HomeMy WebLinkAbout2025-08-11
Special Council Agenda
Date:August 11, 2025
Time:5:00 PM
Location:Council Chambers or Electronic Participation
Municipal Administrative Centre
40 Temperance Street, 2nd Floor
Bowmanville, Ontario
Inquiries and Accommodations: For inquiries about this agenda, or to make arrangements for
accessibility accommodations for persons attending, please contact: Michelle Chambers,
Legislative Services Coordinator, at 905-623-3379, ext. 2101 or by email at
mchambers@clarington.net.
Alternate Format: If this information is required in an alternate format, please contact the
Accessibility Coordinator, at 905-623-3379 ext. 2131.
Collection, Use and Disclosure of Personal Information: If you make a delegation, or presentation,
at a Committee or Council meeting, the Municipality will be recording you and will make the
recording public on the Municipality’s website, www.clarington.net/calendar. Written and oral
submissions which include home addresses, phone numbers, and email addresses become part of
the public record. If you have any questions about the collection of information, please contact the
Municipal Clerk.
Cell Phones: Please ensure all cell phones, mobile and other electronic devices are turned off or
placed on non-audible mode during the meeting.
Copies of Reports are available at www.clarington.net/archive
The Revised Agenda will be published on Friday after 3:30 p.m. Late items added or a change to
an item will appear with a * beside them.
Pages
1.Call to Order
2.Land Acknowledgement Statement
3.Declaration of Interest
4.Matters of Business
4.1 Motion regarding Jury Lands Foundation 3
4.2 FSD-026-25 - Elexicon Financing Strategy Update 2025 5
5.Confidential Items
5.1 Presentation by Amanda Klein, President and CEO, Elexicon regarding
Elexicon Update
Municipal Act Section 239(2) (i)
5.2 FSD-025-25 - Elexicon Agreement Update
Municipal Act Section 239(2) (i)
5.3 LGS-027-25 - Proposed Disposition of Land by the Municipality Update
Municipal Act, 2001 Section 239 (2) (c) and (k)
5.4 LGS-028-25 - Proposed Acquisition of Property by the Municipality
Update
Municipal Act Section 239(2) (c) and (k)
6.Confirming By-law
7.Adjournment
August 11, 2025
Special Council Agenda
Page 2
Municipality of Clarington
Special Council Meeting
Resolution #
Date: August 11, 2025
Moved By: Councillor Traill
Seconded By: Councillor Woo
Whereas Council has supported the Jury Lands Foundation (JLF) grant
application to the Ontario Trillium Foundation (OTF) for $80,000;
And whereas the grant was successful and has seen the development of a
"Rejuvenation Garden" adjacent to the Cafeteria building, with produce being
donated to the East Clarington Food Bank;
And whereas a storage container has been purchased, installed, and a mural will
be painted on the container in early August;
And whereas the OTF grant provided funding for events including a speaker
series, movie nights and a community picnic/market;
And whereas the speaker series has been ongoing since April at the Sarah Jane
Williams Heritage Centre and the movie nights are at the Visual Arts Centre , but
the OTF grant requires some events to be held on site;
And whereas the JLF was working with the owner of the site to gain access for
community events, (essentially for parking) and a license agreement has been
drafted and reviewed with the owner and their insurer;
And whereas liability would be the responsibility of JLF;
And whereas this is much like the permits necessary for the use of the municipal
property;
And whereas the JLF permit applications have been reviewed with staff and are
ready to be issued when dates are confirmed;
And whereas the owner of the site has advised that, until ownership is
transferred to Clarington (and then to JLF), their insurer will not permit any
events to take place on or near the site, thereby jeopardizing the JLF's OTF
funding;
Page 3
2
And whereas future municipal access to the site will be via a new entrance from
Lambs Road to match the future road alignment as approved in Official Plan
Amendment 121;
Now therefore be it resolved that:
1. To facilitate municipal access without requiring use of Kaitlin's easement, the
planned gated driveway access be constructed in the Fall of 2025 through the
donation of materials and in-kind contributions from local contractors in the same
manner that the Ehrenwort Trail was constructed in 2015 from Sprucewood to
the Ring Road (i.e. NOT using Clarington staff); and
2. To ensure the timely construction of the driveway, funds already approved in
the 2023 budget (Resolution# PD-080-23), be used to augment any construction
materials, design fees and labour donations that JLF is unable to secure; and
3. All interested parties, including Kaitlin Corp., be notified of Council’s decision.
Page 4
Staff Report
If this information is required in an alternate accessible format, please contact the Accessibility
Coordinator at 905-623-3379 ext. 2131.
