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HomeMy WebLinkAboutLGL-007-17Legal Services Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: General Government Committee Date of Meeting: June 19, 2017 Report Number: LGL-007-17 Resolution: GG-365-17 File Number: L1000-37 By-law Number: 2017-054 Report Subject: Orono Arena and Community Centre Board Recommendations: 1.That Report LGL-007-17 be received; 2.That Council pass By-law No. 2017-054 attached to this Report (Attachment 1 to Report LGL-007-17) to designate the Orono Arena and Community Centre as a municipal capital facility and exempt it from taxation; 3.That the Clerk be directed to provide written notice of By-law No. 2017-054 to the Minister of Education as required by subsection 110(5) of the Municipal Act, 2001; 4.That the Clerk be directed to provide written notice of By-law No. 2017-054 to the Municipal Property Assessment Corporation, the Clerk of the Region of Durham and the local school boards as required by subsection 110(8) of the Municipal Act, 2001; 5.That the Municipality enter into a Municipal Capital Facility Agreement with the Orono Amateur Athletic Association substantially in the form attached to this Report (Attachment 2) to manage and operate the Centre; 6.That provided a Municipal Capital Facility Agreement has been entered into with the Orono Amateur Athletic Association, the Orono Arena and Community Centre Board be dissolved effective August 1, 2017; and 7.That the Orono Amateur Athletic Association and all members of the Orono Arena Board be notified of Council’s decision. Municipality of Clarington Report LGL-007-17 Page 2 Report Overview As part of the Municipality’s on-going efforts to deliver services and programs as efficiently and effectively as possible, staff have been in discussions with the Orono Arena and Community Centre Board and the Orono Amateur Athletic Association respecting services and programs at the Orono Arena and Community Centre. The Centre has been and continues to be managed and operated very well, but all involved believe there is no longer a need to have a municipal service board oversee the Centre’s management and operation. Instead, it is recommended that the Municipality enter into a Municipal Capital Facility Agreement with the Orono Amateur Athletic Association. 1. Background 1.1 By an agreement dated September 1, 1977, The Corporation of the Town of Newcastle (now the Municipality) leased from The Durham Central Agricultural Society the property municipally known as 2 Princess Street, Orono and constructed an arena, community centre and grandstand (“the Centre”) on the lands. 1.2 The Orono Arena and Community Centre Board (the “Board”) was originally established in 1978 under the Community Recreation Buildings Act, 1974 (now repealed), and has continued to exist as a municipal service board under what is now section 196 of the Municipal Act, 2001, to control and manage the Centre. 1.3 The Orono Amateur Athletic Association (“OAAA”) was incorporated as a not-for-profit corporation by Letters Patent issued on September 28, 1981 to “promote, develop, improve, encourage and advance amateur athletics in all of its phases including hockey, skating, all field and indoor sports, swimming and aerial exercises and to do all such things as are incidental or conducive to the attainment of [those] objects”. 1.4 In October 1993, the Association entered into a “Statement of Understanding” with the Board to operate and maintain the Centre on behalf of the Board, and the Association has effectively provided such services since the Statement of Understanding was entered into. A copy of this Statement of Understanding is attached to this Report (Attachment 3). 1.5 The Centre has been and continues to be managed and operated very well, but all involved have concluded that there is no longer a need to have a municipal service board oversee its management and operation. At its meeting on May 30, 2017, the Board therefore passed the following motion: That the Municipality of Clarington enter into a Municipal Capital Facility Agreement to operate the Orono Arena and Community Centre with the Orono Amateur Athletic Association and once executed dissolve the Orono Arena Board. Municipality of Clarington Report LGL-007-17 Page 3 2. Discussion 2.1 Staff fully support the resolution passed by the Board. In our opinion, a Municipal Capital Facility Agreement similar to what the Municipality has with the Bowmanville Older Adult Association will create some efficiencies without impacting how the Centre is being managed. Most importantly, it will eliminate the need for oversight by the Board. 2.2 The proposed Municipal Capital Facilities Agreement (“the MCFA”) attached to this Report (Attachment 2) is essentially a lease that has been tailored so that it also addresses municipal taxation issues and operational issues relating to the delivery of amateur athletics and other recreation services and programs at the Centre. It will essentially replace the Statement of Understanding that was signed in 1993 with something that more clearly sets out the expectations of the Municipality and the OAAA going forward. 2.3 The two key sections of the proposed MCFA are as follows: (a) Section 10 - Term The term of the MCFA is specified to continue until the land lease referred to in section 1.1 of this Report is terminated or expires. By virtue of the Municipality having exercised its options to extend, the current term of this land lease expires on August 31, 2022. (b) Section 15 - Taxes If Council passes the by-law attached to this Report (Attachment 1) to designate the Centre as a municipal capital facility, it will be exempt from taxes levied for municipal and school board purposes. 2.4 Other than the OAAA being required to obtain additional insurance to protect their Directors and possible year-end audit services, the MCFA will not change the way in which services and programs are being delivered today. All of the basic responsibilities of the Municipality and the OAAA will remain the same. 2.5 Municipal staff will work with OAAA to make sure that it is able to obtain the additional insurance and audit services economically. 3. Concurrence 3.1 This Report has been reviewed by the Director of Finance/Treasurer, Director of Operations and Municipal Clerk who concur with the recommendations. Municipality of Clarington Report LGL-007-17 Page 4 3.2 The recommendations in this Report are supported by the Orono Arena and Community Centre Board and the Orono Amateur Athletic Association. 4. Conclusion 4.1 It is respectfully recommended that Council adopt all of the recommendations contained in this Report in order to allow for a more stream-lined delivery of services at the Centre. 5. Strategic Plan Application 5.1 Not applicable. Submitted by: Reviewed by: Andrew C. Allison, B. Comm, LL.B, Curry Clifford, MPA, CMO Municipal Solicitor Interim CAO Staff Contact: Andrew C. Allison, Municipal Solicitor, 905-623-3379 ext 2013 or aallison@clarington.net Attachment 1 By-law to designate the Orono Arena and Community Centre as a municipal capital facility and exempted it from taxation. Attachment 2 Draft Municipal Capital Facility Agreement Attachment 3 Statement of Understanding dated October 1993 Attachment 1 to Report LGL-007-17 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW NO. 2017-054 A by-law to designate the Orono Arena and Community Centre as a municipal capital facility and exempt it from all taxes levied for municipal and school purposes WHEREAS section 110 of the Municipal Act, 2001 permits a municipality to enter into agreements for the provision of municipal capital facilities; AND WHEREAS, the Orono Arena and Community Centre (“the Centre”) located on the lands known municipally as 2 Princess Street, Orono is a municipal capital facility from which a broad range of amateur athletics and other recreational services and programs have been and will continue to be provided; AND WHEREAS the Municipality has authorized the execution of an agreement with the Orono Amateur Athletic Association (“OAAA”) for the continued use of the Centre as a municipal capital facility; AND WHEREAS subsection 110(6) of the Municipal Act, 2001 provides that a municipality may exempt from all or part of the taxes levied for municipal and school purposes land or a portion of it on which municipal capital facilities are located; AND WHEREAS Ontario Regulation 603/06, as amended, specifies the classes of municipal capital facilities that can be exempt from taxation under subsection 110(6) of the Municipal Act, 2001, and the Centre is within a class that qualifies for such exemption. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON ENACTS AS FOLLOWS: Designation 1. The Centre is hereby designated as a municipal capital facility (as that term is defined in subsection 2(1) of Ontario Regulation 603/06) effective August 1, 2017 for the purpose of providing a broad range of amateur athletics and other recreational services and programs. Tax Exemption 2. The Centre is hereby exempted from taxation in accordance with subsection 110(6) of the Municipal Act, 2001 and paragraph 15 of subsection 2(1) of Ontario Regulation 603/01 effective August 1, 2017. 3. In accordance with clause 5(b) of Ontario Regulation 603/01, Council hereby declares that the Centre shall be used for the purposes of the Municipality as set out in the Municipal Capital Facilities Agreement between the Municipality and OAAA dated August 1, 2017 and shall be for public use. Effective Date 4. This by-law comes into force and is effective on August 1, 2017. PASSED this 3rd day of July, 2017. __________________________ Adrian Foster, Mayor __________________________ C. Anne Greentree, Municipal Clerk Attachment 2 to Report LGL-007-17 MUNICIPAL CAPITAL FACILITY AGREEMENT This Agreement is dated as of August 1, 2017 BETWEEN: THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON (the “Municipality") and THE ORONO AMATEUR ATHLETIC ASSOCIATION (the “Association") RECITALS: A. By an agreement dated September 1, 1977 (the “Land Lease”), The Corporation of the Town of Newcastle (now the Municipality) leased from The Durham Central Agricultural Society the property municipally known as 2 Princess Street, Orono and constructed thereon an arena, community centre and grandstand. B. The Orono Arena and Community Centre Board (the “Board”) was originally established in 1978 under the Community Recreation Buildings Act, 1974 (now repealed), and has continued to exist as a municipal service board under what is now section 196 of the Municipal Act, 2001, to control and manage the arena and community centre (the “Centre”). C. The Orono Amateur Athletic Association was incorporated as a not-for-profit corporation by Letters Patent issued on September 28, 1981 to “promote, develop, improve, encourage and advance amateur athletics in all of its phases including hockey, skating, all field and indoor sports, swimming and aerial exercises and to do all such things as are incidental or conducive to the attainment of [those] objects”. D. In October 1993, the Association entered into a “Statement of Understanding” with the Board to operate and maintain the Centre on behalf of the Board, and the Association has continued to effectively provide such services up to the current date. E. In an effort to make it easier and more efficient to make decisions respecting the control and management of the Centre, the Municipality has dissolved the Board and is entering into this Municipal Capital Facility Agreement in accordance with subsection 110(2) of the Municipal Act, 2001 to allow for such services to be provided directly by the Association to the Municipality. F. On July 3, 2017, Council considered Report LGL-007-17 and passed By-law No. 2017- 054 which designated the Centre as a municipal capital facility and exempted the Centre from taxation. Page | 2 NOW THEREFORE the Municipality and the Association agree as follows: PART 1 - INTERPRETATION Definitions 1. In this Agreement, "Agreement” means this Agreement as it may be amended from time to time; “Association" means The Orono Amateur Athletic Association including, where appropriate, its agents, consultants, contractors, employees and those for whom it is in law responsible; “Centre” means the Orono Arena and Community Centre, grandstand and the surrounding parking lot; “Council” means the Council of the Municipality; “Land Lease” means the lease agreement referred to in Recital A; and "Municipality" means The Corporation of the Municipality of Clarington including, where appropriate, its agents, consultants, contractors, employees and those for whom it is in law responsible. 2. In this Agreement, (a) where reference is made to a consent, waiver, approval, notice, request or other communication, such matters shall be deemed to be qualified by the words “acting reasonably”; and (b) every provision by which the Association obligated in any way through the words “the Association shall” will be deemed to include the words “at its expense” (including the payment of any applicable taxes). PART 2 - GRANT AND USE Grant 3. In consideration of the performance by the Association of its obligations under this Agreement, the Municipality leases to the Association the Centre and agrees to observe and perform all of the covenants to be observed and performed by the Municipality under this Agreement. In consideration of the performance by the Municipality of its obligations under this Agreement, the Association takes the Centre on lease from the Municipality and agrees to observe and perform all covenants to be observed and Page | 3 performed by the Association under this Agreement. Use of Centre 4. The Centre may be used by the Association for such purposes as in its judgment are consistent with the purposes for which it was incorporated which are set out in Recital C. Without limiting the generality of the foregoing, the Association may, (a) fix the hours when the Centre will be open to the public; (b) establish rates, fees or charges for admission to, or use of, the Centre; and (c) adopt policies or rules for the use of the Centre. 5. The Municipality acknowledges that the Association is permitted to allow individuals and organizations to use the Centre on a limited basis in the same manner as members of the public are entitled to use portions of the Municipality’s other community centres. 6. The Association shall not be permitted to allow any person to use any portion of the Centre for any period of time for any commercial activity if such use will alter the tax exempt status of the Centre. 7. The Centre shall be used only for the purposes set out in sections 5 and 6 and for no other purpose without the consent of the Municipality. Nuisance 8. The Association shall not carry on any activity or do or suffer any act or thing that constitutes a nuisance or which is offensive or an annoyance to the owners or tenants of properties surrounding the Centre. Assignment and Subletting 9. In order to ensure compliance with subsection 110(6)(c) of the Municipal Act, 2001, the Association shall not assign, sublet or otherwise allow any person to occupy or use any portion of the Centre except as permitted by this Part without the consent of the Municipality. PART 3 - TERM AND RENT Term 10. Subject to section 11, the term of this Agreement shall commence on August 1, 2017 and shall continue until the Land Lease is terminated or expires. By virtue of the Municipality having exercised its options to extend, the current term of the Land Lease Page | 4 expires on August 31, 2022. Termination 11. This Agreement may terminate terminated by either party upon 12 months’ notice to the other. Overholding 12. If the Association remains in possession of the Centre after the expiry or earlier termination of the Term, there shall be no tacit renewal of this Agreement or the Term, notwithstanding statutory provisions or legal presumption to the contrary, and the Association shall be deemed to be occupying the Centre as a tenant from month to month upon the same terms, covenants and conditions as are set forth in this Agreement insofar as they are applicable to a monthly tenancy. Rent 13. The Association shall pay