Item - 2018.EX35.19

The Executive Committee recommends that:

1.  City Council authorize the Toronto Atmospheric Fund to borrow up to $5 million from the Federation of Canadian Municipalities for the purpose of financing eligible capital costs associated with the construction of the next phase of the Tower-wise project building retrofits identified in Confidential Attachment 1 to the report (June 4, 2018) from the Interim Chief Financial Officer and for a term that extends beyond the current Term of Council. 

2.  City Council authorize the Toronto Atmospheric Fund to enter into a secured loan agreement with the Federation of Canadian Municipalities by way of the pledge of a portion of the City and Provincial endowments of the Toronto Atmospheric Fund, subject to the following conditions:

a.  Toronto Atmospheric Fund be permitted to pledge a portion of the City endowment, not to exceed $4 million, as security for the loan from the Federation of Canadian Municipalities Green Municipal Fund and for no other purpose;

b.  Toronto Atmospheric Fund be permitted to pledge a portion of the Provincial endowment, not to exceed $1.9 million, as security for the loan from the Federation of Canadian Municipalities Green Municipal Fund and for no other purpose;

c.  the terms and conditions of the City pledge consent not to be inconsistent with the existing Provincial pledge consent dated May 8, 2018 (Attachment 2 to the report (June 4, 2018) from the Interim Chief Financial Officer) and be on such other terms as deemed appropriate by the Interim Chief Financial Officer in consultation with the City Solicitor;

d.  the default provisions of the secured loan agreement between Toronto Atmospheric Fund (TAF) and the Federation of Canadian Municipalities provide that in the event of default by the Toronto Atmospheric Fund, any resort to the City pledge and the Provincial pledge be equitable and allocated on a pro rata basis based on the proportionality ratio of the Funds in effect at the time of the loan disbursement;

e.  the provisions of the secured loan agreement between Toronto Atmospheric Fund (TAF) and the Federation of Canadian Municipalities not permit any recourse to the City in the event of a default by the Toronto Atmospheric Fund;

f.  the Toronto Atmospheric Fund not allow any other third party pledges against its marketable securities for the purpose of the Project without the approval of City Council;  

g.  the current TD Canada Trust fixed assets pledge (City Endowment) be reduced to an amount not to exceed $3.1 million for the existing $2.4 million Line of Credit to be negotiated by the Toronto Atmospheric Fund on terms that are satisfactory to the Interim Chief Financial Officer; and

h.  the current TD Canada Trust fixed assets pledge (Provincial Endowment) be reduced to an amount not to exceed $2.1 million for the existing $1.6 million Line of Credit to be negotiated by the Toronto Atmospheric Fund.

3.  City Council authorize the Toronto Atmospheric Fund to accept a grant of up to $750,000 from the Federation of Canadian Municipalities for eligible project costs as determined in the agreement with Federation of Canadian Municipalties.

4.  City Council direct the Toronto Atmospheric Fund to provide the status of the loan annually to the City's Chief Financial Officer to include, but not be limited to, updates on the drawdown and repayment of the loan.

5.  City Council authorize the public release of the agreement between Toronto Atmospheric Fund and Federation of Canadian Municipalities (Confidential Attachment 1 to the report (June 4, 2018) from the Interim Chief Financial Officer) once the loan agreement is signed between Toronto Atmospheric Fund and Federation of Canadian Municipalities and financing agreements are signed with the participating building owners.

The Federation of Canadian Municipalities (FCM) has approved Toronto Atmospheric Fund's (TAF) application for a loan of up to $5 million and a complementary grant of up to $750,000 for the next phase of Toronto Atmospheric Fund's TowerWise program (the Project).  The proceeds from the loan will be used for the multi-measure retrofits of four multi-residential buildings. The project aligns with TransformTO's goal of achieving an 80 percent greenhouse gas reduction target by 2050 which requires average greenhouse gas reduction of 40 percent across all existing Toronto homes and buildings. 

This report recommends that City Council give its approval for Toronto Atmospheric Fund to enter into the loan agreement with Federation of Canadian Municipalities, and for Toronto Atmospheric Fund to pledge up to $4 million of the Toronto Atmospheric Fund Fund to Federation of Canadian Municipalities as security for the loan.  Toronto Atmospheric Fund has also sought and received the Province's consent to pledge up to $1.9 million of the Provincial Endowment as security for the loan.

In addition this report updates previously provided authority to pledge assets as security.

All recommendations were developed in consultation with and are fully supported by staff at the Toronto Atmospheric Fund.