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FINANCEMENT PAR DéBENTURE -
ANNéE 2006 |
COMMITTEE RECOMMENDATION
That Council receive this report on the results of the
City’s 2006 debenture issue, for information.
RECOMMENDATION DU COMITÉ
Que le Conseil prennent connaissance
du présent rapport qui présente les résultats du financement par débenture de
la Ville pour l'année 2006.
DOCUMENTATION
1.
Chief
Corporate Services Officer’s report dated 11 September 2006
(ACS2006-CRS-FIN-0038).
Report to/Rapport
au :
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and Council / et au Conseil
11 September 2006 / le 11 septembre 2006
Submitted by/Soumis par : Greg Geddes, Chief Corporate Services Officer/
Contact
Person/Personne ressource : Marian Simulik, Director, Financial Services and
City Treasurer/Directrice des services financiers et trésorière municipale
(613) 580-2424 x 14159,
Marian.Simulik@ottawa.ca
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SUBJECT: |
2006
DEBENTURE FINANCING |
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OBJET : |
FINANCEMENT PAR DéBENTURE - ANNéE 2006 |
REPORT RECOMMENDATION
That the Corporate Services and Economic Development Committee and
Council receive this report on the results of the City’s 2006 debenture issue,
for information.
RECOMMANDATION DU
RAPPORT
Que le Comité des services organisationnels et
du développement économique ainsi que le Conseil municipal prennent
connaissance du présent rapport qui présente les résultats du financement par
débenture de la Ville pour l'année 2006.
BACKGROUND
On 8 March 2006, City Council adopted a report, which delegated the authority to proceed with debenture issues to the Treasurer as long as the current year's debt servicing budget is not exceeded and the project debt authority has been previously approved by Council. An information report must be brought forward to Council on the conclusion of the debt issue.
On 15 August 2006, the City issued $100,000,000 in twenty year fully amortizing debentures with interest at an all-in effective yield of 5.074% per annum. The debentures mature in semi-annual instalments commencing 28 February 2007 and ending 28 August 2026 as authorized by By-law 2006-297.
Approximately 50% of the issue was placed domestically including orders from large life insurance and general insurance companies with the balance of the issue sold internationally to European financial institutions. The debenture issue successfully closed on 28 August 2006 when the City came into receipt of the funds raised.
From January to May 2006, the Bank of Canada raised its overnight borrowing rates four times from 3.25% to 4.25%. This was a continuation of interest rate increases started in July 2005. Government of Canada bond yields also increased with 10 year Canada bond yields increasing from 3.98% to 4.50% by June 2006. Employment and wage data released in June continued to put upward pressure on rates. However, on 11 July 2006, the Bank of Canada announced that it was not increasing its interest rate. There was growing evidence of a slowing economy in the USA and US interest rates began to fall with Canadian rates following this direction. When the City's debt issue was issued on 15 August, 10 year Government of Canada bonds were yielding 4.345%. The City's bond yield is based off of the Government of Canada bond yield.
In recent years the City of Ottawa has been issuing debentures with 20-year terms to take advantage of near historically low interest rates as well as to issue somewhat more debt while keeping annual debt charges within the tax supported debt service budget. The amortizer structure with equal semi-annual payments of principal and interest has been the lowest cost alternative for this term. The 2006 issue was well received in the market and was fully subscribed.
CONSULTATION
The public consultation process is not applicable.
FINANCIAL IMPLICATIONS
The debenture issue does not involve any new debenture authority but completes the financing authorized by Council at the time the various capital works were approved. The 2006 Budget included new debenture issues in the amount of $170 million. This issue can be managed in the existing base Capital Formation Envelope which is part of the long-term debt management strategy.
SUPPORTING DOCUMENTATION
Details of the projects financed from the proceeds of the 2006 debenture issue are attached in Appendix A.
