HomeMy WebLinkAboutTR-15-98
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
Meeting:
Date:
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
File # W"")L\ . (~) e:
Res. #(,V'H -17~ _~s(
March 23, 1998
Report #:
Subject:
TR-15-98
File #:
By-law #
INCORPORATION OF RECREATION AFFILIATE GROUPS
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report TR-15-98 be received;
2. THAT, in order to execute lease agreements, Brownsdale Community Centre
Board, Haydon Hall Board, Hampton Hall Board, Memorial Park Association,
Baseline Community Centre Board, Orono Town Hall Board, and Newtonville
Town Hall Board be incorporated, as non-profit corporations;
3. THAT; the incorporation cost and lease agreement cost of approximately
$900.00 (plus GST) per group be funded by the Municipality from the
Working Funds Reserve Account # 2900-1-X;
4. THAT the Municipality co-ordinate with a local Bookkeeper to assist with the
GST and reporting requirements for the first two years with the fees to be
charged to the Working Funds Reserve Account # 2900-1-X;
5. THAT the legal services of the Municipality's solicitor be obtained to effect
the incorporations unless otherwise specifically requested by the group;
6 . THAT the applicable groups be notified of Council's decision.
BACKGROUND:
1.0 At the meeting held on March 24, 1997, Council approved Addendum to Report TR-
85-96 (distributed previously under separate cover). The purpose of the report was to
clarify the relationship between the groups identified and the Municipality in order to
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REPORT TR-15-98
PAGE 2
ensure that the groups were provided with adequate insurance coverage, as well as to
bring the groups into compliance with Provincial legislation governing the operation
of Boards of Council, and clarify annual audit obligations. There is a legal liability to
the municipal Council and the Treasurer if the Boards are permitted to operate outside
of the Provincial directive. Therefore it is the responsibility of the Municipality to
assist in setting up the Boards in a manner that best protects them and the
municipality.
1.1 As a result of the Addendum to TR-85-96, the following groups, by by-law, were to
be formally disbanded as Boards of Council, with lease arrangements to be negotiated
for each facility at a lease rate of $1 per year:
1) Brownsdale Community Centre
2) Baseline Community Centre
3) Hampton Hall Board
4) Haydon Hall Board
5) Orono Town Hall Board
6) Memorial Park Association
7) Newtonville Town Hall Board
1.2 As part of the Report, liability coverage in the amount of $3 million was purchased
under a group arrangement for each organization.
1.3 Also included in the Report, was direction by Council to obtain Life Insurance and
accidental death and dismemberment coverage including weekly indemnity for the
members of each of those groups equivalent to that previously provided under the
Municipality's Master Insurance Policy from Frank Cowan Company. Staff has had
considerable difficulty in obtaining this coverage due to the small size of the policy.
No provider has expressed any interest in providing this coverage. Currently,
investigation is underway to have this coverage provided by the Municipality's benefit
plan carriers.
802
REPORT TR-15-98
PAGE 3
1.4 Difficulty will be encountered in establishing and maintaining this policy since the
insurance carrier will require continuously updated personal information on all
members of the groups to be covered under this policy. This was not required by
Frank Cowan Insurance Company previously due to their specialization in the
Municipal Insurance Market.
1.5 In accordance with TR-85-96 the Municipality's solicitor has developed a standard
model for the lease agreement at a cost of $1,790.12 (plus GST). This cost is also
proposed to be financed from the Working Funds Reserve. The model will be used in
future lease negotiations such as with the Seniors Centre. The Solicitor has informed
staff that for the lease to be valid, it must be signed by a legal entity (either an
individual or a body corporate). As all of the members of the groups are volunteers,
it does not seem appropriate to expect an individual member to sign the lease
agreement. Also, succession problems would be experienced with the leases each
time the composition of the board changed.
1.6 As a result, it is recommended that each of the groups be incorporated as a non-profit
entity. This ensures legal continuation of the Board and validity of the lease as well
as providing protection to the members.
1.7 The total cost of $900.00 includes an estimated cost of incorporation of $800.00 (plus
GST) per group plus an additional cost of approximately $100.00 per board for the
adjustment of the model lease for the specifics of each Board. The cost of
incorporation includes legal services as well as mandatory registration and filing fees
etc. The registration and filing fees are approximately $400.00 per group and they
are standard, non-negotiable charges. It is recommended that the municipal solicitor
carry out the required legal services in order to contain costs. There are efficiencies
to be gained by having one standard format developed for incorporation documents
which can be applied to all groups. It is recommended that this one-time upfront cost
be paid for by the Municipality in order to finalize recommendations approved in the
Addendum to Report TR-85-96.
803
. REPORT TR-15-98
PAGE 4
incorporated body, they would be required to file non-profit tax returns annually as
well as Notices of change of Directors for any changes to the executive members of the
incorporated body. There may also be a GST reporting requirement for a few of the
larger boards. In keeping with the intent of the Provincial directive to remain at 'arms-
length' regarding financial responsibility, it is recommended that this function be co-
ordinated by the municipality on behalf of the boards through an independent
bookkeeper. This will be consistent with the coordination of the insurance
arrangements with a separate insurance firm. It is considered that in order to assist
during the transition, the first two reporting years be funded from the Working Funds
Reserve.
