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HomeMy WebLinkAbout08 014 2008 Current Operating Borrowing By-law . . . . THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE BY-LAW NO. 2008" 014 BEING A BY-LAW TO AUTHORIZE THE BORROWING OF MONEY TO MEET CURRENT EXPENDITURES OF THE COUNCIL OF THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE WHEREAS Section 407(1) of the Municipal Act, 2001, S.O. 2001, c. 25, as amended, provides that a municipality may authorize temporary borrowing, until taxes are collected and other revenues are received, of the amount council considers necessary to meet the current expenditures of the municipality for the year; AND WHEREAS pursuant to the said Municipal Act, Section 407(2) provides that, except with the approval of the Ontario Municipal Board, the total amount borrowed at anyone time, plus any outstanding amounts of principle borrowed and accrued interest, shall not exceed the limits set forth in that section or other relevant sections of the act; AND WHEREAS the Council for The Corporation of the Municipality of Kincardine deems it necessary to authorize borrowing in the amount of one million dollars ($1,00,000.00) to meet, until taxes are collected and other revenues are received, the current expenditures of the Municipality for the year; AND WHEREAS pursuant to the said Municipal Act, Section 23(1) authorizes a municipality to delegate its powers and duties under this or any other Act to a person or body subject to the restriction set out in the Act; AND WHEREAS the Council for the Corporation of the Municipality of Kincardine deems it advisable to delegate the power in Section 407 (1) of the said Municipal Act to the Mayor and Treasurer of the Municipality; NOW THEREFORE, the Council of The Corporation of the Municipality of Kincardine ENACTS as follows: 1. The Mayor and the Treasurer are authorized on behalf of the Municipality to borrow from time to time from the Canadian Imperial Bank of Commerce ("CIBC") a sum or sums not exceeding in the aggregate one million dollars ($1,000,000.00) to meet, until taxes are collected, the current expenditures of the Municipality for the year pursuant to Section 407(1) of the said Municipal Act, and to execute any documents that are required in connection with the borrowing of the above sum, plus interest, at a rate to be agreed upon from time to time with CIBC, in addition to any reasonable charges of CiBC associated with this borrowing. .. ./2 . . . . Page 2 2008 Current Operating Borrowing By-law By-law No. 2008 - 014 2. All sums borrowed pursuant to this by-law, as well as all other sums borrowed pursuant to the said Municipal Act in this year and in previous years from CIBC for any purpose will, with Interest thereon, be a charge upon the whole of the revenues of the Municipality for the current year and for all preceding years as and when this revenue is received, 3. The Treasurer is authorized and directed to apply in payment of all sums borrowed plus interest, all of the moneys collected or received on account in respect of taxes levied for the current year and preceding years or from any other source which may lawfully be applied for this purpose. 4. The Treasurer is authorized to furnish to CIBC a statement showing the nature and amount of the estimated revenues of the Municipality not yet collected and also showing the total of any amounts borrowed that have not been repaid. 5. This by-law shall come into full force and effect at the time of its passing. 6. This by-law may be cited as the "2008 Current Operating Borrowing By- law". READ a FIRST and SECOND time this 23" day of January, 2008. 'tlc_1~ Clerk ~ READ a THIRD time and FINALLY PASSED this 23"' day of January, 2008. ~'j~ Clerk Private and Confidential January 30, 2008 The Corporation of the Municipality of Kincardine 14755th Concession RR#5 Kincardine, Ontario N2Z 2X6 Dear Mr. Kraemer: Thank you for choosing CIBC for your business needs. We are pleased to confirm the special arrangements established for your account activity based on our recent review and discussion. These arrangements are effective on January 1, 2008 and will continue to apply for a five year period of time ending December 31, 2013 unless changed in accordance with the terms of this letter. Canadian and U.S. Arranaements 1. Monthly Service Charge Monthly account Activity Fee: Flat Fee of $0.00 Services included in Monthly Service Charge Canadian - Business Operating Account Fees: . Account Fee . Transaction Fee (deposits, cheques, withdrawals and Bill Payments) . Deposit Content (cheques, cash and coin deposited) . Bank Statements . Bank Confirmations (audit verifications) . Verification of balance only . Cheque certification . Currency supplied . Cash and/or coin orders supplied up to and including $15,000 . Returned cheques (a cheque you deposit is returned unpaid) . Stop payments 2. The Bank's standard charges will apply for all other