5. Financing of the City Portion of Infrastructure Stimulus Projects

Financement de la portion de la Ville concernant les projets de stimulation de l'infrastructure

COMMITTEE RECOMMENDATIONS AS AMENDED

That Council:

a) Approve the projects and the City financing share of the Infrastructure Stimulus Projects as outlined in Document 1;

b) Temporarily amend:

i) Schedule E, sections 11 (4) and (5) of the Delegated Authority by-law as detailed in this report for the acquisition of land associated with the approved Stimulus projects;

ii) Section 21 (9) of the Purchasing By-law as detailed in this report for purposes of procuring goods and services related to the approved Stimulus projects;

c) Authorize the City Treasurer to:

i) Make a loan application for any eligible debt identified in Document 1 to the Canada Mortgage and Housing Corporation’s Municipal Infrastructure Lending Program;

ii) Negotiate and sign all required loan agreements and documentation;

iii) Bring debenture by-law(s) to Council if required, to complete the request for loan advances under this loan facility; and

d) Authorize the Treasurer to make any financing adjustments to the Stimulus projects as required.

e) That, should the Province of Ontario provide their share of funding for the Hunt Club / 417 interchange within the requested time limits, that the City Treasurer be delegated the authority to establish the necessary debt to fund the City’s share of the interchange within the parameters of the City’s Fiscal Framework and Provincial debt limits.

RecommandationS MODIFIÉES du Comité

Que le Conseil :

a) approuve les projets et la part du financement municipal dans le cadre des projets de stimulation de l’infrastructure, comme l’explique le document 1;

b) modifie temporairement :

i) les articles 11 (4) et (5) de l’annexe E du Règlement sur la délégation de pouvoirs comme l’explique le présent rapport, concernant l’acquisition de terrains dans le cadre des projets de stimulation approuvés;

ii) l’article 21 (9) du Règlement sur les achats, comme l’explique le présent rapport, concernant l’acquisition de biens et de services relativement aux projets de stimulation approuvés;

c) autorise la trésorière municipale à :

i) déposer une demande de prêt pour toute dette admissible déterminée dans le document 1 dans le cadre du Programme de prêts pour les infrastructures municipales de la Société canadienne d’hypothèques et de logement;

ii) négocier et à signer toutes les ententes de prêts et la documentation connexe requises;

iii) présenter au Conseil les règlements municipaux sur l’émission de débentures s’il y a lieu, afin de compléter la demande d’avance de prêts dans le cadre de cette facilité de prêt; et

d) autorise la trésorière à effectuer tout ajustement financier relativement aux projets de stimulation, au besoin.

e) Que si le gouvernement de l’Ontario fournit sa part du financement de l’échangeur du chemin Club et de l’autoroute 417 dans les délais demandés, la trésorière de la Ville se voie déléguer le pouvoir de contracter la dette nécessaire pour financer la part de la Ville des coûts de construction de l’échangeur dans le respect des paramètres du Cadre financier de la Ville et des limites de dette provinciales.

DOCUMENTATION

1. City Treasurer’s report dated 15 June 2009 (ACS2008-CMR-FIN-0030)

2. Extract of Draft Minutes

Report to/Rapport au :

Corporate Services and Economic Development Committee

Comité des services organistionnels et du développement économique

and Council et au Conseil

15 June 2009 / le 15 juin 2009

Submitted by/Soumis par : Marian Simulik, City Treasurer/Trésorière municipale

Contact Person/Personne ressource: Tom Fedec, Manager, Financial Planning/Planification financière

Financial Services/Services financiers

(613) 580-2424 ext. 21316, Tom.Fedec@ottawa.ca

Ref N°: ACS2009-CMR-FIN-0030

SUBJECT:	Financing of the City Portion of Infrastructure Stimulus Projects

OBJET :	Financement de la portion de la Ville concernant les projets de stimulation de l'infrastructure