DISPOSITION
Following consideration by Corporate Services and Economic Development Committee, this report will be forwarded to Council for its consideration.
|
Project |
Authorizing By-Law Number |
Debentures Authorized by Council $ |
Debentures Previously Issued Amount B/L No. $ |
Debentures Issued $ |
General Government – Governance
903020 Life Cycle Renewal
Heritage Buildings - 2004 This capital program entails
a wide assortment of major repairs and replacement work in order to preserve
the heritage value of the property.
Work such as roof replacement; window restoration; door
reconstruction; masonry repairs; structural work; wall re-construction;
lighting; etc., form the essence of the capital program. |
2004-162 |
700,000 |
|
700,000 |
Protection Services – Police
901891 Capital costs
associated with construction costs of a new Property and Evidence Facility on
an existing City owned site located at the Charles Sims Municipal Workshops
and Garage on Swansea Crescent. |
2005-226 |
4,557,000 |
|
4,557,000 |
|
903033 Central Cellblock
Upgrade Capital costs associated
with the Central Cellblock Upgrade & Expansion. |
2005-33 2006-296 |
2,200,000 170,000 2,370,000 |
|
320,000 |
|
903130 Facility Work Plan -
2005 Capital costs associated
with the facility work plan designed to ensure owned facilities at 474 Elgin
Street, 245 Greenbank Road, 2799 Swansea Crescent, 3343 St. Joseph Boulevard,
and 4561 Bank Street are properly maintained. |
2005-33 |
1,200,000 |
|
1,000,000 |
|
903132 Accommodation Master
Plan - 2005 Capital costs associated
with renovations to the existing main police facilities to support
operational requirements resulting from the amalgamation of the 3 former
police forces and the unification of some OPP areas. |
2005-33 |
1,130,000 |
|
1,130,000 |
|
903141 Building Security
& Access Control - 2005 Capital costs associated
with the Integrated Security Management System at various facilities to
complete. |
2005-33 2006-296 |
650,000 (170,000) 480,000 |
|
480,000 |
|
Project |
Authorizing By-Law Number |
Debentures Authorized by Council $ |
Debentures Previously Issued Amount B/L No. $ |
Debentures Issued $ |
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Transportation Services - Roadways
900061 King Edward Avenue
(Laurier to Sussex) This project is part of the
Urban Rehabilitation Program which provides for the total reconstruction of
roadways including underground utilities, curbs, sidewalks and related
facilities. |
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1,000,000 1,970,000 1,400,000 7,725,000 1,700,000 13,795,000 |
2005-321 3,708,000 |
7,176,759 |
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900070 (912-30745) Reconstruction of Elgin
Street (Queen to Laurier). |
39-1998 17 of 1999 |
400,000 2,000,000 2,400,000 |
2002-173 1,293,000 |
600,000 |
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900086 (912-31032) Reconstruction of Laurier
Avenue Bridge from Elgin Street to Waller Street |
3 of 1996 2001-173 2002-123 2004-162 2005-432 |
3,850,000 2,748,241 1,000,000 200,000 1,900,000 9,698,241 |
2004-297 7,366,000 |
2,332,241 |
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900428 Innes (417-Blair
& Orleans-Tenth Line) Widening the section
between Highway 417 and Blair Road and the section between Orleans Boulevard
and Trim Road. |
2001-173 2004-162 2005-226 2005-432 2006-296 |
1,020,000 965,000 135,000 1,600,000 300,000 4,020,000 |
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4,020,000 |
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900686 Capital costs related to the
2001 Street Lighting Program involving the installation of new streetlights
at intersections and at dead-ends in rural areas. |
2001-173 |
1,632,000 |
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1,632,000 |
|
Project |
Authorizing By-Law Number |
Debentures Authorized by Council $ |
Debentures Previously Issued Amount B/L No. $ |
Debentures Issued $ |
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900708 Capital costs related to
the 2001 Approved Structures Program involving Pre-Engineering etc., Tomas
Dolan Parkway, Carp River Bridge (Road 5, Structure #4311), Middle Castor
River Bridge (Structure 8235) RR#6, Rollo’s Bridge – Moodie Drive (Structure
#1304), St-Laurent Boulevard Retaining Wall (Structure #927), Structure #8260
(Road 31), Structure #9792 (Road 37), Structure 9846 (Road 8), Wellington
Street Overpass (Structure #538) Miscellaneous Structures, subject to the
limits set out in the City’s 2001 Capital Budget. |
2001-173 2004-228 |
4,165,000 (75,000) 4,090,000 |
2002-173 3,600,000 |
490,000 |
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900895 Capital costs
