOVER (US$/bbl : as of May 6, 2019) 150 - 1343.75 125 62.25 1 100 6(,.40 75 - 359 50 25 292 07 North American Outlook — Canada WTI (rude Oil r 5 09 11 13 15 17 19 May 7, 2019 • Investors also expect the Bank of Canada to chop rates this year, though not due to too -low inflation—the core rate is practically sitting on the 2% target—but because of a downbeat economy. Real GDP barely grew in Q4 and looks to do just slightly better in 01. Mandated oil output cuts are a factor, but the bigger issue is that even non -energy exports have backfired recently due to a slowing global economy, fading competitiveness and trade tensions with both the U.S. (metals) and China (agriculture). Consumers are in no mood to drive the expansion, as they are now borrowing at the slowest rate in 35 years to get a handle on record debt burdens. Meantime, the housing market is merely steadying after last year's slump in the face of higher interest rates and tougher lending rules, and remains weak in some regions, notably Vancouver and the oil-producing provinces. • Canada does have a few things going for it, though. The first is the recovery in oil prices and a sharp decline in the discount on Canadian crude, which is now about half its norm. While this won't overcome regulatory hurdles and spur new investment, it will pump much-needed revenue into the coffers of energy producers and Alberta's Government. The second is the fastest population growth in a quarter century, driven by strong international migration. This has boosted labour force growth and eased worker shortages, in turn encouraging hiring. Outside the energy patch, business investment intentions remain positive, according to the Business Outlook Survey. The federal government's accelerated depreciation allowance was a helpful initial step in bridging the competiveness gap. • The bad news is that wages and productivity are depressed, with the former rising about 2% in the past year and the latter stalling after a listless decade. Zero real wage gains provide little support to consumers, while zero productivity undercuts competitiveness further. Consequently, although GDP growth is expected to pop above 2% in Q2, in part due to some easing in oil output restrictions, we still see a slower 1.5% pace in 2019, down from 1.8% in 2018 and not much faster than the population is growing. This risks an upturn in the jobless rate from current four -decade lows. • With so much stacked against it the Canadian dollar will do well to hold its own against a firm greenback. We see it hovering below 75 cents (US) for most of 2019, barring a further climb in oil prices which we deem unlikely given record U.S. shale production. - 159 - • Given the sluggish economy, the Bank of Canada has backed away (at least for now) from plans to lift rates further. While Governor Poloz continues to warn that the current 1.75% policy rate remains below the neutral range of 2.25% -to -3.25%, the tightening hurdle appears high, barring an upside growth surprise. At the same time, a rate cut is unlikely given that core inflation is on target and growth is expected to improve at least somewhat this summer. We see a standoff, with rates on hold for the next two years. • Legislative failure to ratify the USMCA, weaker growth in resource gobbling China, and growing trade tensions between Canada and China are several downside risks to the Canadian economy. USMCA ratification appears unlikely until after the presidential election, which will weigh on business spending. The country's best hope for an upside surprise is if the U.S. economy outperforms. Provincial GDP Real GDP Growth Rate (percent British Columbia 2017 3.8 2018 2.4 2019 1.8 2020 2.4 Alberta ' ; Manitoba '2017 4.4 2017 3.2 2018 2.3 2018 1.3 2019 1.3 2019 1.5 Canada 2017 3.0 2018 1.8 2019 1.4 2020 1.7 2020 2.2 2020 1.6 Saskatchewan' 2017 2.2 2018 1.6 2019 0.9 2020 1.3 Shaded bars are BMO Economics forecasts Ontario Newfoundland and Labrador 2017 0.9 1,2018 -2.7 2019 2.0 2020 0.2 Quebec 12017 2.8 A 2018 2.5 ''2019 1.6 Ontario 2020 1.5 * j 2017 2.8 � ty 2018 2.2 New / t 2019 1.6 Brunswick 2020 1.7 2017 1.8 Prince Edward Island 2017 3.5 2018 2.6 2019 1.2 2020-' 0.9 " Nova Scotia 2017 1.5 2018 0.1 2018 1.2 2019 0.6 2019 0.7 2020 0.7 2020 0.7 Ontario's economy has moderated after a powerful multi-year run. Real GDP is expected to grow 1.6% this year, down from 2.2%_in 2018 and an average pace of 2.5% in the four years prior to that. The downshift largely reflects a move back toward potential for the province, with some key sectors, such as housing, coming off the boil. The" housing market is stabilizing after a wave of recent policy measures (15% tax on non-resident buyers and OSFI rules), and after five Bank of Canada rate hikes. Toronto detached home prices are down roughly 10% from their peak, but condo prices remain at record levels and vacancies are extremely low. This highlights that, despite measures to cool price growth, fundamental supply/demand conditions are still very supportive. Meantime, markets outside the Greater Golden Horseshoe continue to perform very well. - 160 - The labour market is solid, with 2.5% y/y job growth in 2019Q1, the strongest in 16 years. The jobless rate, at 6% has held relatively steady over the past year amid surge in the labour force, but the province has been able to churn out enough jobs to absorb the influx. The province drew in a record 215,000 migrants from outside Canada and other provinces in 2018. Export volumes are rising at a very modest pace, and longer-term issues remain as relatively high labour and electricity costs continue to pose challenges- many sectors are pushing capacity limits, but have been shy to deploy new investment. That said, USMCA clarity, accelerated CCA allowances and a business -friendly policy shift should support business confidence and investment. The Province of Ontarioisprojecting a $10.3 billion deficit in FY19/20 (1.2% of GDP), following an $11.7 billion shortfall expected for FY18/19. The Province expects the deficit to shrink gradually before returning to balance in FY23/24, and will focus on reducing real per -capita program spending, while following through on tax -cut promises. Portfolio Performance Review For comparison purposes we have included the following benchmarks that provide