HomeMy WebLinkAboutFCS-14-182 - Termite Treatment Loans Staff Report
rTC.�r R finance and Corporate Services Department www.kitchener.ca
REPORT TO: Finance and Corporate Services
DATE OF MEETING: November 10, 2014
SUBMITTED BY: Dan Chapman, Deputy CAO/Treasurer
PREPARED BY: Joyce V. Evans, Director of Revenue/Deputy City Treasurer
519-741-2200 Ext 7895
Dan Chapman, Deputy CAO/Treasurer
519-741-2200 Ext 7347
WARD(S) INVOLVED: 6
DATE OF REPORT: October 21, 2014
REPORT NO.: FCS-14-182
SUBJECT: Termite Treatment Loans
RECOMMENDATION:
That staff be directed to implement a termite treatment loan application and
agreement process as outlined in staff report FCS-14-182.
BACKGROUND:
At the September 15, 2014 Council meeting, the following recommendation was
approved as part of a motion in respect to the area bounded by Briargate Drive and
Greenock Drive (23 properties):
"That for residents required to apply chemical treatments for termites, staff be directed
to investigate a process for loan application/agreement and for an ability to charge back
to taxes in the event of a default loan payment."
The program outlined in this report achieves the following objectives, which have been
summarized from previous Council discussions on the matter-
- Affordable loans provided `at direct cost' to homeowners
- Limited red tape with a simple application process
- Provides flexibility to homeowners to borrow less than the maximum amount and
pay any outstanding balance off early
- Protects the City's investment
- Limits support to properties which were identified under the pre-existing termite
control by-law
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REPORT:
As directed by Council, staff has developed a process to administer loan applications
and agreements to provide assistance to properties which were identified under the pre-
existing termite control by-law.
Section 107 of the Municipal Act authorizes Council to make grants to a person for a
purpose that Council considers to be in the best interests of the municipality. This
section provides that the power to make a grant includes the power to make a grant by
way of loan and to charge interest on the loan.
Although the amount of the loan and interest can be added to the tax roll in some cases,
the Act does not give priority lien status to these amounts. That means that the
amounts do not necessarily have to be paid before other financial obligations of the
owner. To ensure repayment, the City is permitted to register a lien against the property
that is subject of the loan (s. 443).
The five objectives of the program are outlined below along with the associated
administrative details.
Objective #1 —Affordable loans provided`at direct cost' to homeowners
- Loan interest rates will be fixed for the term of the loan based in Infrastructure
Ontario rates, which are currently set at 2%
- Homeowner's cost for the registration and discharge of the lien is $165, due at
time of application
- Loans can only be made to residential owners living on their own property (i.e.,
no loans will be made to commercial enterprises)
Objective #2— Limited red tape with a simple application process
- Simple application/agreement form
- Funds will be advanced upon execution of the application/agreement and receipt
of final invoice or proof of payment subsequent to work being completed
Objective #3 - Provides flexibility to homeowners to borrow less than the
maximum amount and pay any outstanding balance off early
- Early repayment would be allowed
- Any amount up to the total chemical treatment cost may be advanced
Objective #4 - Protects the City's investment
- Lien would be registered against each property receiving a loan, since the
Municipal Act does not confer priority lien status for this type of loan
- Any balance would be due on closing if the property is sold
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In the event of a loan default, the balance owing would be added to property
taxes for collection after appropriate reminders
Objective #5 - Limits support to properties which were identified under the pre-
existing termite control by-law
- Loans are limited to a one-time basis to avoid becoming a permanent, revolving
line of credit
- Term of the loan would be 5 years
- Loans would be available to the twenty-three properties bounded by Briargate
Drive and Greenock Drive.
- Application deadline will be October 31, 2015
Subject to Council's final approval, staff will begin accepting requests for loan
assistance from eligible property owners.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Efficient and Effective Government — Financial Management — Ensure effective and
responsible use of public funds within a supportive policy framework
Efficient and Effective Government — Customer Service — Continue to build and
strengthen a culture of customer service within the corporation that responds to the
changing needs and expectations of stakeholders
FINANCIAL IMPLICATIONS:
The cost of chemical termite treatment has been quoted by some individuals as being in
the range $5,000 to $8,000 per property. The maximum total amount of loans for the 23
properties would therefore be $184,000. Since this amount will be repaid with interest
over a 5 year period there will be no financial impact to the City.
COMMUNITY ENGAGEMENT:
INFORM — This report has been posted to the City's website with the agenda in
advance of the council meeting' and has been hand-delivered to the 23 properties within
the affected area.
ACKNOWLEDGED BY: Dan Chapman, Deputy CAO/Treasurer
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