HomeMy WebLinkAboutFCS-11-109 - Homer Watson House Foundation Community LoanREPORT TO:Finance and Corporate Services Committee
DATE OF MEETING:
June 20, 2011
SUBMITTED BY: Dan Chapman, Deputy CAO & City Treasurer, Finance and
Corporate Services
PREPARED BY:
Dan Chapman (x2347)
WARD(S) INVOLVED:
Ward 4
DATE OF REPORT:
May 31, 2011
REPORT NO.:
FCS-11-109
SUBJECT:
Homer Watson House Foundation Community Loan
RECOMMENDATION:
That the balance of the community loan outstanding to the Homer Watson House Foundation of
$36,700.87 with respect to 1762 Old Mill Road be forgiven; and further,
That the accrued interest on outstanding payments of $16,018.96 as of December 31, 2010 be
written off against the allowance for doubtful accounts.
BACKGROUND:
The City entered into an agreement with the Homer Watson House Foundation in August of
2000 to facilitate the purchase of 1762 Old Mill Road (an adjacent property) by the Foundation
in response to a request from the Lower Doon Neighbourhood Group. Under the provisions of
the Community Loans program, the City lent $100,166.69 to the Homer Watson House
Foundation, repayable over five years via donations, pledges and fund raising primarily from the
neighbourhood. The City also contributed $50,000 from capital contingency towards the
purchase. The Foundation has requested that the outstanding loan balance be forgiven (refer
to the attached letter).
REPORT:
The balance on the community loan is $36,700.87 plus accrued interest. Loan payments to
date have been made primarily by fund raising initiated by the neighbourhood group. The
neighbourhood group believes it has exhausted its ability to raise additional funds and the
Foundation’s focus is on fundraising for other capital needs. In light of these two realities, staff
recommends that the loan balance and accrued interest be forgiven.
A final resolution to this request for forgiveness was originally deferred in 2006 pending the
completion of a master plan for the Homer Watson House. The growing interest accrual has
presented financial reporting concerns for the Foundation and, on this basis, the
recommendation to forgive the balance is being brought forward at this time.
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ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Community Priority: Quality of Life
Strategic Direction: That the City protect its cultural heritage resources through the
employment of various forms of conservation practice, including
designation under the Ontario Heritage Act
Strategic Direction: That the City highlights arts and culture as a factor critical to the health of
the community through supporting goals and objectives of Culture Plan II
FINANCIAL IMPLICATIONS:
The Community Loans program functions on a revolving basis, whereby the repayment of
existing loans funds future loans. The forgiveness of the balance on this loan will permanently
reduce the amount available in the fund from $857,500 to $820,799.
Interest of $16,018.96 has accrued on the outstanding loan payments to the end of 2010, but
has been fully provided for in the allowance for doubtful accounts. As such, there is no net
financial impact associated with writing off the accrued interest.
COMMUNITY ENGAGEMENT:
A copy of this report has been shared with the Board of the Homer Watson House Foundation
through the Board’s Treasurer.
ACKNOWLEDGED BY: Dan Chapman, Deputy CAO
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