REPORT RECOMMENDATIONS

That the Corporate Services and Economic Development Committee recommend Council:

a) Approve the projects and the City financing share of the Infrastructure Stimulus Projects as outlined in Document 1;

b) Temporarily amend:

i) Schedule E, sections 11 (4) and (5) of the Delegated Authority by-law as detailed in this report for the acquisition of land associated with the approved Stimulus projects;

ii) Section 21 (9) of the Purchasing By-law as detailed in this report for purposes of procuring goods and services related to the approved Stimulus projects;

c) Authorize the City Treasurer to:

i) Make a loan application for any eligible debt identified in Document 1 to the Canada Mortgage and Housing Corporation’s Municipal Infrastructure Lending Program;

ii) Negotiate and sign all required loan agreements and documentation;

iii) Bring debenture by-law(s) to Council if required, to complete the request for loan advances under this loan facility; and

d) Authorize the Treasurer to make any financing adjustments to the Stimulus projects as required.

RECOMMANDATIONS DU RAPPORT

Que le Comité des services organisationnels et du développement économique recommande au Conseil :

a) d’approuver les projets et la part du financement municipal dans le cadre des projets de stimulation de l’infrastructure, comme l’explique le document 1;

b) de modifier temporairement :

c) d’autoriser la trésorière municipale à :

ii) négocier et à signer toutes les ententes de prêts et la documentation connexe requises;

d) d’autoriser la trésorière à effectuer tout ajustement financier relativement aux projets de stimulation, au besoin.

BACKGROUND

On June 5, 2009 the Federal and Ontario governments provided the City of Ottawa with a list of approved stimulus projects based on the Council approved list as submitted in March. In total, $376 million in “shovel-ready” projects were approved with the Federal and Provincial governments providing $125.2 million respectively to the funding of these projects. Projects approved under this program are to be completed by municipalities by March 2011. A complete listing and description of these projects is provided as Document 1.

The remaining $125.4 million is to be funded primarily by the City with external revenues of $350,000 to be provided for the Ottawa Chinatown Gateway project and $25,000 from the Friends of the Library for the renovations of the Sunnyside Library branch.

The purpose of this report is to seek Committee and Council approval for the required financing to fund the City share of these projects and to authorize the City Treasurer to apply, negotiate and sign agreements with the Canada Mortgage and Housing Corporation to secure low interest loans to debt finance a portion of the Stimulus projects.

In addition, temporary amendments to the Purchasing and Delegated Authority by-laws are recommended in order to ensure that the projects can be expedited and completed within the required timeframes.

DISCUSSION

Project Financing

Based on the approved list of Stimulus projects, staff has reviewed the internal financing sources available to fund the City’s required share. The following table summarizes the recommended financing of these projects.

Table 1

	$
Total Projects	375,832,500
Federal Funding	(125,202,496)
Provincial Funding	(125,202,496)
	125,427,508
External Revenues
Chinatown Gateway	(350,000)
Sunnyside Library	(25,000)
City Funding Requirement	125,052,508

Proposed Financing Sources
Previous Budget Approval	(17,533,334)
Transit Reserve Fund	(57,500)
Rate Reserve Fund	(23,334)
Development Charges	(56,303,110)
Debt Financing
Tax Supported - City Wide - Transit	(20,017,023) (16,062,003)
Rate Supported	(15,056,204)
	(51,135,230)
Total City Funding	(125,052,508)

Of the $125.1 million City requirement, $17.5 million has already been approved in the 2009 capital budget for the Southwest Transitway Extension project - Fallowfield to Barrhaven. This project was approved subject to 2/3 funding commitment from the Federal and Provincial governments. The City’s share has been approved utilizing Transit Reserve funds ($10.9m) and development charge revenues ($6.6m).

A minimal amount of Transit and Rate reserve funds have been used as a financing source for a small number of projects. Although more funds could be used from these reserve funds, it is recommended that the City maintain maximum financial flexibility and establish debt authority as the financing source at this time. If debt authority is not approved at the time of initially approving the project, once the project has commenced debt authority cannot be introduced at a later date as a financing source. Additional debt authority can be added or removed during the life of a project that has been established using debt as a funding source.

Development charge revenues of $56.3 million plus the $6.6 million previously approved will fund approximately 50% of the City’s share. The majority of projects funded from development charge revenues are in the pathway, new sidewalks and road construction areas and include the Hazeldean Road widening, Earl Armstrong road, Hunt Club extension to Highway 417 and Terry Fox Drive.

