Regional Municipality of Durham v. The Corporation of the City of Oshawa
113 O.R. (3d) 54
2012 ONSC 5803
Ontario Superior Court of Justice
J. Wilson J.
October 31, 2012
Limitations -- Municipal law -- By-law transferring jurisdiction over public transportation to Durham from Oshawa and other lower-tier municipalities coming into effect on January 1, 2006 -- By-law providing for negotiations over amount and future payments of unfunded liabilities and stating that any matter not agreed to within three months "may" be determined by arbitration -- Oshawa staff taking position that Durham was responsible for particular underfunded liability payments -- Oshawa council passing resolution on April 21, 2009 denying responsibility for underfunded liabilities and refusing to proceed to arbitration -- Durham suing Oshawa -- Limitation period beginning to run when resolution was passed and not when three-month grace period in arbitration clause expired or when Oshawa staff denied responsibility for underfunded liabilities.
A by-law transferring jurisdiction over public transportation to Durham from Oshawa and other lower-tier municipalities came into effect on January 1, 2006. The by-law provided that the amount and future payments of any unfunded liabilities existing on that date was to be determined through negotiations between Durham and the lower-tier municipalities, and that any matter not agreed to within three months of that date "may" be determined by arbitration. Durham and Oshawa could not agree on responsibility for the unfunded liabilities for former transit employees of Oshawa. On June 1, 2007, a "Summary of Transition Issues" was sent by Durham to the lower-tier municipalities confirming the existence of that outstanding issue, among others. On April 21, 2009, Oshawa council passed a resolution denying responsibility for the underfunded liabilities and refusing to proceed to arbitration. Durham sued. Oshawa brought a motion for summary judgment dismissing the action as statute- barred. Oshawa took the position that the two-year limitation period began to run from the expiry of the three- month grace period during which negotiation was contemplated by the arbitration clause or, alternatively, that it began on June 1, 2007.
Held, the motion should be dismissed.
The limitation period began to run on April 21, 2009, when Oshawa council passed a resolution denying responsibility for the underfunded liabilities in issue. A permissive clause, providing that parties "may" proceed to arbitration, does not trigger a limitation period. The by-law was silent as to the time limit within which agreement had to be reached with respect to the underfunded liability. From April 2006 to April 2009, Durham was negotiating in good faith with Oshawa and the other lower-tier municipalities. The continued refusal by Oshawa staff to assume responsibility for the underfunded liability did not trigger commencement of the limitation period. No municipal employee can bind the municipality unless decision-making authority has been delegated to that employee by the municipal council. No such delegation occurred in this case. Durham could not reasonably have known the position of Oshawa council until Oshawa council passed its resolution on April 21, 2009. [page55 ]
MOTION for summary judgment dismissing an action.
Cases referred to
Bolton Oak Inc. v. McColl-Frontenac Inc., [2011] O.J. No. 4953, 2011 ONSC 6567 , 64 C.E.L.R. (3d) 239, 209 A.C.W.S. (3d) 812 (S.C.J.); Combined Air Mechanical Services Inc. v. Flesch (2011), 108 O.R. (3d) 1, [2011] O.J. No. 5431, 2011 ONCA 764 , 286 O.A.C. 3, 97 C.C.E.L. (3d) 25, 14 C.P.C. (7th) 242, 13 R.P.R. (5th) 167, 211 A.C.W.S. (3d) 845, 93 B.L.R. (4th) 1, 10 C.L.R. (4th) 17 [Leave to appeal to S.C.C. granted [2012] S.C.C.A. No. 47, [2012] S.C.C.A. No. 48]; Magical Waters Fountains Ltd. v. Sarnia (City) (1992), 1992 (ON SC) , 8 O.R. (3d) 689, [1992] O.J. No. 1320, 91 D.L.R. (4th) 760, 56 O.A.C. 377, 1 C.L.R. (2d) 290, 10 M.P.L.R. (2d) 253, 34 A.C.W.S. (3d) 349 (Div. Ct.)
