Tripartite Funding Agreement for Toronto Atmospheric Fund's Canada Endowment

The balance of the $350 million - $167 million - will go to Green Municipal Fund as an endowment to support low-carbon action in communities not directly served by the Low Carbon Cities Canada initiative. The new Canada endowment will be dedicated to advancing Toronto Atmospheric Fund's current mandate in the Greater Toronto and Hamilton Area. The seven Low Carbon Cities Canada centres, including Toronto Atmospheric Fund, negotiated a non-binding Indicative Term Sheet intended to guide the development of individual Funding Agreements with Federation of Canadian Municipalities. The Indicative Term Sheet was approved in principle by the Toronto Atmospheric Fund Board on February 14, 2020, subject to resolution of several key issues. These issues have now been resolved and the Term Sheet will be executed. In tandem, Toronto Atmospheric Fund, the City of Toronto and Federation of Canadian Municipalities negotiated a tripartite Funding Agreement which sets out the purpose and objectives of the Canada endowment; Toronto Atmospheric Fund's governance, accountabilities and ongoing obligations with respect to its management; matters requiring Federation of Canadian Municipalities approval or consent; events of default and remedies; and reporting requirements. Toronto Atmospheric Fund's governance under the Toronto Atmospheric Fund Act, Toronto Atmospheric Fund/City of Toronto Relationship Framework and Council-approved Statement of Investment Objectives and Principles remains the same. Toronto Atmospheric Fund commits, among other things, to invest the endowment in a prudent manner in keeping with Council-approved investment policy and to maintain the nominal value in perpetuity, to provide grants to eligible recipients, to keep our administrative costs within best-practice boundaries, and to pay Federation of Canadian Municipalities fees and provide Federation of Canadian Municipalities with the information it needs for oversight and reporting to the Government of Canada and for management of a national Low Carbon Cities Canada Network. The Funding Agreement applies only to the Canada endowment and includes protections for Toronto Atmospheric Fund's Toronto and Ontario endowments. It also acknowledges that Toronto Atmospheric Fund's existing endowments satisfy, in perpetuity, the requirement for matching the funds provided by the federal government. Federation of Canadian Municipalities has also confirmed that Toronto Atmospheric Fund has provided satisfactory evidence of the conditions of transfer outlined in the Funding Agreement, including the requisite organizational policies, staff and advisory competencies, financial statements, governance documents, risk management framework, and insurance coverage. A 5-year cashflow projection and bring-down certificates are in development. Funds would be received by the City, in trust for Toronto Atmospheric Fund, within 30 days of all parties executing the Funding Agreement. It is recommended that Toronto Atmospheric Fund's Board approve the Funding Agreement and request, via the City Manager, City Council's approval. In addition, to facilitate implementation of the Canada endowment, including in the context of funding projects and expenses using all three endowments, it is recommended that Council's approval be sought for a Line of Credit (which is provided for in the Funding Agreement) and, in the context of Section 11 of the Toronto Atmospheric Fund Act, for the authority to undertake obligations beyond the terms of Council, similar to the approval provided when the Ontario Transfer Payment was approved.

approving a Line of Credit of up to $1.6 million secured by the Canada endowment once the funds are received from Federation of Canadian Municipalities; b. making any necessary amendments to the Toronto Atmospheric Fund/City Relationship Framework or any other governance instruments or agreements; and c. Approving, pursuant to Section 11 of the Toronto Atmospheric Fund Act, any financial commitments, liabilities or contractual obligations undertaken by Toronto Atmospheric Fund which extend after the expiry of present and future Council terms using: 1. the City endowment funds; 2. the Ontario endowment; and/or 3. the new Canada endowment, and which comply with the Relationship Framework. 4. Authorize the public release of the confidential information in Confidential Attachment 1 to this report from the Chief Executive Officer once the Funding Agreement is signed with Federation of Canadian Municipalities . 5. Direct that the confidential information contained in Confidential Attachment 2 remain confidential in its entirety, as it pertains to negotiations carried on or to be carried on by or on behalf of the Toronto Atmospheric Fund.