STAFF REPORT
March 3, 2000
To: Community services Committee
From: Commissioner of Community and Neighbourhood Services
Subject:Capital Loan Guarantee for Growing Tykes Childcare to Develop a Child Care Centre
Purpose:
This report seeks approval for the City of Toronto to provide a loan guarantee for Growing Tykes Child care to develop a
child care centre.
Financial Implications and Impact Statement:
Growing Tykes Child Care meets the Criteria for Capital Loan Guarantees first approved by the former Metropolitan
Toronto Council on June 1, 1994 and since used by the City for similar child care development projects. A guarantee for a
loan in the amount of $700,000 for the development of a child care program at 4105 Lawrence Avenue East, Scarborough
is recommended. While the City will not be providing direct funding for this project, the City must meet requirements for
certification under the established debt and obligation limit. The Chief Financial Officer and Treasurer has reviewed this
report and concurs with the financial impact statement.
Recommendations:
It is recommended that:
(1)subject to sufficient performance safeguards, the City of Toronto guarantee a capital loan of up to $700,000 to be
arranged by Growing Tykes Childcare;
(2)the nature and terms of the guarantee, including any requirement for potential certification under the established debt
and obligation limit, be subject to the concurrence of the Treasurer, City Solicitor and the Commissioner of Community
and Neighbourhood Services; and
(3)the appropriate City Officials be authorized to take the necessary action to give effect thereto.
Background:
"Criteria for Capital Loan Guarantees for Non-Profit Child Care Programs" were approved by the former Metropolitan
Toronto Council on June 1, 1994 and have been subsequently used to support loan guarantees for Allenby Day Care
Centre, John Wanless Child Care, Charlottetown Blvd. Child Care and Growing Tykes Child Care. In 1997, a loan
guarantee of $200,000 was approved to allow the development of Growing Tykes' Markham Road site. This five-year loan
is in good standing and will be discharged by October, 2002.
Growing Tykes Child Care, which currently operates 2 child care centres in Scarborough City Centre is now proposing to
develop another child care facility at 4105 Lawrence Avenue East in Scarborough. This new proposed centre would have a
licensed capacity of 142 children (30 infants, 40 toddlers and 72 preschoolers). The proposed new location offers the
opportunity to increase the licensed service available to infants and toddlers and is consistent with the priorities contained
in the City's Service Plan for Child Care. The Growing Tykes organization, while operating in a fiscally solvent position,
does not have sufficient funds to pay for the leasehold improvements necessary to bring the proposed facility into
compliance with provincial Day Nurseries Act requirements.
Comments:
The Province of Ontario no longer funds major capital costs of child care development. As a result, there are significant
barriers to the growth of licensed child care which have made the City's objective of service equity difficult to achieve.
Loan guarantees are one strategy that the City has been able to use to support the growth of more licensed child care stock.
Growing Tykes Child Care has submitted a business plan to the Department in support of its request for a loan guarantee.
The construction costs will be funded through the loan and the loan payments financed through the per diem rates paid. To
obtain the required loan from a commercial lender, the organization requires a loan guarantee.
This project meets the City's established criteria for loan guarantees and will be eligible for a fee subsidy agreement when
complete. A preliminary review of the organization's financial plan has found their plan to be viable. The Department,
therefore, recommends that the City approve a loan guarantee for Growing Tykes Child Care and authorize City Officials
to negotiate acceptable performance standards and finalize the City's agreement with them.
Conclusions:
The Department recommends that Council approve a loan guarantee for Growing Tykes Childcare subject to sufficient
safeguards and in accordance with the established criteria.
Contact:
Brenda Patterson
Director, Contracted Services Unit
Children's Services Division
Tel: 392-3319
Email: patterso@csis.csis.csd.metrotor.on.ca
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General Manager of Children's Services
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Commissioner of Community & Neighbourhood Services
