Principal and interest payments
252. (1) Subject to subsection (2), a money by-law for the issuing of debentures shall provide that the principal shall be repaid in annual instalments with interest payable in one or more instalments in each year, and the by-law may provide for annual instalments of combined principal and interest. R.S.O. 1990, c. M.62, s. 252 (1); 1996, c. 32, s. 78 (32). Sinking fund debentures (2) A money by-law for the issuing of debentures may provide that the principal shall be repaid at a fixed date with interest payable in one or more instalments in each year, in which case debentures issued under the by-law shall be known as sinking fund debentures. R.S.O. 1990, c. M.62, s. 252 (2); 1996, c. 32, s. 78 (33). When debentures payable (3) The whole debt and the debentures to be issued therefor shall be made payable within a term not to exceed the lifetime of the undertaking up to a maximum of forty years. 1992, c. 15, s. 49 (1). Special levy against area municipalities (4) The by-law may provide for raising in each year, by special levy or levies against one or more area municipalities, the whole or specified portions of the sums of principal and interest payable under the by-law in such year, and each such area municipality shall pay to the Metropolitan Corporation such sums at the times and in the amounts specified in the by-law. General levy (5) The by-law shall provide for raising in each year, by a special levy on all the area municipalities, the sums of principal and interest payable under the by-law in such year to the extent that such sums have not been provided for by any special levy or levies against any area municipality or municipalities made especially liable therefor by the by-law. Levy by area municipalities (6) Any special levy against an area municipality imposed by the by-law under the authority for subsection (4) may be levied by the area municipality against persons or property in the same manner and subject to the same limitations as if it were passing a by-law authorizing the issue of debentures of the area municipality, for the same purpose, for the portion of the debt levied against it under subsection (4). Levies a debt (7) All levies imposed by the by-law against an area municipality are a debt of the area municipality to the Metropolitan Corporation. By-law to change mode of issuing debentures (8) The Metropolitan Council may by by-law authorize a change in the mode of issue of the debentures, and may provide that the debentures be issued with coupons instead of in amounts of combined principal and interest or vice versa, and where any debentures issued under the by-law have been sold, pledged or hypothecated by the Metropolitan Council, upon again acquiring them, or at the request of any holder of them, may cancel them and issue one or more debentures in substitution for them, and make such new debenture or debentures payable by the same or a different mode on the instalment plan, but no change shall be made in the amount payable in each year. R.S.O. 1990, c. M.62, s. 252 (4-8). Dating and issuing of debentures (9) A by-law for the issuing of debentures may provide for issuing them, (a) on any date specified in the by-law; or (b) in sets in the amounts and on the dates required. Same (10) Subject to subsection (11), debentures may bear any date or dates specified in the issuing by-law, including a date before the by-law is passed if the by-law provides for the first levy being made in the year in which the debentures are dated or in the next year. Same (11) Every debenture in a set or issue of debentures shall bear the same date. Extension of time for issue (12) The Metropolitan Council may by by-law extend the date for an issue of debentures or sets of them. Effective date of by-law (13) A by-law passed under this section comes into force on the day it is passed, unless a later date is specified in the by-law. 1996, c. 32, s. 78 (34). (14) REPEALED: 1996, c. 32, s. 78 (34). Consolidation (15) Despite any general or special Act, the Metropolitan Council may borrow sums for two or more purposes in one debenture by-law and provide for the issue of one series of debentures therefor. R.S.O. 1990, c. M.62, s. 252 (15). Application (16) Subsections 140 (4) and (16), sections 141, 142 and 143 and subsections 144 (2.1) to (2.3) and 145 (1) and (2) of the Municipal Act apply with necessary modifications to the Metropolitan Corporation. 1992, c. 15, s. 49 (2). Registration of debentures (17) Subsection 181 (4) of the Municipal Act applies and shall be deemed to have always applied, with necessary modifications, to the Metropolitan Corporation. Administration of retirement fund (18) The retirement fund for term debentures shall be administered by the sinking fund committee in all respects in the same manner as a sinking fund established under this section, and the provisions of subsections (24) to (44) of this section with respect to a sinking fund shall apply with necessary modifications to such retirement fund. R.S.O. 1990, c. M.62, s. 252 (17, 18). Redemption before maturity (19) The by-law may provide that all the debentures or a portion thereof shall be redeemable at the option of the Metropolitan Corporation on any date prior to maturity subject to the following provisions: 1. The by-law and every debenture that is so redeemable shall specify the place or places of payment and the amount at which such debenture may be so redeemed. 