Statutes referred to
Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4 , 5 , (1) (a)(iv), (2)
Municipal Act, 2001, S.O. 2001, c. 25 [as am.], ss. 5 , 9 [as am.], 23
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194 , rules 20, 20.04(2) (a)
K. John Harild and Courtney Raphael, for plaintiff (responding party).
Barnet Kussner and Tiffany Tsun, for defendant (moving party).
J. WILSON J.: -- The Motion
[ 1 ] In December 2004, Durham passed a by-law authorizing the transfer of jurisdiction over public transportation to the region from Oshawa and seven other lower-tier municipalities. By-law No. 85-2004 (the "By-Law") was enacted pursuant to the Municipal Act, 2001, S.O. 2001, c. 25 and came into effect January 1, 2006.
[ 2 ] This motion raises the question of discoverability for the commencement of a limitation period when a by-law is passed transferring responsibility from one municipality to another. There is a dispute with respect to financial consequences of the transfer resulting in litigation. In this motion, my task is to determine what is the applicable date triggering the initiation of the two-year limitation period.
[ 3 ] In this summary judgment motion, pursuant to Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 , the Corporation of the City of Oshawa ("Oshawa") seeks a declaration that for the action commenced by the Regional Municipality of Durham ("Durham" or the "Region") on March 22, 2011, the applicable two-year limitation period has expired, and therefore, the action should be dismissed. [page56 ]
The position of the parties
[ 4 ] Oshawa argues that the two-year limitation period began to run from after the date the By-Law was passed and after the expiry of the three-month grace period during which negotiation was contemplated by the arbitration clause. Oshawa argues that the commencement of the two-year limitation period was triggered on April 1, 2006 and hence that it expired on April 1, 2008.
[ 5 ] Alternatively, Oshawa argues that the two-year limitation period commenced in June 2007, when a draft report authored by Durham was circulated to the Regional council, recommending referral to arbitration for the three lower-tier municipalities with outstanding underfunded liability issues. Although the report and recommendation was withdrawn from the Regional council meeting, Oshawa argues that from this date, Durham knew the likely position of Oshawa council would be to deny responsibility for the funding issue in dispute. Oshawa argues that the Region failed to take reasonable steps to clarify the issue triggering the commencement of the limitation period.
[ 6 ] Durham argues that the limitation period commenced on April 21, 2009, when Oshawa council passed a resolution denying responsibility for the underfunded liabilities and refusing to proceed to arbitration, and communicated this decision to Durham. Durham argues that any position taken by Oshawa staff denying responsibility was not binding on Oshawa council. A limitation period cannot begin to run until a municipal council with decision making authority makes and communicates a decision to its municipal counterpart.
Conclusions
[ 7 ] Having reviewed all of the materials, I conclude that it is clear in this case the triggering date initiating the two- year limitation period is April 21, 2009, when the council for Oshawa passed a resolution and communicated its decision to Durham which confirmed that it did not recognize Durham's request to refer the matter to arbitration and denied responsibility for the underfunded liabilities in issue. Up until this time, the parties were in negotiations on a variety of issues, although they were clearly not in agreement as to responsibility for the payments that underpin this claim.
[ 8 ] I conclude that there is no genuine issue for trial, having regard to rule 20.04(2) (a) of the Rules of Civil Procedure , and considering the principles of the full appreciation test enunciated in Combined Air Mechanical Services Inc. v. Flesch (2011), 108 O.R. (3d) 1, [2011] O.J. No. 5431, 2011 ONCA 764 , at para. 50 , leave to appeal to S.C.C. granted [2012] S.C.C.A. No. 47, [2012] S.C.C.A. No. 48. [page57 ]
[ 9 ] The continued refusal by Oshawa staff to assume responsibility for the liability does not trigger commencement of a limitation period. Durham could not reasonably have known the position of Oshawa council until the Oshawa council passed its resolution denying responsibility to pay the amounts in dispute and refusing to proceed to arbitration because the limitation period had expired.