the closest representative return data. There are three separate issues that should be taken into consideration when comparing the representative rates of return. First, the guidelines set out in the Municipal Finance Statutes governing your investment policy prohibit you from owning any fixed income investments that are not either government guaranteed or issued by a major Canadian Chartered Bank. Canadian money market funds used to construct the Morningstar Canadian Money Market Index contain a high percentage of higher yielding money market products including investments such as asset backed securities, some of which your investment policy prohibits you from holding. Secondly, your portfolio has a smaller percentage of qualified fixed income investments that are slightly longer than the 1 year maturity period that typically defines money market investments. Annual Account Return Benchmark Comparisons* Calendar Year Your BMO Nesbitt Burns Account Return** CIBC World Markets 91 Day T -Bill Index** Morningstar Canadian Money Market Mutual Fund Index *** 2018 1.56% 1.15% 1.20% 2017 0.89% 0.52% 0.47% 2016 0.84% 0.50% 0.32% 2015 1.36% 0.64% 0.37% 2014 1.51% 0.91% 0.59% 2013 1.23% 0.97% 0.56% 2012 1.37% 0.93% 0.58% 2011 2.49% 0.96% 0.64% 2010 1.25% 0.37% 0.31% 2009 1.54% 0.52% 0.53% 2008 4.92% 3.13% 2.84% 2007 4.27% 4.29% 3.82% 2006 3.81% 3.84% 3.21% 2005 2.51% 2.48% 1.87% 2004 4.39% 2.27% 1.51% - 161 - * Return Comparisons are derived from separate third party sources which are believed to be accurate but are not guaranteed by BMO Nesbitt Burns Inc. ** Comparative benchmarks have been selected that are most reasonable to use for comparison purposes but are not 100% specific to the investment guidelines followed by the representative account in question. *** The Morningstar Fund Indices are the best available representation of the performance of aggregate dollars actually invested, currently and historically, in Canadian money market mutual funds and/or segregated funds. The indices measure the dollar weighted return of assets in Canadian funds. The return calculation does not suffer from survivorship bias, as the impact of returns with funds that are no longer active are retained. Funds that report returns before fees are excluded from Morningstar Fund Indices. Returns are rounded to 2 decimal places. In conclusion, I would like to highlight the following points; a) Our investment parameters are much narrower than money market funds. Government legislation governing Municipal Investments limits the selection of qualified investments. b) Within the portfolio, we have successfully blended a small percentage of investments with a time horizon exceeding 12 months, but less than 3 years. c) The account maintains an active pattern of cash in -flows and out -flows as a result of the nature of the cash-flow requirements of an entity like the City of Pickering. As a result, it can be difficult to execute a specific investment plan that is not highly liquid and flexible. d) While the current and anticipated interest rate environment is extremely important in shaping the composition of the account portfolio, we always endeavour to attempt to avoid making decisions that could be construed as market timing any changes in relation to Bank of Canada rate decisions. Sincerely, � w ketee Andrew R. Geddes PFP, CIM, FCSI Vice President, Portfolio Manager, Senior Investment Advisor BMO Wealth Management, BMO Nesbitt Burns Inc. CIM' CHARTERED IVL INVESTMENT MANAGER (F0 Client Reports Disclaimer This report is not an official statement. It is a supplemental consolidated summary of your positions held at BMO Nesbitt Burns Inc. along with unofficial positions held off -book. It is provided to you solely for information purposes and may, in part, be based on information provided by you or from third party sources and must not be relied upon for its accuracy. The unofficial positions identified in this statement with (*) may be held at other financial institutions where theymay not be covered by the Canadian Investor Protection Fund ("CIPF"). Please consult the monthly statements you receive from the relevant financial institution(s) to determine CIPF coverage. Also, please consult the monthly statements you receive from BMO Nesbitt Burns Inc. to determine which positions are held in segregation. In October of each year, your official statement from BMO Nesbitt Burns will include a request that clients examine their month-end statements carefully and bring to BMO Nesbitt Burns' auditor's attention any discrepancies. - 162 - Securities Disclaimer The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of BMO Nesbitt Burns Inc. ("BM.0 NBI"). Every effort has been made to ensure that the contents have been compiled or derived from sources believed to be reliable and contain information and opinions that are accurate and complete. Information may be available to BMO Nesbitt Burns or its affiliates that is not reflected herein. However, neither the author nor BMO NBI makes any representation or warranty, express or implied, in respect thereof, takes any responsibility for any errors or omissions which may be contained herein or accepts any liability whatsoever for any loss arising from any use of or reliance on this report or its contents. This report is not to be construed as an offer to sell or a solicitation for or an offer to buy any securities. BMO NBI,its affiliates and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. NBI will buy from or sell to customer's securities of issuers mentioned herein on a principal basis. BMO NBI, its affiliates, officers, directors or employees may have a long or short position in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. BMO NBI or its affiliates may act as financial advisor and/or underwriterfor the issuers mentioned herein and may receive remuneration for same. A significant lending relationship may exist between Bank of Montreal, or its affiliates, and certain of the issuers mentioned herein. BMO NBI is a wholly owned subsidiary of Bank of Montreal. Any U.S. person wishing to effect transactions in any security discussed herein should do so through BMO Nesbitt Burns Corp. Member -Canadian Investor Protection Fund. Corporate Trade -mark Disclaimer ®"BMO (M -bar roundel symbol)" is a registered trade -mark of Bank of Montreal, used under licence. ® "Nesbitt Burns" is a registered trade -mark of BMO Nesbitt Burns Inc. BMO Nesbitt Burns Inc. is a wholly-owned subsidiary of Bank of Montreal. BMO Wealth Management is the brand name for a business group consisting of Bank of Montreal and certain of its affiliates in providing wealth management products and services. - 163 - ID TD Wealth Bill MacMillan THE CORPORATION OF THE CITY OF PICKERING (7AS047A) As of May 29, 2019 PORTFOLIO PERFORMANCE (CAD) Changes in Market Value 2018 01/01/2018 -12/31 /2018 Starting Value $ 10,384,480.84 Inflows $ 0.00 Outflows $ -108,584.84 Income $ 192,209.22 Ending Value $ 10,461,471.41 Performance Money -Weighted -Net 1.794 % Notes: Values in percentage are annualized for periods of more than twelve months. 