The establishment of debt financing authority of $51.1 million is recommended as the funding source for the remaining balance of the Stimulus projects. It should be noted that establishing the debt authority for these projects does not mean that the debt will actually be issued in the future. Some of the projects may not meet the criteria for debt financing and therefore would normally be financed from the City’s reserve funds. In order to expedite the establishment of these projects they are initially being established with debt authority. Any non-debt eligible projects will need to be reviewed and refinanced in the next few years.

As all of the rules for these projects have not yet been established, there may be a need in the future to realign some of the funding. In order to make any necessary funding corrections or adjustments to these projects, it is recommended that the City Treasurer be given the authority to make these amendments as required and advise Council in the Quarterly Status reports.

Amendments to Delegated Authority By-law / and Purchasing By-Law

Given the limited timeframes established by the Federal and Provincial governments for completion of these Stimulus projects, staff are recommending a number of temporary changes to the Purchasing By-law and to the Delegated Authority By-law pertaining to the land acquisition process.

a) Purchasing By-law

The Purchasing By-Law, under section 21, describes the process applied to standing offers, and the City has leveraged this functionality in authorizing over 150 current standing offer agreements. Clause 21 (9), allows call-ups against standing offers to a maximum of $150,000, with exceptions to be approved by Supply Management. The Manager of Supply would like to amend this section, on a temporary basis, to allow projects to be undertaken using existing competitive standing offers, in order that work can be initiated without delay. The section would be amended as follows:

Existing clause 21 (9), becomes 21 (9)(a);
New clause 21 (9)(b): During the active period of the Infrastructure Stimulus Projects, as determined by the Manager of Supply, the maximum call-up limit against a standing offer is raised to $250,000, and exceptions to increase this call-up amount may be approved by the Manager of Supply and the Director, jointly, where a clear benefit, financial or otherwise, is available to the City by doing so.
New clause 21 (9)(c): During the active period of the Infrastructure Stimulus Projects, as determined by the Manager of Supply, for requirements estimated to be in the range of $250 to $500k, where a standing offer is in place, the Manager of Supply may institute a "fast track" competitive process, by selecting (along with the City client) up to three vendors from the authorized standing offer list and conducting a proposal process with an aggressive time frame, such that the project may commence without undue delay.
New clause 21 (9)(d): During the active period of the Infrastructure Stimulus Projects, as determined by the Manager of Supply, for requirements estimated to exceed $500k, whether a standing offer is in place or not, the requirement will be formally communicated through an internet based bid distribution portal, in accordance with existing City practice.

b) Land Acquisition Process

Currently, the Delegated Authority By-law (Schedule E) authorizes City officers to acquire lands on behalf of the City as outlined in the table below. Staff is recommending that a temporary amendment be made to the bylaw, which will allow the Director of Real Estate Partnerships & Development Office to approve land acquisitions for Infrastructure Stimulus projects of up to $500,000 and allow the City Manager to approve amounts in excess of that level. Staff would report back to Council on all acquisitions made under this temporary authority on a semi-annual basis.

Table 2

	Current	Proposed
Program Manager	$1.00 to $25,000	No Change
Manager	$25,000 to $50,000	No Change
Director	$50,000 to $100,000	$50,000 to $500,000
City Manager	$100,000 to $500,000	> $500,000

Municipal Infrastructure Lending Program (MIL)

On April 19, 2009, Federal Government announced that it will provide up to $2 billion in direct low-cost loans to municipalities over two years through a new Municipal Infrastructure Lending Program (MIL) for housing related infrastructure projects through Canada Housing and Mortgage Corporation (CMHC). Eligible projects are municipal housing related infrastructure projects serving new or existing residential areas, provided work has started after January 27, 2009 and is completed by March 31, 2012. Ineligible projects include infrastructure not related to housing, and social infrastructure such as community centres, libraries and theatres.