to the Municipality as rent for the entire term in lawful money of Canada the nominal amount of Two Dollars ($2.00). Utilities 14. The Association shall pay or cause to be paid all charges for water, gas, electricity, light, heat or power, telephone, internet, cable or other communication service used, rendered or supplied upon or in connection with the Centre throughout the term. Taxes 15. The parties agree that because the Centre has been designated by the Municipality as a municipal capital facility, the Centre is exempt from taxes levied for municipal and school board purposes. PART 4 - MAINTENANCE AND REPAIRS Association Responsibilities 16. Subject to section 19, the Association shall be responsible for such day-to-day repair and maintenance of the Centre as are proper or necessary to keep the Centre clean and in good condition. This responsibility shall include janitorial services and snow removal. 17. The Association shall not alter any physical component of the Centre without approval from the Municipality. 18. The Association shall promptly notify the Municipality’s Director of Operations of any significant accident, defect, damage or deficiency in or on any part of the Centre which Page | 5 comes to its attention. Municipal Responsibilities 19. The Municipality shall be responsible for all repairs and maintenance to the Centre’s structure including its roof, foundation or load bearing walls, building envelope, mechanical systems and elevator. 20. The Operations Department of the Municipality shall assign a representative who will act as a staff liaison to the Association to respond to building maintenance and repair issues. As the Municipal liaison, this individual shall attend the Association board meetings as a non-voting resource person when requested. PART 5 - INSURANCE Building Insurance 21. The Municipality shall take out and maintain insurance for the building, including all building components (i.e. mechanical). Director’s Liability Insurance 22. The Association shall be required to obtain its own director’s liability insurance. Contents Insurance 23. The Association shall be required to obtain its own contents insurance. CGL Insurance 24. The Association shall take out and maintain commercial general liability insurance pertaining to the Association's liability to others in respect of injury, death or damage to property occurring upon, in or about the Centre, such insurance to be of an amount which is reasonable and sufficient having regard to the scope of the risk and the current practice of prudent owners of similar building for the carrying on of similar businesses, but in any event in an amount not less than five million dollars ($5,000,000.00) for claims arising out of one occurrence. Such policy shall also name the Municipality as an additional insured and may not be cancelled unless prior notice by registered letter has been given to the Municipality by the insurer 30 days in advance of the expiry d ate. 25. If requested, the Association shall file with the Municipality a Certificate of Insurance in a form satisfactory to the Municipality’s Director of Finance, verifying that the insurance required by this Agreement is in effect and setting out the essential terms and conditions of the insurance. 26. The provision of the insurance required by this Agreement shall not relieve the Association from liability for claims not covered by the policy or which exceed its limits, Page | 6 if any, for which the Association may be held responsible. Insurance Risks 27. The Association shall not do, omit to do, or permit to be done or omitted to be done upon the Centre anything that may contravene or be prohibited by any of the Municipality's insurance policies in force from time to time covering or relevant to any part of the Centre or which would prevent the Municipality from procuring its policies with companies acceptable to the Municipality. If the occupancy of the Centre, the conduct of activity in the Centre or any acts or omissions of the Association at the Centre causes or results in any increase in premiums for any of the Municipality's insurance policies, the Association shall pay such increase to the Municipality. Indemnification 28. Each of the Municipality and the Association shall indemnify and save harmless the other from and against any and all actions, losses, damages, claims, costs and expenses (including solicitors' fees on a solicitor and client basis) to which the party being indemnified shall or may become liable by reason of any breach, violation or non- performance by the party so indemnifying of any covenant, term or provision of this Agreement or by reason of any damage, injury or death occasioned to or suffered by any person or persons including the Municipality or the Association, as the case may be, or any property by reason of any wrongful act, neglect or default on the part of the party so indemnifying or any of those persons for whom it is in law responsible. For greater certainty, the limitation of liability set out above in this section does not extend to claims, losses or damages resulting in whole or in part from the gross negligence or wilful misconduct of the party claiming indemnification, its employees or those for whom it is in law responsible. PART 6 - REMEDIES Municipality's Right to Remedy Default 29. In addition to all other remedies the Municipality may have under this Agreement and