PART XIII DEBT AND INVESTMENT
409.
409 (1) A municipality may provide in a debenture by-law, (a)  that all or a portion of the debentures are sinking fund debentures which have the principal payable on a fixed date; (b)  that a portion of the debentures are term debentures which have, (i)  the principal payable on a fixed date, and (ii)  a retirement fund for the repayment of the principal which does not require payment into it to begin until after the principal of the other debentures issued under the by-law becomes payable; or (c)  that a retirement fund be established for the repayment of the principal amount of a class or classes of its debentures other than sinking fund or term debentures.  2006, c. 32, Sched. A, s. 177. Amount to be raised annually (2) A by-law passed under this section shall provide for the following amounts: 1.  In respect of a sinking fund by-law, an estimated amount in each year for the sinking fund which, with interest compounded annually, will be sufficient to pay the principal of the debentures at maturity. 2.  In respect of a term debenture by-law, in each year that a payment is made into the retirement fund, an estimated amount in each year for the retirement fund which, with interest compounded annually, will be sufficient to pay the principal of the debentures at maturity. 3.  In respect of a retirement fund by-law for a class of debentures other than a sinking fund or term debenture, in each year an amount equal to or greater than the amount that would have been required for the repayment of the principal of the debentures in that year if the principal had been payable in equal annual instalments and the debentures had been issued for the maximum period authorized by the municipality for the repayment of the debt for which the debentures were issued.  2006, c. 32, Sched. A, s. 177. Principal payable (3) An amount required to be provided in a year under subsection (2) shall be deemed to be an amount of principal payable to the lender in the year for the purposes of subsections 403 (3) and 404 (8) and clause 408 (4) (a).  2002, c. 17, Sched. A, s. 79 (2). Exception (4) Despite clause 408 (4) (b), a municipality that passes a by-law under subsection (1) is not required to pay an annual instalment of an amount of principal to the holder of a debenture issued under the by-law.  2001, c. 25, s. 409 (4). Limitation (5) Except as provided in this section, a municipality shall apply an amount raised for a sinking or retirement fund, including earnings or proceeds derived from the investments of those funds, only towards repayment of the principal of the fund at maturity.  2009, c. 18, Sched. 18, s. 8 (1). Duty to annually certify balance (6) On or before December 31 in each year, the municipal auditor shall certify the balance in each sinking and retirement fund of a municipality for the year.  2001, c. 25, s. 409 (6). Deficiency (7) If the balance certified is less than the amount required in the year for the repayment of the sinking or retirement fund debentures for which the fund was established, the municipality shall pay an amount sufficient to make up the deficiency into the sinking or retirement fund.  2001, c. 25, s. 409 (7). Excess balance (8) The certified balance may exceed the amount required in the year for the repayment of the sinking or retirement fund debentures for which the fund was established.  2001, c. 25, s. 409 (8). Reduction of levy, etc. (9) Despite this Act, a municipality may amend a debenture by-law to reduce an amount to be raised with respect to a sinking or retirement fund to the extent that the certified balance of the fund, including any estimated revenue, is or will be sufficient to repay the principal of the debt for which the fund was established on the date or dates the principal becomes due.  2001, c. 25, s. 409 (9). Repayment of principal (10) Despite this Act, if the certified balance of a sinking fund or retirement fund, including any estimated revenue, is or will be sufficient to entirely repay the principal of the debt for which the fund was established on the date or dates the principal becomes due, the municipality may amend its debenture by-law to eliminate the provision for the raising of any amount for the sinking or retirement fund.  2001, c. 25, s. 409 (10). Remaining balance (11) If there is a portion of a certified balance remaining after a municipality eliminates a provision for an amount to be raised in accordance with subsection (10), the municipality may apply the portion, (a)  to the payment of interest on the principal of the sinking or retirement fund debenture; or (b)  to each remaining sinking fund or retirement fund of the municipality proportionately as the amount of that sinking fund or retirement fund bears to the total of all the remaining sinking or retirement funds.  2001, c. 25, s. 409 (11). Further amounts (12) If there is any amount remaining after applying the funds in accordance with subsection (11), the municipality may use the amount for any purpose of the municipality.  2009, c. 18, Sched. 18, s. 8 (2). Upper-tier municipality (13) If a sinking or retirement fund is established by an upper-tier municipality for the purposes or joint purposes of one or more of its lower-tier municipalities, the upper-tier municipality, (a)  shall, if it reduces or eliminates any amount to be raised under subsection (9) or (10) with respect to the fund, reduce or eliminate them for lower-tier purposes proportionate to the contributions to that fund by its lower-tier municipalities; (b)  shall, despite subsection (11), apply any portion under that subsection proportionate to the contributions to the fund or to all sinking or retirement funds of the municipality, as the case may be, by its lower-tier municipalities; (c)  shall, despite subsection (12), if there is any amount remaining after applying the funds in accordance with clause (b), transfer to its lower-tier municipalities their proportionate share of the amount based on their contributions to the fund; and (d)  shall, if it is required to pay an amount under subsection (7) to make up a deficiency, require one or more of its lower-tier municipalities to make payment to the upper-tier municipality for the deficiency, proportionate to the amount of their contributions to the fund, and may amend its debentures by-law accordingly.  2001, c. 25, s. 409 (13); 2002, c. 17, Sched. A, s. 79 (3). Section Amendments with date in force (d/m/y) 2002, c. 17, Sched. A, s. 79 (1-3) - 01/01/2003 2006, c. 32, Sched. A, s. 177 - 01/01/2007 2009, c. 18, Sched. 18, s. 8 (1, 2) - 05/06/2009