Municipal Act is prescriptive with respect to select timelines required for repayment; however, section 30(3) of Ontario Regulation 586/06 is prescriptive in stating that the repayment period must not exceed the life of the asset.

The ability to provide for a 20-year option to repay special charges for drainage and local improvement works would appear to be feasible in light of the direction of the Court of Revision; however, the decision to adopt a longer repayment period must be carefully weighed in light of current and future economic circumstances.

Risk Analysis:

There are no particular risks inherent with the recommendation of this report; however, the possible risks of a policy change are noted in the Financial Matters section.

Financial Matters:

There are a number of financial impacts that would need to be more fully analyzed and considered if such a change in policy were to be put forward. This would include such items as assessing the impact to city funding, the impact on available cash flows, and costs associated with the administration of the program, etc. Currently the cost for such work is either funded as part of a municipal capital project or as noted above, cost shared between the City and the property owner. The portion which remains to be funded over time to the taxpayer is in essence a loan with the City becoming the financing authority on a long-term basis. In terms of cash flow, in today's economic environment wherein interest rates are very low and affordable, it would be advantageous for a property owner to accept and maintain a 20-year repayable loan from the City. In contrast, where interest rates are initially higher and then fall over the repayment period, a property owner can choose a payout based upon the remaining balance outstanding. The same does not hold true for the city, as interest rates rise over the 20-year period, the City would be essentially forgoing interest revenue until the full balance owing is collected. There is no ability for the City to renegotiate the terms of the loan.

Under the current policy, property owners are provided with the choice to pay their share of the cost in full. Those property owners who require financial assistance with the full payment can choose to access alternative financing through various lending institutions which would likely have provisions for longer-term repayment periods and attractive interest rates.

Consultations:

Janice Guthrie, Deputy Treasurer, Taxation and Financial Projects

Wira Vendrasco, Deputy City Solicitor Legal and Real Estate

Conclusion:

A change in the repayment period for works undertaken under the Drainage Act and the Local Improvement Regulation is within the discretion of council subject to the