related to the 2001 Road Reconstruction Program involving the following
components of the project: Integrated
Road, Sewer and Water Program, Infrastructure Management Program, Roads
involving the various Location/Description of roads contained in the 2001
Proposed Road Reconstruction Program subject to the limits set out in the
City’s 2001 Capital Budget. |
2001-173 |
19,598,000 |
1,370,000 203-103 1,080,000 2004-297 20,000 2005-321 12,600,000 15,070,000 |
2,106,000 |
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901069 2002 Road
Reconstruction/Rehabilitation Program Capital costs related to
the 2002 Resurfacing Program, subject to the limits set out in the City’s
2002 Capital Budget. |
2002-123 |
15,800,000 |
203-103 14,000,000 |
93,000 |
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Capital costs related to
the 2003 Road Reconstruction/Rehabilitation Program for the following capital
projects: 901269 Adeline Street. –
Railway tracks to Rochester; 901277 Breezehill Avenue – Queensway to
Gladstone; 902324 Birch Street (Hemlock to Sandridge); 902333 Ladouceur
Ave./Stirling Avenue Rehabilitation; 902334 Lorne Ave. (Somerset to
Primrose); 902339 Percy Street Rehabilitation; 902344 Infrastructure
Management – Roads; 902345 Quigley Hill Road. The Road
Reconstruction/Rehabilitation Program addresses annual rehabilitation
requirements for the City’s 5,300 km of rural, urban and transit roadway
network in order to preserve and extend the life of the infrastructure, to
provide continued uninterrupted commuter service and to prevent failures
requiring heavier and costlier reconstruction strategies. |
2003-9 2004-391 |
2,980,000 300,000 3,280,000 |
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1,830,000 |
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Project |
Authorizing By-Law Number |
Debentures Authorized by Council $ |
Debentures Previously Issued Amount B/L No. $ |
Debentures Issued $ |
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903049 Infrastructure
Management (0103TU1100) Road Reconstruction/Rehabilitation – 2004 2004-Capital costs
associated with the performance monitoring, and condition assessment of the
City’s roadwork network. Funding also
provides for payment testing, network level data collection and miscellaneous
soils and pavement evaluation undertakings. |
2004-162 |
300,000 |
2005-321 114,903 |
50,000 |
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903054 Sidewalk
Reconstruction (0103TU1310) Sidewalk & Curb Rehabilitation – 2004 Capital costs associated
with the block to block reconstruction of existing sidewalks that have
deteriorated to a point requiring replacement. |
2004-162 2005-432 |
200,000 50,000 250,000 |
|
240,000 |
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903055 (0103TU1250)
Structures – 2004 This project provides for
engineering and construction activities relating to repairs and
rehabilitation of various smaller structures to address deficiencies and to
extend their service life. |
2004-162 |
1,600,000 |
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1,400,000 |
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903376 (0103TU1200)
Resurfacing – 2005 Funding provides for actual
pavement resurfacing costs as well as ancillary costs associated with
ironwork adjustments, curb repairs and base repairs where necessary. |
2005-33 |
16,400,000 |
2005-321 6,900,000 |
9,500,000 |
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903379 (0103TU1250)
Structures – 2005 This project provides for
condition assessments, preventative maintenance, rehabilitation and
reconstruction works undertaken on the City’s existing bridges, culverts,
pedestrian overpasses and retaining wall systems. |
2005-33 2005-432 |
100,000 5,000,000 5,100,000 |
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4,525,000 |
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903501 (0103TU1553) New
Traffic Control Program – 2005 This program allows for the
installation of new traffic control signals and roadway modifications of
intersections if required before traffic control signals can be installed. |
2005-33 |
722,000 |
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100,000 |
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903675 Infrastructure
Services Structures – Pretoria Lift Bridge Rehabilitation (WIP) |
2005-226 |
1,846,000 |
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Capital costs associated
with the construction of Phase 2 rehabilitation will take place in 2006 to
address structural deficiencies that include rusting of structural members,
leaky joints and access hatches, deteriorated windows and doors, as well as
failed mortar joints in the masonry.
