HomeMy WebLinkAboutFIN-09-169 - Green Municipal Fund ApplicationREPORT
REPORT T0: Mayor Carl Zehr and Members of Council
DATE OF MEETING: November 23, 2009
SUBMITTED BY: Dan Chapman, General Manager of Financial Services and
City Treasurer
PREPARED BY: Saleh Saleh, Senior Financial Analyst, Financial Planning
WARD(S) INVOLVED:
DATE OF REPORT:
REPORT NO.:
SUBJECT:
ALL
November 17, 2009
FIN-09-169
Green Municipal Fund Application
RECOMMENDATION:
THAT staff be directed to submit an application for the Consolidated Maintenance Facility
Project for consideration of a loan in the amount of $3,869,000 and a grant in the amount of
$389,000 under the Green Municipal Fund; and further,
THAT if the Consolidated Maintenance Facility Project application does qualify for funding under
the Green Municipal Fund, debenture funding for the 2010 Capital Program be reduced by the
amount of the loan.
BACKGROUND:
The Government of Canada Endowed the Federation of Canadian Municipalities (FCM) with
$550 million to establish the Green Municipal Fund (GMF). The purpose of this fund is to:
1. Provide below-market loans and grants to municipalities that deliver leading examples of
sustainable development; and
2. To build capacity and share knowledge and experiences gained by municipal leaders
through GMF funded studies and projects.
There are specific, targeted calls for applications in each of the five sectors every year. These
sectors include; Brownfields, Energy, Transportation, Waste and Water. FCM has now put out
a call for applicants in the "Energy" category with the goal to decrease energy consumption in
municipal buildings in Canada. The application deadline for funding under this category is
December 9, 2009.
Projects are eligible to receive funding for up to 80% of the eligible project costs up to a
maximum of $4,000,000 and a $400,000 grant per project. The value of the grant cannot
exceed 10% of the loan amount.
2-1
REPORT:
Staff are recommending that the Consolidated Maintenance Facility (CMF) project be submitted
for consideration for funding under the GMF as it fits nicely with the criteria outline by FCM
under the "Energy" category. The CMF is expected to achieve the LEED Silver designation
which will positively impact the environment and result in energy savings for the City.
There are two parts to the GMF funding application, a loan of $3,869,000 and a grant of 10% of
the loan amount or $386,900.
On September 17, 2009, Council approved an overall base budget for the CMF of $48,261,581
which included a funding shortfall of $1,289,125. If successful, Staff are proposing that the
grant amount go towards reducing the shortfall in the CMF budget.
With respect to the loan, currently, the City of Kitchener issues debentures to fund a portion of
the 2010 Capital Program. For 2010, approximately $7,171,000 of capital funding will be raised
through the issue of debentures. The CMF project will make up $3,869,000 of the total
debenture issue for 2010. The current interest rates on a 20 year debenture range between
5%-5.75%. The interest rate for the loan under the GMF program will be lower as it will be set
at the Government of Canada bond rate less 1.5% which will result in lower interest costs in
comparison to the debenture.
It is being recommended that if the City is successful in getting the $3,869,000 loan from FCM,
the proposed debenture issue of $7,171,000 to fund the 2010 Capital Program be reduced to
$3, 302, 000.
FINANCIAL IMPLICATIONS:
If successful, the City will save on interest costs due to the low interest loan of $3,869,000 and
will also be able to reduce the deficit currently projected in the CMF project by the grant amount
or $386,900.
COMMUNICATIONS:
None.
CONCLUSION:
The Consolidated Facility Project is anticipated to have a LEED Silver designation which further
promotes the City of Kitchener's commitment as leaders in environmental stewardship.
ACKNOWLEDGED BY: Dan Chapman, General Manager of Financial Services and City
Treasurer
z-z