Report To: Special Council
Date of Meeting: August 11, 2025 Report Number: FSD-026-25
Authored by: Trevor Pinn, Deputy CAO/Treasurer, Finance and Technology
Submitted By: Trevor Pinn, Deputy CAO/Treasurer, Finance and Technology
Reviewed By: Mary-Anne Dempster, CAO
By-law Number: Resolution Number:
File Number:
Report Subject: Elexicon Financing Strategy Update 2025
Recommendation:
1. That Report FSD-026-25, and any related delegations or communication items, be
received for information;
2. That the Mayor be requested to phase-out Elexicon dividend and interest revenue from
the operating budget in 2026 and 2027 and that the Deputy CAO/Treasurer be directed
to put any future dividend and interest revenue from Elexicon into capital reserve funds
to assist with financing future capital budgets;
3. That the Deputy CAO/Treasurer, as the Shareholder Representative, be authorized to
approve the Memorandum of Understanding and any related documentation necessary
to give effect thereto, on behalf of the Municipality, as substantially outlined in Report
FSD-025-25, in a form satisfactory to the Deputy CAO/Solictor.
Page 5
Municipality of Clarington Page 2
Report FSD-026-25
Report Overview
This report provides an update on pending shareholder transactions and a financial update
including the 2024 financial statements.
The Pickering and Ajax RFP to transact their shares is complete and at this time there are
no pending share transactions.
The 2024 Consolidated Financial Statements are included at Attachment 1 and shows an
improving net income in 2024 compared to 2023. Elexicon has also completed customer
surveys to complete a capitalization plan, this plan will require Elexicon to invest in the
necessary infrastructure to service a growing customer base and maintain delivery reliance
to existing customers. This investment plan will require significant capital financing.
It is being recommended to continue the phase-out of the operating budget reliance on
investment income from Elexicon. Future investments are recommended to go into capital
reserves to assist with the Municipality’s asset management plan.
1. Background
1.1 Elexicon Corporation (“Elexicon”) is a holding company that is owned jointly by five
municipal shareholders as follows:
Shareholder Percentage Ownership
Town of Ajax 21.828%
Town of Belleville 9.044%
Municipality of Clarington 9.248%
City of Pickering 27.880%
Town of Whitby 32.000%
1.2 Elexicon Energy Inc. (“Energy”) is a fully owned subsidiary of Elexicon. Energy is a rate
regulated electricity distribution company that delivers electricity to over 180,000
customers throughout ten municipalities in Ontario.
Page 6
Municipality of Clarington Page 3
Report FSD-026-25
1.3 Elexicon was formed in 2019 through the merger of Veridian and Whitby Hydro and
assumed the same operating territory as its predecessor organizations.
2. Potential Shareholder Transaction
2.1 Following the merger in April 2019, shareholders were not able to transact t heir shares
for 18 months. Since that time there have been several potential shareholder
transactions contemplated.
2021 Potential Sale by Pickering
2.2 On October 31, 2021, the City of Pickering approved report FIN 15 -21 “City Centre
Financial and Legal Implications”. The City expressed at that time an interest to sell
their shares in Elexicon as a way to partially fund the City Centre project.
2.3 In 2022, the City of Pickering indicated that it was no longer pursuing a sale of its
shares.
2024 Request for Proposals by Pickering and Ajax for Shares in Elexicon
2.4 On July 3, 2024, the City of Pickering and the Town of Ajax issued a joint statement that
noted that they had jointly retained Borden Ladner Gervais LLP (“BLG”) to undertake a
non-binding request for proposal to explore the potential sale of their combined share
ownership in Elexicon Corporation.
2.5 The Unanimous Shareholders’ Agreement (“the USA”) outlines the rights,
responsibilities, timelines and processes that must occur when one or more
shareholders wish to sell their shares.
2.6 The non-selling shareholders have the right of first refusal at the same price, terms and
conditions of any potential sale. Further, any sale for a controlling share (more than
50%), the non-selling shareholders have the right to elect to also sell at the same terms,
conditions and price (the “piggyback right”).
2.7 On July 18, 2025, Pickering notified Elexicon and the other shareholder representatives
that the City had concluded the process started by the RFP and “has decided not to
proceed with a sale at this time and has formally terminated the RFP process.” Ajax
provided similar notification.