[ 10 ] As this action was commenced on March 22, 2011, within the applicable two-year limitation period beginning April 21, 2009, the motion for summary judgment is dismissed.
[ 11 ] The parties have agreed that if the motion for summary judgment is dismissed, they will proceed to binding arbitration, and each party will bear their own legal costs. Overview
[ 12 ] The relevant portions of s. 2 of the By-Law provide:
- On the Effective Date, all rights and obligations and all assets and liabilities of the lower-tier municipalities pertaining to or used for Public Transportation Systems including all real and personal property and all interests and obligations in any agreement, shall be transferred to the Region subject to the following terms and conditions: @7 . . . . .
Liabilities (k) The amount and future payments of any unfunded liabilities existing at the Effective Date shall be determined through negotiations between the Region and the lower-tier municipalities. @7 . . . . .
Transition Period (o) During the Transition Period, the Region and the lower-tier municipalities shall negotiate and enter into agreements for the transfer of all assets, liabilities and personnel on terms that are consistent with this by-law. Any matters not agreed to within three (3) months of the Effective Date may, at the request of the Region or a lower-tier municipality, be determined by arbitration under the provisions of the Ontario Arbitrations Act. (Emphasis added)
[ 13 ] The entire text of s. 2 of the By-Law is attached and marked "Schedule A".
[ 14 ] There were eight lower-tier municipalities, including Oshawa, undergoing the transfer of their transportation systems to the Region pursuant to the By-Law. Suffice to say this was a complex undertaking involving multiple issues and negotiations [page58 ]between the staff from each of the lower-tier municipalities and the staff from the Region. Each municipality had multiple issues to resolve.
[ 15 ] Various issues had to be resolved between Oshawa and Durham. One of the major, unresolved issues and the subject matter of this action was the determination of responsibility for the unfunded liabilities for former transit employees of Oshawa in the amount of $8.9 million dollars.
[ 16 ] Another major issue between Oshawa and Durham involved the transfer of the regional transit facilities at the Farwell and the Raleigh Avenue locations. Up until late 2009, it was not clear whether one of the facilities would be leased or transferred. On December 18, 2009, Oshawa council passed a resolution confirming that the Raleigh Avenue location would be transferred, not leased.
[ 17 ] Oshawa relies upon the arbitration clause as triggering commencement of the limitation period: "any matters not agreed to within three (3) months of the Effective Date may, at the request of the region or a lower-tier municipality, may be determined by arbitration" (emphasis added). Oshawa interprets the ability to refer a dispute to arbitration three months after the By-Law was passed as the commencement of the two-year limitation period.
[ 18 ] Durham argues that although the effective date for the transfer of assets and liabilities is January 1, 2006, the By- Law does not specify any time limit within which negotiations are to take place with respect to the unfunded liabilities. Clause 2(k) is open ended, and provides no time limit for the negotiation of the underfunded liability issue: "the amount and future payments of any unfunded liabilities existing at the Effective Date shall be determined through negotiations between the Region and the lower-tiered municipalities" (emphasis added).
[ 19 ] Durham argues that the plain meaning of the By-Law and the right to proceed to arbitration is permissive, allowing either party, if they wish, after three months of the effective date to refer a matter to arbitration. Durham asserts that this permissive arbitration clause does not trigger the commencement of the two-year limitation period, and has no impact upon the limitation period whatsoever. The Limitations Act
[ 20 ] The Limitations Act, 2002, S.O. 2002, c. 24, Sch. B (the "Act") provides that there is a two-year limitation for all matters from the date that the claim was "discovered".
