HomeMy WebLinkAboutCRPS-08-097 - Kitchener-Waterloo Art Gallery - Discharge-Release of City GuaranteeJ
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Corporate Services
Report To: Committee of the Whole
Date of Meeting: June 9, 2008
Submitted By: Lesley MacDonald,
Director of Legal Services and City Solicitor (Ext. # 2267}
Prepared By: Lesley MacDonald,
Director of Legal Services and City Solicitor
Ward(s) Involved: Ward 1: Bridgeport -Centre -John Smola
Date of Report: June 5, 2008
Report No.: CRPS - 08 - 097
Subject: Kitchener-Waterloo Art Gallery
Discharge/Release of City Guarantee
RECOMMENDATION:
That the Mayor and Clerk be authorized to execute aDischarge/Release with respect to an
Agreement dated August 26, 2002 with the Kitchener-Waterloo Art Gallery for the purpose of
terminating the City's limited guarantee of the Gallery's operating line of credit and releasing the
City's security interest in unencumbered artwork; said documentation to be to the satisfaction of
the City Solicitor.
EXECUTIVE SUMMARY:
N/A
BACKGROUND:
On May 27, 2002, City Council authorized an Agreement between The Corporation of the City of
Kitchener and the Kitchener-Waterloo Art Gallery whereby the City guaranteed an operating line
of credit, not to exceed $200,000.00 for the Gallery with the Toronto-Dominion Bank for a term
not to exceed ten (10} years. In accordance with Council's instructions, the guarantee was fully
secured by a first call on unencumbered art work owned by the Kitchener-Waterloo Art Gallery.
REPORT:
Kitchener-Waterloo Art Gallery no longer requires the City's guarantee of its operating line of
credit and accordingly, has made alternate arrangements with the bank removing the
requirement for the City's guarantee. The Toronto-Dominion Bank has subsequently released
and discharged The Corporation of the City of Kitchener with respect to the City's limited
guarantee to a maximum of $200,000.00 for the benefit of Kitchener-Waterloo Art Gallery. Now
that the limited guarantee is no longer required, the Kitchener-Waterloo Art Gallery would like to
have released and discharged the Agreement between The Corporation of the City of Kitchener
and the Kitchener-Waterloo Art Gallery, whereby the City guaranteed the operating line of credit
to a limited amount for the Gallery's benefit, under which the City took full security for its
guarantee through a first call on unencumbered art work owned by the Kitchener-Waterloo Art
Gallery.
FINANCIAL IMPLICATIONS:
The City's obligation to guarantee operating line of credit ceases.
COMMUNICATIONS:
Corporate Communications staff will work with the KW Art Gallery to find ways of informing the
public of this development.
CONCLUSION:
Now that the guarantee is no longer required and the City has been released from the
commitment to the Bank, it is appropriate for the City to discharge/release its agreement with
Kitchener-Waterloo Art Gallery thereby terminating the City's limited guarantee of the Art
Gallery's operating line of credit and releasing the security interest the City took through a first
call on unencumbered art work.
Lesley MacDonald,
Director of Legal Services and City Solicitor
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