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Staff Report
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Report To: General Government Committee
Date of Meeting: November 30, 2020 Report Number: FND-046-20
Submitted By: Trevor Pinn, Director of Finance/Treasurer
Reviewed By: Andrew C. Allison, CAO By-law Number: 2020-088
File Number: Resolution#: GG-451-20
Report Subject: 2021 Interim Financing By-law
Recommendations:
1. That Report FND-046-20 be received; and
2. That the By-law attached to Report FND-046-20, as Attachment 1, be approved.
Municipality of Clarington
Resort FND-046-20
Report Overview
Page 2
The Municipality of Clarington is required to provide a by-law authorizing temporary
borrowing as part of its banking arrangements with TD Bank. This is an annual requirement
and remains unchanged from prior years. It is not anticipated that this borrowing will be
utilized.
1. Background
1.1 Annually, Council is requested to grant authority to the Mayor and Treasurer to borrow,
on a temporary basis, funds that may be required to meet current expenditures and
liabilities of the Municipality prior to the receipt of the Municipality's property taxes and
other revenues. These borrowings may be in the form of external or internal sources,
including interfund transactions.
1.2 The legal authority for these borrowings is pursuant to Section 407 of the Municipal Act,
2001 and allows municipalities to borrow amounts between January 1 and September
30 not to exceed 50 per cent of total estimated annual revenues and to borrow amounts
between October 1 and December 31 not to exceed 25 per cent of total estimated
annual revenues.
1.3 Consistent with prior years, the request for authority is $15,000,000. Under current
regulations the upper limit would be more than $25,000,000.
1.4 Historically, it has not been necessary for the Mayor and the Treasurer to exercise this
authority, it is not expected that authority will be needed; however, this is a requirement
of our banking agreements.
2. Concurrence
Not Applicable.
3. Conclusion
It is respectfully recommended that the temporary borrowing by-law be approved and
authority be provided. This authority provides the Municipality with contingency
borrowing capacity in the event of unknown circumstances related to the collection of
the Municipality's revenues. The proposed 2021 limit remains unchanged from 2020.
Staff Contact: Trevor Pinn, CPA, CA, Director of Financial Services/Treasurer, 905-623-3379
ext. 2602, tpinn@clarington.net.
Attachments:
Attachment 1 — Draft By-law to authorize temporary borrowing for the year 2021
Interested Parties:
The following interested parties will be notified of Council's decision:
TD Bank
Attachment 1 to Report FND-046-20
THE CORPORATION OF THE MUNICIPALITY OF
CLARINGTON BY-LAW NUMBER 2020-
Being a by-law to authorize the borrowing of
$15,000,000 to meet, until the taxes
are collected, the current
expenditures of the Municipality for
the year 2021
WHEREAS under Section 407 of the Municipal Act, 2001, the Municipality is empowered to
borrow for current expenditures from January 1 Stto September 30, up to 50 per cent and from
October 1 to December 31 up to 25 per cent, of the estimated revenues for the year;
NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE MUNICIPALITY OF
CLARINGTON HEREBY ENACTS AS FOLLOWS:
THAT the Director of Financial Services/Treasurer be hereby authorized on behalf of
the Municipality to borrow from time to time by way of operating line of
credit/overdraft facility, from the Bank holding the Municipality's banking contract,
(hereinafter called the "Bank"), a sum or sums not exceeding in the aggregate
$15,000,000 to meet until the taxes are collected the current expenditures of the
Municipality for the year, including the amounts required for the purposes mentioned
in Subsection (1) of Section 407 of the Municipal Act, 2001, with interest at such rate
as may be agreed upon from time to time with the Bank under the banking contract.
2. THAT all sums borrowed pursuant to the authority of this by-law as well as
all other sums borrowed in this year and in previous years from the Bank for
anyor all of the purposes mentioned in the said Section 407, shall with
interest thereon, be a charge upon the whole of the revenues of the
Municipality for the current year and for all preceding years as and when
such revenues are received.
3. THAT the Director of Financial Services/Treasurer is hereby authorized and directed
to apply in payment of all sums borrowed as aforesaid, together with interest
thereon, all of the monies hereafter collected or received either on account or
realized in respect of taxes levied for the current year and preceding years or from
any other source which may lawfully be applied for such purpose.
Attachment 1 to Report FND-046-20
4. THAT the Director of Financial Services/Treasurer is hereby authorized to
furnish to the Bank a statement showing the nature and amount of the
estimated revenues of the Municipality not yet collected and also showing
the total of any amounts borrowed under Section 407 of the Municipal Act,
2001, that have not been repaid.
BY-LAW passed in open session this day of 2020.
Adrian Foster, Mayor
June Gallagher, Municipal Clerk