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3. DELEGATION OF AUTHORITY TO ISSUE DEBT
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That Council:
1. Delegate the authority to the City Treasurer to proceed with one or more debt issues so long as the debt can be repaid within the current year’s debt servicing budget as approved by Council in the current year’s Operating and Capital Budgets and the project debt authority has been previously approved by Council.
2. Delegate to the City Treasurer the authority to incur and
pay all costs associated with these debt issues and bring forward by-laws as
required for each debenture issue for execution by Council and an
information report to Council upon the conclusion of the debt issue which identifies
the details of the debt issue and the projects to which the debt funding was
applied.
Que le Conseil :
1. délégue
au trésorier de la Ville le pouvoir de procéder à une ou plusieurs émissions
obligataires, à la condition que la dette ainsi contractée puisse être
remboursée à même le budget du service de la dette de l'année courante approuvé
par le Conseil dans le cadre des budgets de fonctionnement et d'immobilisations
de l'année courante et que le pouvoir d'endettement ait été approuvé au
préalable par le Conseil.
2. délégue au trésorier municipal le pouvoir d’engager et de payer tous les
coûts relatifs à ces valeurs mobilières et soumettre au besoin des règlements,
que le Conseil pourra appliquer, pour chaque émission d’obligation. Soumettre
au Conseil, à l’échéance de la valeur mobilière, un rapport d’information
précisant les détails de cette valeur mobilière et les projets auxquels la
consolidation de la dette s’appliquait.
1.
Chief
Corporate Services Officer’s report dated 09 February 2006
(ACS2006-CRS-FIN-0005).
Report
to/Rapport au:
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and Council / et au Conseil
09 February 2006 / le 09 février 2006
Submitted by/Soumis par : Greg Geddes, Chief Corporate Services
Officer/Chef des Services généraux
Contact
Person/Personne ressource : Marian.Simulik, Acting Director Financial Services
and City Treasurer/ Directeur des Services financiers et trésorier municipalpar
interim
Financial Services/Services financiers
(613) 580-2424 x14159 Marian.Simulik@ottawa.ca
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SUBJECT: |
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OBJET : |
DÉLÉGATION DU POUVOIR DE PROCÉDER À DES
ÉMISSIONS OBLIGATAIRES
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REPORT RECOMMENDATIONS
That the Corporate Services and
Economic Development Committee recommend that Council:
1. Delegate the authority to the City Treasurer to proceed with one or more debt issues so long as the debt can be repaid within the current year’s debt servicing budget as approved by Council in the current year’s Operating and Capital Budgets and the project debt authority has been previously approved by Council.
2. Delegate to the City Treasurer the authority to incur and pay all costs associated with these debt issues and bring forward by-laws as required for each debenture issue for execution by Council and an information report to Council upon the conclusion of the debt issue which identifies the details of the debt issue and the projects to which the debt funding was applied.
RECOMMANDATIONS DU RAPPORT
Que le Comité des
services organisationnels et du développement économique recommande au Conseil
:
1. de déléguer au trésorier de la Ville le
pouvoir de procéder à une ou plusieurs émissions obligataires, à la condition
que la dette ainsi contractée puisse être remboursée à même le budget du
service de la dette de l'année courante approuvé par le Conseil dans le cadre
des budgets de fonctionnement et d'immobilisations de l'année courante et que
le pouvoir d'endettement ait été approuvé au préalable par le Conseil.
2. déléguer au trésorier municipal le pouvoir d’engager et de payer tous les
coûts relatifs à ces valeurs mobilières et soumettre au besoin des règlements,
que le Conseil pourra appliquer, pour chaque émission d’obligation. Soumettre
au Conseil, à l’échéance de la valeur mobilière, un rapport d’information
précisant les détails de cette valeur mobilière et les projets auxquels la
consolidation de la dette s’appliquait.
BACKGROUND
Every year the City normally
undertakes a debt issue to fund spending on capital works that have debt
authority which has been previously approved by Council, either through the
capital budget process or a specific report.
Council’s policy has been to approve new debt each year restricted to
the amount that can be repaid within the existing repayment envelope. Prior to going to the market to issue debt,
the City Treasurer brings forward a report that identifies the amount of debt
that is to be issued and requests Council approval of the issue.
The Capital Debt Model, provided
in each year’s capital budget, identifies the value of the estimated new debt
issue which includes a calculation of the debt servicing required and the
sources of funds for the debt servicing (tax, rate, gas tax revenues,
development charges, etc.). For the
debt that is serviced from taxation the amount of the estimated issue is
limited by the policy mentioned above.
The financial markets can change rapidly and the decision around the
timing of a debt issue is made with
significant input from the City’s financial advisors. The City’s flexibility in how quickly it can
respond to favourable financial conditions is limited because of the need to
have Council consider a report on the
current year’s debt issue. Typically this report provides an overview of
current financial market conditions and identifies the value of the debt
issue. The report may specify the
capital projects the debt will be applied to, but the project’s debt authority
has already been approved by Council.
As the debt issue tends to be done mid-year the reduced number of Council
meetings in the summer months further restricts how quickly we can respond to
favourable market conditions.
In order to improve flexibility
and efficiency it is recommended that the City Treasurer be delegated the
authority to proceed with a debt issue, so long as the debt can be accommodated
as identified in the debt model, and the projects being funded have debt
authority previously approved by Council.
Upon conclusion of the debt issue, the City Treasurer would bring
forward the required by-laws for the issue and
an information report for Council indicating the terms of the issue and
the projects the debt is being applied to.
CONSULTATION
This is an administrative matter that does not require public consultation.
FINANCIAL IMPLICATIONS
There are no direct financial implications from approving these recommendations.
DISPOSITION
The City Solicitor will amend the delegation of authority by-law.