Report to: General
Committee – Finance & Admin. Date
Report Authored: March 9,
2010
SUBJECT: Green Municipal Fund Loan Application
PREPARED
BY: Mark Visser, Manager, Financial Strategy & Investments
RECOMMENDATION:
1)
THAT the report dated March 9, 2010 entitled “Green
Municipal Fund” be received.
2)
THAT Council approve
the submission of a loan application (through the Region of York) to the Federation
of Canadian Municipalities’ Green Municipal Fund to partially fund the construction
of the East Markham Community Centre.
3)
AND THAT staff be authorized and directed to do all things necessary to
give effect to this resolution.
The purpose
of this report is to obtain Council’s approval to submit a loan application (through
the Region of York) to the Federation of Canadian Municipalities (FCM) Green Municipal Fund (GMF) to partially fund
the construction of the East Markham Community Centre (EMCC).
On December
15, 2009 Council authorized Staff to proceed with tendering for the
construction phase of the construction of the EMCC.
Since that time Town staff have been pursuing a grant
and a low cost loan available through the Federation of Canadian Municipalities
(FCM) Green Municipal Fund (GMF).
GMF program supports municipal initiatives across Canada that benefit the environment, local economies and quality of
life. GMF provides grants and below-market loans that directly support
municipal initiatives for up to 80
per cent of construction costs to a maximum of $4 million in loans
combined with a $400,000 grant. For municipal governments, GMF
offers interest rates 150 basis
points lower than the Government of Canada bond rate for the
equivalent term.
As a lower tier Municipality the Town does not have the
ability to borrow long-term funds, therefore the borrowing must be through the Regional Municipality. Town staff have been
in contact with the Region regarding this potential FCM
loan and Region staff have advised that they would support the application to
Regional Council, subject
to all legal and program requirements relating to the
application being met.
Staff
recommend Council approve the submission of a loan application
(through the Region of York) to Federation of Canadian Municipalities Green Municipal
Fund to partially fund the construction of the East Markham Community Centre.
A high level forecast of the Recreation Development Charge
Reserve identifies the potential requirement to begin borrowing funds starting
in the next 18 to 36 months. With this understanding, the Town will need to
leverage programs, like the Green Municipal Fund, that offer grants and low
cost loans which will help reduce the Town’s future borrowing costs.
If the Town’s
Green Municipal Fund application is approved, the Town could receive a grant up
to $400,000 and receive approval for a $4,000,000 low cost loan. The financial impact
of the loan, assuming a 150 basis point reduction over a 20 year term, is
approximately $700,000. Therefore the total positive financial impact to the
Town could be $1,100,000.