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HomeMy WebLinkAbout14 010 Bruce Telecom Sale By-law THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE A_ _ 7 C /P L M " ® BY -LAW NO. 2014 - 010 BEING A BY -LAW TO ENTER INTO AN ASSET PURCHASE AGREEMENT FOR THE SALE OF BRUCE TELECOM AND ASSOCIATED ASSETS AND PROPERTIES TO BRAGG COMMUNICATIONS INCORPORATED WHEREAS pursuant to Sections 8 (1) and 9 of the Municipal Act 2001, S.O. 2001, c. 25, as amended, the powers of a municipality under this or any other Act shall be interpreted broadly so as to confer broad authority on the municipality to enable the municipality to • govern its affairs as it considers appropriate and to enhance the municipality's ability to respond to municipal issues and a municipality has the capacity, rights, powers and privileges of a natural person for the purpose of exercising its authority under this or any other Act; AND WHEREAS Section 11 (1) of the said Municipal Act gives broad authority to lower - tier municipalities to provide any service or thing that the municipality considers necessary or desirable for the public; AND WHEREAS the Municipal Act, 2001, S.O., c.2, as amended, allows municipalities to establish municipal service boards within the jurisdictional sphere of "public utilities ", which includes telephone systems; AND WHEREAS in 2006 The Corporation of the Municipality of Kincardine (the "Municipality ") passed By -law No. 2006 - 266 to establish a Municipal Service Board, to be known as "Bruce Telecom ", to assume control and management, subject to the provisions of By -law No. 2006 - 266, of the telecommunications services operations owned by the Municipality; • AND WHEREAS section 3.01 of By -law No. 2006 - 266 stipulates that the Board shall conduct Bruce Telecom ( "BT ") on a commercially prudent basis to provide reliable, effective, competitive and efficient telecommunications systems to its customers; AND WHEREAS section 3.04 of By -law No. 2006 - 266 stipulates that the title to all lands, building and equipment acquired or constructed for the purposes of BT shall be held in the name of the Municipality and not in BT's name or in the name of the Board; AND WHEREAS Accelerator Strategies Inc., ( "Accelerator ") partnering with TMT Advisors ( "TMT ") were engaged on February 24, 2013 by the Board of BT to review BT's past performance, operations and financial outlook to provide a report assessing the company's positioning, possible valuation range and strategic alternatives; AND WHEREAS Accelerator and TMT completed its Assessment Report on BT's Position, Valuation & Strategic Alternatives in April of 2013 (the "Advisor's Report"); III Page 2 Bruce Telecom Sale By -law By -law No. 2014 - 010 AND WHEREAS on July 29, 2013 the Municipality convened a Closed Special Meeting of the Council of the Municipality to discuss the Advisor's Report. In 111 addition to the Mayor and Members of Council being in attendance Mr. Bart Cameron, BT President & Chief Executive Officer and other representatives of BT's Board were in attendance. Mr. Cameron reviewed the Advisor's Report and representatives of the BT Board spoke on their preferred path forward and then left the meeting; AND WHEREAS the Mayor and Members of Council discussed the matters affecting BT and in particular the material risks to its financial outlook and operating issues that may impact the Municipality's Distributions as outlined in the Advisor's Report. Specifically the Mayor and Members of Council discussed imminent competitive threats to launch in- territory telephony, technological advances and needed capital to remain competitive, the future of land lines, the impact of CRTC rulings on monopolies, potential tax burden to borrow funds for capital expenditure and responsibility to their ratepayers. As well, Council discussed options such as the purchase of various other telephone companies, corporate structure change, potential merger or potential sale of BT; AND WHEREAS at the end of the debate Council voted to support the sale of BT at • an acceptable negotiated price; AND WHEREAS at a Closed Session Meeting of the Municipality held on August 7, 2013 the Mayor and Chief Administrative Officer of the Municipality confirmed that George Horhota (Accelerator Strategies) and Peter Rhaney (TMT) would be recommended to advise the Municipality on the sale of BT. As well Councillor Coristine moved a Motion for Council to reconsider their decision of July 29, 2013 to pursue a sale of BT which Motion failed after a thorough debate; AND WHEREAS the Chief Administrative Officer has confirmed to the Mayor and Members of Council that the Municipality has actively been seeking potential purchasers of BT and has obtained an offer with a purchase price of $24 million dollars which offer does not include the $3 million dollars in cash available to BT, which monies will remain with the Municipality; AND WHEREAS at a Closed Session Meeting of the Municipality held on December 18, 2013 Council supported the sale of BT at the purchase price of $24 million dollars, not including the $3 million dollars of cash assets of BT with the further understanding that the final transaction may be concluded within a 5% margin of the subject offer and that the Mayor and Chief Administrative Officer take all necessary steps to finalize the purchase agreement; AND WHEREAS the Council of The Corporation of the Municipality of Kincardine considers it to be in the interest of the Municipality to sell Bruce Telecom and associated assets and properties; NOW THEREFORE the Council of The Corporation of the Municipality of Kincardine ENACTS as follows: 1. That the agreement for the sale of Bruce Telecom and associated assets and properties to Bragg Communications Incorporated is hereby approved and will be held in confidence pending the completion of the transaction. 2. That the Mayor and Chief Administrative Officer are and have been hereby authorized and directed to execute the said agreement and all supplemental agreements and documents to complete the transaction, on behalf of the Municipality of Kincardine by affixing their signatures and the corporate seal. • 3. This by -law shall come into full force and effect upon its final passage. Page 3 Bruce Telecom Sale By -law By -law No. 2014 - 010 4. This by -law may be cited as the "Bruce Telecom Sale By -law ". • READ a FIRST and SECOND TIME this 22 day of January, 2014. READ a THIRD TIME and FINALLY PASSED this 22 day of January, 2014. di - • - - SC*Ma ti+ac, U Mayor Clerk • 111 111