[ 21 ] Sections 4 and 5 of the Act provide: [page59 ]
Basic limitation period
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
Discovery
5(1) A claim is discovered on the earlier of, (a) the day on which the person with the claim first knew, (i) that the injury, loss or damage had occurred, (ii) that the injury, loss or damage was caused by or contributed to by an act or omission, (iii) that the act or omission was that of the person against whom the claim is made, and (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
Presumption
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
Demand obligations
(3) For the purposes of subclause (1)(a)(i), the day on which injury, loss or damage occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made.
Same
(4) Subsection (3) applies in respect of every demand obligation created on or after January 1, 2004.
[ 22 ] Durham relies on s. 5(1)(a)(iv) of the Limitations Act as to when the claim was discoverable: "the day on which the person with the claim first knew that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it".
[ 23 ] Durham asserts that the claim in this matter was discovered on April 21, 2009, when Durham received notification from Oshawa council that it was denying the right to proceed to arbitration because the limitation period had expired, and that it was denying responsibility for the underfunded liabilities. [page60 ]
[ 24 ] Oshawa argues that Durham knew or ought to have known of the position of Oshawa council, as responsibilities for the underfunded liabilities were in dispute even before the By-Law was passed. Oshawa relies on s. 5(2) of the Limitations Act: "a person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved".
Negotiations after the By-Law was passed
[ 25 ] Counsel for Oshawa concedes that the passage of the By- Law resulted in complex multifaceted negotiations.
[ 26 ] The complexity of the negotiations is confirmed by a summary document prepared by the commissioner of finance from Durham in June 2007.
[ 27 ] This document, dated June 1, 2007 and entitled "Summary of Transition Issues", was sent by Durham to the eight lower- tier municipalities requesting confirmation of which matters had been resolved and which matters were still in dispute.
[ 28 ] The summary document confirms that, from the perspective of Durham, there remained outstanding issues for unfunded liabilities with three lower-tier municipalities including Oshawa, Ajax and Whitby.
[ 29 ] The response to this summary document, prepared by several of the Oshawa staff, did not indicate whether there was agreement or disagreement with the summary prepared by Durham with respect to the unfunded liabilities issue.
[ 30 ] The reason for this omission is very relevant to this motion.
[ 31 ] When the senior officer from Oshawa was questioned why there was no indication of Oshawa's position on the summary document and that the unfunded liabilities was simply left blank, he confirmed that "[w]e [the Oshawa municipal staff] could not be in a position to agree or disagree. That would have to be a council decision" (emphasis added) (Stockman transcript, p. 48, qu. 152 to 153).
[ 32 ] Durham acknowledges that the focus of the negotiations with Oshawa was with respect to the transfer of the facilities, not the underfunding issue. These transfer issues were resolved between Durham and Oshawa in November 2009, and the transfers took place in December 2009. It is not disputed that there was little or no negotiation with respect to the underfunded liabilities.
[ 33 ] It is of note that Durham was able to resolve the unfunded liability issue with the two other lower-tier municipalities. [page61 ]Approval of that resolution was in the same resolution package considered by Durham council in April 2009, recommending referral to arbitration of the unresolved unfunded issue with Oshawa.
[ 34 ] Another major issue between Oshawa and Durham involved the transfer of the regional transit facilities at the Farwell and the Raleigh Avenue locations. The negotiation of a resolution of this issue was finalized in November 2009, and the transfers took place in December 2009, after approval by Oshawa council. Applicable Law
[ 35 ] Section 5 of the Municipal Act, 2001 stipulates that municipal powers, including powers outlined in s. 9 , are to be exercised by council or by by-law. The section provides:
Powers exercised by council
5(1) The powers of a municipality shall be exercised by its council.
Council a continuing body
(2) Anything begun by one council may be continued and completed by a succeeding council.
Powers exercised by by-law
(3) A municipal power, including a municipality's capacity, rights, powers and privileges under section 9, shall be exercised by by-law unless the municipality is specifically authorized to do otherwise.
Scope
(4) Subsections (1) to (3) apply to all municipal powers, whether conferred by this Act or otherwise.
