O. Reg. 266/02: MUNICIPAL AND SCHOOL CAPITAL FACILITIES - AGREEMENTS AND TAX EXEMPTIONS

 

ontario regulation 266/02

made under the

municipal act

Made: September 18, 2002
 Filed: September 20, 2002
Printed in The Ontario Gazette: October 5, 2002

Amending O. Reg. 46/94

(Municipal and School Capital Facilities —
Agreements and Tax Exemptions)

1. Section 1 of Ontario Regulation 46/94 is amended by adding the following definitions:

“financing lease” means a lease allowing for the provision of municipal capital facilities if the lease may or will require payment by the municipality beyond the term for which the council was elected;

“lower-tier municipality” means a municipality that forms part of a regional municipality for municipal purposes;

“material impact” means costs or risks that significantly affect, or would reasonably be expected to have a significant effect on, the debt and financial obligation limit prescribed under Ontario Regulation 799/94;

“regional municipality” means a municipality that was a regional or district municipality or the County of Oxford on December 31, 2001.

2. Section 3 of the Regulation is amended by striking out “under subsection 201.1 (7) of the Act” and substituting “under subsection 210.1 (7) of the Act”.

3. (1) Paragraph 3 of subsection 6 (2) of the Regulation is amended by striking out “Ministry of Colleges and Universities Act” and substituting “Ministry of Training, Colleges and Universities Act”.

(2) Paragraph 4 of subsection 6 (2) of the Regulation is revoked and the following substituted:

4. A person authorized to grant degrees by an Act of the Assembly or by the Minister of Training, Colleges and Universities under the Post-secondary Education Choice and Excellence Act, 2000.

4. Clause 6.1 (1) (c) of the Regulation is amended by striking out “operate and manage housing” and substituting “operate and manage housing projects”.

5. Section 7 of the Regulation is revoked and the following substituted:

7. Under subsection 210.1 (12) of the Act, a school board may exempt from taxation as a school capital facility anything that the school board is authorized to provide under the Education Act, the Day Nurseries Act, the Public Libraries Act, the Community Recreation Centres Act or The Essex County French-language Secondary School Act, 1977.

8. (1) The council of a municipality may enter into a financing lease only if,

(a) before the by-law authorizing the financing lease is enacted, the municipality has adopted a statement of the municipality’s lease financing policies and goals; and

(b) the financing lease includes a schedule of all fixed amounts of payment, if any, required under the lease and that may be required under any possible extensions or renewals of the lease.

(2) The statement mentioned in clause (1) (a),

(a) shall include, at a minimum, a discussion of the financial and other risks for the municipality of financing leases; and

(b) may provide for a special category of financing leases, to be composed of financing leases which, in the opinion of both the treasurer and the council, would not result in a material impact for the municipality.

9. (1) Before entering into a financing lease, the council of a municipality shall,

(a) have its treasurer prepare a report with a recommendation, assessing, in the opinion of the treasurer, the costs and financial and other risks associated with the proposed financing lease, including,

(i) a comparison between the fixed and estimated costs and the risks associated with the proposed lease and those associated with other methods of financing,

(ii) a statement summarizing, as may be applicable, the effective rate or rates of financing for the lease, the ability for lease payment amounts to vary, and the methods or calculations, including possible financing rate changes, that may be used to establish that variance under the lease,

(iii) a statement summarizing any contingent payment obli­gations under the lease that in the opinion of the treasurer would result in a material impact for the municipality, including lease termination provisions, equipment loss, equipment replacement options and guarantees and indem­nities,

(iv) a summary of the assumptions applicable to any possible variations in the lease payment and contingent payment obligations, and

(v) any other matters the treasurer or council considers advisable;

(b) obtain legal advice and financial advice with respect to the proposed financing lease;

(c) consider if the scope of the proposed transaction warrants obtaining legal advice or financial advice with respect to the proposed financing lease that is from a source independent of the source of the advice mentioned in clause (b);

(d) advise in writing the regional municipality of which it forms a part of the proposed financing lease before the lease is entered into, in the case of a lower-tier municipality; and

(e) consider and give its assessment of the report prepared under clause (a), including whether, in its opinion, the costs of financing for the proposed financing lease are lower than other methods of financing available to the municipality, and whether the risks associated with the financing lease are reasonable.

(2) The costs and risks associated with a proposed financing lease in a report made under subsection (1) shall be assessed as of the date the report is made.

(3) At any time after a report under subsection (1) is made, but before the financing lease is entered into, if the treasurer becomes of the opinion that a changed circumstance with respect to the proposed lease may result in a material impact for the municipality, the treasurer shall as soon as is reasonably possible update the report and present the updated report to the council.

(4) A report made under subsection (1) shall summarize the information required by that subsection for the entire term of the financing lease, including any possible extensions or renewals.

(5)  Despite this section, a municipality may enter into a financing lease without complying with the requirements of subsection (1) if,

(a) the statement of lease financing policies and goals includes the category referred to in clause 8 (2) (b); and

(b) in the opinion of the treasurer and the council, the proposed lease is within that category, and its costs and risks, in combination with all the others leases of that category entered into or proposed to be entered into in that year by the municipality, would not result in a material impact for the community. 

(6) In this section,

“costs” includes the costs of any advice obtained under clause (1) (b) or (c).

10. (1) If a municipality has one or more financing leases subsisting in a fiscal year, the treasurer of the municipality shall prepare and present to council of the municipality once in that fiscal year, or more often if the council so desires, a detailed report containing the information described in subsection (2).

(2) The detailed report mentioned in subsection (1) shall contain,

(a) a description of the estimated proportion of the total financing arrangements of the municipality that is undertaken through financing leases to the total long-term debt of the municipality and a description of the change, if any, in that estimated proportion since the previous year’s report;

(b) a statement by the treasurer as to whether, in his or her opinion, all financing leases were made in accordance with the statement of leasing policies and goals adopted by the municipality; and

(c) any other information that the council may require or that, in the opinion of the treasurer, should be recorded.

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