Application of proceeds of debentures
168.(1)Subject to subsections (3) and (4), money received by any municipal corporation from the sale or hypothecation of any debentures shall be kept in a separate account and shall be used only for the purposes for which it was raised and shall not be applied towards payment of the current or other expenditure of the municipality. Idem (2)Despite subsection (1) and section 175, where a local municipality has money received from the sale of debentures that are not required immediately for the purpose or purposes for which the debentures were issued, such money may be invested in the general fund of the municipality, but such money shall be returned to the debenture account, (a) by the day on which the money is required for the purpose or purposes for which the debentures were issued; or (b) not later than the 31st day of December of the year in which the money was so invested, whichever occurs first and interest shall be credited to the debenture account on the amount so invested, at a rate equal to the rate currently applicable to the temporary borrowings of the municipality. Application of surplus funds raised in debentures (3)Subject to subsection (4), when the amount realized from the debentures is in excess of that required for the purpose or purposes for which the debentures were issued, the excess amount shall be applied as follows: 1. Where the amount is sufficient to redeem one or more debentures of the latest maturity, it shall be applied for that purpose if any such debentures are redeemable. 2. Where no such debentures are redeemable or where the amount is not sufficient to redeem a debenture or where a balance remains after redemption as required by paragraph 1, the amount or the balance, as the case may be, shall be applied on the annual payments of principal and interest on the debentures until the amount or the balance, as the case may be, has all been so applied, and the levies required for such purpose shall be reduced accordingly. R.S.O. 1990, c. M.45, s. 168 (1-3). Application of amounts not required for purposes of debentures (4)Where the whole or any part of the amount realized from the sale or hypothecation of any debentures is not required for the purpose or purposes for which the debentures were issued, it may be applied to buy back the debentures or may be applied to meet the whole or a portion of any other capital expenditure the debt charges for which if raised by taxation would be raised by taxation levied upon the assessment of the same class of ratepayers as would have been levied upon to meet the debt charges if the amount had been spent for the purpose or purposes for which the debentures were issued. R.S.O. 1990, c. M.45, s. 168 (4); 1996, c. 32, s. 39. Use of proceeds of sale of property acquired from proceeds of sale of debentures (5)Where real or personal property acquired with all or part of the proceeds of the sale of debentures is sold while any part of the debentures remains outstanding, the net proceeds of the sale, to the extent of the amount of principal and interest then outstanding on such debentures, shall be applied in accordance with subsections (3) and (4). R.S.O. 1990, c. M.45, s. 168 (5).