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6. Ottawa Firefighters Monument Loan Repayment Extension
PROLONGATION DU DÉLAI DE REMBOURSEMENT DU PRÊT consenti POUR LA CONSTRUCTION DU MONUMENT AUX POMPIERS D’OTtawa
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That Council approve changes to the current loan agreement with the Ottawa Firefighters Community Foundation as follows:
1. an extension of the interest-free loan repayment for an additional seven years;
2. direct staff to establish a new repayment schedule for the balance;
3. eliminate the maintenance trust fund requirement of $150,000;
4. require that the Ottawa Firefighters Community Foundation pay an additional $4,000 annually for maintenance to the City for the term of the agreement for a total of $20,000, to be paid in year seven of the extension; and
5. with the funds received in recommendation d) staff are to establish a trust account to pay for maintenance thereafter.
RecommandationS MODIFIÉES du ComitÉ
Que le Conseil approuve les modifications suivantes à l’accord de prêt conclu avec l’Ottawa Firefighters Community Foundation (Fondation communautaire des pompiers d’Ottawa) :
1. un prolongement du remboursement d’un prêt sans intérêt de sept ans supplémentaires;
2. demandé au personnel d’établir un nouveau calendrier de remboursement pour le solde;
3. éliminé le fonds de prévoyance pour l’entretien de 150 000 $;
4. exigé que la Fondation communautaire des pompiers d'Ottawa paie des frais d’entretien annuels supplémentaires de 4 000 $ à la Ville pour la durée de l’entente, ce qui correspond à un total de 20 000 $, devant être payé la septième année du prolongement; et
5. avec les fonds reçus de la recommandation d) le personnel établira un compte en fiducie afin de payer l’entretien par la suite.
DOCUMENTATION
1. City Treasurer’s report dated 7 February 2011 (ACS2011-CMR-FIN-0005).
2. Extract of Draft Minutes dated 1 March 2011.
Finance and Economic Development Committee
Comité des finances et du développement économique
and Council / et au Conseil
7 February 2011 / le 7 février 2011
Submitted by/Soumis par : Marian Simulik, City Treasurer/Trésorière municipale
Contact Person/Personne ressource : Ken Hughes, Deputy City Treasurer, Revenue/ Trésorier Municipal Adjoint, Recettes
Finance Department/Service des finances
613-580-2424 ext/ poste.13485, Ken.Hughes@ottawa.ca
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Ref N°: ACS2011-CMR-FIN-0005 |
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OBJET : |
PROLONGATION DU DÉLAI DE REMBOURSEMENT DU PRÊT consenti POUR LA CONSTRUCTION DU MONUMENT AUX POMPIERS D’OTtawa |
That the Finance and Economic Development Committee recommend Council approve changes to the current loan agreement with the Ottawa Firefighters Community Foundation as follows:
1. an extension of the interest-free loan repayment for an additional five years;
2. direct staff to establish a new repayment schedule for the balance;
3. eliminate the maintenance trust fund requirement of $150,000;
4. require that the Ottawa Firefighters Community Foundation pay an additional $4,000 annually for maintenance to the City for the term of the agreement for a total of $20,000; and
5. with the funds received in recommendation 4, staff are to establish a trust account to pay for maintenance thereafter.
Que le Comité des finances et du développement économique recommande au Conseil d’approuver les modifications suivantes à l’accord de prêt conclu avec l’Ottawa Firefighters Community Foundation (Fondation communautaire des pompiers d’Ottawa) :
1. un prolongement du remboursement d’un prêt sans intérêt de cinq ans supplémentaires;
2. de demander au personnel d’établir un nouveau calendrier de remboursement pour le solde;
3. d’éliminer le fonds de prévoyance pour l’entretien de 150 000 $;
4. d’exiger que la Fondation communautaire des pompiers d'Ottawa paie des frais d’entretien annuels supplémentaires de 4 000 $ à la Ville pour la durée de l’entente, ce qui correspond à un total de 20 000 $; et
5. avec les fonds reçus de la recommandation 4, le personnel établira un compte en fiducie afin de payer l’entretien par la suite.