Page 7
Municipality of Clarington Page 4
Report FSD-026-25
3. Elexicon Financial Update
Financial Statements
3.1 The Consolidated Financial Statements for Elexicon Corporation for the year ended
December 31, 2024 are attached as Attachment #1. These statements are completed
under International Financial Reporting Standards (IFRS) which is significantly different
than the reporting requirements that the Municipality follows.
3.2 The Consolidated Balance Sheet includes both regulatory assets and liabilities, these
do not necessarily offset and are shown specifically separate on the balance sheet.
These amounts will be dealt with in the future through OEB orders.
3.3 The Corporation has seen a decrease in its current ratio (current assets/current
liabilities) in 2024 and currently is approximately 0.64. A ratio below 1.0 means that
current liabilities exceed current assets and may indicate liquidity concerns. However,
cash and accounts receivable exceed accounts payable which indicate that the
Corporation is able to meet its immediate obligations.
3.4 Total liabilities have increased in 2024 while shareholders’ equity decreased, this
indicates a raising debt to equity ratio. The Ontario Energy Board has prescribed targets
for debt to equity ratios and the capital structure of local distribution companies in
Ontario. A raising debt to equity ratio may require shareholders to maintain equity within
the company to maintain the required equity investment.
3.5 The consolidated Statement of Income and Comprehensive Income shows a net
income of net movements in regulatory balances of $5.6 million which is $5 million
higher than in 2023. This number is relevant to Council as it shows the net income after
the impacts of rate regulation are factored in.
3.6 The 2023 net income was impacted by an unrealized loss on an interest rate swap
which was $9.2 million higher than the unrealized loss in 2024.
3.7 During the year, Elexicon added over $81 million in property, plant and equipment which
was primarily $30.8 million in the distribution system and $39.9 million in projects still
under progress. This investment supports the earlier comments that investment in the
distribution system is required to maintain the system and support the growing
community that Elexicon serves.
Capitalization Plan
3.8 In April and May of 2025, Elexicon sought input from its customers and stakeholders on
their draft capital investment plan for 2027 to 2031.
Page 8
Municipality of Clarington Page 5
Report FSD-026-25
3.9 The investment plan addresses a number of challenges, including rapid growth that puts
pressure on the existing electricity systems and requires additional resources and new
solutions to manage effectively.
3.10 The plan will build electrical capacity to enable communities to grow, replacing aging
and deteriorating infrastructure, improving resilience in the grid to extreme weather
events, respond to increasing electrical demand (EV chargers etc) and manage rising
costs.
3.11 The capital investment plan will form part of the rate application that Energy is required
to file with the OEB to set future electrical rates.
3.12 The capital investment plan will require financing, in the form of debt or equity, to
implement.
3.13 To fund the investment in the long-term sustainability of Energy, funds may be required
to be kept within the corporation for self-financing. This will reduce dividend revenue to
shareholders until the cost for these investments can be included in rates.
4. Financial Considerations
4.1 The investment in Elexicon consists of both fixed income (promissory notes that earn
interest), and equity (shares that earn a dividend). The dividend revenue is subject to
approval by the Board of Directors and is discretionary. Over the past several years we
have seen declines to the dividend revenue, and with the anticipated capital
investments expected over the next few years Staff anticipate income to be kept within
Elexicon rather than being declared as a dividend.
4.2 The Municipality has already taken steps to eliminate the reliance on the Elexicon
dividends to balance current budgetary needs. Dividends received in the future will be
used to fund future capital and other one-time needs. This is prudent fiscal management
as dividend revenues are not a guaranteed source of income and are dependent on
several factors outside of the control of the Municipality.
4.3 Mitigating the impact of removing Elexicon investment income will be increased third -
party investment income. Over the past five years, the Municipality has been more
active in investments and has benefitted from investment revenues increasing higher
than expected. It should be noted that investment revenues are not anticipated to
remain at the 2024 level; however it is expected that an increase in investment
revenues is sustainable.
4.4 Staff recommend the removal of Elexicon investments from the operating budget, offset
by an increase in investment revenues. Any investment income from Elexicon should be
put into capital reserves for future capital budget needs.
Page 9
Municipality of Clarington Page 6
Report FSD-026-25
5. Strategic Plan
5.1 Not Applicable.
6. Climate Change
6.1 Not Applicable
7. Concurrence
Not Applicable.
