2. About Forum
• Richard A. Abboud, President & Founder
• Privately held
• $500 million built/bought and sold since 2002
• 4 P3’s closed - $300 million
• 2 P3’s in negotiation - $350 million total
• Real estate portfolio of net leased single tenant primarily office
buildings.
3. Forum’s P3 Track Record
• 6 P3s launched and selected to date
• Total commitments $300 million
• Ontario Power Generation, Design/Build/Lease/Operate - $12 M
• City of Ottawa, Design/Build/Finance/Operate/Transfer - $22M
• City of Hamilton, Co-Investment Program - $40M Target
• City of Ottawa, Design/Build/Operate/Finance/Transfer, Sale
leaseback, Mixed Use Development - $225M
• Highway Service Centres - $300 million
• Centre for Addiction and Mental Health - $50 million
4.
5.
6.
7. Key Forum Team
Participants/Suppliers
Kilmer Van Nostrand Capital Partner
Johnson Controls/BLJC Operations
Aecon Buildings Design Builder
Lemay + Doyle Architects Architect
YMCA/YWCA of Ottawa-Carleton Land swap/Options/
Services Partnership
Communishare 10 Local not for profits
8. Public Sector Benefits
• Execution accountability transfer
• Risk transfer
• Schedule certainty
• Cost certainty
• Private sector innovation
• Capital/Operating/Lifecycle Cost optimization
• Total investment of $225MM
• Economic spin-off of $75.2 MM
• Annual realty taxes $3.2MM
• Development and Permit fees of $12.1MM
9. Risk Transfer
• Driving Principle – acceptance of controllable risk
• Completion risk (force majeure carve out)
• Construction cost risk
• Design risk
• Unforeseen soils risk (except hazmat and antiquities)
• Some operating risk
• Mixed Use Development Schedule Risk
11. YMCA of Hamilton / Burlington / Brantford
3 Examples of Municipal / YMCA Partnerships
• Township of Flamborough
• City of Hamilton
• City of Brantford
Other YMCA / Municipal Partnerships
Factors Contributing to Successful Partnerships
12. Township of Flamborough
• In 1997, the community desired an indoor pool
• Town of Waterdown had a population under 9,000, and
Township population was 30,000
• Concerns about facility design and operations expertise,
capital construction costs and ongoing operating costs
• Mayor had a vision beyond an “indoor pool”
• Centre of the Community that would focus on children
and families, go beyond basic recreation and include
13. Vision – Centre of the Community
Programs and services would include
• Variety of aquatic and wellness programs
• Day camps
• Youth drop in programs
• Youth leadership development
• Licensed child care
• Adult fitness
14. Project Partners
YMCA and Township were key partners
Additional benefits of project
• Proximity to elementary and secondary schools
• Proximity to green space
• Future urban development in area
• Centre of the community for Flamborough residents
15. Project Overview
Components of a new community YMCA
• 45,000 sq ft on 4.7 acres of land
• Adjacent to elementary and secondary schools
• 8,000 sq ft aquatic centre with 2 pools & whirlpool
• 3 “half gyms” in L shape (6,000 sq ft)