services Where banking law requires, information about new or increased service charges for such other services will be provided to you in writing at least 30 days before the increased or new charge is effective. Interest paid on Canadian Dollar Business Operating Accounts Standard Interest Rate Bulletin Interest is calculated and paid monthly based on your average monthly credit balance. The interest rate paid is determined by your average monthly balance according to the tiered interest rate structure below. The CIBC Prime Rate may change without prior notice. The current CIBC Prime Rate is available from your CIBC bank representative at the branch that holds your account. ,~ Balance Tier All balances *MAP is the Monthly Average Prime rate Rate Paid MAP -1.70% Note: Your account interest is subject to a rate cap equal to the average monthly 30 day Banker's Acceptance (BA) rate less 10 basis points. This means that the maximum rate paid will not exceed the monthly average 30 day BA rate less 10 bps. Taxes You agree to pay any Federal or Provincial Goods, Service, Sales, use or other tax from which you do not enjoy exemption, which is imposed with respect to any of these arrangements. Notification of Larae Fluctuations You agree to provide CIBC with notice (by the deadlines set out below) of transactions which will cause the aggregate amount of your day end balance to increase or decrease by at least $10 million from the amount of your day-end balances of the previous business day (a "Fluctuation.") If you fail to provide CIBC with such advance notice, CIBC may charge your account with the cost to CIBC of any such unadvised Fluctuations. You will advise the following CIBC office of Fluctuations: Canadian Dollar Current Account: (416) - 594.8318 or (416) - 594.8319 U.S. Dollar Current Account: (416).594.7815 Fax (Canadian or U.S. Dollar Current Account): (416).594.8336 Timing on Notification of Fluctuations in balances: Over $100 million You shall notify CIBC: By 11 :00 AM same business day (Eastern Standard Time) By 4:00 PM the business day immediately prior (Eastern Standard Time) If Fluctuation in balance is aoing to be the sum of : Over $10 million to $100 million General Provision CIBC reserves the right to increase or change the charges and/or change how interest is calculated and paid in certain circumstances. If new laws are introduced, there is a change in the interpretation of an existing law or CIBC must comply with a government guideline or requirement, and any of these events has the effect of: i) increasing the cost to CIBC of providing the services covered under these arrangements, or ii) reducing any amount received or receivable by CIBC under these arrangements, CIBC may increase or otherwise change the charges and/or change how interest is calculated and paid in these special arrangements. These changes will be effective upon CIBC providing 60 days written notice of such changes to you. During the tenure of these arrangements, should any account(s) be opened or closed, or a service added or deleted, consideration will be given to amending the arrangements. Schedule A, which is attached to this letter, lists those accounts included in these special arrangements. You must provide this Centre with written notice of any changes to this list of accounts. Once you have had an opportunity to review these special arrangements, we would be pleased to discuss any questions or concerns which may arise. Your acceptance of these arrangements must be indicated by signing and returning the enclosed duplicate of this letter. Ackno and accepted The Corporation of the Municipality incardine ~ Ke-ff tf-.-~ date:_~V ') JOJ~ I 4~'ru-r s; ;J.q~ f" SCHEDULE A Interest Bearing CON Dollar Business Operating Accounts Account Title The Corp of the Muncipality of Kincardine The Corp of the Mun of Kincardine The Corp of the Mun of Kincardine The Corp of the Mun of Kincardine The Corp of the Mun of Kincardine The Corp of the Mun of Kincardine The Corp of the Mun of Kincardine The Corp of the Mun of Kincardine The Corp of the Mun of Kincardine Transit 05252 05252 05252 05252 05252 05252 05252 05252 05252 Account # 68-00114 68-00319 68-00416 68-00513 68-00610 68-00718 68-00815 68-00912 68-01013 Service Charoe $0 $0 $0 $0 $0 $0 $0 $0 $0 cmc November 21,2007 The Corporation of the Municipality of Kincardine, 1475 5th Concession, RR#5, Kincardine, ON N2Z 2X6 Attention: Larry Kraemer Dear Mr. Kraemer; We, Canadian Imperial Bank of Commerce ("CIBC"), are pleased to establish the following Credits for you, our customer. Overall Credit Limit Overall Credit Limit: The total use of Credits: Operating Line Demand Instalment Loan(s} Corporate VISA is not at any time to exceed $1,796,679. Credit A: Operating Line Credit Limit: $1,000,000. Description and Rate: A revolving demand credit, for general business purposes, having the following parts: (1) Canadian dollar loans and overdrafts. The Interest Rate is as follows: Prime Rate minus. 