05/30/2019 03:39 PM - 164 - Page: 1 / 3 m #1110d311 01 E 1 NG Report to Executive Committee Report Number: FIN 11-19 Date: June 17, 2019 From: Stan Karwowski Director, Finance & Treasurer Subject: Annual Indexing — Development Charges and Seaton Financial Impacts Agreement Recommendation: 1. That Report FIN 11-19 of the Director, Finance & Treasurer be received; 2. That effective July 1, 2019 as provided for in By-law No. 7595/17, the Development Charges (the "DCs") referred to in Schedule "C" of that By-law be increased by 5.2 per cent; 3. That effective July 1, 2019 as provided for in By-law No. 7595/17, the DCs referred to in Schedule "D" of that By-law be increased by an annual indexing of 5.2 per cent; 4. That effective July 1, 2019 the payments related to "10 per cent Soft Services" as provided for by the Seaton Financial Impacts Agreement (FIA) dated November 26, 2015 be increased by an annual indexing of 5.2 per cent; and 5. That the appropriate City of Pickering officials be authorized to take the necessary actions as indicated in this report. Executive Summary: The Development Charges Act 1997 and Ontario Regulation 82/98, and By-law No. 7595/17 provide for an automatic annual adjustment to the City's development charges based on the Building Construction Price Index in order to keep development charges revenues current with construction costs. The Building Construction Price Index for the non-residential buildings construction for the annual period ending March 31, 2019 is 5.2 per cent. Adoption of the recommendations of this report will put into effect the higher rate for the period of July 1, 2019 to June 30, 2020. Attachment 1 provides the DCs by service category for the City-wide area in Pickering excluding the Seaton lands with the new rates reflecting the annual indexing of 5.2 per cent. - 165 - FIN 11-19 June 17, 2019 Subject: Annual Indexing and Development Charges for Page 2 City -Wide and Seaton Lands Attachment 2 provides the DCs by service category for the Seaton lands, and the new rates with the indexing of 5.2 per cent as well as additional charges applicable to development in Seaton as approved in the Seaton Financial Impacts Agreement (FIA). Financial Implications: Increasing the development charges based on an increase in the construction price index will assist in keeping the revenues generated in line with current construction costs. Discussion: As provided for in Ontario Reg. 82/98, s.7, and in section 16 of the City's By-law No. 7595/17, the development charges charged by the City for all types of development shall be indexed annually without amending the By-law. Adoption of the recommendations contained in this report will allow that increase to take effect July 1, 2019, thereby assisting in keeping revenues in line with the costs that development charges fund. Note that starting from the first quarter of 2018, Statistics Canada released the first building construction price indexes that included both new residential and non- residential buildings construction in Canada. The City continues to use the non- residential buildings construction price index for the purpose of indexing the DCs rates. Statistics Canada indicates that the non-residential buildings construction price index (an indicator of our costs of construction) for the Toronto area has increased by 5.2 per cent for the annual period from April 1, 2018 to March 31, 2019. The change is reflected in the tables attached. The 2017 DC Background Study was completed in December 2017. DC By-law No. 7595/17, section 16(1)(ii) provides that commencing on July 1, 2019, the rates in Schedule "C" shall be adjusted annually in accordance with the change in the index for the most recently available annual period ending March 31. Attachment 4 provides the change in rates in Schedule "C" from July 1, 2018 to July 1, 2019 based on the 5.2 per cent indexing. Schedule "C" is applicable to the new DCs rates effective on January 1, 2018 as a result of the 2017 DC Background Study. The same By-law, under section 16(1) (iii) provides that the rates in Schedule "D" shall be adjusted on July 1, 2018, July 1, 2019 and July 1, 2020 in accordance with the change in index for the most recently available annual period ending March 31. Schedule "D" is applicable to residential apartments dwelling units for the area outside of Seaton lands. Attachment 5 provides the change in rates in Schedule "D" from July 1, 2018 1 to July 1, 2019 based on the 5.2 per cent indexing. The implementation of new DCs rates for apartment dwellings units was delayed to accommodate the long-term planning and construction cycle associated with this development. - 166 - FIN 11-19 June 17, 2019 Subject: Annual Indexing and Development Charges for Page 3 City -Wide and Seaton Lands Continuing from previous years, City staff are including in the DCs annual indexing report, additional charges applicable to development in Seaton lands as approved in the Seaton FIA. Sections 4 - 6 of the FIA outline the DC -related financial terms of the agreement. Note that of all the 3 services collectible based on the Seaton FIA, the "10% Soft Services" is the only service to be indexed. Attachment 3 provides the further details on these charges with the 5.2 per cent indexing. The Seaton DC rates are lower than the City-wide DC rates to reflect the fact that the Seaton Landowner Group (SLG) is responsible to design, build and pay for the Seaton internal roads network. Upon Council's approval of the recommendations