Allocating funding over the 10 years leaves sufficient funding and room for other projects to proceed.
3. Grants from senior levels of government require confirmation of matching funding. Many grants do not fund projects which are already funded and have already been started by the municipality. In these cases, in order to leverage as much grant funding as possible from the senior government levels we look for appropriate projects which are included in the forecasted capital plan and that meet the required grant guidelines. Often times this requires the pre-commitment of future funds in order to qualify for the grant funding. Failure to do so would result in foregoing grant funding. For example, in the case of the Disaster Mitigation and Adaptation Fund, the project is over 10 years for a total amount of $89 M of which $32 M in grant funding has been requested. Aligning City funding with the construction process was key to being able to accommodate the $57 M in matching City funding.
4. The budget includes projects which are anticipated not to start until future years, however assets can and do fail at times sooner than anticipated. As a result, the ability to pre-commit future funding for immediate use allows the asset to be addressed without cancelling or pushing out other projects.
5. Annually Administration will seek pre-commitments to the next year's capital budget funding so that tenders can be issued for projects in the fall, and construction to start in the spring. While this does not represent a long precommitment period prior to the budget year being finalized, it greatly improves our ability to obtain favourable tender pricing and expedite the construction early in the year.
Placeholder funding ensures that projects which City Council has identified as a priority have funding in place should they proceed. Administration is not able to reallocate placeholder funding unless formally approved by City Council to do so. They are however not committed and therefore a request can be made to reallocate the funding to an alternative project. An example of this is the recommendation to reallocate a portion of the placeholder funding for Paul Martin Building as a portion of the City's grant matching for the ICIP – Community, Culture and Recreation grant.
Long Term Debt Considerations
Consistent with the very successful Pay-As-You-Go approach which has saved tens of millions of dollars in interest costs, the 8-year plan, as presented, is funded from available funds without the use of any long-term debt. Details of the City's long-term debt projections are provided to Council as part of the 2020 Operating Budget document.
It is worth noting that the City's consolidated long-term debt currently stands at approximately $70.2 M (projected for year-end 2019) and is expected to decrease to approximately $41 M by 2023 assuming that no new debt is issued. It is noted that the tax supported portion of this debt which is funded directly from the property tax base is only approximately $4.3M (projected for year-end 2019) and expected to be fully paid by the end of 2021.