in law, if the Association is in default of any of its obligations under this Agreement, and such default has continued for a period of 30 days after receipt of notice by the Association (or such longer period as may be reasonably required in the circumstances to cure such default, except in an emergency where the Municipality will not be required to give notice), the Municipality, without prejudice to any other rights which it may have with respect to such default, may remedy such default and the Association shall be responsible for all such costs. Waiver 30. No condoning, excusing or overlooking by the Municipality of any default, breach or non-observance by the Association at any time or times in respect of any covenant, Page | 7 obligation or agreement under this Agreement shall operate as a waiver of the Municipality’s rights hereunder in respect of any continuing or subsequent default, breach or non-observance, or so as to defeat or affect in any way the rights of the Municipality in respect of any such continuing or subsequent default or breach, and no waiver shall be inferred from or implied by anything done or omitted by the Association save only an express waiver in writing. PART 7 - FINANCIAL Grant Requests 31. Any grant request from the Association submitted for Council’s consideration shall include financial statements from the Association’s previous fiscal year and current unaudited financial statements. 32. If requested by the Municipality, as part of the review of any grant, all minutes, books, records, documents, transactions, accounts and vouchers of the Association related to the grant shall be open to the Municipality for inspection. PART 8 - MISCELLANEOUS Employees 33. No employee of the Association be considered an employee of the Municipality under any circumstances. Quiet Enjoyment 34. The Municipality shall permit the Association to peaceably possess and enjoy the Centre during the Term without any interference from the Municipality, or any person lawfully claiming by, from or under the Municipality provided the Association is not in default. Right of Entry 35. The Association agrees to permit the Municipality to enter the Centre during normal business hours for the purpose of inspecting the same, and the Association shall arrange for such entry at a time convenient to both parties. The Municipality shall use its best efforts to minimize the disruption to the Association's operations during any such entry. Signs 36. The Association may only erect signs at the Centre with the Municipality’s approval. All Page | 8 such signs shall be removed from the Centre at the end of the Term. Compliance with Laws 37. The Association shall comply with all legal requirements (including statutes, laws, by- laws, regulations, ordinances, orders, rules and regulations of every governmental authority having jurisdiction) that relate to its use or occupation of the Centre. Agreements 38. The Association may enter into agreements for normal operating or administrative matters respecting the Centre provided such agreements are consistent with the terms of this Agreement. Entire Agreement 39. This Agreement constitutes the entire agreement between the parties concerning the Centre and may only be amended or supplemented by an agreement in writing signed by both parties. Further Assurances 40. Both parties agree that they shall execute and deliver, at the request of the other party, all such further documents, agreements and instruments, and will do and perform all such acts as may be necessary to give full effect to the intent and meaning of this Agreement. Registration 41. Neither this Agreement nor notice of it shall be registered against title. Notice 42. Any notice which may be or is required to be given under this Agreement shall be in writing and shall be mailed by first class prepaid post, sent by e-mail or delivered: To the Municipality: Municipality of Clarington 40 Temperance Street Bowmanville, ON L1C 3A6 Attention: Municipal Clerk Email: clerks@clarington.net With a copy to the Director of Operations Email: operations@clarington.net To the Association: The Orono Amateur Athletic Association 2 Princess Street Box 165, Orono, Ontario L0B 1M0 Page | 9 Attention: Allen Lagace Email: oronoassociation@gmail.com or such other address or number of which one party has notified the others. Any such notice shall be effective from the date that it is so transmitted, mailed, emailed or delivered. Governing Law 43. This Agreement shall be governed by, and be construed and interpreted in accordance with, the laws of Ontario and the laws of Canada applicable in Ontario. Successors and Assigns 44. This Agreement shall extend, be binding upon and enure to the benefit of the parties, their respective successors and permitted assigns. Severability 45. The invalidity or unenforceability of any provision in this Agreement shall affect the validity or enforceability of such provision only and any such invalid provision shall be deemed to be severable from the balance of this Agreement. WITNESS WHEREOF the parties have executed this Agreement. THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON _________________________________________ Adrian Foster, Mayor _________________________________________ Anne Greentree, Municipal Clerk THE ORONO AMATEUR ATHLETIC ASSOCIATION _________________________________________ _________________________________________