On March 6, 2006 the Ottawa Firefighters Community Foundation made a request to City staff to locate and construct a Firefighters Memorial at City Hall. The intent was to create a permanent memorial to recognize Ottawa Firefighters for their work in the Ottawa community in the line of duty. City Council approved the location at the June 14, 2006 Council meeting. During the October 25, 2006 City Council meeting, the following motion was tabled and carried unanimously:
Moved by Councillor M. McRae
Seconded by Councillor D. Deans
That the Rules of Procedure be suspended to consider and approve the following Motion:
WHEREAS City Council on June 14, 2006 approved the concept and location of the Ottawa Firefighters Memorial to be installed on the grounds at City Hall, 110 Laurier Avenue;
AND WHEREAS the Ottawa Firefighters Community Foundation Inc. wishes to complete the project in late spring/early summer of 2007 for the Memorial Ceremony of Fallen Fighters in the Line of Duty;
BE IT THEREFORE RESOLVED that Council waive the provisions of By-Law No. 2002 - 522, being a by-law of the City of Ottawa respecting public notice pursuant to the Municipal Act, 2001;
AND BE IT FURTHER RESOLVED that in order to commence construction, City Council approve an interest-free loan of up to $550,000 to the Ottawa Firefighters Community Foundation Inc., a non profit organization with the following conditions:
· That the loan be paid back over four years;
· Demonstration of a viable business/fund-raising plan.
CARRIED
Following Council approval, a repayment schedule was established and the Foundation was to repay the loan as follows:
By December 21, 2007 $ 10,000
By December 31, 2008 $100,000
By December 31, 2009 $140,000
By December 31, 2010 $300,000
$550,000
To date, $325,000 has been paid towards the balance, leaving $225,000 outstanding. The Ottawa Firefighters Community Foundation has requested the City to extend the terms of repayment for an additional five years in order to meet their loan repayment commitment.
The original report included a provision for a maintenance trust fund in the amount of $150,000. The original maintenance fund was established with the Ottawa Firefighters Community Foundation where the original design included year round water features and a more ambitious design. The design has since been scaled back due to the funding challenges experienced. The fund has not been created as the monument is not complete. While discussions have been held regarding construction of the next two phases, the phases are on hold at this time.
The Foundation initiated numerous fundraising activities such as the donor wall, an annual gala, a firehouse cookbook sale and regular donations. Due to a variety of reasons, including the downturn in the economy, not enough funds have been raised to cover the balance of the loan or the trust fund.
The Foundation has repaid a total of $325,000 to the City to date and is now in default as the term has ended. Fundraising has not been as successful as originally hoped and the Foundation is not in a position to clear the final instalment of the loan balance at this time. The Foundation has requested a five year extension of the repayment terms to ensure it can meet its financial obligations. In the original agreement there was also a requirement of the Foundation to create a $150,000 trust fund for ongoing maintenance after construction is completed. The Ottawa Firefighters Community Foundation has requested the dollar amount of the trust fund be reviewed by staff.
Finance staff have reviewed the year-end financial statements of the Foundation and it is clear they are not in a position to repay the remainder of the loan at this time. Additionally, a recent review of the maintenance requirements confirms the actual versus original construction plans are different and require much less maintenance on a go forward basis. Phases 2 and 3 of the project, which included a water feature, are now on hold and may commence only after the original loan is repaid.
Staff of the City’s Public Works Department have reviewed the trust fund requirements and recommend the trust fund requirement be modified. It was determined that the Ottawa Firefighters Community Foundation make an annual payment of $4,000 to cover anticipated maintenance charges. If, in the future, the scope for the present monument changes then the maintenance costs identified will have to be renegotiated to align with any added features.
There are no rural implications of this report.
