Item - 2015.EX9.10

Tracking Status

  • City Council adopted this item on November 3, 2015 with amendments.
  • This item was considered by the Executive Committee on October 20, 2015 and adopted without amendment. It will be considered by City Council on November 3, 2015.

EX9.10 - Adjustments to Various Direct City Loans

Decision Type:
ACTION
Status:
Amended
Wards:
All

City Council Decision

City Council on November 3 and 4, 2015, adopted the following:

 

1.  City Council:

 

      a.  write off the capital loan to the Sony Centre for the Performing Arts, in the amount of $7.002 million; and

 

     b.  provide funding for this write-off from either increasing debt, or the 2015 operating budget surplus.

 

2.  City Council:

 

      a.  write off the capital loan to the Toronto Centre for the Performing Arts in the amount of $10.023 million; and

 

      b.  provide funding for this write-off from either the Land Acquisition Reserve Fund, or the 2015 operating budget surplus.

 

3.  City Council request the Deputy City Manager and Chief Financial Officer to report back as part of the final 2015 year end variance report on which source of funds was used, as referred to in Parts 1.b. and 2.b. above.

 

4.  City Council:

 

a.  authorize a reduction in the amount of $8.1 million to the $20.0 million amount owing on a direct City loan made to the Lakeshore Arena Corporation, and that this $8.1 million reduction be considered as a shareholder capital contribution, subject to:

 

i.  the Lakeshore Arena Corporation obtaining permanent financing for the balance of the loan owing being approximately $11.9 million from a third party lender on such terms as are acceptable to the Deputy City Manager and Chief Financial Officer; and

 

ii.  City Council authorizing a loan guarantee for such a loan, and that the loan guarantee be deemed to be in the interest of the City;

 

      b.  amend the Unanimous Shareholder Declaration to require that Lakeshore Arena Corporation make an annual contribution to the City equal to 50 percent of net operating income, before amortization and depreciation, and that such contributions be reflected as return of capital contributions, to a limit of $8.1 million; and

 

c.  amend Schedule 8 of Chapter 227, Reserves and Reserve Funds, of the City of Toronto Municipal Code by establishing a discretionary reserve fund called "Lakeshore Arena Capital Reserve Fund" the purpose of which will be to receive the annual contribution equal to 50 percent of the net operating income, before amortization and depreciation, for the purpose of providing a source of funding for Parks, Forestry and Recreation capital repair projects associated with the Arena, with criteria as set out in Attachment 1 to report (October 5, 2015) from the Deputy City Manager and Chief Financial Officer.

 

5.  City Council, in accordance with Section 15 of the City Services Corporation Regulation 609/06, authorize City staff as deemed appropriate and as directed by the City Manager, to provide assistance to the Lakeshore Arena Corporation Board and/or subcommittee of the Board.

 

6.  City Council authorize the appropriate City officials to enter into any documents and agreements necessary to give effect to Parts 1 through 4 above, and to take the necessary action to give effect to Council's decision.

 

7.  City Council request the Board of Directors of Civic Theatres Toronto to review, as an early priority, opportunities for partnerships with potential partners (private sector or others) that could improve the opportunities and offerings of the civic theatres.

Background Information (Committee)

(October 5, 2015) Report and Attachment 1 from the Deputy City Manager and Chief Financial Officer on Adjustments to Various Direct City Loans
https://www.toronto.ca/legdocs/mmis/2015/ex/bgrd/backgroundfile-84484.pdf

Motions (City Council)

1 - Motion to Amend Item moved by Councillor Giorgio Mammoliti (Carried)

That City Council request the Board of Directors of Civic Theatres Toronto to review, as an early priority, opportunities for partnerships with potential partners (private sector or others) that could improve the opportunities and offerings of the civic theatres.


2 - Motion to Amend Item (Additional) moved by Mayor John Tory (Withdrawn)

That City Council request the Boards for the Sony Centre for the Performing Arts Board, the Toronto Centre for the Performing Arts and the Lakeshore Arena Corporation to explore any reasonable measures such that part of the debts can be recaptured.


Motion to Withdraw a Motion moved by Mayor John Tory (Carried)

That Mayor Tory be permitted to withdraw his motion 2.


Motion to Adopt Item as Amended (Carried)

Motion to End Debate moved by Councillor Shelley Carroll (Withdrawn)

That in accordance with the provisions of Chapter 27, Council Procedures, City Council end the debate on Item EX9.10 and take the vote immediately.


Motion to Withdraw a Motion moved by Councillor Shelley Carroll (Carried)

That Councillor Carroll be permitted to withdraw her motion to end debate on the item.

