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Home My WebLink AboutENG 12-16 • Cali 00 A Report to Executive Committee �te1.•3;i4 PICKERIN Report Number: ENG 12-16 Date: June 20, 2016 From: Richard Holborn Director, Engineering & Public Works Subject: Debenture Financing for the West Shore Neighbourhood - Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction Project - File: A-1440 Recommendation: 1. That the West Shore Neighbourhood Flood Remediation, the West Shore Neighbourhood- Breezy Drive Road Reconstruction, and the West Shore Neighbourhood Vistula Drive Road Reconstruction projects be combined as the "West Shore Neighbourhood - Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction" project for debenture financing for an estimated total project cost of$815,500.00 be approved; 2. That, notwithstanding the Council approved Purchasing Policy, The Regional Municipality of Durham (the "Region") be authorized on behalf of the City of Pickering (the "City"), to undertake the calling and awarding of the contract which will include the West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction project; 3. That Council authorize the Division Head, Finance & Treasurer to finance the estimated project cost of $815,500.00 as follows: a) the financing source for West Shore Neighbourhood — Flood Remediation Breezy Drive and Vistula Drive Roads Reconstruction Projects (Account 5320.1617.6250) be changed to 10-year external debt; b) the sum of$815,000.00, as provided for in the 2011, 2015 and 2016 Capital Budgets and as amended in 3 a) be financed by the issue of debentures by The Regional Municipality of Durham over a period not to exceed 10 years; c) the balance of$500.00 to be funded from property taxes; d) the annual repayment charges in the amount of approximately $98,000.00 be included in the annual Current Budget for the City of Pickering commencing 2016, or such subsequent year in which the debentures are issued, and continuing thereafter until the debenture financing is repaid, and any financing cost to be paid out of the Current Budget; ENG 12-16 June 20, 2016 Subject: Debenture Financing for the West Shore Neighbourhood - Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction Page 2 e) the.Treasurer be authorized to make any changes, adjustments, and revisions to amounts, terms, conditions, or take any actions necessary in order to effect the foregoing; 4. That the draft by-law attached to this report be enacted; and 5. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. Executive Summary: This report serves to seek Council approval for the expenditure and debenture financing with The Regional Municipality of Durham for work to be undertaken by the Region on behalf of the City of Pickering. The Region will be calling and awarding the contract on behalf of the City. In order to mitigate basement flooding in the West Shore Neighbourhood, due to surcharging of the sanitary sewer system during high intensity storm events, the Region is replacing the existing sanitary sewers to provide additional capacity. The City has recognized an opportunity to cost share with the Region during their road restoration to bring sections of Breezy Drive, Vistula Drive and Essa Crescent up to a current standard and to renew the infrastructure. The West Shore Neighbourhood Flood Remediation, the West Shore Neighbourhood- Breezy Drive Road Reconstruction, and the West Shore Neighbourhood - Vistula Drive Road Reconstruction projects are to be combined as the "West Shore Neighbourhood - Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction" project for the purpose of debenture financing. CORP0227-07/01 revised ENG 12-16 June 20, 2016 Subject: Debenture Financing for the West Shore Neighbourhood - Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction Page 3 Financial Implications: Approved Source of Funds 2011, 2015 & 2016 Capital Budgets —West Shore Neighbourhood Flood Remediation, West Shore Neighbourhood - Breezy Drive and Vistula Drive Roads Reconstruction project: Project Code Description Source of Funds Budget Required 5320.1514.6250 Breezy Drive Debt— 10 Years $420,500.00 $420,000.00 (2015) 5320.1617.6250 Breezy Drive — Debt— 10 Years 85,000.00 85,000.00 (2016) additional funds (Revised as per Recommendation 3a) 5320.1516.6250 Vistula Drive Debt— 10 Years 250,000.00 250,000.00 (2015) 5410.1101.6181 West Shore Debt— 10 Years 200,000.00 60,000.00 (2011) Neighbourhood — Flood Remediation Property Taxes 0.00 500.00 Total $955,500.00 $815,500.00 In the 2015 Roads Capital Budget, three road reconstruction projects were approved in the West Shore Neighbourhood. These three projects are: • West Shore Neighbourhood-Breezy Drive • West Shore Neighbourhood-Vistula Drive • West Shore Neighbourhood-Essa Crescent Both the West Shore Neighbourhood — Breezy Drive Road Reconstruction and Vistula Drive Road Reconstruction projects are to be financed through the issuance of debentures for a 10-year term. Additional funds were requested in the 2016 Roads Capital Budget for the West Shore Neighbourhood - Breezy Drive Road Reconstruction, and were to be financed by a 10-year internal loan. Recommendation 3 a) changes the financing source from internal loan to 10-year external debt to match the project financing. In the 2011 Stormwater Management Capital Budget, the West Shore Neighbourhood Flood Remediation project was approved. A portion of the funds will be required for a new storm sewer on Breezy Drive. This work is to be financed through the issuance of CORP0227-07/01 revised ENG 12-16 June 20, 2016 Subject: Debenture Financing for the West Shore Neighbourhood - Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction Page 4 debentures fora 10-year term. The balance of the approved project ($140,000) will be required in a future year (after this project is complete) to create an overland flow route from Breezy Drive to Frenchman's Bay, across Bruce Hanscombe Park. This project will be rebudgeted in 2017 with a source of funding to be determined at that time. For the purpose of debenture financing, the West Shore Neighbourhood Flood Remediation, the West Shore Neighbourhood-Breezy Drive Road Reconstruction and the West Shore Neighbourhood-Vistula Drive Road Reconstruction projects will be combined into one project and named as the "West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction" project. The West Shore Neighbourhood - Essa Crescent Road Reconstruction project is to be funded from the Roads and Bridges Reserve Fund; funds have been approved by Council in the 2015 Capital Budget, and as such does not require additional specific Council approval. Discussion: In accordance with Purchasing Policy, Exceptions, Appendix 1, Item #8, work or services to or from other government agencies, utilities, provincial or federal agencies, crown corporations, municipalities, public agencies or boards may be procured by obtaining one price, subject to the funds being available in the current or capital budgets. The Regional Municipality of Durham meets the above exception. The West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction project will be completed by the Region in 2016 and 2017 and is approved in the Capital budget to be financed by external debt. Projects identified in the capital budget as being financed through the issuance of debentures are subject to additional, specific approval of the expenditure and the financing by Council. This report serves to seek Council specific approval of the expenditure and the debenture financing for the West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction project. Upon Council's approval of this report, the normal practice of issuing a purchase order for the actual tendered amount will be followed. CORP0227-07/01 revised • ENG 12-16 June 20, 2016 Subject: Debenture Financing for the West Shore Neighbourhood - Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction Page 5 Attachments: 1. Being a by-law to authorize the West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction project in the City of Pickering and the issuance of debentures in the amount of $815,000.00 2. Location Map Prepared By: Approved/Endorsed By: GCaryn Kong, CPA, CGA Holborn, P.Eng Senior Financial Analyst— Capital & r, Engineering & Public Works Debt Management • Stan Karwowski, MBA, CPA, CMA Division Head, Finance & Treasurer • CK:mjh Recommended for the consideration of Pickering Cit Council Tony Prevedel, P.Eng. Chief Administrative Officer CORP0227-07!01 revised � TO REPORT#� 1 r 2 1� ATTACHMENT#�— 1of The Corporation of e i y or ickering By-law No. Being a by-law to authorize the West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction project in the City of Pickering and the issuance of debentures in the amount of $815,000.00 Whereas Section 11 of the Municipal Act, 2001, as amended, provides that a lower-tier municipality may pass by-laws respecting matters within the spheres of jurisdiction described in that Section; and, Whereas Subsection 401(1) of the Municipal Act, 2001, as amended, provides that a municipality may incur a debt for municipal purposes, whether by borrowing money or in any other way; and, Whereas Subsection 401(3) of the Municipal Act, 2001, as amended, provides that a lower-tier municipality in a regional municipality does not have the power to issue debentures; and, Whereas The Regional Municipality of Durham (the "Region") has the sole authority to issue debentures for the purposes of its lower-tier municipalities including The Corporation of the City of Pickering (the "City"); and, Whereas the Council of the City wishes to proceed with debenture financing for the West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction project; and Whereas before the Council of the City authorizes the West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction project on the date hereof on the basis of the Region issuing debenture in the amount $815,000.00 for such project, the Council of the City had the Treasurer update the City's Annual Repayment Limit, the Treasurer calculated the estimated annual amount payable in respect of such project and determined that such annual amount would not cause the City to exceed the updated Limit and therefore, Ontario Municipal Board approval is not required as per Section 401 of the Municipal Act, 2001, as amended, and the regulations made thereunder; And whereas after determining that Ontario Municipal Board approval is not required, the Council of the City approved report ENG 12-16 on the date hereof and authorize the Region to undertake the calling and awarding of the contract for the West Shore _C4\1(119,- 000 By-law No. XXXX ATTAC HMENT TOREPORT#, Page 2 Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction project; Now therefore the Council of The Corporation of the City of Pickering hereby enacts as follows: 1. That the City proceed with the project referred to as "West Shore Neighbourhood — Flood Remediation, Breezy Drive and Vistula Drive Roads Reconstruction"; 2. That the estimated costs of the project in the amount of$815,500.00 be financed as follows: a) the sum of$815,000.00 be financed by the issue of debentures by The Regional Municipality of Durham over a period not to exceed 10 years; b) the sum of$500.00 be funded from property taxes; 3. That the funds to repay the principal and interest of the debentures be provided for in the annual Current Budget for the City commencing in 2016 or such subsequent year in which the debentures are issued and continuing thereafter until the debenture financing is repaid. By-law passed this 27th day of June, 2016. 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