Annual Report on City Loans and Loan Guarantees

Entities eligible for loan guarantees continue to be non-profit cultural and community organizations or recreational and sports-based organizations, each of which must have an existing financial relationship with the City. This report also recommends that investigation of requests for a new or extended loans or loan guarantees from eligible entities must include a financial due diligence assessment, to be undertaken by the Chief Financial Officer and Treasurer, who would also be responsible for ongoing financial monitoring of existing loans and loan guarantees. This report also provides regular annual update reporting on an existing portfolio of City direct loans, capital loan and line of credit guarantees. The portfolio of loans included in this report is separate and apart from other internal City loan programs (e.g., Home Ownership Assistance Program, Sustainable Energy Plan Financing Program) which are covered under other City policies. This report also seeks approval for the renewal of the line of credit guarantee issued by the City on behalf of Toronto Symphony Orchestra to its lender, in the amount of $5 million for a three-year period commencing on November 1, 2024 and expiring on October 31, 2027. Lastly, this report recommends the adoption of an amended repayment formula for Lakeshore Arena Corporation's Shareholder Capital Contribution, which better aligns with estimated annual cash flows and supports Lakeshore Arena Corporation in continuing to operate and make outstanding debt repayments while making Shareholder Capital Contribution repayments. As at December 31, 2023, the City had authorized line of credit guarantees amounting to approximately $5.995 million, provided capital loan guarantees for underlying loans of $72.5 million, and had outstanding direct loans of $43.4 million, as identified in this report and as outlined in more detail in Appendix 4.

the Chief Financial Officer and Treasurer undertake ongoing financial monitoring of existing loans and loan guarantees; and c. the above be undertaken in conjunction with capital project assessments or monitoring, as may be deemed appropriate, to be undertaken by the Deputy City Manager of the relevant program areas. 3. City Council direct the City Solicitor to work together with the Chief Financial Officer and Treasurer to develop standard terms and conditions to be included in Loan and Loan Guarantee Agreements. 4. City Council amend the Unanimous Shareholder Declaration for Lakeshore Arena Corporation, as set out in Appendix 3, with such amendments to include the following: a. Lakeshore Arena Corporation to provide the City with its annual audited financial statements, to be delivered to the Chief Financial Officer and Treasurer within 120 days after the end of each fiscal year; b. Lakeshore Arena Corporation shall not undertake any additional borrowings without the approval of the City, with the exception of equipment leases as may be required in support of operations; c. Lakeshore Arena Corporation to make an annual shareholder capital contribution to the City, due by the end of each fiscal year, and based on its prior year audited financial statements, with the contribution equal to 65 percent of net revenues in excess of expenses before amortization and depreciation and after debt principal repayments, to be deposited into the Lakeshore Arena Capital Reserve Fund. This revised formula is intended to replace any previous formulas relating to the return of capital contributions, commencing in in 2025 in relation to the 2024 fiscal year. Together with amounts deposited between 2016 and 2023, the total amount shall be to a limit of $8.1 million; d. the Chief Financial Officer and Treasurer, upon request from Lakeshore Arena Corporation, may consider temporary adjustments to the contribution rate, on an annual case by case basis, which shall be supported by an explanation and supporting materials, to the satisfaction of the Chief Financial Officer and Treasurer, with such requests limited to two times over any ten-year period; and e. the Chief Financial Officer and Treasurer will review the contribution percentage in the revised formula every three years to determine whether further adjustments should be recommended to the City. 5. City Council approve the renewal of the line of credit guarantee issued by the City on behalf of Toronto Symphony Orchestra to its lender, in the amount of $5 million, inclusive of all interest payable by Toronto Symphony Orchestra, for a three-year period, commencing on November 1, 2024 and expiring on October 31, 2027.