contained in this report, the development charges brochure will be updated to reflect the approved rates. The updated brochure will be posted on the City's website and made available at various counters throughout the Civic Complex. Attachments: 1. City -Wide Development Charges (excludes Seaton Lands) -Effective July 1, 2019 2. Seaton Lands Development Charges and Financial Impacts Agreement (FIA) Charges -Effective July 1, 2019 3. Seaton Lands — Financial Impacts Agreement (FIA) Charges, Section 5.1 4. Schedule "C" — City of Pickering Schedule of Development Charges 5. Schedule "D" — City of Pickering Schedule of Development Charges for Residential Apartments Dwelling Units for the Area Outside of Seaton Prepared By: Caryn Kong, CPA, CGA Senior Financial Analyst — Capital & Debt Management Approved/Endorsed By: t . Stan Karwowski, CPA, CMA, MBA Director, Finance & Treasurer Recommended for the consideration of Pickering City Council Tony Preyed I, P.Eng. Chief Administrative Officer 3, Zo 17 - 167 - City of Pickering City -Wide Development Charges (Excludes Seaton Lands) Development Charges By-law No. 7595/17 Effective July 1, 2019 1Per Residential Dwelling Unit By Type INon-Residential Charges Service Category Apt Dwellings Apt Dwellings Singles or Semi- with 2 or more with less than Detached bdrms 2 bdrms Other Dwellings Non -Residential per Sq. Ft of Total Floor Area Other Services Related to a Highway Protection Services Parks and Recreation Services Library Services Administration Studies Stormwater Management Transportation 1 $470 $242 $177 948 487 357 5,175 2,658 1,950 1,158 595 437 296 153 112 307 158 117 6,952 3,570 2,621 $380 766 4,179 935 239 248 5,612 $0.16 0.35 0.42 0.08 0.11 0.11 1.95 `Total 1 $15,306 $7,863 $5,771 $12,359 1 $3.18 I 1 Does not apply to Seaton Lands. Seaton Lands subject to a separate agreement outside of the Development Charges Act concerning provision of the Transportation requirements in addition to other funding contributions. - 168 - # 1N3WHOV1IV City of Pickering Seaton Lands Development Charges and Financial Impacts Agreement (FIA) Charges Development Charges (DC) By-law No. 7595/17 and FIA Article 5 Effective July 1, 2019 DC By-law No. 7595/17 , Per Residential Dwelling Unit By Type )Non -Residential Charges Apt Dwellings Apt Dwellings Non -Residential per Prestige Employment Singles or Semi- with 2 or with less than Other Sq. Ft of Total Floor Land in Seaton (per Service Category Detached more bdrms 2 bdrms Dwellings Area 5 Net Hectare, Other Services Related to a Highway $470 $298 $210 $380 $0.16 $5,814 Protection Services 948 600 425 766 0.35 12,194 Parks and Recreation Services 5,175 3,270 2,315 4,179 0.42 14,146 Library Services 1,158 732 519 935 0.08 2,779 Administration Studies 296 186 133 239 0.11 3,797 Stormwater Management 307 195 138 248 0.11 3,738 Transportation 1 0 0 0 0 0.00 0 ' Total DC By-law No.7595/17 I $8,354 $5,280 $3,740 $6,747 I $1.23 $42,468 I Per Sq. Ft of Total SLG FIA Floor Area 10% Soft Services 2 $845 $386 $386 $670 $0.098 $0.098 Non Indexed Municipal Buildings 3 189 86 86 150 n/a n/a Community Uses 4 300 137 137 238 n/a n/a Total SLG FIA 1 $1,334 $609 $609 $1,058 1 $0.098 $0.098 1 $42,468/ha & Total Charges -Seaton Lands $9,688 $5,889 $4,349 $7,805 ( $1.328 $0.098/sq. ft J:\RPTCOUNC\2019\FIN lick Attachments 1-5 Does not apply to Seaton Lands. Seaton Lands subject to a separate agreement outside of the Development Charges Act concerning provision of the Transportation requirements in addition to other funding contributions. 2 Breakdown by service category is available upon request. Not applicable to lands owned by the Province. For residential development, payment is due at subdivision registration except for mixed-use or multi -use or multi -residential development blocks subject to site plan approval. For all other development, payment is due prior to building permit issuance. Subject to annual indexing. 3 Applicable to the first 11,280 S.D.Es built on SPL Lands, due prior to building permit issuance. No indexing 4 Applicable to the first 11,280 S.D.Es built on SPL Lands to a maximun payment of $3.3 million; due prior to building permit issuance. No indexing 5 Does not apply to prestige employment land in Seaton, as that development is subject to the per net Ha land area charge instead. Applies to non-residential development in the non -prestige employment land in Seaton. - 169 - CD City of Pickering Seaton Lands - Financial Impacts Agreement (FIA) Charges, Section 5.1 Section 5.1: 10% Soft Services Contribution* Effective July 1, 2019 * This contribution is to be indexed with the construction price index prescribed by the DC Act. RR FIA version (October 28, 2013) subsection 5.1 and 5.2 permits the City to charge an additional DC to compensate for the 10% soft services deduction. The calculation is based on the DC rate multiplied by 11.11% as stated in the FIA agreement subsection 5.2. 1 19.0% of the DC Recoverable share for the Development Related Studies is comprised of costs that are subject to the 10% deduction - 170 - 1 rn z b) i / J#ilium 01 `Per Residential Dwelling Unit By Type ** `Non -Residential Charges Apt Prestige Dwellings Non -Residential Employment Land Singles or Semi- with 2 or Apt Dwellings with Other per Sq. Ft of in Seaton (per Sq. Service Category Detached more bdrms less than 2 bdrms Dwellings Total Floor Area Ft) Development -Related Studies 1 $4.51 $2.05 $2.05 $3.56 0.002 0.002 Parks Development & Trails 214.38 97.97 97.97 170.01 0.018 0.018 Indoor Recreation Facilities 446.73 204.01 204.09 354.18 0.037 0.037 Library 107.38 49.07 49.07 85.16 0.009 0.009 Operations Facilities & Vehicles 72.01 32.91 32.91 57.10 0.032 0.032 Total ( $845.00 $386.00 $386.00 $670.00 I 0.098 0.0981 * This contribution is to be indexed with the construction price index prescribed by the DC Act. RR FIA version (October 28, 2013) subsection 5.1 and 5.2 permits the City to charge an additional DC to compensate for the 10% soft services deduction. The calculation is based on the DC rate multiplied by 11.11% as stated in the FIA agreement subsection 5.2. 