Report to / Rapport au : Council / Conseil. 1 June 2011 / le 1 juin 2011

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1 1 Report to / Rapport au : Council / Conseil 1 June 2011 / le 1 juin 2011 Submitted by/soumis par : Marian Simulik, City Treasurer/Trésorière municipale Contact Person/Personne ressource : Mona Monkman, Deputy City Treasurer Corporate Finance/ Trésorière municipal adjointe Finances municipales Finance Department/ Service des finances ext./poste 41723, Mona.Monkman@ottawa.ca City Wide/à l'échelle de la Ville Ref N : ACS2011-CMR-FIN-0034 SUBJECT: OBJET : PROVINCIAL GAS TAX LA TAXE PROVINCIALE SUR L ESSENCE REPORT RECOMMENDATION That City Council: 1. Authorize the Mayor and City Treasurer to sign an agreement with the Province relating to the City s share of the provincial gas tax in accordance with the terms set out in Document 1; and 2. That a By-law be enacted as required by the Province to authorize the Mayor and Treasurer to execute the Letter of Agreement each year RECOMMANDATION DU RAPPORT Que le Conseil: 1. Autorise le maire et la trésorière municipale à ratifier une entente avec le gouvernement provincial concernant la part de la Ville d Ottawa de la taxe provinciale sur l essence, conformément aux modalités énoncées dans le document Qu un règlement municipal soit adopté tel que requis par la Province afin d autoriser le maire et la trésorière à exécuter une lettre d entente chaque année.

2 2 BACKGROUND In 2004, the Province of Ontario announced that it would be transferring a portion of the gas tax to municipalities for public transit. The revenue sharing has been phased in starting at one-cent ($0.01) per litre in October 2004, increasing to one and a half cents ($0.015) per litre in October 2005 and two cents ($0.02) per litre in October 2006 where it currently remains. In order to receive this funding, municipal councils are required to authorize the signing of an agreement and by-law. DISCUSSION The City is eligible to receive a provincial gas tax allocation of $32,564,077 for the period, October 1, 2010 to September 30, Payments will be made on a quarterly basis beginning with the first payment of $24,423,058 payable on receipt of the signed agreement and the authorizing by-law. The allocation formula established by the Province is based on 70% transit ridership and 30% municipal population. Both ridership and population figures are updated and revised annually to determine the amounts provided to each municipality. A copy of the Letter of Agreement is provided as Document 1 and the authorizing by-law is attached as Document 2. The agreement requires that all funds received under this program be used in accordance with the guidelines and requirements as set out in Document 3 which is on file with the City Clerk. Generally, provincial gas tax funds may be spent on: Public transportation capital expenditures that promote increased transit ridership, and are above a municipality s baseline spending; Public transportation operating expenditures that are above a municipality s baseline spending; Capital expenditures for the replacement of any transportation vehicles, and are above a municipality s baseline spending; Capital expenditures that provide improvements to transit security and passenger safety and are above a municipality s baseline spending; and Major refurbishment on any fully accessible, or to be made fully accessible, public transportation vehicle. RURAL IMPLICATIONS There are no rural implications.

3 3 CONSULTATION The purpose of this report is administrative in nature and therefore no public consultation is required. All Departments reporting to Committee were consulted in the preparation of this report. LEGAL IMPLICATIONS There are no legal impediments to implementing the recommendations of this report. RISK MANAGEMENT IMPLICATIONS There are no risk implications. FINANCIAL IMPLICATIONS The 2011 budget had assumed the receipt $ million of provincial gas tax funds which is $2.676 million less than the announcement. The province allocates 70% of the gas tax funds to municipalities based on ridership while the remaining 30% is allocated based on population. The decline in the funding allocated to Ottawa is reflective of the lower 2009 ridership numbers due to the transit strike. It is anticipated that the 2011 / 12 allocation will increase as it will be based on 2010 ridership levels. The reduced level of funding will result in a temporary over commitment of gas tax funds against approved capital projects. On a cash basis there are sufficient funds to finance the projected capital expenditures. TECHNOLOGY IMPLICATIONS There are no technology implications with this report. CITY STRATEGIC PLAN There are no impacts on the City s Strategic Plan. SUPPORTING DOCUMENTATION Document 1 - Letter of Agreement Document 2 Authorizing By-law Document /2011 Guidelines and Requirements (on file with the City Clerk)

4 4 DISPOSITION Signed agreements and authorizing by-law will be forwarded to the Ministry of Transportation.

5 5 DOCUMENT 1

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9 9 BY-LAW DOCUMENT 2 A by-law of the City of Ottawa to authorize the entering into of an agreement with the Province of Ontario through the Minister of Transportation relating to funding provided by the Province of Ontario to the City under the Dedicated Gas Tax Funds for Public Transportation Program. WHEREAS the Province has announced a Dedicated Gas Tax Funds for Public Transportation Program to assist municipalities in expanding and renewing their public transit system; AND WHEREAS the Province has indicated that as a condition precedent for the participation in this Program, municipalities must enter into an agreement through the Minister of Transportation; THEREFORE the Council of the City of Ottawa enacts as follows: 1. The Mayor and Treasurer are hereby authorized to execute Letters of Agreement on an annual basis between the Province of Ontario represented by the Minister of Transportation for the Province of Ontario and the City of Ottawa related to funding provided by the Province of Ontario to the City under the Dedicated Gas Tax Funds for Public Transportation Program in accordance with the Guidelines and Requirements issued by the Province of Ontario. ENACTED AND PASSED this 8 th day of June, CITY CLERK MAYOR

10 10 BY-LAW NO o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o- A by-law of the City of Ottawa to authorize the entering into of an agreement with the Province of Ontario through the Minister of Transportation relating to funding provided by the Province of Ontario to the City under the Dedicated Gas Tax Funds for Public Transportation Program. -o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o- Enacted by City Council at its meeting of June 8, o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o- LEGAL SERVICES AMP:mm G04-01-GAS COUNCIL AUTHORITY City Council June 8, 2011 Treasurer s Report