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Report To: General Government Committee
Date of Meeting: January 9, 2023 Report Number: FSD-001-23
Submitted By: Trevor Pinn, Deputy CAO/Treasurer
Reviewed By: Mary-Anne Dempster, CAO
File Number:
Resolution#: GG-004-23
By-law Number: 2023-007
Report Subject: 2023 Interim Financing
Recommendations:
1.That Report FSD-001-23 and any related delegations or communication items, be
received;
2.That the By-law attached to Report FSD-001-23, as attachment 1, be approved; and
3.That all interested parties listed in Report FSD-001-23 and any delegations be
advised of Council’s decision.
Municipality of Clarington Page 2
Report FSD-001-23
Report Overview
The Municipality of Clarington is required to provide a by-law authorizing temporary
borrowing as part of its banking arrangements with TD Bank. This by-law is an annual
requirement and remains unchanged from prior years. Staff do not anticipate that the
Municipality will draw on this credit facility.
1. Background
1.1 Annually, Council is requested to grant authority to the Mayor and Treasurer to borrow,
temporarily, funds that may be required to meet current expenditures and liabilities of
the Municipality before the receipt of the Municipality's property taxes and oth er
revenues. These borrowings may be in the form of external or internal sources,
including inter-fund transactions.
1.2 The legal authority for these borrowings is under Section 407 of the Municipal Act, 2001.
It 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. Staff do not anticipate utilizing the funds in 2023; however, the adoption of the
by-law is a requirement of our banking agreements.
2. Concurrence
Not Applicable.
3. Financial Considerations
3.1 The Municipality only pays interest expenses on the amount of funds that are borro wed
at any given time. If the Municipality does not borrow funds, there will be no interest
expense occurred.
Municipality of Clarington Page 3
Report FSD-001-23
4. 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 collecting the
Municipality's revenues. The proposed 2023 limit remains unchanged from 2022.
Staff Contact: Trevor Pinn, Deputy CAO/Treasurer, 905-623-3379 x2602 or
tpinn@clarington.net.
Attachments:
Attachment 1 – Draft By-law to authorize temporary borrowing for the year 2023
Interested Parties:
The following interested parties will be notified of Council's decision:
TD Bank
Attachment 1 to report FSD-001-23
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Coordinator at 905-623-3379 ext. 2131.
The Corporation of the Municipality of Clarington
By-law 2023-XXX
Being a by-law to authorize the borrowing of $15,000,000 to meet, until taxes are
collected, the current expenditures of the Municipality for the year 2023.
Whereas under Section 407 of the Municipal Act, 2001, the Municipality is empowered
to borrow for current expenditures from January 1 to September 30, up to 50 per cent
and from October 1 to December 31 up to 25 per cent, of the estimate revenues for the
year;
Now therefore the Council of the Municipality of Clarington enacts as follows:
1. That the Deputy CAO/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 any or
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 Deputy CAO/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 FSD-001-23
4. That the Deputy CAO/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.
5. That this by-law shall become effective on the date of passage.
Passed in Open Council this ____th day of January, 2023.
_____________________________________
Adrian Foster, Mayor
_____________________________________
June Gallagher, Municipal Clerk