Loans are available at interest rates, which are lower than typical borrowing rates for municipalities (approximately 1% less than the City’s rate for similar terms) for 15-year terms. Loans will be approved largely on a first-come, first-serve basis, provided the proposal meets eligibility requirements. There will be a focus on funding projects that are shovel-ready, as this is a targeted, short-term, temporary measure intended to create jobs. Project proposals will be accepted until all available funds are committed.

It is recommended that the City Treasurer be authorized to make a loan application for any debt financing identified in Document 1 that is eligible, to Canada Mortgage and Housing Corporation’s Municipal Infrastructure Lending Program, and to negotiate and sign loan agreements and other documentation required and to bring debenture by-law(s) to Council if required, to complete a request for loan advances under this loan facility.

Impact of Debt Financing on the Fiscal Framework Principles

The Council approved Fiscal Framework document authorizes the use of debt when it leverages funds from other levels of government. However limits have been established as to the amount of debt that can be utilized to fund capital projects. Future principal and interest payments for tax and rate supported debt is not to exceed 7.5% of the City’s own source revenues. Based on the 2009 adopted budget, the current amount of debt servicing costs represents approximately 4.65% of the City's own source funds. An additional $600 million in new debt would need to be issued before the debt servicing costs would reach the limits as established by Council.

In addition, the Framework document limits the increase in debt servicing for non-legacy projects in any year to no greater than one-quarter of 1 per cent of property taxes. Although the additional debt authority being requested in this report to fund the City’s share of the Stimulus projects is $51.1 million, only $36.1 million is debt that will require future debt servicing costs to be funded from property taxes. The remaining $15 million will be funded from water and sewer revenues.

As the projects approved as part of the stimulus program were all identified for completion in future years, this acceleration of their approval will result in the debt authority being reduced in the years they were originally scheduled for approval. The effect of this will be that the City’s total debt envelope will be the same over the next five years, except that the debt authority in the latter years is being pushed forward into the earlier years.

Risks / Outstanding Issues

At the time of preparing this report, many of the regulatory details surrounding the Federal, Provincial and CMHC funding have not yet been released. Some of the details that need to be confirmed include the following:

What agreements will need to be signed between the City and the Federal / Provincial governments?
What will be defined as “eligible costs”?
How will the funds flow from the senior levels of government to the City of Ottawa?
Will projects be required to be completed by the March 2011 deadline to secure the Federal and Provincial funding or will the funds be available after this date based on substantial completion of the capital works?
What documentation will be required for any future audits?

Staff will provide an update to Council as information on these issues is obtained.

CONSULTATION

The original list of infrastructure projects was reviewed and amended by Council prior to the application being finalized and submitted to the Federal and Provincial governments.

FINANCIAL IMPLICATIONS

The financial implications are as outlined in the report.

LEGAL/RISK MANAGEMENT IMPLICATIONS

There are no legal / risk management impediments to implementing the recommendation in this report.

SUPPORTING DOCUMENTATION

Document 1 – Recommended Funding of the City’s Share of the Stimulus Projects (Previously issued to all members of Council and held on file with the City Clerk.)

DISPOSITION

Subject to Committee and Council approval, staff will implement the recommendations as outlined in the report.

Financing of the City Portion of Infrastructure Stimulus Projects

Financement de la portion de la Ville concernant les projets de stimulation de l'infrastructure

ACS2009-CMR-FIN-0030 city wide / À l’Échelle de la ville

Ms. Marian Simulik, City Treasurer, spoke to a PowerPoint presentation, which served to provide Committee with a detailed overview of the report. A copy of her presentation is held on file.

Councillor El-Chantiry expressed concerns with respect to the City’s ability to complete projects within the prescribed timelines and the potential for costs to rise given the limited number of people and/or companies able to do the work. He wondered what mechanisms would be in place to safeguard against price gouging in the market. Ms. Simulik indicated staff were very cognisant of this issue and she suggested part of the answer was the use of standing offers because these had fixed prices attached to them. Secondly, she advised that when staff went out to tender for the construction components of these major projects, they would be looking to ensure they stayed within the respective budgets and would compare the costs of stimulus projects to those of previous projects. Finally, she noted that because the list was public, everyone was aware of the upset limits for these projects. However, should there be any issues in this regard, she stated staff would come back to Council to get direction on how to proceed; whether to put in the extra money from City resources, whether to not do the work, or whether to slow down other work in order to accommodate the stimulus projects.

