prior to the development of the implementation plan. A full Qualitative Municipal Risk Assessment for Energy Retrofit Loans, which was informed primarily by the work undertaken in the City of Vaughn, is included in Appendix G of the attached Business Case and will serve as basis for the next phase of analysis to be undertaken.

Building on the risks identified in Appendix G, and through consultation with city administration, additional and significant areas of risk have been identified that warrant a more detailed and fulsome review. Full analysis of these risks and approaches in order to eliminate or mitigate such risks will be included in the future report to Council. Overall, the attached business case is prepared in such a manner that implementation would proceed in several phases, each providing City Council with the opportunity to stop the endeavor if deemed unattractive or potentially exposing the city to an unacceptable level of risk.

Several initial risks that have been identified by city administration as outlined below.

Financial risk from loss of start-up capital if program does not proceed beyond business plan phase

This risk can be mitigated by ensuring that knowledgeable and experienced individuals develop the Business Plan and that appropriate accounting principles are applied to the various financial aspects of the business. The forthcoming implementation strategy will further detail startup capital requirements and how these finances would be allocated.

Reputational risk to city if the program is not successful.

This risk can be mitigated by ensuring that the Business Plan addresses thoroughly areas which commonly cause new ventures to fail including amongst others marketing strategy, cash flow considerations, methods of attracting third-party investments etc. More importantly, the plan further identifies some very aggressive participation target levels in order for the program to be successful and financially viable. These levels ware expected to be difficult to achieve. All of these considerations will be critical to the Program’s success and considered as part of the forthcoming report to council.

Reputational risk to city if work conducted as part of the retrofit program is not completed to owners satisfaction.

This risk can be mitigated by having strict quality control measures put in place as part of the business structure. As outlined in the attached Business Case a quality control inspection is required for every property which receives a retrofit. Contractors are not paid until the quality inspection is passed.

Risk that entity is not self-sustaining

If the Entity proves to be non self-sustaining then the city would have the option to stop business as any additional funds beyond initial start-up capital would require council approval as well as administrative support. Notwithstanding this ability, there always remains a very significant financial risk that a Municipal Services Corporation (MSC) entity cannot sustain itself well beyond the initial start up capital cost and responsibility would then fall to the municipality to provide required funding from the limited property