EX9.10 - Adjustments to Various Direct City Loans

Decision Type:
ACTION
Status:
Adopted
Wards:
All

Committee Recommendations

The Executive Committee recommends that:

 

1.  City Council:

 

     a.  write off the capital loan to the Sony Centre for the Performing Arts, in the amount of $7.002 million; and

 

     b.  provide funding for this write-off from either increasing debt, or the 2015 operating budget surplus.

 

2.  City Council:

 

     a.  write off the capital loan to the Toronto Centre for the Performing Arts in the amount of $10.023 million; and

 

     b.  provide funding for this write-off from either the Land Acquisition Reserve Fund, or the 2015 operating budget surplus.

 

3.  City Council request the Deputy City Manager and Chief Financial Officer to report back as part of the final 2015 year end variance report on which source of funds was used, as referred to in Recommendations 1b and 2b above.

 

4.  City Council:

 

a.  authorize a reduction in the amount of $8.1 million to the $20.0 million amount owing on a direct City loan made to the Lakeshore Arena Corporation (LAC), and that this $8.1 million reduction be considered as a shareholder capital contribution, subject to:

 

i.  the LAC obtaining permanent financing for the balance of the loan owing being approximately $11.9 million from a third party lender on such terms as are acceptable to the Deputy City Manager and Chief Financial Officer; and

 

ii.  City Council authorizing a loan guarantee for such a loan, and that the loan guarantee be deemed to be in the interest of the City;

 

     b.  amend the Unanimous Shareholder Declaration to require that LAC make an annual contribution to the City equal to 50 percent of net operating income, before amortization and depreciation, and that such contributions be reflected as return of capital contributions, to a limit of $8.1 million; and

 

c.  amend Schedule 8 of Chapter 227, Reserves and Reserve Funds, of the City of Toronto Municipal Code by establishing a discretionary reserve fund called "Lakeshore Arena Capital Reserve Fund" the purpose of which will be to receive the annual contribution equal to 50 percent of the net operating income, before amortization and depreciation, for the purpose of providing a source of funding for Parks, Forestry and Recreation capital repair projects associated with the Arena, with criteria as set out in Attachment 1 to report (October 5, 2015) from the Deputy City Manager and Chief Financial Officer.

 

5.  City Council, in accordance with Section 15 of the City Services Corporation Regulation 609/06, authorize City staff as deemed appropriate and as directed by the City Manager, to provide assistance to the Lakeshore Arena Corporation Board and/or subcommittee of the Board.

 

6.  City Council authorize the appropriate City officials to enter into any documents and agreements necessary to give effect to Recommendations 1 through 4 above, and to take the necessary action to give effect to this Report.

Origin

(October 5, 2015) Report from the Deputy City Manager and Chief Financial Officer

Summary

This report recommends the write-off of the City loans made to the Sony Centre for the Performing Arts (Sony Centre), in the amount of $7.002 million, and to the Toronto Centre for the Performing Arts (TCA), in the amount of $10.023 million, as the Deputy City Manager and Chief Financial Officer has determined that recovery of these loans is unlikely and the loan loss should be recognized in accordance with generally accepted accounting principles (GAAP).  This determination follows the outcome of the Theatre Working Group, from which City Council in July 2015 directed the consolidation of the three major theatres into a single organization with a view to the development of an efficient and strategically sound operating model.

 

This report also recommends replacing a portion of the City loan made to the Lakeshore Arena Corporation (LAC), in the amount of $8.1 million, with a capital contribution in order to put this City Services Corporation on a long term sustainable operating footing, and to amend the Unanimous Shareholder Declaration to recognize the City capital contribution entitling the City to share in any future net operating income of the Corporation for the purposes of funding capital repairs to the Lakeshore Arena.

Background Information

(October 5, 2015) Report and Attachment 1 from the Deputy City Manager and Chief Financial Officer on Adjustments to Various Direct City Loans
https://www.toronto.ca/legdocs/mmis/2015/ex/bgrd/backgroundfile-84484.pdf

Motions

1 - Motion to Adopt Item moved by Deputy Mayor Denzil Minnan-Wong (Carried)

Vote (Adopt Item) Oct-20-2015

Result: Carried Majority Required - EX9.10 - Adopt the item
Total members that voted Yes: 5 Members that voted Yes are Ana Bail„o, Gary Crawford, Frank Di Giorgio, Mary-Margaret McMahon, Denzil Minnan-Wong
Total members that voted No: 3 Members that voted No are Paul Ainslie, James Pasternak, David Shiner
Total members that were Absent: 5 Members that were absent are Michelle Berardinetti, Cesar Palacio, Jaye Robinson, Michael Thompson, John Tory (Chair)
Source: Toronto City Clerk at www.toronto.ca/council