Financing the Triple Play Projects

Financing the Triple Play Projects
Summerside Wellness Center
Summerside Wind Farm
Summerside Waste Water Treatment Plant
3 Projects
• Summerside
Wellness Center
 $ 40 million
3 Projects
• Summerside
Wellness Center
 $ 40 million
• Summerside Wind
Farm
 $ 30 million
3 Projects
• Summerside Wellness
Center
 $ 40 million
• Summerside Wind
Farm
 $ 30 million
• Summerside Waste
Water Treatment Plant
 $ 20 million
General Fund Accounting
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General Fund
Electric Utility
Water Utility
Sewer Utility
Summerside Community Network
 All of these funds are composed of both a revenue fund and
a capital fund
 Projects in the General Fund are usually paid through the
general tax base, whereas projects in the utilities are user
pay.
General Fund Accounting
• Summerside Wellness Center
 $40 Million General Fund Project (Tax Base)
• Summerside Wind Farm
 $30 Million Electric Utility Project (User Pay)
• Summerside Waste Water Treatment Plant
 $20 Million Sewer Utility Project (User Pay)
Summerside Wellness Center
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Initial cost estimated was $25 Million
Confirmed funding from other sources was minimal
so the city planned to borrow the entire amount as a
worst-case scenario
Estimated annual debt servicing of $25 Million @
8.5% over 20 years was $2.5 Million
The plan was:
 Eliminate other long term debt thereby providing
annual debt servicing capacity of $1 Million;
 Reduce annual capital spending out of revenue from
$3 Million to $2 Million; and
 Plan for $0.5 Million from assessment growth (or be
prepared to reduce capital spending even further)
Summerside Wellness Center
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•
Final Costs - $40 Million
Funding
 $10 Million from other sources:
 $1.5 Million - ACOA for convention rooms
 $3.0 Million - Provincial Government
 $3.0 Million - Federal Government (MRIF)
 $2.0 Million - 2009 Canada Games
 $0.5 Million – others
 $30 Million borrowed
 Interest rates of 5% locked in for 20 years
 Annual debt servicing - $2.4 Million -within
original debt servicing cost estimates
Summerside Wellness Center
• Funding from other sources was
proportionately low because the facility was
not “eligible” for typical infrastructure funding
• This led to the allocation of normal
infrastructure funding to another “eligible”
project….
Summerside
Wind Farm
Summerside Wind Farm
• $30 Million
• Eligible for infrastructure funding
 MRIF
 Gas Tax
 Building Canada Fund
• Discussions with other orders of government resulted in
infrastructure funding support which was the initiative needed to
proceed with this green energy initiative
 MRIF
 Gas Tax
 Building Canada Fund
 City (debt)
$ 4 Million
$ 8 Million
$ 9 Million
$ 21 Million
$ 9 Million
$ 30 Million
Summerside Wind Farm
Financial Impact
• General Fund
 Annual sale of electricity to
electric utility $0.08/kwh
 Annual cost of debt
 Net annual contribution to the city
$2.4 Million
$0.8 Million
$1.6 Million
 Offsets the reduction to annual capital spending from the Credit
Union Place debt ($1.0 million) plus removes need for
assessment growth of $0.5 million.
Summerside Wind Farm
Financial Impact
• Electric Utility
 Power Purchase Costs
 Maintenance Costs
 Eco energy credit (10 years)
$0.080/kwh
0.015
(0.010)
 Final cost
$0.085/kwh
Final cost is lower than off-island purchase cost.
Waste Water
Treatment
Plant
Waste Water Treatment Plant
Provincial Standards
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Provincial cost estimates
 Treatment Plant
$9.5 Million
(MRIF – 1/3, 1/3, 1/3)
 Sludge Treatment
$4.5 Million
(100% Province)
 Tertiary Treatment for Nitrates and Phosphates
$1.0 Million
(100% City)
City Share of $15 Million was to be $4 Million, of which $2 Million was to
come from reserves
Final tendered costs - $20 Million ($5 million more than planned)
Waste Water Treatment Plant
Provincial Standards
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Additional $5 Million became the sole responsibility of the City
Province constructed another lagoon in close geographical proximity to the
city plant, diverting approximately $300,000 out of city revenues
Additional annual operating costs:
$0.5 Million debt servicing (on $5 million extra costs)
$0.3 Million lost revenues
$0.3 Million increased operating costs of new plant
$1.1 Million increase to previous $1.5 Million operating budget (73%)
Increased user rates 50% in 2008 and 23% in 2009
Current rate for residential at $34.59 / month (was $19.99)
City of Summerside
Small City. Big Sustainability
Greg Gaudet, P.Eng.,
Director Municipal Services
275 Fitzroy Street
Summerside, PE
C1N 1H9
Phone: (902)432-1272
Cell: (902)439-5776
Fax: (902)436-4255
Email: [email protected]
Web: www.city.summerside.pe.ca