[ 36 ] Although in certain circumstances, as outlined in s. 23 of the Municipal Act, some municipal powers may be delegated, there is no assertion in the facts of this case that any such delegation took place.
[ 37 ] It is clear from the record before me that the municipal staff of Oshawa took the position that Durham was responsible for the underfunded liability payments after the passage of the By-Law and that the staff of Durham took the contrary position.
[ 38 ] Counsel for Oshawa agrees that no employee of a municipality can bind the municipality, unless decision making authority has been delegated to that employee by the municipal council. No such delegation occurred in this case. Council for a municipality is the only body authorized to make decisions for the municipality: see Magical Waters Fountains Ltd. v. Sarnia (City) (1992), 1992 (ON SC) , 8 O.R. (3d) 689, [1992] O.J. No. 1320 (Div. Ct.). [page62 ]Magical Waters confirms, at para. 8:
It is important to remember this distinction, as a staff member cannot bind the municipal corporation unless authority has been delegated to the staff member by by-law or resolution of Council. In the absence of delegation by Council to an individual or by-law, there must be some affirmative action evidenced by a majority vote of the members of Council, sufficient for a quorum, in order to commit a municipal corporation to any legal obligation. The onus is on a person dealing with a municipal corporation to determine whether the proper delegation either to a committee or an individual has been made and that the power to do so is present.
[ 39 ] Oshawa relies upon the decision of Penny J. in Bolton Oak Inc. v. McColl-Frontenac Inc., [2011] O.J. No. 4953, 2011 ONSC 6567 (S.C.J.) , stipulating the principles related to discoverability. Oshawa argues that the onus is on the plaintiff Durham to lead evidence that it behaved reasonably and that it used reasonable diligence in relation to discovery of facts relating to the limitation issue. Oshawa relies in particular on paras. 12 to 14 of that decision:
The question as to when a plaintiff becomes aware of the material facts is determined by an objective standard, i.e., when the claim ought reasonably to have been discovered by a plaintiff exercising reasonable diligence. In assessing whether or not a plaintiff has acted with reasonable diligence, the court must consider whether a reasonable person, exercising reasonable diligence under the circumstances, would have discovered the material facts upon which to form an action. The obligation on a plaintiff to exercise reasonable diligence is a positive one, Soper v. Southcott (1998) 1998 (ON CA) , 39 OR (3d) 737 (C.A.) paras. 13 and 21 .
The issue of discoverability is no small matter. Three rationales underlie limitation periods: certainty, evidentiary and diligence. The Supreme Court has stated, in M(K) v. M(H), 1992 (SCC) , [1992] 3 S.C.R. 6 at paras. 21-24 , that:
Statutes of limitations have long been said to be statutes of repose . . . The reasoning is straightforward enough. There comes a time, it is said, when a potential defendant should be secure in his reasonable expectation that he will not be held to account for ancient obligations . . .
The second rationale is evidentiary and concerns the desire to foreclose claims based on stale evidence. Once the limitation period has lapsed, the potential defendant should no longer be concerned with the preservation of evidence relevant to the claim . . .
Finally, plaintiffs are expected to act diligently and not "sleep on their rights"; statutes of limitation are an incentive for plaintiffs to bring suit in a timely fashion.
When a limitations defence is raised, the onus is on the plaintiff to show that its claim falls within the applicable limitation period. In particular, this requires that the plaintiff lead evidence that it behaved as a reasonable person in the same or similar circumstances using reasonable diligence in [page63 ]relation to its discovery of facts relating to subs. 5(1)(a), Bhaduria v. Persaud (1998), 1998 (ON SC) , 40 O.R. (3d) 140 (Gen. Div), paras. 16-19 .
[ 40 ] Counsel for Oshawa argues that the presumption in s. 5(2) of the Limitations Act applies imposing an obligation upon Durham to proactively ascertain the position of Oshawa council within the two-year period following April 1, 2006, and that the Region failed to take adequate steps to ascertain the position of Oshawa council. Oshawa argues that, objectively, the Region knew, or ought to have known within the two years after April 1, 2006, that Oshawa council would have denied responsibility for the unfunded liabilities for former transit employees.