1 19.0% of the DC Recoverable share for the Development Related Studies is comprised of costs that are subject to the 10% deduction - 170 - 1 rn z b) i / J#ilium 01 /ATTACH ENT itDPl -19 Schedule "C" City of Pickering Schedule of Developement Charges -DC By-law No. 7595/17 Effective July 1, 2018 Effective July 1, 2019 Indexed at 5.20% I Per Residential Dwelling Unit By Type Non -Residential Charges Service Category Singles or Semi- Detached 2 Apt Dwellings with 2 or more bdrms Apt Other Dwellings Non- Prestige Other Services Related to a Highw. $470 Apt Dwellings $380 Residential Employment Protection Services Singles or Dwellings with less 766 per Sq. Ft of Land in Parks and Recreation Services Semi- with 2 or than 2 Other Total Floor Seaton (per Service Category Detached more bdrms bdrms Dwellings Area Net Hectare) Other Services Related to a High $447 $283 $200 $361 $0.15 $5,527 Protection Services 901 570 404 728 0.34 11,591 Parks and Recreation Services 4,919 3,108 2,201 3,972 0.40 13,447 Library Services 1,101 696 493 889 0.08 2,641 Administration Studies 281 177 126 227 0.10 3,610 Stormwater Management 292 185 131 236 0.10 3,553 Total Municipal Wide Services $7,941 $5,019 $3,555 $6,413 $1.17 $40,369 Outside of Seaton Lands: $8,354 $5,280 $3,740 $6,747 $1.23 $42,468 Transportation 1 6,608 4,175 2,958 5,335 1.86 0 Total Services Outside of Seaton Lands $6,608 $4,175 $2,958 $5,335 $1.86 $0 Seaton $7,941 $5,019 $3,555 $6,413 $1.17 $40,369 Rest of Pickering -City wide $14,549 $9,194 $6,513 $11,748 $3.03 Effective July 1, 2019 Indexed at 5.20% I Per Residential Dwelling Unit By Type Non -Residential Charges Service Category Singles or Semi- Detached 2 Apt Dwellings with 2 or more bdrms Apt' Dwellings with less than 2 bdrms Other Dwellings Non- Residential per Sq. Ft of Total Floor Area Prestige Employment Land in Seaton (per Net Hectare) Other Services Related to a Highw. $470 $298 $210 $380 $0.16 5,814 Protection Services 948 600 425 766 0.35 12,194 Parks and Recreation Services 5,175 3,269 2,315 4,179 0.42 14,146 Library Services 1,158 732 519 935 0.08 2,779 Administration Studies 296 186 133 239 0.11 3,797 Stormwater Management 307 195 138 248 0.11 3,738 Total Municipal Wide Services $8,354 $5,280 $3,740 $6,747 $1.23 $42,468 Outside of Seaton Lands: Transportation' 6,952 4,392 3,112 5,612 1.95 0 Total Services Outside of Seaton Lands $6,952 $4,392 $3,112 $5,612 $1.95 0 Seaton $8,354 $5,280 $3,740 $6,747 $1.23 $42,468 Rest of Pickering -City wide $15,306 NA NA $12,359 $3.18 Does not apply to Seaton Lands. Seaton Lands subject to a separate agreement outside of the Development Charges Act concerning provision of the Transportation requirements in addition to other funding contributions. NA- See Schedule "D" indexed at 3.3% 'Implementation of new DCs rates for apartment dwellings units outside of Seaton lands delayed. Per By-law No. 7595/17 section 16(1)(ii) - 171 - ATTACHMENT ft Schedule "0" City of Pickering Schedule of Developement Charges for Residential Apartments Dwelling Units for the Area Outside of Seaton DC By-law No. 7595/17 Effective July 1, 2018 TO REPORT # J (I— ( 9 Effective July 1, 2019 Indexed at 5.20% RESIDENTIAL RESIDENTIAL Apt Dwellings with 2 Apt Dwellings with Apt Dwellings with 2 Apt Dwellings with) Service Category or more bdrms less than 2 bdrms Other Services Related to a Highway $230 $168 Protection Services 463 340 Parks and Recreation Services 2,527 1,854 Library Services 566 415 Administration Studies 145 106 Stormwater Management 150 111 Total Municipal Wide Services $4,081 $2,994 Outside of Seaton Lands: Transportation 1 Transportation 1 3,394 2,492 Total Services Outside of Seaton Lands $3,394 $2,492 Rest of Pickering -City wide $7,475 $5,486 Effective July 1, 2019 Indexed at 5.20% RESIDENTIAL Apt Dwellings with 2 Apt Dwellings with Service Category or more bdrms less than 2 bdrms Other Services Related to a Highway $242 $177 Protection Services 487 357 Parks and Recreation Services 2,658 1,950 Library Services 595 437 Administration Studies 153 112 Stormwater Management 158 117 Total Municipal Wide Services $4,293 $3,150 Outside of Seaton Lands: Transportation 1 3,570 2,621 Total Services Outside of Seaton Lands $3,570 $2,621 Rest of Pickering -City wide $7,863 $5,771 Does not apply to Seaton Lands. Seaton Lands subject to a separate agreement outside of the Development Charges Act concerning provision of the Transportation requirements in addition to other funding contributions. - 172 - CG/v ,L DICKERING Report to Executive Committee Report Number: FIN 12-19 Date: June 17, 2019 From: Stan Karwowski Director, Finance & Treasurer Subject: Universal City One Developments Inc. - Request to Defer Payment of Development Charges Recommendation: 1. That Report FIN 12-19 of the Director, Finance & Treasurer be received; 2. That, pursuant to By-law 7595/17: a) the request by Universal City One Developments Inc. to defer the payment of the City's share of Development Charges in the amount of approximately $1,739,400 to the earlier of: (i) six months after the commencement of foundation construction at 1474 Bayly Street, Pickering or (ii) when above grade construction at the said address is commenced, be approved; b) that the requirements of Section 14(2) of By-law 7595/17 be waived accordingly and that the date of issuance of the final building permit will determine the applicable Development Charge rate and, if the final building permit is issued before July 1, 2019, that the payment of Development Charges will be based on the current rate plus interest, be approved; c) that Universal City One Developments Inc., be required to enter into a Development Charge Deferral Agreement with the City on terms satisfactory to the Director, Finance & Treasurer and the Director, Corporate Services & City Solicitor; and 3. That the appropriate officials of the City of Pickering be authorized to give effect thereto. Executive Summary: Universal City One Developments Inc. or (UnCity) wants to proceed with construction of its first tower on lands located at 1474 Bayly Street, Pickering. Pursuant to the City's Development Charges By-law 7595/17 (the "DC By- law"), the City share of development charges is payable at the time a building permit is issued. The project involves substantial underground construction requiring substantial investment of funds and that is why UnCity has requested a deferral of up to six months of its obligation to pay development charges to the City. City staff recommend approval