The work also includes the replacement of expansion joints, and
various repairs to the deck and abutment walls. |
2005-432 2005-562 |
700,000 1,800,000 4,346,000 |
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2,470,000 |
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Project |
Authorizing By-Law Number |
Debentures Authorized by Council $ |
Debentures Previously Issued Amount B/L No. $ |
Debentures Issued $ |
|
903848 Resurfacing – 2006 Capital costs associated
with resurfacing projects which funding provides for actual payment
resurfacing costs as well as ancillary costs associated with ironwork
adjustments, curb repairs and base repairs where necessary. |
2005-562 |
10,895,000 |
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10,895,000 |
Transportation Services - Transit
903282 Rapid Transit
Corridor – Property Acquisitions Capital costs associated
with the property acquisition and/or related costs to secure the corridor
will take place in 2005, and will include, as examples, acquisition of the CP
Rail corridor, Transport Canada property at the Airport, property for LRT
stations, park and ride lots, electrical sub-stations, maintenance yard, and
easements. |
2005-33 2005-432 2006-296 |
1,175,000 (250,000) 3,300,000 4,225,000 |
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4,225,000 |
Environmental Services – Waterworks System
900510 Waste Water
Management (0103TU4230) Water Regulatory Program – 2005 Capital costs related to the Lemieux Island Water Purification Plant and Britannia Water Purification Plant predesigns to allow for the discharge of the thickened waste to the sewer system, to be ultimately incorporated with the biosolids from the Robert O. Pickard Environment Center. |
2005-33 2005-562 |
28,640,000 9,700,000 38,340,000 |
|
23,000,000 |
Social and Family Services – Assistance to Aged Persons
903455 Carleton Lodge
Remediation – 2005 To re-construct the
building envelope system serving this facility. The work entails the removal of the exterior metal siding, wall
sheathing and insulation and the re-construction of this wall assembly by
applying new insulation, sheathing, an air barrier, new metal siding and new
windows. |
2005-33 2005-432 |
1,000,000 900,000 1,900,000 |
|
1,900,000 |
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Project |
Authorizing By-Law Number |
Debentures Authorized by Council $ |
Debentures Previously Issued Amount B/L No. $ |
Debentures Issued $ |
Recreation and Cultural Services – Recreation Facilities
900829 Arena Construction Addition of a new second
indoor ice surface and lobby at the existing Fred Barrett Arena and
reconfiguration of existing entrance and change rooms space. |
2001-173 2004-228 2005-432 2006-296 |
1,058,000 250,000 600,000 500,000 2,408,000 |
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2,408,000 |
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902286 Glebe Community
Centre Renovations The project would see a
complete renovation, replacement of all components and provision of more
appropriate recreation and cultural spaces to meet future programming needs. |
2003-9 2003-580 2005-432 |
3,150,000 350,000 300,000 3,800,000 |
|
3,800,000 |
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902980 Greenboro Athletic
Center Capital costs associated
with the Greenboro Athletic Centre. |
2005-226 2005-432 |
400,000 100,000 500,000 |
|
500,000 |
Recreation and Cultural Services - Libraries
902285 Construction South
District Library Capital costs associated
with the construction of the South District Library. |
2003-9 2004-162 |
6,075,000 445,000 6,520,000 |
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6,520,000 |
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Total Amount of the Debentures |
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|
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100,000,000 |