2. The principal of every debenture that is so redeemable becomes due and payable on the date set for the redemption thereof, and from and after such date interest ceases to accrue thereon where provision is duly made for the payment of the principal thereof, the interest to the date set for redemption, and any premium payable on redemption. 3. Notice of intention so to redeem shall be sent by post at least thirty days prior to the date set for such redemption to the person in whose name the debenture is registered at the address shown in the debenture registry. 4. At least thirty days prior to the date set for such redemption, notice of intention so to redeem shall be published in The Ontario Gazette and in a daily newspaper of general circulation in the City of Toronto and in such other manner as the by-law may provide. 5. Where only a portion of the debentures issued under the by-law is so to be redeemed, such portion shall comprise only the debentures that have the latest maturity dates, and no debentures issued under the by-law shall be called for such redemption in priority to any such debenture that has a later maturity date. 6. Where a debenture is redeemed on a date prior to maturity, such redemption does not affect the validity of any by-law by which special assessments are imposed or instalments thereof levied, the validity of such special assessments or levies, or the powers of the Metropolitan Council to continue to levy and collect from any area municipality the subsequent payments of principal and interest payable by it to the Metropolitan Council in respect of the debenture so redeemed. R.S.O. 1990, c. M.62, s. 252 (19); 1992, c. 15, s. 49 (3). (20)-(22) REPEALED: 1996, c. 32, s. 78 (35). Principal levies (23) When sinking fund debentures are issued, the amount of principal to be raised in each year shall be a specific amount that, with the estimated interest at a rate not exceeding 8 per cent per year, compounded annually, will be sufficient to pay the principal of the debentures at maturity. 1996, c. 32, s. 78 (36). Consolidated bank accounts (24) When sinking fund debentures are issued, the sinking fund committee shall keep one or more consolidated bank accounts in which, (a) the treasurer of the Metropolitan Corporation shall deposit each year during the term of the debentures the money raised for the sinking fund of all debts that are to be paid by means of sinking funds; and (b) there shall be deposited all earnings derived from, and all proceeds of the sale, redemption or payment of, sinking fund investments. Sinking fund committee (25) When sinking fund debentures are issued, there shall be a sinking fund committee which shall be composed of the treasurer of the Metropolitan Corporation and such other members appointed by the Metropolitan Council as it considers appropriate and the appointed members shall be paid, out of the current fund of the Metropolitan Corporation, such annual remuneration as the Metropolitan Council may determine. Alternate members (26) The Metropolitan Council may appoint an alternate member for each of the appointed members and any such alternate member has all the powers and duties of the member in the absence or inability to act of such member and any such alternate member may be paid, out of the current fund of the Metropolitan Corporation, such remuneration as the Metropolitan Council determines. Chair (27) The treasurer of the Metropolitan Corporation shall be the chair and treasurer of the sinking fund committee and in his or her absence the appointed members may appoint one of themselves as acting chair and treasurer. Security (28) Each member of the sinking fund committee shall, before entering into the duties of office, give security for the faithful performance of his or her duties and for duly accounting for and paying over all money that comes into his or her hands, in such amount as the auditor of the Metropolitan Corporation shall determine, and in other respects section 92 of the Municipal Act applies with respect to such security. Quorum (29) A majority of members of the sinking fund committee are a quorum, and all investments and disposals of investments must be approved by a majority of all the members of the committee. Control of sinking fund assets (30) All assets of the sinking funds, including all consolidated bank accounts, shall be under the sole control and management of the sinking fund committee. Withdrawals from bank accounts (31) All withdrawals from the consolidated bank accounts shall be authorized by the sinking fund committee, and all cheques on the consolidated bank accounts shall be signed by the chair or acting chair and one other member of the sinking fund committee. Investments (32) The sinking fund committee shall invest any money on deposit from time to time in the consolidated bank accounts and may at any time or times vary any investments. R.S.O. 1990, c. M.62, s. 252 (24-32). Same (33) The money in the consolidated bank accounts shall be invested in securities in which the Metropolitan Corporation is permitted to invest under section 167 of the Municipal Act. 1996, c. 32, s. 78 (37). (34), (35) REPEALED: 1996, c. 32, s. 78 (37). Note: During a one-year transitional period, beginning on March 6, 1997 and ending on March 6, 1998, the following rules apply: Subsection 