Item - 2016.EX17.6

The Executive Committee recommends that:

1.  City Council approve the terms and conditions summarized in Confidential Attachment 1 to the report (September 8, 2016) from the City Manager, and authorize the Mayor to enter into a Transfer Payment Agreement with the Government of Ontario and the Toronto Atmospheric Fund for a provincial endowment of $17 million, and authorize the City Manager to resolve any outstanding issues.

2.  City Council approve the Toronto Atmospheric Fund's registration and use under the Business Names Act (Ontario) of "The Atmospheric Fund" as its operating name (with its legal name remaining Toronto Atmospheric Fund), to accommodate an expanded mandate to the broader Greater Toronto and Hamilton Area.

3.  City Council authorize the Toronto Atmospheric Fund to obtain a Line of Credit of up to $2 million secured by the provincial endowment once the funds are received and subject to provincial approval.

4.  City Council authorize the City Manager, in consultation with the Toronto Atmospheric Fund, to amend, as required, the Toronto Atmospheric Fund Relationship Framework to align with the Transfer Payment Agreement and City Council's decisions, in a form satisfactory to the City Solicitor.        

5.  City Council request the Province of Ontario to pass a regulation under the Broader Public Sector Accountability Act to exempt the Toronto Atmospheric Fund from provincial accountability requirements given that it is subject to equally or more stringent City of Toronto requirements.

6.  City Council authorize the public release of the confidential information in Confidential Attachment 1 to the report (September 8, 2016) from the City Manager, once the Transfer Payment Agreement is executed between the Government of Ontario, the Toronto Atmospheric Fund and the City of Toronto.

7.  City Council request the Government of Ontario to amend subsections 11(8) and (9) of the Toronto Atmospheric Fund Act to authorize the Toronto Atmospheric Fund to undertake financial commitments, liabilities or contractual obligations that extend beyond the term of any City Council.

8.  City Council authorize the Toronto Atmospheric Fund, as an interim step to Recommendation 7, to undertake financial commitments, liabilities and contractual obligations for up to six months beyond the 2014 to 2018 term of City Council, for which transactions are to be calculated as part of the City's debt and financial obligation limit under Subsection 11(8) of the Toronto Atmospheric Fund Act.

At the request of the Board of the Toronto Atmospheric Fund (TAF) and a proposal from the Province of Ontario, the City Manager is seeking City Council approval to execute a Transfer Payment Agreement (TPA) with the Government of Ontario, the City of Toronto and TAF for a $17 million endowment. This report seeks approval of the terms and conditions for the TPA found in Confidential Attachment 1, authority for the Mayor to execute the TPA on behalf of the City of Toronto. Furthermore, the report seeks authority for the City Manager to resolve any outstanding issues and finalize the agreement.

The provincial endowment will enhance TAF's work in the City of Toronto, and expand the agency's urban climate solutions mandate to the Greater Toronto and Hamilton Area (GTHA). The provincial endowment recognizes and leverages the City of Toronto's leadership and vision in creating an agency dedicated to addressing climate change 25 years ago. The funds will enable TAF to demonstrate innovative regional solutions towards municipal and provincial greenhouse gas reduction targets, while contributing to regional health and prosperity.

The TPA establishes scope and expectations, replicates the City endowment model where the proceeds from investing the endowment funds the Agency's annual operating costs, and protects City, TAF and provincial interests. The terms of the TPA preserve TAF's accountability and obligations to the City of Toronto for the original City endowment, restrict the use of the City endowment to TAF's original mandate, and protect TAF's assets (and the City's residual interest in the fund) from net incremental costs or negative impacts that may arise from operating in the broader GTHA.

To implement the TPA, City Council authority to broaden TAF's mandate and change its operating name to "The Atmospheric Fund" in recognition of its expansion to the GTHA is required. The report also seeks authority to request legislative change to enable TAF to undertake transactions that go beyond the Council term given TAF's long-term investment horizon. Lastly, to ensure that TAF is not subject to duplicative accountability requirements, the report also seeks authority to request a regulation from the Province of Ontario to exempt the agency from certain provincial provisions.

The composition and governance structure of the TAF Board remains unchanged. The confidential terms and conditions note a governance change to a TAF Committee to improve capacity in meeting the expanded mandate to the GTHA. However, the Province of Ontario entrusts the management of the provincial Funds to the City-appointed TAF Board with certain reporting, communication and performance standards, as set out in the Transfer Payment Agreement.