Councillor El-Chantiry referenced the federal Auditor General’s expressed concerns with respect to this process and he wondered whether the City’s Auditor General was working with staff in Infrastructure Services to make sure projects were not blind-sided by market demands. Ms. Simulik indicated the City’s Auditor General had expressed his intention to audit the projects in the end. Otherwise, she deferred to the Deputy City Manager of Infrastructure Services and Community Sustainability. Ms. Nancy Schepers, Deputy City Manager of Infrastructure Services and Community Sustainability, indicated she was not aware of specific discussions with the Auditor General in terms of ensuring the City received competitive bids. However, she maintained the department was in that business, would be monitoring the bids received, and would know if they were not receiving competitive bids. If this were to happen, she submitted the City may have to rethink its strategy. Although she did not think it would happen, she acknowledged it as a valid comment.

Councillor El-Chantiry again referred to concerns expressed by the federal Auditor General with respect to the amount of projects to be undertaken and the need to ensure the quality of the work. He inquired about monitoring mechanisms and what other jurisdictions were doing in this regard. Ms. Schepers noted there were two aspects to the question; ensuring the quality control was consistant and the ability to complete projects by the March 2011 timeline. She advised that staff would be following normal practices in terms of oversight, though she acknowledged that it would be a challenge to attract, develop and retain the resources to do that oversight. She noted that the stimulus package would introduce a lot of money into the marketplace and it would pose a challenge. However, she noted that other parts of the market were down, therefore staff would be monitoring it but did not expect to see spikes.

Councillor El-Chantiry wondered if staff could be directed to work with the Auditor General’s office, before the next Council meeting, to monitor what other municipalities were doing in this regard.

In terms of giving direction to staff, Vice Chair Desroches remarked that some of the standing procedures and rules would be relaxed a bit in order to accommodate the terms of the federal and provincial stimulus package. Therefore, he wondered if a counter balance to that would be to have timely reporting to Committee in terms of how the program was rolling out and whether staff was seeing some unusual pricing in the sector. He wondered if this would satisfy Councillor El-Chantiry’s concerns. Councillor El-Chantiry responded affirmatively.

Councillor El-Chantiry referred to the list of projects to be undertaken, noting that only 0.4% of the spending would go towards rural road upgrades yet, in terms of debt financing, rural residents would be paying 12% of the bill. He suggested the City needed to be able to community to residents how and why this was taking place. Ms. Simulik explained that of the $36M to be financed, $16M would be for Transit, which rural residents did not pay. Therefore, rural residents would not get the full brunt of the debt servicing.

Responding to a follow-up question from Councillor El-Chantiry with respect to the other $20M, which would go towards road projects and for which rural residents would pay, Ms. Simulik explained these were primarily large growth roads in the City’s perimeter. Therefore, although she the number of projects in specific rural wards was small, she expected rural residents would use perimeter growth roads such as Hazeldean, moreso than downtown residents.

Councillor El-Chantiry felt Commications staff would work on communicating this to residents because if was an important file and a lot of money would be going into it. Further, he expressed the need for the City of Ottawa to work with other municipalities to make sure there were mechanisms of accountability in place.

Vice-Chair Desroches pointed out that this was a stimulus package. It was about stimulating the local economy, which would have City-wide benefits.

Councillor Deans remarked that any time the City received money from upper tier governments for infrastructure, it was good news. However, she expressed concerns with the way it was being rolled out and referenced the City Treasurer’s earlier comment about possibly slowing down other projects. She wondered what projects could potentially be slowed down. Ms. Simulik indicated no projects would be slowed down in 2009. She referred to the list of major construction work and the timelines and cashflow for same, she advised that most of the work would take place in 2010. Therefore, if the construction industry did not have the capacity to do both the stimulus package work and other planned work in 2010, she felt it would be logical to suggest delaying some of the other projects in order to maximize the amount of money the City would receive from the federal and provincial coffers.