of the deferral because it will speed up the process of construction of this condominium development. Construction and occupancy of this building will also increase the City's property tax revenues. - 173 FIN 12-19 June 17, 2019 Subject: Universal City One Developments Inc. - Request to Page 2 Defer Payment of Development Charges The deferral will not result in any reduction in the amount of the development charges paid to the City by developer. Financial Implications: Deferral of the payment of development charges will not result in any loss of DC revenue for the City. There will be no requirements to secure the deferral. The above grade permit will not issued until the developer makes the full payment to satisfy the remaining DC obligations. The deferral of development charges delays the receipts of revenue and impacts the cash flow position of the DC reserve funds. In fact, the City may receive higher DC revenues if UnCity's final building permit is issued after June 30th due to the fact DC rates are scheduled to increased effective July 1st. The economic benefit to Pickering t is the earlier receipt of property taxes for this project. Once fully occupied, this building is expected to generate approximately $370,000 of property tax revenue annually for the City. Discussion: The Council of the City of Pickering adopted the Report FIN 28-17 of the Director, Finance & Treasurer on the 2017 Development Charges Study and enacted By-law No. 7595/17 of, the City's current DC By-law. The DC By-law requires payment of development charges prior to issuance of a building permit. Typically, a municipality will consider a request to defer the payment of development charges when it is in the broader community interest to do so. It should be noted that Council approved DC deferrals for SR&R's three condominium tower project. The SR&R developer has re -branded itself for its six tower project (Universal City). In the specific request before us, UnCity has requested a deferral to assist it in matching its financial obligations with its funding sources. Construction of a condominium building involves large upfront costs associated with underground works. Funds flow, whether from construction financing or units sales, well after underground work must begin. This benefits the City by bringing in new residents and has the potential of increasing the economic activity in the City core. Construction and occupancy of this building will also increase the City's property tax revenues. Once fully occupied, this building is expected to generate approximately $370,000 of property tax revenue annually for the City. UnCity is requesting deferral to the earlier of six months after the commencement of foundation construction or when its above grade work commences. The amount requested to be deferred is $1,739,400 being the City's development charges only. UnCity will have to make separate deferral requests to the Region and the School Board. Total Development Charges payabl7o he City, Region and School Boards is FIN 12-19 June 17, 2019 Subject: Universal City One Developments Inc. - Request to Page 3 Defer Payment of Development Charges estimated to be $6,533,030. From a financial perspective it is not whether or not such a deferral would cost the City, but rather that is it a good business practice to grant this request. UnCity will be required to enter into a Development Charge Deferral Agreement pursuant to the Development Charges Act (Ontario). This Agreement will specify that the development charge amount shall, if unpaid, be added to UnCity's property tax bill and interest charged at 1.25 per cent per month. Attachments: 1. Universal City One Developments Inc. Deferral Request dated May 15, 2019 Prepared By: Approved/Endorsed By: Stan Karwowski, MBA, CPA, CMA Stan Karwowski, MBA, CPA, CMA Director, Finance & Treasurer Director, Finance & Treasurer Recommended for the consideration of Pickering City Council Tony Prevedel, P.Eng. Chief Administrative Officer - 175 - ATTACHMENT . TO REP ORT11-1.►f(2.- Universal City One Developments Inc. City of Pickering Pickering Civic Complex One The Esplanade Pickering, Ontario L1V 6K7 May 15 2019 Attention: Mr. Mr. Tony Prevedel — Chief Administrative Officer Dear Sirs: Re: Universal City One - Request to Defer Payment of Development Charges We are proceeding with the development of the first phase of Universal City, Universal City One, a 17 storey residential condominium tower, and have recently filed our building permit application to the City. The project involves substantial underground construction. We are requesting that the City defer the payment of its development charges until six months after the commencement of foundation construction, or until we commence above grade work. This will assist us in proceeding with the next phase of this important project for the City of Pickering. City staff has advised that the City's development charges by-law requires payment prior to issuing our foundation permit, unless Council approves otherwise and directs staff accordingly. As you know, resolutions were passed by the Executive Committee and Council to defer payment of development levies for Building's "A" and "B" of the San Francisco By The Bay development using the same construction triggers. Building "C" of San Francisco By The Bay was also granted a deferral. 150 Ferrand Drive Suite 801, Toronto, ON M3C 3E5 Tel: 416-649-4470 Fax: 416-497-3809 - 176 - Universal City One Developments Inc. Please accept this letter as our request, pursuant to Section 17 of By-law 6978/09, that Council approve the deferral of the city development charges applicable to our 17 storey tower project. We request that the charges be payable the earlier of six months after the commencement of foundation construction, or upon the commencement of above grade work, instead of prior to the underground building permit being provided by the City. Thank you for your consideration of this matter. I would be please to provide anything further to assist in Council's approval of this request, as necessary. Yours Truly Unive al City One Dove • pments Inc. Pe Steven Warsh 150 Ferrand Drive Suite 801, Toronto, ON M3C 3E5 Tel: 416-649-4470 Fax: 416-497-3809 - 177 - PICKERING cdy Report to Executive Committee Report Number: FIN 13-19 Date: June 