Item - 2023.EX4.5

The Executive Committee recommends that:

1. City Council approve the renewal of the following lines of credit guarantees:

a. the line of credit guarantee issued by the City on behalf of Canadian Stage to its lender in the amount of $820,000 (inclusive of all interest payable by Canadian Stage) be renewed for a three-year period commencing on November 1, 2023 and ending October 31, 2026; and

b. the line of credit guarantee issued by the City on behalf of Young People's Theatre to its lender in the amount of $175,000 (inclusive of all interest payable by Young People's Theatre) be renewed for a three-year period commencing on January 1, 2024 and ending December 31, 2026.

This report provides an update on City loans and loan guarantees which have been reported on yearly, along with the details associated with each of the credit arrangements.

If an organization has an existing financial relationship with the City, line of credit and capital loan guarantees may be provided to non-profit cultural and community organizations and recreational and sports-based organizations.

Providing financial guarantees is beneficial to the City since these groups provide important services to the community. The City also occasionally provides direct loans to its agencies and corporations to contribute to the financing of a project that will create or enhance capital facility.

Policies and parameters that govern these loans and loan guarantees are outlined on pages 5 and 6 in the Comments section of this report.

Under existing policies, as at December 31, 2022, the City had guaranteed operating lines of credit amounting to approximately $6 million, and almost $85 million in capital loans, to entities identified in this report. This report recommends extending two line of credit guarantees, both granted to not-for-profit theatre groups (Young People's Theatre and Canadian Stage), for an additional three-year term. Both of these guarantees are currently set to expire later in 2023. Under the City's current policy, both groups qualify for line of credit guarantees as they have existing financing relationships with the City and as both accounts are in good standing.

In addition, the City has an outstanding amount of $45 million in direct loans to City agencies and corporations which contribute to the financing of projects that create or enhance municipal capital facilities. All loans are in good standing for 2022.

During this reporting period, one direct loan of approximately $1 million was fully repaid; and loans that had been supported by capital loan guarantees of $10.95 million were repaid.

Regular monitoring makes it possible to identify potential financial risks, and to take action to avoid or mitigate potential losses.