Councillor Deans maintained it was still a considerable worry if any of Council’s projects or priorities were to be deferred or delayed as a result of this package and she expressed a desire to receive more information on this in order to understand what could be jeopardized. She then inquired about the City’s debt financing capacities or advisability and the impact of the stimulus package in this regard. Speaking to the first issue, Ms. Simulik explained that the federal and provincial governments were proposing one-quarter of the funding in 2009 and the other three-quarters in 2010 and 2011. Therefore, as Council started the 2010 capital budget process, staff would be able to provide information with respect to the impact in 2010 or whether all the work could get done. With respect to the debt financing, she explained that the debt the City would be putting on the books was referred to as revolving debt whereby each year, a certain amount of debt was retired and replaced. Therefore, she maintained this would not be incremental debt to the City. It would simply be front-ending the amount of debt the City would normally issue in a 5-year period and issuing it in the first couple of years of that 5-year window. As a result, the last couple of years of the 5-year window would see the City having a reduced capacity; perhaps $10M or $20 instead of $40M in each of those years.

Councillor Deans raised the issue of resources and capacity to get the work done. She was concerned that the City did not have enough internal resources to manage of the projects, that this would result in additional costs to farm out the project manager roles and that this would, in turn, result in less control over projects. She wondered if she was reading the situation correctly and how much extra costs would be involved in terms of project management resources. Ms. Schepers confirmed that the City was supplementing internal resources with external resources, which was how it was always done. She referenced to a presentation made by Mr. Wayne Newell at a previous meeting of this Committee with respect to the competitive service assessment done of his unit. She reminded members of some of the recommendations around this in terms of internal versus external resources in that the City should manage straight-forward projects with internal staff and focus on the more complex ones with external resources. She maintained staff would follow these same principles in undertaking the stimulus package work. In terms of the costs, she indicated these would be built into the capital estimates and that staff would ensure the processes were competitive.

Responding to a follow-up question with respect to the costs for project management resources and the funding to be received from the upper tier governments, Ms. Simulik reminded Committee that the stimulus package had to be used for incremental spending. Therefore, the upper tiers would not pay for the salaries of existing staff. However, they would pay for any external resources or supplemental staff brought on to manage the projects.

In reply to a question from Councillor Hume with respect to the state of the credit market, Ms. Simulik indicated the capital credit market was fairly good and that staff could go to the private sector. However, she explained the CMHC was offering a venue with a great rate and that allows the City to have construction up to the end of 2012, thereby extending the timeframe.

Councillor Bloess posed questions with respect to the financing of projects that would normally be funded through development charges. He wondered whether the City would recuperate those development charge contributions in the future. Ms. Simulik explained that under the development charge legislation, the City had to apply any subsidy it received before determining the growth portion of any project. She confirmed that because of the federal and provincial stimulus funding, projects were being subsidized to some extent. However, she maintained that the City would still collect development charges of its portion of the costs of those projects. She indicated this was consistent with existing legislation.

Councillor Bloess referred to the Hunt Club extension project and a motion he would be introducing in terms of how to move forward with it. He wondered if there were risks for the City if the funding for the interchange did not come through. Ms. Schepers confirmed there were risks if the City did not get 50/50 cost sharing from the Province for the interchange portion of the project. She explained that what was shown in the stimulus package was phase 1, $20M for the Hunt Club extension. She indicated the City had been very clear in terms of needing the remainder of the funding to complete the project over-all. She advised that staff would be sending a letter to the Province and giving them a deadline for responding in order to be able to award the full contract. She remarked that what was before Committee represented only the $20M needed for the extension, which would not complete the interchange.

Councillor Bloess introduced a motion, which he felt was the right approach, that if the Province provided its share of the funding for the interchange within the requested timeframe, that the City Treasurer be delegated the authority to amend the project and fund the City’s share with debt.

When asked, Ms. Simulik confirmed that she was comfortable with this.

