7. CITY OF OTTAWA SHARE OF THE PROVINCIAL GAS TAX

PART DE LA VILLE D’OTTAWA DE LA TAXE PROVINCIALE SUR L’ESSENCE

COMMITTEE RECOMMENDATIONS

That Council approve:

1. That the Mayor and the Acting City Treasurer be authorized to sign an agreement with the province relating to the city's share of the provincial gas tax in accordance with the terms set out in Appendix A.

2. That the by-law authorizing the agreement as set out in Appendix B be approved.

RECOMMENDATIONS DU COMITÉ

Que le Conseil municipal approuver :

1. que le maire et la trésorière municipale par interim soient autorisés à signer une entente avec le gouvernement provincial concernant la part de la Ville d’Ottawa de la taxe provinciale sur l’essence, conformément aux modalités énoncées au annexe A.

2. que soit approuvé le règlement municipal qui autorise la conclusion de l’entente et qui est reproduit dans l’annex B.

Documentation

1. Chief Corporate Services Officer’s report dated 20 February 2006
(ACS2006-CRS-FIN-0013).

2. Appendix C - 2005/2006 Guidelines and Requirements issued previously to all members of Council and held on file with the City Clerk.

Report to/Rapport au :

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

and Council / et au Conseil

20 February 2006 / le 20 février 2006

Submitted by/Soumis par : Greg Geddes, Chief Corporate Services Officer/Chef des Services généraux

Contact Person/Personne ressource : Marian Simulik, Acting City Treasurer/Trésorière municipale par interim, Financial Services/Services financiers

(613) 580-2424 x14159, Marian.Simulik@ottawa.ca

City Wide

Ref N°: ACS2006-CRS-FIN-0013

SUBJECT:	CITY OF OTTAWA SHARE OF THE PROVINCIAL GAS TAX

OBJET :	PART DE LA VILLE D’OTTAWA DE LA TAXE PROVINCIALE SUR L’ESSENCE

REPORT RECOMMENDATIONS

That Corporate Services and Economic Development Committee recommend Council approve:

2. That the by-law authorizing the agreement as set out in Appendix B be approved.

RECOMMANDATIONS DU RAPPORT

Que le Comité des services organisationnels et du développement économique recommande au Conseil municipal d’approuver :

2. que soit approuvé le règlement municipal qui autorise la conclusion de l’entente et qui est reproduit dans l’annex B.

BACKGROUND

In 2004, the provincial government announced that it would be transferring a portion of the gas tax to municipalities for public transportation. This revenue sharing was to be phased in with a one ($0.01)cent per litre share flowing to municipalities commencing October 1, 2004. As of October 2005, the Province provided one and on-half ($0.015) cents/litre of gas tax funds towards public transportation and this will increase to two ($0.02) cents/litre in October 2006. For the period October 1, 2005 to September 30, 2006, the City of Ottawa's share of the gas tax has been announced to be $27,404,852.

DISCUSSION

The letter of agreement with the Province indicates that the City of Ottawa will receive payment in the amount of $13,702,426 upon receipt of a signed agreement and an authorizing by-law. Subsequent payments will begin in May 2006. The terms of the agreement are set out in Appendix A and the authorizing by-law is provided as Appendix B.

The agreement requires that all funds received under this program are to be used in accordance with the guidelines as set out in Appendix C to this report. The Province advises that an agreement and confirmation by-law will be required every year as the guidelines are amended every year to reflect feedback from stakeholders. Some of the changes and clarification to the 2005/2006 Guidelines and Requirements are as follows:

All gas tax spending must be incremental to baseline spending towards increasing transit ridership only.
Three year baseline (2001-2003) to include annual rate of inflation (2%).
Deferral or reduction of fares may be undertaken as a strategy but only once within a three year period.
In 2006, up to 70% may be spent on operating expenditures that support ridership growth (exception for municipalities with no capital assets.) Beginning in 2007, eligible operating expenditures will be limited to a maximum of 50%.
Gas tax funds cannot be used to offset expenditures of other municipal departments such as welfare / social services.
Interest accumulated on gas tax fund reserves must be spent on eligible transit expenditures.
Specialized transit system strategies that may not initially result in ridership growth but will provide increased accessibility may be considered if discussed and approved by MTO prior to implementation.
Any transit vehicles purchased must be fully accessible.
Funds may be used to support increased capital expenditures that provide improvements to transit security and passenger safety.

CONSULTATION

This report responds to a provincial request with a tight deadline and no consultation was undertaken.

FINANCIAL IMPLICATIONS

These funds have been budgeted in the 2005 and 2006 capital and operating budgets.

SUPPORTING DOCUMENTATION

Appendix A - Letter of Agreement

Appendix B - Authorizing By-law

Appendix C - 2005/2006 Guidelines and Requirements (on file with the City Clerk)

DISPOSITION

Mayor and Acting City Treasurer to sign agreement and forward same to the Minister of Transportation along with the authorizing by-law.

APPENDIX A

APPENDIX B

BY-LAW 2006-

A by-law of the City of Ottawa to authorize the entering into of an agreement with the Province of Ontario through the Minister of Transport relating to funding provided by the Province of Ontario to the City under the Dedicated Gas Tax Funds for Public Transportation Program.

WHEREAS the Province has announced a Dedicated Gas Tax Funds for Public Transportation Program to assist municipalities in expanding and renewing their public transit system;

AND WHEREAS the Province has indicated that as a condition precedent for the participation in this Program, municipalities must enter into an agreement through the Minister of Transport;

THEREFORE the Council of the City of Ottawa enacts as follows:

1. The Mayor and Acting Treasurer are hereby authorized to execute a Letter of Agreement with the Minister of Transport of the Province of Ontario relating to the Dedicated Gas Tax Funds for Public Transportation Program consistent with the 2005/2006 Guidelines and Requirements issued by the Province of Ontario in February, 2006.

ENACTED AND PASSED this 22^nd day of February, 2006.

CITY CLERK MAYOR

BY-LAW NO. 2006 -

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Enacted by City Council at its meeting of

February 22, 2006.

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LEGAL SERVICES

AMP:ec

COUNCIL AUTHORITY:

February 22, 2006

CSEDC Report , Item .