17, 2019 From: Stan Karwowski Director, Finance & Treasurer Subject: 2019 Final Tax Due Date for Commercial, Industrial, and Multi -Residential Realty Tax Classes Recommendation: 1. That Report FIN 13-19 of the Director, Finance & Treasurer be received; 2. That the Director, Finance & Treasurer be authorized to issue the final 2019 Tax Bills for Commercial, Industrial and Multi -Residential properties with a due date of September 26, 2019; 3. That the Director, Finance & Treasurer be authorized to make any changes or undertake any actions necessary, including altering the due date, in order to ensure that the tax billing process is completed and in order to comply with Provincial Regulations; 4. That the draft By-law attached to this report be enacted; and 5. That the appropriate City of Pickering officials be authorized to take the necessary actions as indicated in this report. Executive Summary: Adoption of the above recommendations and passing the attached By-law provides for the final 2019 tax billing for non-residential tax classes (commercial, industrial and multi -residential). During the last few years, the City has billed the final non-residential taxes separately, mainly due to the additional steps that are required as a result of the capping legislation. Financial Implications: The attached By-law is for the final billing of 2019 property taxes for commercial, industrial, and multi -residential properties. This billing of final non-residential property taxes will raise approximately $33.5 million for the City, Region of Durham, and the School Boards. Tax bills for the residential tax classes were mailed during the last week of May, with due dates of June 26th and September 26th. - 178 - FIN 13-19 June 17, 2019 Subject: 2019 Final Tax Due Date for Commercial, Industrial and Page 2 Multi -Residential Realty Tax Classes Discussion: In 1998, the Province introduced Current Value Assessment or CVA on a Province -wide basis to replace the old patchwork system (throughout the Province) where each municipality used a different base year for assessment purposes. The end result of CVA was that some businesses experienced property tax increases well above 100 per cent. To reduce the property tax increases, the Province introduced capping legislation in 1998. The City of Pickering will soon be in a position to issue the final 2019 property tax bills in accordance with the capping provisions of Bill 140, Continued Protection for Property Taxpayers Act, 2000 and implemented through various regulations (Bill 140 replaced the original capping legislation of Bill 79 introduced and approved in 1998). This legislation was put in place to limit assessment reform related increases to 5 per cent per year on commercial, industrial and multi -residential properties. Under this legislation, property owners facing increases due to property assessment reform had their increases "capped" (reduced). Conversely, those properties experiencing decreases were limited to that permitted under the legislation. This meant that taxes had to be clawed back from those experiencing decreases to fund the loss of revenue resulting from the capped increases. The funding of the capping protection is paid for on a Region -wide basis. The Region of Durham acts like a banker in this process. For example, the total cost of the capping protection for commercial tax class is paid for by the other commercial properties throughout the Region by having a portion of their property tax decrease withheld (clawed back). As part of the Region -wide process, the City of Pickering uses a Provincial database program called "Online Property Tax Analysis" (OPTA) to verify non-residential assessment data. Every municipality within Durham Region uses the OPTA system. Assessment Review Board decisions and Minutes of Settlement decisions have been incorporated into the capping calculations up to the "cut-off date" of Apr 1,2019. Bill 83 — Legislative Changes to Capping Legislation In 2004, the Province passed Bill 83, Budget Measures Act, 2004, which provided for various optional tax tools that could be used for the non-residential tax class. In a two tier municipal government structure, the upper tier has the option to select all or some of the tax tools. These tax tools consist of the following options: 1. Annual threshold increase of previous year's annualized taxes raised from 5 per cent to 10 per cent. 2. Annual threshold increase capped at 5 per cent of previous year's CVA taxes. 3. Billing threshold established whereby a property that is within the $250 of its CVA based taxation is required to pay its full CVA property taxes. 4. The minimum CVA tax for new construction properties was 60 per cent in 2006. New construction properties are now fully ply in at 100 per cent CVA tax. FIN 13-19 June 17, 2019 Subject: 2019 Final Tax Due Date for Commercial, Industrial and Page 3 Multi -Residential Realty Tax Classes The purpose of these tax tools was to accelerate the movement of non-residential taxpayers to full CVA taxes (such that taxes are calculated using Current Value Assessment multiplied by the corresponding tax rate). Bill 144 — Legislative Enhancements to Capping Legislation In 2015, the Province provided additional enhancements to the capping program through Bill 144, the Budget Measures Act, 2015. Beginning in 2016, municipalities are able to increase the annual cap from its current level of 5 per cent of previous year's CVA level taxes up to a new maximum of 10 per cent. In addition, municipalities are able to move properties directly to CVA level taxes if they are within $500 of CVA level taxes, up from the current $250 threshold. The annual cap of up to 10 per cent of previous year's annualized taxes would be maintained. For 2019, the Region of Durham has adopted all of the tax tools and enhancements referenced above, which will reduce the potential remaining life of this program and the protection requirements. Under the Municipal Act, Subsection 343(1), the tax bills must be mailed 21 days before the due date. Taxation staff are cognizant of this legislative requirement and design the tax billing process to meet this requirement. The coordinated efforts between OPTA and Durham Region municipalities have accelerated the capping calculation process over the