Staff of the Revenue Branch met extensively with the Ottawa Firefighters Community Foundation. Various departments were consulted throughout the report preparation. The Departments consulted were Public Works, City Clerk and Solicitor, and Realty Services.
N/A
Although the City Clerk and Solicitor Department was not involved in the negotiations of the terms of the initial repayment agreement, it has had the opportunity to review the terms of the proposed loan repayment extension. While it is notable that a significant repayment has been made under the original repayment agreement, as with any loan should it ultimately not be repaid in full there would be a corresponding loss to the City. Subject to the above limitation, there are no other legal/risk management implications to implementing the recommendations in this report.
There are no implications on the City’s Strategic Plan.
There are no technical implications of this report.
There are no financial implications of the extension of the loan repayment as the monies to be repaid were advanced as a loan. However, any amounts not paid will be a financial loss to the City.
N/A
The City Clerk and Solicitor Department to prepare the extension agreement and have it executed by the Ottawa Firefighters Community Foundation and the staff of the Revenue Branch to monitor the terms of the new agreement.
Ottawa Firefighters Monument Loan Repayment Extension
PROLONGATION DU DÉLAI DE REMBOURSEMENT DU PRÊT consenti POUR LA CONSTRUCTION DU MONUMENT AUX POMPIERS D’OTtawa
ACS2011-CMR-FIN-0005 city-wide / À l’Échelle de la ville
Councillor Taylor introduced a motion which would progress two fo the items in the staff recommendations; extending the interest-free loan repayment period to seven years instead of five years; and requiring that the $20,000 referenced in recommendation 4 be paid in year seven. He explained the purpose of the motion was to allow the organization to not have to allocate 100% of its available funds to address this concern and to give them a little more flexibility. He believed staff supported the motion. Ms. Marian Simulik, City Treasurer, confirmed staff’s support.
Councillor McRae referenced a motion she and Councillor Deans had moved in October 2006, which talked about a business plan. She wondered if staff had a copy of the aforementioned business plan. Ms. Simulik responded affirmatively.
Councillor McRae felt extending this load repayment was a worthy cause and she submitted that the alternative was the City would end up paying the loan. Therefore, she suggested it should not be seen as an opportunity for expending new money. Further, in terms of precedents being set for other groups that may come forward, she maintained it was good to know that there was documentation available and the paper trail followed because this was not the case earlier in the year, when the repayment had not been made.
Responding to a question from the Councillor, Ms. Simulik stated that, as was indicated in the motion, the organization was having difficulty due to changes in the economic climate, but that they had made significant progress in 2010. Although the motion was to extend the loan for seven years, she anticipated it would be paid before then.
Going back to the issue of precedents for other organizations, Councillor McRae noted there was a requirement for a business case, which had to meet with Mr. Kanellakos’ approval before being submitted.
At this juncture, Committee voted on the motion.
Moved by Councillor M. Taylor
WHEREAS the Ottawa Firefighters Community Foundation have made a significant contribution to the City with the establishment of a Firefighters memorial, and
WHEREAS due to economic conditions they are having difficulty raising the remaining funds borrowed from the City;
THEREFORE BE IT RESOLVED that the recommendations be amended to establish the term of the loan extension to seven years and that the $20,000 required o establish a maintenance trust account be paid to the city in year seven of the extension.
CARRIED with Councillor P. Clark dissenting
Committee then voted on the item as amended.
That the Finance and Economic Development Committee recommend Council approve changes to the current loan agreement with the Ottawa Firefighters Community Foundation as follows:
6. an extension of the interest-free loan repayment for an additional seven years;
7. direct staff to establish a new repayment schedule for the balance;
8. eliminate the maintenance trust fund requirement of $150,000;
9. require that the Ottawa Firefighters Community Foundation pay an additional $4,000 annually for maintenance to the City for the term of the agreement for a total of $20,000, to be paid in year seven of the extension; and
10. with the funds received in recommendation d) staff are to establish a trust account to pay for maintenance thereafter.
CARRIED, as amended, with Councillor P. Clark dissenting