• 8,000 sq ft of Health and Wellness space
• 5 change rooms including Special Needs / Family
• Licensed Child Care Centre
16. Some Benefits to the Township
YMCA expertise in design, build and operate
• Staff and volunteer (Board & Committee) expertise
National programs in aquatics, fitness, wellness, leadership
Major community capital fund raising campaign (local &
regional) resulting in lower cost to Township
State of the art facility open 365 days each year
Facility that is open to all, regardless of ability to pay a fee
Ongoing annual campaign to provide financial assistance
No ongoing operational costs and no ongoing capital costs
18. Project Costing
Facility opened 2001
Project costs, all in, was $12M
• Township provided $4M and land
• Community Campaign (local and regional) $4M
• YMCA contribution $4M
19. Hamilton Mountain YMCA
City of Hamilton’s population exceeds 500,000
Hamilton Mountain (south part of city) is major growth area
Urgent need for a recreation centre
Plans for a new Police Station and Library
In 2002, the newly amalgamated City experienced the
benefits of Municipal / YMCA partnerships
Suggestion to build the three facilities together and
experience possible synergies
20. Project Overview - Final Partners
Over a 2 year period, the final project includes
• Mountain Police Station
• 25,000 sq ft Library
• 53,000 sq ft YMCA
• Hamilton Health Sciences
• Skateboard Park
• City of Hamilton - 12 Ball Diamonds
21. Library / Police / Hospital / City
Partnership
Benefits of community policing – community interaction
Residents benefit from “one stop” community centre
YMCA / Library / Skate park benefit from shared clientele
Wider range of programs and services to all participants
Hospital expertise and leadership in preventative medicine
• Bone & joint, cardiac, cancer wellness, youth obesity
Efficient capital construction and operations
22. City of Brantford Project – Planning
Stages
Project Partners
• City of Brantford
• YMCA
• Laurier University
• Nipissing University
• Mohawk College
• First Nations
• Private Developers
23. Project Vision
To assist with downtown revitalization, construct a new
YMCA / Post Secondary recreation complex
• YMCA facilities
• University varsity athletic facilities
• Shared instructional facilities – YMCA & Post
Secondary Institutions
• University residences, support facilities
• Private developer partnerships for commercial
investments
24. Why Consider Partnerships?
Currently over 40 YMCA / Municipal collaborations in
Canada benefiting our communities, regardless of City
size including
• Vancouver, Edmonton, Calgary, Montreal, Toronto,
Hamilton, Niagara Falls, Innisfil Township, Wasaga
Beach, Cobourg, Quinte West, Goderich
Every collaboration has been a success
25. Monetary Benefits of Partnerships
Philanthropic Revenues
• Communities support effective & efficient partnerships
Access to Provincial Funding
• $2M from Province of Ontario for Hamilton Mountain
• Provincial Recreation Infrastructure funding
Access to Federal Government Funding
• Recreation Infrastructure funding
26. Critical Success Factors
Project Champions
• Mayor Ted McMeekin in Flamborough
• Community Leaders – Mel Hawkrigg (McMaster)
• YMCA – John Mayberry (Dofasco)
Shared Vision and Values among all partners
• Time to develop a common vision
Big Picture Thinking
• Keep your eye on the Vision
Trust
27. YMCA Learnings
50 years ago, all new YMCAs were built once money from
community campaign was in the bank
30 years ago, new YMCAs built with community campaigns,
operational funding and financing
Past 10 years, new YMCAs built in partnership with Cities,
community groups, schools, libraries and other
organizations
Next 10 years, in building new facilities, the YMCA will need
to consider working with all of the above partners and
the private sector
28. Thank You
Jim Commerford
President & CEO
YMCA of Hamilton / Burlington /
Brantford
(905) 317-4919
Jim_Commerford@ymca.ca
29. Public Financing Support for Municipal AFP
Projects
The Infrastructure Ontario Loan Program
Steve Rohacek, Vice President – Business Development & Customer Relations
30. Agenda
• Infrastructure Ontario
• Overview of the loan program
• How public and private financing can co-
existing in a municipal AFP/P3 project
• Financing considerations
• Summary
2
www.infrastructureontarIo.ca
31. Infrastructure Ontario
• A Crown corporation dedicated to building and renewing public
infrastructure in Ontario
• Among the world leaders in public infrastructure development
• Has two main business streams
1. Alternative Financing and Procurement (AFP)
– Large, provincially-assigned infrastructure projects
– Over $10.0 billion in capital brought to the market since 2006
2. Loan Program
– Financed the development of over $4 billion in local projects
– Advanced over $2.0 billion in loans
– Over 220 public sector clients
– Successful since 2003
3
www.infrastructureontarIo.ca
32. Loan Program
A public sector lending vehicle
that provides efficient access to
capital market financing
4
www.infrastructureontarIo.ca
33. Providing Access to Capital Markets
Borrowing Pool
Capital
for Eligible Loan
Markets
Clients
Infrastructure $3M
Long-Term
g
Renewal
enewal
Money
Bonds
$1M
$30
Infrastructure million
Ontario $.5M
$5M
5
www.infrastructureontarIo.ca
34. Loan Terms and Interest Rates
• Terms up to 40 years or useful life of the
asset
• Interest rate based on market sector
• Within a sector and a give term (i.e. 10 yrs)
the interest rate is the same regardless of
loan amount
6
www.infrastructureontarIo.ca
35. Infrastructure Ontario Credit Ratings
• North America’s three leading credit rating agencies
have consistently confirmed IO’s stellar credit ratings:
– DBRS AA
– Moody’s Aa2
– S&P AA+
• Benefits of high credit rating: financial discipline and
internal efficiencies are passed directly on to clients
through affordable rates
7
www.infrastructureontarIo.ca
36. Eligible Borrowers
Borrowers include:
• Municipalities and local services boards
• Universities and affiliated colleges
• Non-profit long-term care homes
• Hospices
• Municipal Corporations
– Electricity distribution, power generation, transit
• Non-profit professional arts training facilities
• Housing providers
– Social, affordable, co-operative, supportive
8
www.infrastructureontarIo.ca
37. Municipal vs. Municipal Corporation
Municipal Municipal Corp.