Councillor McRae noted that an official City spokesperson had said over the weekend that the City might not meet the prescribed timeframe and that there was flexibility and fluidity in the system in this regard. She was concerned by this and requested clarification. Ms. Simulik indicated staff had identified some risks, though she maintained the City fully intended to get these projects done. Having said that, she believed there had been some indication at the recent Federation of Canadian Municipalities (FCM) conference that the federal government was now saying municipalities had to have substantive completion. However, the term “substantive” had not been define. She explained her understanding was that the federal government would request reimbursement for their share of any portion of projects not completed by the March 2011 deadline. In other words, if a project was 90% complete by that time, the federal government would request reimbursement for one-third (its share) of 10% of the project’s costs. She noted that to date, no details had been confirmed in terms of the federal government’s expectations in this regard, how the money would flow, or the kind of progress reports expected.

Councillor McRae remarked that in the event of problems at the time of construction, the City could be on the hook for a lot of money if some of these big projects did not meet the deadline by a significant percentage. Ms. Simulik submitted there were many risks associated with this program, including the one referenced by the Councillor. She suggested that, if there were any significant issues, staff would bring these to Committee’s attention as part of the regular reports, as previously requested, and would seek direction from Council on what to do about them.

Councillor McRae wondered, in crafting contracts for the projects, if Legal Services staff would ensure the City’s risks and liabilities were minimized. Mr. Rick O’Connor, City Clerk and Solicitor, responded affirmatively.

Responding to questions from Councillor McRae with respect to future operating pressures associated with these capital projects, Ms. Simulik indicated staff had not had the opportunity to identify the operating impacts or when they would appear in the City’s budget. However, she advised there would not be an operating impact on the 2010 budget. She believed these operating pressures would be built into the 2011 and/or 2012 budgets, depending on when the projects were finally commissioned and being used.

Councillor McRae advised that representatives of the French Language Services Advisory Committee, who were in attendance, had asked whey the staff presentation was not available in both official languages. She noted that at some Committees, presentations were made in both official languages. Ms. Simulik indicated she had never done a presentation in both official languages at the Corporate Services and Economic Development Committee but that if it was Committee’s desire, this could be accommodated. With respect to the current item, she noted that the report had been finalized late and the presentation prepared only the previous afternoon, therefore translation would have been difficult.

Councillor McRae indicated that at Transportation Committee, they always had both screens and presentations in both official languages. She realized the inquiry was not related to the subject before Committee. However, she felt it was important to consider it and suggested staff could deal with it offline in order to be cohesive in terms of how presentations were made at the various standing committees.

Councillor Chiarelli felt this was a substantive request and therefore should not be dealt with offline.

Vice-Chair Desroches believed it was a wise suggestion to have presentations translated because there could potentially be members of the public or members of Council at Committee wanting to communicate in French.

Councillor Wilkinson imparted some of the announcements made at FCM with respect to the stimulus package and requested confirmation that all the projects that were approved were on the list submitted by the City. Ms. Simulik responded affirmatively.

Councillor Wilkinson reminded her colleagues that when Council prepared the list, there was recognition that it was bigger than what would likely be approved and that all the projects were things the City wanted to have funded over the next few years and that by undertaking them as part of the stimulus package, the City would have less to fund than if it had undertaken the projects on its own in two or three years. Ms. Simulik again responded affirmatively.

Responding to a question from Vice Chair Desroches, Ms. Simulik felt it would be logical for staff to provide regular updates on the stimulus projects as part of the quarterly status reports.

Councillor Bloess referenced the motion he introduced earlier, noting that it did not change the list current before Committee; that it simply gave the Treasurer the authority to fund the City’s share of the interchange with debt if the Province came through with its share of the funding for that project.

When asked to comment on this, Ms. Simulik suggested that, in terms of economies of scale, it made sense for the City to try and do it as one whole project; the interchange and the extension at the same time. She advised that if the Provincial government did not come forward with funding for the interchange, then the City would continue with the Hunt Club extension only and it would not connect to the 417.

Vice Chair Desroches advised that the City Solicitor had suggested some revised wording for the motion and he read this into the record: that should the Province provide their share of funding for the Hunt Club / 417 interchange within the requested time limits, that the City Treasurer be delegated the authority to establish the necessary debt to fund the City’s share of the interchange within the parameters of the City’s Fiscal Framework and provincial debt limits.