75% per year. Other provisions/Conditions; At the Bank's request, any outstanding borrowings by way of overdraft will be converted to promissory note format. Credit B: Demand Instalment Loan Loan Amount: $112,000. Purpose: MD recruitment The Corporation of the Municipality of Kincardine, November 21, 2007 Interest Rate: Prime Rate minus .25% per year. Scheduled Payments: Unless we make demand, you will pay CIBC as follows: 112 regular monthly payments of $1,000 each, plus interest. The first/next regular monthly payment is due on December 1, 2007. The last payment, plus any outstanding principal and interest together with any other amount due under this Agreement, is due on September 1, 2012. Credit C: Demand Instalment Loan Loan Amount: $584,677. Purpose: long term water project funding, with proceeds to be applied against outstanding Water Construction Loan. Interest Rate: Fixed rate of 4.86% per year. Scheduled Payments: Unless we make demand, you will pay CIBC as follows: 16 regular semi-annual payments of $30,687.89 each. The first/next regular semi-annual payment is due on April 14,2008. The last payment, plus any outstanding principal and interest together with any other amount due under this Agreement, is due on October 14, 2015. Credit D: Corporate VISA. Credit Limit: $100,000. Documentation: Our standard VISA documentation. Security Security: Other security: The following security is required: Current Expenditure Borrowing By-law Capital expenditure Borrowing By-law to secure facilities B & C. Reporting Requirements Reporting Requirements: (1) Within 150 days of each fiscal year end, accountant prepared financial statements for that fiscal year on an Audited Basis. 2of4 (1) Within 150 days of each fiscal year end, a copy of the Municipality's approved budget for the following year. Fees Loan Administration: Waived. Review: Waived. Amendment: Waived. Late Reporting: Waived. Other Provisions Default Interest Rate: Currently 21 % per year. If the Credit Limit of a Credit, or the Credit Limit of part of a Credit, or the Overall Credit Limit, is exceeded at any time, interest at the Default Rate is calculated on that excess amount. Next Scheduled Review Date: Standard Credit Terms: August 31, 2008 The attached Schedule - Standard Credit Terms forms part of this Agreement. General: You agree that (a) you have read this Agreement (including the Schedule - Standard Credit Terms), (b) CIBC has explained it to you, and (c) you understand it. Please indicate your acceptance of these terms by returning a signed copy of this Agreement Upon acceptance, this Agreement replaces the existing credit agreement between you and CIBC. Outstanding amounts (and security) under that Agreement will be covered by this Agreement it being the intention that the obligations under this Agreement are not a substitution for the obligations under the existing credit agreement and that the security under that agreement continues to secure the obligations under this Agreement. Yours truly, by: Bernice Rib Account Ma Phone no.: 519-832-9065-400 Fax no.: 519-832-2170 3of4 Acknowledgement: The undersigned certifies that all information provided to CIBC is true, and acknowledges receipt of a copy of this Agreement (including any Schedules referred to above). Accepted this s-tI-- day of r....,p br lUl. nf I ~DO ~. Title: By: ~.b--?--Cf;-F~~ Name: ~- ~ IlL t;) t c- / c!5 "'- _ r/~"'-c--'" Title: rr~ .skr~r 4of4 cmc 6326-99/06 (wp51CRED) Schedule - Standard Credit Terms ARnCLE 1 - GENERAL 1.1 Interest Rate. You will pay interest on each Credit at nominal rates per year equal to: (a) for amounts above the Credit Limit of a Credit or a part of a Credit or the Overall Credit Limit, as described in section 1.4, or for amounts that are not paid when due, the Default Interest Rate, and (b) for any other amounts, the rate specified in this Agreement. 1.2 Variable Interest. Each variable interest rate provided for under this Agreement will change automatically, without notice, whenever the Prime Rate or the U.S. Base Rate, as the case may be, changes. 1.3 Payment of Interest. Interest is calculated on the daily balance of the Credit at the end of each day. Interest is due once a month, unless the Agreement states otherwise. Unless you have made other arrangements with us, we will automatically debit your Operating Account for interest amounts owing. If your Operating Account is in overdraft and you do not deposit to the account an amount equal to the monthly interest payment, the effect is that we will be charging interest on overdue interest (which is known as compounding). Unpaid interest continues to compound whether or not we have demanded payment from you or started a legal action, or get judgment, against you. 1.4 Default Interest. To determine whether Default Interest is to be charged, the following rules apply: (a) Default Interest will be charged on the