8. Conclusion
It is respectfully recommended that the Municipality complete the transition to fully
remove the Elexicon investment income from the 2026 Budget Update and future
investment income be placed into capital reserves.
Staff Contact: Trevor Pinn, CPA, CA, Deputy CAO/Treasurer, 905-623-3379 ext.2602 or
tpinn@clarington.net.
Attachments:
Attachment 1 – Elexicon Corporation 2024 Audited Financial Statements
Interested Parties:
The following interested parties will be notified of Council's decision:
Elexicon Corporation
City of Pickering
Town of Ajax
Town of Whitby
City of Belleville
Page 10
Attachment 1 to Report FSD-026-25
Page 11
Attachment 1 to Report FSD-026-25
Page 12
Attachment 1 to Report FSD-026-25
Page 13
Attachment 1 to Report FSD-026-25
Page 14
Attachment 1 to Report FSD-026-25
Page 15
Attachment 1 to Report FSD-026-25
Page 16
Attachment 1 to Report FSD-026-25
Page 17
Attachment 1 to Report FSD-026-25
Page 18
Attachment 1 to Report FSD-026-25
Page 19
Attachment 1 to Report FSD-026-25
Page 20
Ontario Energy Board Act, 1998
Attachment 1 to Report FSD-026-25
Page 21
Attachment 1 to Report FSD-026-25
Page 22
Attachment 1 to Report FSD-026-25
Page 23
Attachment 1 to Report FSD-026-25
Page 24
Attachment 1 to Report FSD-026-25
Page 25
Attachment 1 to Report FSD-026-25
Page 26
Attachment 1 to Report FSD-026-25
Page 27
Attachment 1 to Report FSD-026-25
Page 28
Attachment 1 to Report FSD-026-25
Page 29
Attachment 1 to Report FSD-026-25
Page 30
Electricity Act, 1998
Electricity Act, 1998
Attachment 1 to Report FSD-026-25
Page 31
Attachment 1 to Report FSD-026-25
Page 32
Attachment 1 to Report FSD-026-25
Page 33
Attachment 1 to Report FSD-026-25
Page 34
Attachment 1 to Report FSD-026-25
Page 35
Attachment 1 to Report FSD-026-25
Page 36
Attachment 1 to Report FSD-026-25
Page 37
Attachment 1 to Report FSD-026-25
Page 38
Attachment 1 to Report FSD-026-25
Page 39
Attachment 1 to Report FSD-026-25
Page 40
Attachment 1 to Report FSD-026-25
Page 41
Attachment 1 to Report FSD-026-25
Page 42
Notice of Amendments to Codes
Attachment 1 to Report FSD-026-25
Page 43
Attachment 1 to Report FSD-026-25
Page 44
Getting Ontario Connected Act
Attachment 1 to Report FSD-026-25
Page 45
Attachment 1 to Report FSD-026-25
Page 46
Attachment 1 to Report FSD-026-25
Page 47
Attachment 1 to Report FSD-026-25
Page 48
Attachment 1 to Report FSD-026-25
Page 49
Attachment 1 to Report FSD-026-25
Page 50
Attachment 1 to Report FSD-026-25
Page 51
Attachment 1 to Report FSD-026-25
Page 52
Attachment 1 to Report FSD-026-25
Page 53
Attachment 1 to Report FSD-026-25
Page 54
Attachment 1 to Report FSD-026-25
Page 55
Attachment 1 to Report FSD-026-25
Page 56
Attachment 1 to Report FSD-026-25
Page 57
Attachment 1 to Report FSD-026-25
Page 58
Attachment 1 to Report FSD-026-25
Page 59
Attachment 1 to Report FSD-026-25
Page 60
Attachment 1 to Report FSD-026-25
Page 61
Attachment 1 to Report FSD-026-25
Page 62
Attachment 1 to Report FSD-026-25
Page 63
Attachment 1 to Report FSD-026-25
Page 64
Attachment 1 to Report FSD-026-25
Page 65
Attachment 1 to Report FSD-026-25
Page 66
Attachment 1 to Report FSD-026-25
Page 67
Attachment 1 to Report FSD-026-25
Page 68
Attachment 1 to Report FSD-026-25
Page 69
Attachment 1 to Report FSD-026-25
Page 70
Attachment 1 to Report FSD-026-25
Page 71