Responding to a series of questions from Councillor McRae with respect to the project referenced in Councillor Bloess’ motion, Ms. Simulik explained that the interchange was a provincial road and was therefore not eligible for federal funding. As a result, the increased authority would be for 50% of the project’s costs. She indicated Committee was dealing with it under stimulus because the Hunt Club extension had been submitted as a stimulus project and, because of potential economies of scale, it made sense to tender the whole project at the same time. Ms Schepers clarified that the entire project, worth $51M, had been submitted as part of the stimulus. The City had asked for $20M for the Hunt Club extension and indicated that the remainder of it, the interchange, was to be cost shared with the Province. However, she confirmed that the interchange portion of the project was not shovel-ready and could not be built by March 2011. Speaking to the issue of priorities, she maintained that the project was on Council’s priority list in terms of the Transportation Master Plan and that Council had approved it as part of the stimulus package. Further, she recalled that when Council approved it as part of the stimulus package, it was clearly reflected as a project costing $51M with $20M being eligible for stimulus and the balance as being cost-shared 50/50 with the Province.

Councillor McRae suggested waiting for a response from the Province on its share of the funding for the interchange before giving authority to the City Treasurer with respect to the City’s share of the project costs. Ms. Schepers suggested that, in terms of timing for the construction award and Council’s timetable, it could create a delay in order for staff to award the contract and make a decision to move ahead this year in order to do the $20M by March 2011.

Councillor McRae requested clarification with respect to the delay, noting all that would be needed was another CSEDC meeting to deal with this. Therefore, she did not understand the rush. Ms. Simulik explained that staff would be asking that the Province respond within 60 days, which would mean receipt of a response some time in early August. She noted that there had been discussions about not having a Council meeting in August and that meeting being moved to early September. In looking at the timetable, she submitted that there was a timing issue with getting the project authority on the books so that staff could actually go out and do the tender. However, she advised that if it was the will of Committee, staff could come back in early September, once a response was received from the Province.

Councillor McRae stated that when this rose to Council, she would want to know what other projects Council should be ramping through and giving staff the authority to move forward with.

Councillor Deans wondered if the projects total cost of $51M included sound attenuation features all the way along Hunt Club Road, as approved by City Council as part of the over-all package or whether these would result in additional costs. Ms. Schepers indicated staff would provide a response before the item was considered by Council.

Councillor Bloess clarified that this project had been put forward and approved, that the interchange was another element of it, for which an Environmental Assessment had been done, and that this project was listed in the City’s Transportation Master Plan. Further, he believed staff had taken the proper approach with respect to its funding.

Responding to a question from Vice Chair Desroches, Ms. Simulik re-iterated that Committee could either approve the delegated authority now or this could be brought forward at the Committee’s August meeting, once a response was received from the Province.

At this juncture, Committee voted on the motion.

Moved by Councillor R. Bloess

Should the Province of Ontario provide their share of funding for the Hunt Club / 417 interchange within the requested time limits, that the City Treasurer be delegated the authority to establish the necessary debt to fund the City’s share of the interchange within the parameters of the City’s Fiscal Framework and Provincial debt limits.

CARRIED

Committee then approved the item as amended.

That the Corporate Services and Economic Development Committee recommend Council:

a) Approve the projects and the City financing share of the Infrastructure Stimulus Projects as outlined in Document 1;

b) Temporarily amend:

i) Schedule E, sections 11 (4) and (5) of the Delegated Authority by-law as detailed in this report for the acquisition of land associated with the approved Stimulus projects;

ii) Section 21 (9) of the Purchasing By-law as detailed in this report for purposes of procuring goods and services related to the approved Stimulus projects;

c) Authorize the City Treasurer to:

i) Make a loan application for any eligible debt identified in Document 1 to the Canada Mortgage and Housing Corporation’s Municipal Infrastructure Lending Program;

ii) Negotiate and sign all required loan agreements and documentation;

iii) Bring debenture by-law(s) to Council if required, to complete the request for loan advances under this loan facility;

d) Authorize the Treasurer to make any financing adjustments to the Stimulus projects as required; and

CARRIED as amended