amount that exceeds the Credit Limit of any particular Credit. That will happen even if the Overall Credit Limit has not been exceeded. (b) If there are several parts of a Credit, Default Interest will be charged if the Credit Limit of a particular part is exceeded. For example, if Credit A's limit is $250,000, and the limit of one part is $100,000 and the limit ofthat part is exceeded by $25,000, Default Interest will be charged on that $25,000 excess, even if the total amount outstanding under Credit A is less than $250,000. (c) To determine if the Overall Credit Limit has been exceeded, the outstanding principal amount of each Credit is totalled, and any amounts in foreign currency are converted to Canadian dollars. If that total exceeds the Overall Credit Limit, Default Interest will be charged on that excess amount. For example, if there are three Credits, each with a Credit Limit of $100,000 and an Overall Credit Limit of $250,000, if each of those Credits is at $90,000, they are each under their own Credit Limits, but the Overall Credit Limit has been exceeded by $20,000, and Default Interest will be charged on that excess amount. The Corporation of the Municipality of Kincardine 1.5 Fees. You will pay CIBC's fees for each Credit as out lined in the Letter. You will also reimburse us for all reasonable fees (including legal fees) and out-of-pocket expenses incurred in registering any security, and in enforcing our rights under this Agreement or any security. We will automatically debit your Operating Account for fee amounts owing. 1.6 Our rights re demand Credits. At CIBC, we believe that the banker-customer relationship is based on mutual trust and respect. It is important for us to know all the relevant information (whether good or bad) about your business. CIBC is itself a business. Managing risks and monitoring our customers' ability to repay is critical to us. We can only continue to lend when we feel that we are likely to be repaid. As a result, if you do something that jeopardizes that relationship, or if we no longer feel that you are likely to repay all amounts borrowed, we may have to act. We may decide to act, for example, because of something you have done, information we receive about your business, or changes to the economy that affect your business. Some of the actions that we may decide to take include requiring you to give us more financial information, negotiating a change in the interest rate or fees, or asking you to get further accounting assistance, put more cash into the business, provide more security, or produce a satisfactory business plan. It is important to us that your business succeeds. We may, however, at our discretion, demand immediate repayment of any outstanding amounts under any demand Credit. We may also, at any time and for any cause, cancel the unused portion of any demand Credit. 1.7 Payments. If any payment is due on a day other than a Business Day, then the payment is due on the next Business Day. 1.8 Applying money received. If you have not made payments as required by this Agreement, or if you have failed to satisfy any term of this Agreement (or any other agreement you have that relates to this Agreement), or at any time before default but after we have given you appropriate notice, we may decide how to apply any money that we receive. This means that we may choose which Credit to apply the money against, or what mix of principal, interest, fees and overdue amounts within any Credit will be paid. 1.9 Information requirements. We may from time to time reasonably require you to provide further information about your business. We may require information from you to be in a form acceptable to us. 1.10 Insurance. You will keep all your business assets and property Novernber21,2007 insured (to the full insurable value) against loss or damage by fire and all other risks usual for property such as yours (plus for any other risks we may reasonably require). If we request, these policies will include a loss payee clause (and if you are giving us mortgage security, a mortgagee clause). As further security, you assign all insurance proceeds to us. If we ask, you will give us either the policies themselves or adequate evidence of their existence. If your insurance coverage for any reason stops, we may (but do not have to) insure the property. We will automatically debit your Operating Account for these amounts. Finally, you will notify us immediately of any loss or damage to the property. 