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Home My WebLink About04 - Project Ojibwa - Power PointMUNICIPALITY OF BAYHAM Project Ojibwa –Action Plan March 16, 2015 Objective To provide the community with full and factual information on: i.Background ii.Project Ojibwa Relationships iii.Financial Overview iv.Legal Overview v.Assistance Efforts vi. Additional Information Background –Key Dates •April 5, 2012 -By-law No. 2012-037 –Guarantorship Agreement •August 2, 2012 –By-law No. 2012-089 $6,000,000 Letter of Credit •December 18, 2014 –Council Resolution •December 22, 2014 –Council Resolution •March 12, 2015 –Council Resolution By-law No. 2015-027 –$6,000,000 Loan Project Ojibwa Relationships Financial Overview •Financial Information •Project Ojibwa Financial Information •How Does the Municipality Pay the $6,000,000 letter of credit? •Impact on (Municipal Levy) Taxes Detailed Financial Information On August 2nd, 2012, through By-law No. 2012-089, the Municipality provided a letter of credit -‘grant', in the form of a guarantee. Now that the Bank has called upon the Municipality for payment, the Municipality must fund the grant. By-law No. 2015-027 -$6,000,000 Loan Debt Finance Six Million Dollars •10 Year Term at 2.71%, 25 year amortization •$27,555.95/month or $330,671.40/year •2015 Annual Repayment Limit = 31.7% •Levy Impact (2014 Dollars) = 10.3% Potential Levy Impact 2015 •No Levy Impact •Utilize $275,559.50 –Stabilization Reserve 2016 •Levy Impact •$330,671.40 •Levy Impact (2014 Dollars) = 10.3% 2016 Potential Levy Impact $250,000 Residential Class Property -$106 increase $400,000 Farm Class Property -$42 increase $250,000 Commercial Class Property -$174 increase $250,000 Industrial Class Property -$237 increase For Illustration Purposes Only -Based on Estimates –Does Not Include Assessment Value Changes - (2016 –10.3% Municipal Levy Increase) NOTE: As per the Presentation on March 16, 2015 these figures are for illustration purposes only and do not take into account changes in assessment value or revisions of tax rates. These figures are only utilized to illustrate the potential impact on the classifications of properties. Legal Overview 1.Statement of Claim –Defence 2.Guarantorship Agreement Action Statement of Claim Defence On October 17th, 2014 the Municipality of Bayham was served with a Statement of Claim by Mammoet Canada Eastern Ltd. and Heddle Marine Service Inc. in which the Plaintiffs claim that they are owed a cumulative amount of $1,131,008.92 by the Elgin Military Museum and the Municipality. The action is in its "discovery" phase and there is no additional information to report. Those creditors named the Municipality as a defendant concerning the debt of the Elgin Military Museum, on the theory that the Municipality was a proponent (rather than a supporter) of the financial model. The Municipality is defending this action on its own behalf. Guarantorship Agreement Action Guarantorship Agreement Action How much money does the Elgin Military Museum owe the Municipality of Bayham? The Elgin Military Museum owes the Municipality of Bayham the following monies: a.$6,000,000 –letter of credit b.$102,000 –Guarantorship fees c.+any and all future legal fees pertaining to Project Ojibwa and the Guarantorship agreement. The sub-total the Elgin Military Museum currently owes the Municipality is $6,102,000 + any and all future legal fees pertaining to Project Ojibwa and the Guarantorship Agreement. Legal Information Who is now responsible for the HMCS Ojibwa? Does the Municipality have any plans to try and operate the HMCS Ojibwa as a successful tourist site? Legal Information Does the Municipality paying the six million dollar letter of credit leave the Elgin Military Museum with no responsibility for its actions, specifically financial responsibility? With a general knowledge that the Elgin Military Museum was not complying with the requirements of the Guarantorship Agreement, why didn’t the Municipality take action earlier against the Elgin Military Museum, pursuant to the Guarantorship Agreement? Why didn’t the Municipality make the loan payments to prevent the letter of credit from being called upon? Assistance Efforts Before March 20, 2015 –After March 20, 2015 Pre-Negotiating –Negotiating Pre-Negotiating During 2014, staff under the direction of Council made numerous requests of upper levels of government including: a.MP requested assistance to source an entity to hold the guarantee in place of the Municipality and/or pay out the same. b.MPP requested assistance to source an entity to hold the guarantee in place of the Municipality and/or pay out the same. c.Request of FedDev , Heritage Canada, National Defence and Public Works Canada to assume the Guarantorship and/or pay out the same, as permitted under Federal Legislation via incor poration into the Federal Budgetary Estimates Further, the Municipality is currently engaged in a Senior Government Cash Strategy to aggressively lobby for the financial support of senior levels of government to pay out or assume the financial responsibility of Project Ojibwa. Negotiating 1.Senior Government Cash Strategy: A strategy to aggressively lobby for the financial support of senior levels of government to pay out or assume the financial responsibility of Project Ojibwa. 2.Managing Debt Strategy: With a concerted effort to assess inventory and surplus and remove non-essential or non-sustainable equipment, property and generally assets, efforts can be made to mitigate overall financial impacts. This can be seen as a continuation of current staff efforts including streetlights and resource procurement, which lower operational costs and can offset the impact of the Project Ojibwa debt. 3.Legal Strategy: The Municipality will pursue various legal actions against the Elgin Military Museum. Specifically legal action pursuant to the Guarantorship Agreement.