HomeMy WebLinkAboutFIN-2021-52 - 2021 Debt Issue Revision
Committee of the Whole
REPORT TO:
DATE OF MEETING: September 20, 2021
SUBMITTED BY: Ryan Hagey, Director of Financial Planning & Reporting
PREPARED BY: Ryan Hagey, Director of Financial Planning & Reporting
WARD(S) INVOLVED: All Wards
DATE OF REPORT: September 10, 2021
REPORT NO.: FIN-2021-52
SUBJECT: 2021 Debt Issue Revision
RECOMMENDATION:
That a total of $321,000 be transferred from the Tax Capital Reserve to the Capital
Pool in order to fund capital projects identified as debt funded in 2021.
REPORT HIGHLIGHTS:
The purpose of this report is to approve the use of capital reserves instead of debt for a
small number of 2021 capital projects.
This report supports the delivery of core services.
BACKGROUND:
The City uses debt as a means to fund a portion of its capital program each year. During
the annual budget process, debt funded capital projects are identified and approved by
Council. They are then funded by a subsequent debt issue managed by the Region of
Waterloo, who as an Upper Tier municipality, has the authority to issue the debt as outlined
in the Municipal Act.
REPORT:
Staff are recommending the list of 2021 capital projects for debt issue be revised to exclude
some of the smaller dollar projects and instead be funded by capital reserves. The projects
being recommended may not easily
capitalization threshold of $50,000 and/or may not extend the life of the asset for the full
term of the debt (10 years).
As part of the 2021 budget strategy staff sought to maximize the use of debt, given borrowing
interest rates were at historically low levels. Using debt also meant funding could remain in
reserves and could be used to fund operating deficits caused by COVID-19 (e.g. recreation
revenue shortfalls). As noted above, some of the projects originally recommended for debt
are not good candidates due to their small dollar amount, or they
useful life of the asset by at least 10 years.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
Finance staff at the Region of Waterloo are revision and are
of debt is shown in the table below.
Projects to Be Funded by Reserve Instead of Debt
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
charges, although by a minimal amount (e.g. less than $5,000 per year). The Tax Capital
reserve fund has a balance of $2.6M prior to considering the recommended revision. Staff
are comfortable using the reserve to fund these projects instead of debt based on the
position.
COMMUNITY ENGAGEMENT:
INFORM This report has been posted to
the council / committee meeting.
APPROVED BY: Jonathan Lautenbach, Chief Financial Officer