252 (33), as it read on March 5, 1997, continues to apply to investments made before that date. However, an investment made before that date shall not be continued beyond the transitional period unless it is a permitted investment under section 167 of the Municipal Act. Money in a reserve fund may also be invested in securities in which the Metropolitan Corporation is permitted to invest under section 167 of the Municipal Act. See: 1996, c. 32, ss. 78 (38-40), 102 (4). Sinking fund accounts (36) All sinking fund debentures issued on the same date, payable in the same currency, and maturing on the same date, although they are issued under one or more by-laws, shall be deemed one debt and be represented by one sinking fund account. R.S.O. 1990, c. M.62, s. 252 (36). Earnings credited to sinking fund account (37) That proportion of the amount of all earnings in any year, on an accrual basis, from sinking fund investments, obtained by, (a) multiplying the amount of all such earnings by the amount of the compounded interest for that year under subsection (23) with respect to the principal raised up to and including such year for all sinking fund debentures represented by any sinking fund account; and (b) dividing the product obtained under clause (a) by the amount of all compounded interest for that year under subsection (23) with respect to all principal raised up to and including such year for all outstanding sinking fund debentures, shall be credited to the sinking fund account mentioned in clause (a). R.S.O. 1990, c. M.62, s. 252 (37); 1996, c. 32, s. 78 (41). Sinking fund requirements (38) The treasurer of the Metropolitan Corporation shall prepare and lay before the Metropolitan Council in each year, before the annual metropolitan levies are made, a statement showing the sums that the Metropolitan Council will be required, by by-law, to raise for sinking funds in that year. Offence (39) If the treasurer contravenes subsection (24) or (38), he or she is guilty of an offence. Failure to levy (40) If the Metropolitan Council neglects in any year to levy the amount required to be raised for a sinking fund, each member of the Metropolitan Council is disqualified from holding any municipal office for two years, unless he or she shows that he or she made reasonable efforts to procure the levying of such amount. R.S.O. 1990, c. M.62, s. 252 (38-40). Where sinking fund account more than sufficient to pay debt (41) Despite this or any other Act or by-law, if it appears at any time that the amount at the credit of a sinking fund account will, together with the estimated earnings to be credited to it under subsection (37) and the levy required by the by-law or by-laws that authorized the issue of the debentures represented by the sinking fund account, be more than sufficient to pay the principal of the debt when it matures, the Metropolitan Council or the council of an area municipality may reduce the amount of money to be raised with respect to the debt. 1996, c. 32, s. 78 (42). No diversion of sinking funds (42) No money collected for the purpose of a sinking fund shall be applied towards paying any part of the current or other expenditure of the Metropolitan Corporation or otherwise than is provided in this section. R.S.O. 1990, c. M.62, s. 252 (42). Surplus (43) When there is a surplus in a sinking fund account, the sinking fund committee may, with the approval of the Metropolitan Council, (a) use the surplus to increase the amount at the credit of another sinking fund account; or (b) authorize the withdrawal of the surplus from the consolidated bank accounts, to be used for one or more of the purposes described in subsection (43.1). Purposes (43.1) The purposes referred to in clause (43) (b) are: 1. Retirement of unmatured debentures of the Metropolitan Corporation or of an area municipality. 2. Reduction of the next annual levy on account of principal and interest payable with respect to debentures of the Metropolitan Corporation or of an area municipality. 3. Reduction of the amount of debentures to be issued for capital expenditures for which the issue of debentures has been approved. 4. Transfer to the general funds of the Metropolitan Corporation or of an area municipality. Proportion (43.2) The surplus shall be used under clause (43) (a) or (b) for the purposes of the Metropolitan Corporation or an area municipality in the proportion that the amount of the contribution for the purposes of each bears to the total contributions to the sinking fund account in which the surplus arose. 1996, c. 32, s. 78 (43). Deficit and surplus (44) Although any sinking fund debentures have been issued for the purposes of one or more area municipalities, any deficit in the sinking fund account shall be provided by the Metropolitan Corporation out of its current funds and any surplus in the sinking fund account shall be used as provided in subsection (43). R.S.O. 1990, c. M.62, s. 252 (44); 1996, c. 32, s. 78 (44). Debentures rank equally (45) Despite any general or special Act or any differences in date of issue or maturity, every debenture issued shall rank concurrently and equally in respect of payment of principal and interest thereon with all other debentures of the Metropolitan Corporation except as to the availability of any sinking funds applicable to any particular issue of debentures. R.S.O. 1990, c. M.62, s. 252 (45).