[ 41 ] Durham agrees that Bolton Oak correctly outlines the principles that apply to the discoverability. However, Durham argues that until Oshawa council refused the request of Durham to proceed with arbitration to determine the matter in dispute, the position of Oshawa council could not be reasonably be ascertained.
Conclusion that limitation period runs from when a municipal council passes a resolution
[ 42 ] Counsel had no authority for the proposition that the two-year limitation period begins to run from the date that a by-law comes into effect.
[ 43 ] Although counsel agree that a limitation period may apply to an arbitration provision, determination of the issue depends on the specific wording of the arbitration provision. There is no decision that a permissive clause, in which parties "may" proceed to arbitration, triggers a limitation period. Had the limitation clause instead required the parties to attend arbitration after three months by using the word "shall", it would have changed the complexion of Oshawa's arguments.
[ 44 ] The By-Law is silent as to the time limit within which agreement must be reached with respect to the underfunded liability.
[ 45 ] The record confirms that from April 2006 to April 2009, Durham was negotiating in good faith to resolve the complex multitude of issues with Oshawa and the other seven lower-tier municipalities. Oshawa does not suggest that Durham was acting in bad faith. However, counsel for Oshawa takes the position that after March 31, 2008, Durham was negotiating on this and all other issues outside the limitation period at its "peril".
[ 46 ] The interpretation suggested by Oshawa, that the limitation period began to run once the three-month period for negotiation had expired, does not make sense. Nor does this interpretation accord with the actions of the parties, as no steps [page64 ]were taken to proceed to arbitration, and ongoing discussions and negotiations took place with respect to this issue and other issues after this date.
[ 47 ] From a practical point of view, because the financial statements were not available prior to April 1, 2006, resolution of the issue was precluded before that date, as facts were not yet available to make an informed decision. I note that for the other lower-tier municipalities, including Ajax and Whitby, the issue of transit employees' unfunded liabilities was resolved in April 2009, and approved by Durham council as part of the same resolution package referring the outstanding Oshawa issue to arbitration.
[ 48 ] The By-Law does not provide any time limits with respect to the unfunded liability issue. I conclude that the April 1, 2006 date in clause 2 of the By-Law in relation to arbitration is permissive only. It allows either party to request to go to arbitration. This request must be made by a municipal council. The request to proceed to arbitration was made by Durham council on April 1, 2009.
[ 49 ] The confirmation by the most senior member of staff for Oshawa that the staff would not be in a position to agree or disagree as to Oshawa's position on the unfunded liability issue as "that would have to be a council decision" confirms this fundamental principle in municipal law that decisions must be made by council.
[ 50 ] Time for any limitation period ran from when Oshawa council took a clear position by way of resolution and notified Durham. Oshawa council passed a resolution denying Durham's request on April 20, 2009.
Dismissal of the alternative argument
[ 51 ] Oshawa argues, in the alternative, that time for the calculation of a limitation period runs from June 2007.
[ 52 ] The facts do not support this assertion. Staff cannot bind a municipality. The failure by the Oshawa staff to agree or disagree with respect to the document Summary of Transition Issues in June 2007 confirms that staff cannot take a position on behalf of a municipality and in case of a dispute, the position of a municipality must be confirmed by council. Commencement of the beginning of a limitation period must be clear. At no time did the Oshawa staff advise the Durham staff of their argument that the limitation period began on April 1, 2006. The fact that Oshawa staff continued to deny responsibility for the unfunded payments during the ongoing negotiations cannot trigger the beginning of any limitation period. [page65 ]
[ 53 ] For these reasons, the motion for summary judgment initiated by Oshawa is dismissed. Pursuant to the parties' agreement in case of dismissal, the matter shall proceed to binding arbitration, and each party shall bear their own costs of this motion and this proceeding.
