Report to:  General Committee                                          Report Date:  November 1, 2010

 

 

SUBJECT:                         By-law to authorize Temporary Borrowing for 2011

PREPARED BY:              Raj Raman, Senior Manager Financial Reporting & Purchasing

 

RECOMMENDATION:

 

  1. That the report “By-law to authorize Temporary Borrowing for 2011”  be received;

 

  1. AND THAT a by-law be brought forward for Council approval to authorize the temporary borrowing, if required, of an amount not to exceed $115,573,134 from January 1, 2011 to September 30, 2011 and $57,786,567 from October 1, 2011 to December 31, 2011 to meet the current expenditures of the municipality until taxes are collected and other revenues are received;

 

  1. AND THAT the Treasurer will report back to Council in advance of borrowing, if temporary borrowing is required;

 

  1. AND THAT Staff be authorized and directed to do all things necessary to give effect to this resolution.

 

1. Purpose   2. Background   3. Discussion   4. Financial  

 

5. Others (Environmental, Accessibility, Engage 21st, Affected Units)   6. Attachment(s)

PURPOSE:

To obtain Council approval to establish a temporary borrowing credit facility with an upset limit as described above to ensure that the Town is able to meet its financial obligations in 2011 should it be required.  

 

BACKGROUND:

Town of Markham cash flows are historically at their lowest at the end of each budget cycle (December 31st) after all Town expenses, and payments to the Region of York and the York Region School Boards have been made. The Municipal Act, 2001 allows for potential short term borrowing that municipalities may require in the early part of the new year, until interim tax bills generate cash flows.  The Town of Markham is required to pass a borrowing by-law each year in order to have an expenditure facility made available to it by their bankers.  In the past the Town has not availed itself of this facility but nevertheless must have a borrowing by-law in place to apply for such an expenditure facility.

 

Subsection 407(2) of the Municipal Act, 2001 governs the upper limits on the amounts the Town can borrow.  For the period January 1st to September 30th of the year, the Town’s borrowing cannot exceed 50 per cent of the total estimated revenues of the municipality, and from October 1st to December 31st, 25 per cent of the total estimated revenues of the municipality.

 

OPTIONS/ DISCUSSION:

Not applicable.

 

 

 

FINANCIAL CONSIDERATIONS

The Town would be required to pay interest on any short term borrowing.  Currently, the Town does not budget for interest expense, as borrowing has not been required in the past.

 

The Treasurer will report to Council prior to borrowing, if it appears that short-term borrowing is required.

 

 

 

RECOMMENDED

            BY:     Microsoft Office Signature Line...Microsoft Office Signature Line...

 

 

 

ATTACHMENTS:

Appendix A, “2011 Temporary Borrowing Bylaw”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX A: 2011 Temporary Borrowing Bylaw

 

By-law to authorize temporary borrowing to meet the expenditures of the Town of Markham until taxes are collected and other revenues received.

 

A by-law to authorize the temporary borrowing of an amount not to exceed $115,573,134 from January 1st to September 30th, 2011 and $57,786,567 from October 1st to December 31st, 2011 to meet the current expenditures of the Corporation for the year, until taxes are collected and other revenues received.

 

WHEREAS Section 407 (1) of The Municipal Act authorizes that Council may borrow from time to time such sums as Council considers necessary to meet, until the taxes are collected and other revenues received, the current expenditures of the Corporation for the year;

 

AND WHEREAS Section 407 (2) of The Municipal Act states the amount to be borrowed shall not exceed from January 1st to September 30th of the year, 50 per cent of the total estimated revenues of the Corporation, and from October 1st to December 31st, 25 per cent of the total estimated revenues for the Corporation;

 

AND WHEREAS Section 407 (3) of The Municipal Act states that until the budget is adopted in a year, the limits upon borrowing shall temporarily be calculated using the estimated revenues of the municipality set out in the budget adopted for the previous year;

 

AND WHEREAS the total revenues of the Corporation as set forth for the year 2010 are      $231,146,269 which was adopted by Council at the Council meeting on November 10, 2009;

 

NOW THEREFORE THE CORPORATION OF THE TOWN OF MARKHAM HEREBY ENACTS AS FOLLOWS:

 

1.      The Treasurer is hereby authorized on behalf of the Municipality to borrow from time to time by way of promissory note from the Municipality’s banker a sum or sums not exceeding from January 1st to September 30th of the year $115,573,134 and from October 1st to December 31st $57,786,567 to meet, until the taxes and other revenues are received, the current expenditures of the Municipality for the year, including the amount required for the purposes mentioned in Subsection 1 of Section 407 of The Municipal Act and to give on behalf of the Municipality to the Bank a promissory note or notes sealed with the Corporate Seal and signed by the Treasurer for the monies so borrowed, with interest, which may be paid in advance or otherwise.

 

2.      All sums borrowed pursuant to the authority of this by-law from the said bank for any or all 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.

 

READ A FIRST, SECOND, AND THIRD TIME AND PASSED THIS

                          DAY OF                                      2010.

 

 

______________________________                        __________________________

KIMBERLEY KITTERRINGHAM                         FRANK SCARPITTI, MAYOR

TOWN CLERK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMITTEE/COUNCIL ITEM TRACKING FORM

Revised: September 2009

COUNCIL

 

DEVELOPMENT SERVICES

Planning            

Economic Dev.

Transportation  

GENERAL

Community Services                              

Environment & Sustainability                 

Finance & Administrative                       

Lands, Building & Parks Construction    

TARGET MEETING DATE

November 1, 2010

DATE REPORT AUTHORED

 

 

ITEM TITLE

By-law to authorize Temporary Borrowings for 2011

AGENDA SECTION

TIME TO BE ALLOCATED

Presentation/Deputation            Consent                           Regular

30 minutes

CONFIDENTIAL REPORTS

For in camera reports, please indicate appropriate subsection of  s239(2) Municipal Act (√ all applicable):

(a) Security of Property                                                   (e) Litigation or potential litigation        

(b) Personal matters about  individual                              (f) Solicitor-client privilege                    

(c) Acquisition/disposition of land                                  (g) Legislated authority to be in camera 

(d) Labour relations/Employee negotiations

 

ORIGINATOR: Kishor Soneji                  Ext.2681

CONTACT: Raj Raman               Ext.2013

DOES THE REPORT, PRESENTATION, BY-LAW AFFECT OTHER DEPTS:

Yes    No  (List all departments impacted and being consulted on this report.)

Electronic Approval Required by:

Department

Individual

Obtained

Treasurer

Joel Lustig

Commissioner, Corporate Services

Andy Taylor

CAO

John Livey

 

 

 

 

 

Attachments:

 

 

 

Comments & Questions: