MAR 16 2015 REGULAR COUNCIL PACKAGE

DATE:
March 16, 2015
TO:
His Worship the Mayor,
Members of Council
FROM:
Jeff Ward, City Treasurer
RE:
2015 Borrowing Specifications
RECOMMENDATIONS
That the City Treasurer and City Clerk be authorized to execute the required financial
documents to borrow $5 million for the 2015 General Capital Program.
BACKGROUND AND DISCUSSION
City Council, at its meeting held on January 26, 2015 considered a report in relation to
external financing/borrowing for the 2015 General Capital Program. City Council delegated
authority to the City Treasurer to negotiate financing terms on the issuance of debt in the
amount of $5 million. The City Treasurer also committed to providing a brief report on the
terms of the required financing. Negotiations are complete with The City’s financial
institution and the following terms have been agreed to pending Council decision..
The $5 million loan will be amortized over 15 years and will have a locked in annual interest
rate of 3.32%. In 2015, an interest only payment of $55,333.33 will be paid in August. It is
assumed the required time frame of the draw will be April 30, 2015.
_____________________________________________________________
Efficiency, Effectiveness, Excellence
The amortization table is as follows:
Periods
Close Date
0.58
1.58
2.58
3.58
4.58
5.58
6.58
7.58
8.58
9.58
10.58
11.58
12.58
13.58
14.58
15.58
Period
Ending
30-Apr-15
31-Aug-15
31-Aug-16
31-Aug-17
31-Aug-18
31-Aug-19
31-Aug-20
31-Aug-21
31-Aug-22
31-Aug-23
31-Aug-24
31-Aug-25
31-Aug-26
31-Aug-27
31-Aug-28
31-Aug-29
31-Aug-30
Beginning
Balance
5,000,000.00
5,000,000.00
5,000,000.00
4,737,413.30
4,466,108.72
4,185,796.82
3,896,178.57
3,596,945.00
3,287,776.87
2,968,344.36
2,638,306.69
2,297,311.77
1,944,995.81
1,580,982.97
1,204,884.90
816,300.38
414,814.85
Interest
Payment
55,333.33
166,000.00
157,282.12
148,274.81
138,968.45
129,353.13
119,418.57
109,154.19
98,549.03
87,591.78
76,270.75
64,573.86
52,488.63
40,002.18
27,101.17
13,771.85
Principal
Payment
262,586.70
271,304.58
280,311.89
289,618.25
299,233.57
309,168.13
319,432.51
330,037.67
340,994.92
352,315.95
364,012.84
376,098.07
388,584.52
401,485.53
414,814.85
Total
Payment
55,333.33
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
428,586.70
Period End
Balance
5,000,000.00
4,737,413.30
4,466,108.72
4,185,796.82
3,896,178.57
3,596,945.00
3,287,776.87
2,968,344.36
2,638,306.69
2,297,311.77
1,944,995.81
1,580,982.97
1,204,884.90
816,300.38
414,814.85
(0.00)
In order for the City to proceed with the financing, City Council must pass a borrowing bylaw
and provide a copy to the bank.
RECOMMENDATION IMPLICATIONS
Financial
The debt issuance was approved by City Council in January 2015. Financing is required in
order to carry out the 2015 General Capital Program. Should there be a surplus in this
program for 2015, City Council will be presented with options for using the surplus.
Policy and/or Strategic
Negotiations were done in good faith based on the Council directive. Failure to follow
through on the agreed to terms may negatively impact the City’s reputation and jeopardize
future financing opportunities.
COMMUNICATION
This report will be available on the City’s website and provided to the bank along with a
certified copy of the Borrowing Bylaw. Public notice has been given pursuant to Section 101
of The Cities Act.
DELEGATED AUTHORITY
City Council approval is required to take out long term debt.
Respectfully submitted,
Jeff Ward, CPA, CA
City Treasurer
_____________________________________________________________
Efficiency, Effectiveness, Excellence