1.9 The groups have been contacted as to the contents of this report and their concerns are
noted on attachment #1. In order to address these concerns, and assure them that
incorporation will protect them more than the current status, the letter which is shown
as attachment #2 is proposed to be mailed to each Board. As the letter indicates, a
meeting will be set up for all interested parties to attend before incorporation proceeds.
CONCLUSION
2.0 In order to ensure both adequate insurance coverage and compliance with legislative
requirements, it is recommended that the groups listed in Recommendation #2 above be
legally incorporated and that the cost of this incorporation be funded by the
Municipality's working funds reserve.
Respectfully submitted,
Reviewed by,
......-.,
tJ~ · ,
ari. A: Marano, H.BSc.,A.M.C.T..
Treasurer.
MAM/NT/km
~
W.H. Stockwell,
Chief Administrative Officer.
804
Attachment IiI
DN: ,r.lBINCORP
INCORPORATION OF RECREATION AFFILIATE GROUPS
RECREATION AFFILIATE CONTACT CONCERNS/COMMENTS
1. Brownsdale Community Centre Ann Smith, - requires more information on incorporating
Secretary
- Municipality will obtain legal services of Municipality's
solicitor for the process of incorporating
- Municipality will co-ordinate with local bookkeepper
for reporting requirements for first 2 years
2 Baseline Community Centre Brenda Metcalf, - requires more information on incorporating - ie; requirements
Secretary/Treasurer for non -profit status - currently hall has annual profit;
- can volunteers still be paid an honourarium; if not, then the
centre will lose its volunteers
- how will change to non - profit affect operation of centre
financially and number of personnel
- when reporting 'change of directors', is there a fee?
who pays for this?
- Municipality will obtain legal services of Municipality's
solicitor for the process of incorporating
- Municipality will co-ordinate with local bookkeepper
for reporting requirements for first 2 years
3. Hampton Hall Board Beth Knowler, - requires more information on incorporating; Le, cost of
President incorporating and fee for upkeep
- requires more information on insurance
- Municipality will obtain legal services of Municipality's
solicitor for the process of incorporating
- Municipality will fund cost of incorporating
- Municipality will co-ordinate with local bookkeepper
for reporting requirements for first 2 years
4. Haydon Hall Board Barb Walsh - no concerns/comments
President
5. Orono Town Hall Board Elizabeth Bovaird, - requires more information on the process of incorporating
Secretary/Treasurer - volunteers are paid; if they do not get paid, then hall will
lose its volunteers
- Municipality will obtain legal services of Municipality's
solicitor for the process of incorporating
- Municipality will co-ordinate with local bookkeepper
for reporting requirements for first 2 years
5. Memorial Park Association Pat Lunn, - requires more information on incorporating
President
- Municipality will obtain legal services of Municipality's
solicitor for the process of incorporating
- Municipality will co-ordinate with local bookkeepper
for reporting requirements for first 2 years
6. Newtonville Town Hall Board Wallace Boughen, - no concerns/comments
President
8D5
DRAFT LETTER TO RECREATION AFFILIATES
This letter is to address a few concerns expressed ;by some of the Boards during recent
telephone conversations with the Treasury Department regarding the incorporation of the
Recreation Affiliate Boards.
First of all, there are some concerns regarding the incorporating process. This
recommendation is put forward to protect the volunteers working on behalf of the Boards.
As all of the members of the Boards. As all of the members of the Boards are volunteers,
it does not seem appropriate to except an individual member to sign the proposed lease
agreements. Therefore, the Municipality's solicitor recommends that each of the boards
be incorporated as a non-profit entity. This ensures legal continuation of the Board and
validity of the lease as well as providing protection to the members.
A meeting is scheduled on (date) with the Municipality's solicitor at (location) to address
any additional concerns.
Secondly, there are some concerns regarding the cost of incorporating. The Municipality
will pay for the incorporation cost and the lease agreement cost for each Board.
Also, the Municipality will co-ordinate with a local Bookkeeper to assist with reporting
requirements for the first two years with the fees to be paid for by the Municipality.
Thirdly, there are some concerns regarding the loss of volunteers with each Board upon
incorporating. By incorporating, the Board is providing protection to its volunteers while
performing duties on behalf of the Board. It does not mean that the volunteers cannot be
paid.
A concern was also expressed that incorporation as a "non-profit" group would mean that
no profit could be earned by the group. This is not the case and there is no change to the
normal business of generating funds for its use as a recreation Board.
Finally, there are some concerns regarding insurance coverage. Currently, the Boards
each have general liability insurance coverage through the Municipality. This coverage
will be funded by the Municipality for as long as it is reasonably required depending on
the financial status of each Board.
I trust these concerns have been addressed. If you any questions, please do not hesitate
to call.
Yours truly,
806