June 2, 1998

 To:Works and Utilities Committee

 From:H.W.O. Doyle

City Solicitor

 Subject:Agreement for Additional Water Supply to the Region of York

Principle that the Agreement be in Perpetuity

  Recommendation:

 It is recommended that this report be received for information.

 Council Reference/Background/History:

 At its meeting held on July 2nd and 3rd, 1997, Metro Council, by its adoption of Clause No. 3 of Report No. 9 of its Environment and Public Space Committee, as amended, authorized the preparation of a new agreement for additional water supply to the Region of York (AYork@). Metro Council requested a report to its Environment and Public Space Committee on the implications of the proposal that the agreement with York be in perpetuity. In particular, the proposed principles forming the basis of the agreement were set out in attachment A of the Clause. The relevant proposed principle states AAgreement in perpetuity subject to review at mutually agreed intervals (say ten years)@. This report addresses the issue as requested by the former Metropolitan Council.

 Comments and/or Discussion and/or Justification:

 The statutory authority allowing the Metropolitan Corporation to supply water to York was contained in subsection 40(2) of the Municipality of Metropolitan Toronto Act. Similar provisions are contained in the City of Toronto Act, 1997 (No. 2). The relevant subsections state as follows:

 "15(1)The city may enter into a contract to supply water to another municipality for its own use or for resale to the inhabitants of that municipality.

 (2)The contract may run for a period not exceeding 20 years and may be renewable for further periods not exceeding 20 years at any one time.

 (3)No contract under subsection (1) shall be made with a local municipality of a regional municipality."

  A statutory limitation therefore exists that the contract with York cannot exceed twenty years. While there can be further renewal periods (each of which cannot exceed twenty years) upon expiry of the initial and subsequent renewal periods, one or more of the parties (depending upon the contractual terms) would have the discretion to renew the contract or renegotiate. Under the terms of the subject draft agreement, as negotiated, York has the option to renew the agreement upon the same terms and conditions for successive renewal terms of 20 years.

 Contact Name:

J. Anderson, 392-8059

H.W.O. Doyle

City Solicitor

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