Sixteen Mile Sports Complex | Officially opened ... - Oakville

(A) Net investment in direct financing receivable:The town has provided direct financing leases to OakvilleHydro Corporation for the property known municipally as 861Redwood Square. The initial term of the original lease expiredon December 31, 2009 and a new agreement was renegotiatedin early 2010 with an effective date of January 1, 2010. At thebeginning of the year, the town derecognized the original leaseand recognized the new lease obligation. The carrying valueat January 1, 2010 was $9,321. The corporation recognized aloss on derecognition of $3,585.Minimum payments under this lease agreement are as follows:2011 $ 1,3452012 1,3452013 1,3452014 1,3452015 1,345Thereafter 18,83025,555Less amount representing interest, imputed at 8.6% (12,996)$ 12,559(B) Promissory notes:The corporation issued promissory notes to the town, effectiveFebruary 1, 2000, with principal repayment due on February1, 2020. The town has the option on one year’s prior writtennotice to the Corporation to revise the maturity date and any ofthe terms of the promissory notes. At December 31, 2010, theinterest rate in effect on the promissory notes of $67,946 was 6per cent (2009 – 6 per cent) and the promissory note of $9,083 hasan interest rate in effect of 7 per cent (2009 – 7 per cent). Interestrevenue earned from these notes totaled $4,713 (2009 - $4,713).(C) Related party transaction and balances:The following summarizes the town’s related partytransactions and balances with the corporation for the yearsended December 31:2010 2009TransactionsRevenueInterest on capital leases $ 1,002 $ 674Cashier services 3 2Tree trimming service 259 204Garage services 474 491Property taxes 314 314Interest on promissory notes 4,713 4,713ExpensesEnergy purchases(at commercial rates) $ 4,186 $ 3,125Fibre optic rental - 53Streetlight maintenance 428 558BalancesAmounts due from the CorporationAccounts receivable $ 1 $ 93Direct financing leasesreceivable 12,559 9,321Promissory note receivable 77,029 77,029Amounts due to the CorporationAccounts payable andaccrued liability $ 758 $ 392(D) Contingencies and guarantees of Oakville Hydro Corporationas disclosed in their financial statements are as follows:(i) Legal proceedingsPursuant to its order dated July 22, 2010 (the “Order”), theOntario Superior Court of Justice approved the settlementof a class action lawsuit, which was served on the formerToronto Hydro-Electric Commission, continuing as TorontoHydro Corporation, on November 18, 1998. The originalclass action was for the amount of $500,000 and was initiatedagainst the former Toronto Hydro-Electric Commission as therepresentative of the Defendant Class consisting of all municipalelectric utilities (“MEU”) in Ontario, of which the Corporationis a successor MEU, which have charged Late Payment chargeson overdue utility bills at any time after April 1, 1981.By order dated July 22, 2010, the Ontario Superior Courtof Justice formalized a settlement pursuant to which thedefendant MEUs will pay the amount of $17,000 plus costsand taxes in settlement of all claims. The amount allocatedfor payment by each MEU is its proportionate share of thesettlement amount based on its percentage of distributionservice revenue over the period for which it has exposure forrepayment of late payment penalties exceeding the interestrate limit in the Criminal Code. The corporation’s share of thesettlement amount is $258, payable on June 30, 2011.On October 29, 2010, the OEB issued a notice of proceedinginvolving all of the defendant MEUs including the corporation,to determine whether the costs and damages incurred byMEUs are recoverable from electricity ratepayers, and if so,the form and timing of such recovery. On February 22, 2011,the OEB issued its decision on this matter and approved therecovery of all costs and damages arising from the settlementTown of Oakville 2010 Annual Report | 31