1.11 Environmental. You will carry on your business, and maintain your assets and property, in accordance with all applicable environmental laws and regulations. If (a) there is any release, deposit, discharge or disposal of pollutants of any sort (collectively, a "Discharge") in connection with either your business or your property, and we pay any fines or for any clean-up, or (b) we suffer any loss or damage as a result of any Discharge, you will reimburse CIBC, its directors, officers, employees and agents for any and all losses, damages, fines, costs and other amounts (including amounts spent preparing any necessary environmental assessment or other reports, or defending any lawsuits) that result. If we ask, you will defend any lawsuits, investigations or prosecutions brought against CIBC or any of its directors, officers, employees and agents in connection with any Discharge. Your obligation to us under this section continues even after all Credits have been repaid and this Agreement has terminated. 1.12 Consent to release Information. We may from time to time give any credit or other information about you to, or receive such information from, (a) any financial institution, credit reporting agency, rating agency or credit bureau, (b) any person, firm or corporation with whom you may have or propose to have financial dealings, and (c) any person, firm or corporation in connection with any dealings you have or propose to have with us. You agree that we may use that information to establish and maintain your relationship with us and to offer any services as permitted by law, including services and products offered by our subsidiaries when it is considered that this may be suitable to you. 1.13 Our pricing policy. Fees, interest rates and other charges for your banking arrangements are dependent upon each other. If you decide to cancel any of these arrangements, you will have to pay us any increased or added fees, interest rates and charges we determine and notify you of. These increased or added amounts are effective from the date of the changes that you make. 1.14 Proof of debt. This Agreement provides the proof, between CIBC and you, of the credit made available to you. There may be times when the type of Credit you have requires you to sign additional documents. Throughout the time that we provide you credit under this Agreement, our loan accounting records will provide complete proof of all terms and conditions of your credit (such as principal loan balances, interest calculations, and payment dates). 1.15 Renewals of this Agreement. This Agreement will remain in effect for your Credits for as long as they remain unchanged. We have shown a Next Scheduled Review Date in the Letter. If there are no The Corporation of the Municipality of Kincardine changes to the Credits this Agreement will continue to apply, and you will not need to sign anything further. If there are any changes, we will provide you with either an amending agreement, or a new replacement Letter, for you to sign. 1.16 Confidentiality. The terms of this Agreement are confidential between you and CIBC. You therefore agree not to disclose the contents of this Agreement to anyone except your professional advisors. 1.17 PnH:ondltions. You may use the Credits granted to you under this Agreement only if: (a) we have received properly signed copies of all documentation that we may require in connection with the operation of your accounts and your ability to borrow and give security; (b) all the required security has been received and registered to our satisfaction; (c) any special provisions or conditions set forth in the Letter have been complied with; and (d) if applicable, you have given us the required number of days notice for a drawing under a Credit. 1.18 Notices. We may give you any notice in person or by telephone, or by letter that is sent either by fax or by mail. 1.19 Use of the Operating Line. You will use your Operating Line only for your business operating cash needs. You are responsible for all debits from the Operating Account that you have either initiated (such as cheques, loan payments, pre-authorized debits, etc.) or authorized us to make. Payments are made by making deposits to the Operating Account. You may not at any time exceed the Credit Limit. We may, without notice to you, return any debit from the Operating Account that, if paid, would result in the Credit Limit being exceeded, unless you have made prior arrangements with us. If we pay any of these debits, you must repay us immediately the amount by which the Credit Limit is exceeded. 1.20 Instalment Loans. The following terms apply to each Instalment Loan. (a) Non-revolving loans. Unless otherwise stated in the Letter, any Instalment Loan is non-revolving. This means that any principal payment made permanently reduces the available Loan Amount. Any payment we receive is applied first to overdue interest, then to current interest owing, then to overdue principal, then to any fees and charges owing, and finally to current principal. (b) Floating Rate Instalment Loans. Floating Rate Instalment Loans may have either (i) blended payments or (ii) payments of fixed principal amounts, plus interest, as described below. (i) Blended payments. If you have a Floating Rate Loan that has blended payments, the amount of your monthly payment is fixed for the term of the loan, but