Motion dismissed. @7 Schedule A
- On the Effective Date, all rights and obligations and all assets and liabilities of the lower-tier municipalities pertaining to or used for Public Transportation Systems including all real and personal property and all interests and obligations in any agreement, shall be transferred to the Region subject to the following terms and conditions:
Operations (a) As of the Effective Date, the Region shall operate, maintain and regulate the use of a Public Transportation System for both conventional and specialized services. (b) The Region shall at a minimum begin its service based on the existing overall revenue hours of service in effect as of May 1, 2004, with the addition of the Rossland/Taunton "beltline" service jointly planned by the City of Oshawa and the Town of Whitby, the planned service realignments in Oshawa and Whitby for implementation in 2004/2005 and enhanced specialized transit service in Oshawa as a result of a vehicle acquired in 2004. (c) After the Effective Date, the Region may enter into agreements with any adjoining municipality or the Province for the provision of public transportation services.
Asset Transfer (d) All physical assets used for public transportation systems shall be transferred to the Region without compensation as of the Effective Date. Assets shall include, but not be limited to, (i) vehicles and equipment; (ii) lands and premises including garages, terminals and shelters; and (iii) other transit amenities. (e) The transfer of all transit-related assets shall be subject to confirmation of inventories, appropriate asset valuations and environmental site assessments. Such inventories shall include all transit-related assets of the lower-tier municipalities and transit agencies as at the Effective Date. (f) Discretionary transit-related funds including reserves and reserve funds existing on the Effective Date shall be transferred to the Region. [page66 ] (g) All transit-related development charge and other non-discretionary reserve funds shall be transferred to the Region. (h) Lower-tier municipalities shall continue to collect transit development charges where applicable until their by-laws expire or are repealed, including periods beyond the Effective Date. All such development charges shall be transferred to the Region. The transit-related provisions of the development charges by-laws shall not be changed after this by-law has received the necessary triple majority approval without the approval of the Region. (i) After the Effective Date, all Provincial and Federal transit-related funding received by the lower-tier municipalities shall be transferred to the Region, including but not limited to funds received from such programs as the Ontario Transit Vehicle Program (formerly the Transit Renewal Program), the new Provincial Gas Tax Funding program for public transit and potential federal programs such as a federal gas tax.
Liabilities (j) As of the Effective Date, the lower-tier municipalities shall be relieved of all liabilities in relation to any assets transferred to the Region. (k) The amount and future payments of any unfunded liabilities existing at the Effective Date shall be determined through negotiations between the Region and the lower-tier municipalities.
Personnel (l) All transit employees with permanent full time and part time positions, both exempt and union, that are exclusively employed in transit by the lower- tier municipalities, transit operators and Handi Transit Inc. as of the date that this by-law comes into force shall become employees of the Region as of the Effective Date.
Transition Period (m) During the period of time between the date that this by-law has received the necessary triple majority approval and the Effective Date (the "Transition Period"), any new or renewed transit-related contract, lease or contractual obligation that requires a significant financial commitment extending beyond the Effective Date shall require the approval of the Region. (n) Handi Transit Inc. shall be dissolved prior to the Effective Date in order to facilitate the transfer of transit-related assets to the Region. (o) During the Transition Period, the Region and the lower-tier municipalities shall negotiate and enter into agreements for the transfer of all assets, liabilities and personnel on terms that are consistent with this by-law. Any matters not agreed to within three (3) months of the Effective Date may, at the request of the Region or a lower-tier municipality, be determined by arbitration under the provisions of the Ontario Arbitrations Act. [page67 ]
Surplus Assets (p) Any real property acquired by the Region from a lower-tier municipality pursuant to clause 2(d) of this by-law and deemed surplus for transit purposes shall be returned to the lower-tier municipality from which it was transferred at no cost.
Motion dismissed.