last few years, allowing the capping 'freeze' to be completed earlier in the year. Table One 2019 Billing Due Dates As the above table indicates, the residential taxpayer has four instalment dates and the non-residential taxpayer has three dates. In the past, the City has provided indirect cash flow assistance to the non-residential taxpayer by providing them the advantage of skipping the June instalment date, and by having the final instalment due in the fall. This year, taxation staff are recommending that Council continue with the June payment holiday for non-residential properties. Communication Strategy In addition to mailing the tax bills, the City will advertise the tax instalment due dates on the City's webpage and in the Pickering News Advertiser prior to each tax due date. - 180 - February 26 April 26 June 26 September 26 Instalment Dates Residential X X X X 4 Non-residential X X X 3 As the above table indicates, the residential taxpayer has four instalment dates and the non-residential taxpayer has three dates. In the past, the City has provided indirect cash flow assistance to the non-residential taxpayer by providing them the advantage of skipping the June instalment date, and by having the final instalment due in the fall. This year, taxation staff are recommending that Council continue with the June payment holiday for non-residential properties. Communication Strategy In addition to mailing the tax bills, the City will advertise the tax instalment due dates on the City's webpage and in the Pickering News Advertiser prior to each tax due date. - 180 - FIN 13-19 June 17, 2019 Subject: 2019 Final Tax Due Date for Commercial, Industrial and Page 4 Multi -Residential Realty Tax Classes Attachments: 1. By-law to Establish the 2019 Final Property Taxes and Due Date for the Commercial, Industrial and Multi -Residential Tax Classes Prepared By: Mi.. Jones Supervisor, Taxation Approved / Endorsed By: Stan Karwowski Director, Finance & Treasurer Recommended for the consideration of Pickering Ci Council Tony Prevedel, P.Eng. Chief Administrative Officer - 181 - ATTACHMENT#. 1 TO REPORT#NI it^19 The Corporation of the City of Pickering By-law No. XXXX/19 Being a By-law to Establish the 2019 Final Property Tax Due Date for the Commercial, Industrial and Multi -Residential Tax Classes Whereas it is necessary for the Council of The Corporation of the City of Pickering, pursuant to the Municipal Act, 2001, S.O. 2001, c.25 as amended, to pass a By-law to levy a separate tax rate on the assessment in each property class; and, Whereas the property classes have been prescribed by the Minister of Finance under the Assessment Act, R.S.O. 1990, ch.A.31 as amended, and its Regulations; and, Whereas it is necessary for the Council of The Corporation of the City of Pickering, pursuant to the Municipal Act, 2001, S.O. 2001, c.25 as amended, to levy on the whole rateable property according to the last revised assessment roll for The Corporation of the City of Pickering; and, Whereas the Regional Municipality of Durham has passed By-law No. 22-2019 to establish tax ratios, and By-law No. 24-2019 to adopt estimates of all sums required by The Regional Municipality of Durham for the purposes of the Durham Region Transit Commission, and By-law No. 25-2019 to set and levy rates of taxation for Regional Solid Waste Management, and By-law No. 23-2019 to set and levy rates of taxation for Regional General Purposes and set tax rates on Area Municipalities; and, Whereas an interim levy was made by the Council of The Corporation of the City of Pickering (pursuant to By-law No. 7668/19) before the adoption of the estimates for the current year; and, Whereas sub section 342 (2) of the Municipal Act, 2001, S.O. 2001, c.25 as amended, permits the issuance of separate tax bills for separate classes of real property for year 2019. Now therefore the Council of the Corporation of the City of Pickering hereby enacts as follows: 1. For the year 2019, The Corporation of the City of Pickering (the "City") shall levy upon all Property Classes (Residential, Commercial, Industrial and Multi - residential) as set out in Schedule "A" of By-law 7690/19, the rates of taxation, for the City of Pickering, the Region of Durham and for Education purposes on the current value assessment. 2. Where applicable, taxes shall be adjusted in accordance with the Continued Protection for Property Taxpayers Act, 2000, as amended and its Regulations. The levy shall be reduced by the amount of the interim levy for 2019. - 182 - By-law No. Page 2 4. The 2019 final tax capping calculations for the industrial, commercial and multi - residential realty tax classes are based on a freeze date of April 1, 2019. 5. The 2019 taxes owed for the commercial, industrial and multi -residential assessed properties shall be due in one instalment on September 26, 2019, or as adjusted by the Treasurer. 6. Except in the case of taxes payable under Section 33 and 34 of the Assessment Act, R.S.O. 1990, c.A31, as amended, the percentage charge as a penalty for non-payment of taxes and monies payable as taxes shall be added to every tax or assessment, rent or rate of any instalment or part thereof remaining unpaid on the first day of default and on the first day of each calendar month thereafter in which such default continues pursuant to subsections 345 (1), (2) and (3) of the Municipal Act 2001, S.O. c.25 as amended. The Treasurer shall collect by distress or otherwise under the provisions of the applicable statutes all such taxes, assessments, rents, rates or instalments or parts thereof as shall not have been paid on or before the several dates named as aforesaid, together with the said percentage charges as they are incurred pursuant to sections 349, 350 and 351 of the Municipal Act 2001, S.O. c.25 as amended. 7 If any section or portion of this By-law is found by a court of competent jurisdiction to be invalid, it is the intent of Council for The Corporation of the City of Pickering that all remaining sections and portions of this By-law continue in force and effect. 8. Taxes shall be payable to the Treasurer, City of Pickering. 9. This By-law is to come into effect on the date of its final passing. By-law passed this 24th day of June, 2019. David Ryan, Mayor Susan Cassel, City Clerk - 183 -