the interest rate varies with changes in the Prime or U.S. Base Rate (as the case may be). If the Prime or U.S. Base Rate during any month is lower than what the rate was at the outset, you may end up paying off the loan November 21, 2007 before the scheduled end date. If, however, the Prime or U.S. Base Rate is higher than what it was at the outset, the amount of principal that is paid off is reduced. As a result, you may end up still owing principal at the end of the term because of these changes in the Prime or U.S. Base Rate. (ii) Payments of principal plus Interest. If you have a Floating Rate Loan that has regular principal payments, plus interest, the principal payment amount of your Loan is due on each payment date specified in the Letter. The interest payment is also due on the same date, but it is debited from your Operating Account one or two banking days later. Although the principal payment amount is fixed, your interest payment will usually be different each month, for at least one and possibly more reasons, namely: the reducing principal balance of your loan, the number of days in the month, and changes to the Prime Rate or U.S. Base Rate (as the case may be). (c) Prepayment. Unless otherwise agreed, the following terms apply to prepayment of any Instalment Loan: (i) Floating Rate Instalment Loans. You may prepay all or part of a Floating Rate Instalment Loan (whether it is a Demand or a Committed Loan) at any time without notice or penalty. (ii) Fixed Rate Instalment Loans. You may prepay all or part of a Fixed Rate Instalment Loan, on the following condition. You must pay us, on the prepayment date, a prepayment fee equal to the interest rate differential for the remainder of the term of the Loan, in accordance with the standard formula used by CIBC in these situations. (d) Demand of Fixed Rate Demand Instalment Loans. If you have a Fixed Rate Demand Instalment Loan and we make demand for payment, you will owe us (i) all outstanding principal, (ii) interest, (iii) any other amount due under this Agreement, and (iv) a prepayment fee. The prepayment fee is equal to the interest rate differential for the remainder of the term of the loan, in accordance with the standard formula used by CIBC in these situations. ARTICLE 2 - DEFINITIONS 2.1 DefInitions. In this Agreement, the following terms have the following meanings: "Business Day" means any day (other than a Saturday or a Sunday) that the CIBC Branch/Centre is open for business. "CIBC Branch/Centre" means the CIBC branch or banking centre noted on the first page of this Agreement, as changed from time to time by agreement between the parties. "Credit" means any credit referred to in the Letter, and if there are two or more parts to a Credit, "Credit" includes reference to each part. The Corporation of the Municipality of Kincardine "Credit Umit" of any Credit means the amount specified in the Letter as its Credit Limit, and if there are two or more parts to a Credit, "Credit Limit" includes reference to each such part. "Default Interest Rate", unless otherwise defined in the Letter, means the Standard Overdraft Rate. "Demand Instalment Loan" means an Instalment Loan that is payable upon demand. Such a Loan may be either at a fixed or a floating rate of interest. "Fixed Rate Instalment Loan" means an Instalment Loan that is also a Fixed Rate Loan. "Fixed Rate Loan" means any loan drawn down, converted or extended under a Credit at an interest rate which was fixed for a term, instead of referenced to a variable rate such as the Prime Rate or U.S. Base Rate, at the time of such drawdown, conversion or extension. For purposes of certainty, a Fixed Rate Loan includes a UBOR Loan. "Floating Rate Instalment Loan" means either an Instalment Loan that is either a Prime Rate Loan or a Base Rate Loan. "Instalment Loan" means a loan that is repayable either in fixed instalments of principal, plus interest, or in blended instalments of both principal and interest. A Demand Instalment Loan is repayable on demand. A Committed Instalment Loan is repayable only upon the occurrence of an Event of Default. "Letter" means the letter agreement between you and CIBC to which this Schedule and any other Schedules are attached. "Operating Account" means the account that you normally use for the day-to-day cash needs of your business, and may be either or both of a Canadian dollar and a U.S. dollar account. "Prime Rate" means the variable reference rate of interest per year declared by CIBC from time to time to be its prime rate for Canadian dollar loans made by CIBC in Canada. "Prime Rate Loan" means a Canadian dollar loan on which interest is calculated by reference to Prime Rate. "Standard Overdraft Rate" means the variable reference interest rate per year declared by CIBC from time to time to be its standard overdraft rate on overdrafts in Canadian or U.S. dollar accounts maintained with CIBC in Canada. November 21, 2007