• Debt vs. own purpose • 100% municipally owned –
revenues can have more than one
• Debt per household owner
• Reserves • Business case approach
• Economic, demographic and • Management & Governance
population trends • Source of revenues
• Debt to equity ratios
• Debt service coverage ratios
• Retained earnings
9
www.infrastructureontarIo.ca
38. Financing of AFP (DBFM) Projects
Three components:
• Construction financing – Project Company
• Long term private financing – Project
Company
• Take-out (long term) public financing -
Municipality
10
www.infrastructureontarIo.ca
39. RFQ Released
11
6 months
RFP Released
6 months
www.infrastructureontarIo.ca
Evaluation of Proposals
11 to 12 months
4 months
Selection of Preferred Proponent
Commercial Close
Financial Close and
1 to 2 months
Construction Start
Substantial Completion /
Operational Phase
Expiry of Concession Period
DBFM Model – Transaction Phase Timeline
40. Financing Considerations
• Capital market conditions
– Capital market liquidity (availability of funds)
– Slope of the yield curve
• Public and private long term interest rates
– Cost of funds via the capital markets
– Cost differential (spread) between public and private
financing
• Debt structure
– Debt vs. equity (funds from grants, reserves etc.)
– % of public vs. private financing
– Blend rate and terms
12
www.infrastructureontarIo.ca
41. Summary
• Municipalities and municipal corporations –
(100% municipally owned) are eligible for the
loan program.
• Traditional or AFP/P3 projects.
• Public financing can co-exist in a municipal
AFP project
13
www.infrastructureontarIo.ca
42. Ministry of Municipal Affairs and Housing
Ministère des Affaires municipales et du Logement
Tools for Municipalities Addressing
Infrastructure Needs
Dana Richardson
AMO Conference 2009
43. Municipalities and Infrastructure
Infrastructure is important to economic competitiveness and
quality of life in every municipality and the province as a whole.
Provincial and municipal governments invested heavily in
infrastructure, especially in the 1950s and 1960s
ƒ This infrastructure is, in many cases, reaching the end of its
expected life.
Municipalities are on the frontlines of infrastructure provision and
management
ƒ Broad powers under spheres of jurisdiction in the Municipal
Act, 2001;
ƒ In 2006, municipal capital expenditures totalled $7.3 billion;
ƒ Municipal infrastructure makes up almost half of all public
infrastructure in Ontario (see chart).
August 18, 2009 Municipalities and Infrastructure 2
44.
45. PMFSDR Infrastructure Table
Provided research and analytical support to the Coordinating Table
of the Provincial-Municipal Fiscal and Service Delivery Review
(PMFSDR)
Looked at the funding of municipal infrastructure, including
discussing respective roles and responsibilities.
Considered linkages between municipal infrastructure and shared
federal, provincial and municipal priorities, including:
ƒ safe drinking water and the protection of water resources;
ƒ effective transportation and transit systems for competitiveness
and reduction in greenhouse gases;
ƒ sustainable waste management systems; and
ƒ cultural and recreational facilities that support healthy, vibrant,
active communities.
August 18, 2009 Municipalities and Infrastructure 4
46. Infrastructure Gap
The PMFSDR Infrastructure Table studied the infrastructure deficit
in Ontario in roads and bridges, water and wastewater, stormwater,
transit, conservation authorities, and solid waste management.
It identified an additional $6 billion/year that needs to be spent for
the next 10 years to close the infrastructure gap, in addition to
existing spending.
Modelling Ontario’s municipal infrastructure gap was driven by the
need for better data
ƒ Discussions about infrastructure are often clouded by lack of
information about what stock of infrastructure exists and the
related financial needs;
ƒ Going forward, the implementation of PSAB capital accounting
standards is an opportunity for municipalities and the province
to begin collecting better data.
August 18, 2009 Municipalities and Infrastructure 5
47. Infrastructure gap estimates for Ontario municipalities
($ millions)
Investment needs
Lifecycle Eliminate Growth Total Average Gap
deficit need spending, (need less
past 5 yrs spending)
Roads and bridges $2,671.1 $935.8 $651.6 $4,258.5 $1,460.2 $2,798.3
Water and wastewater $844.3 $1,277.7 $661.3 $2,783.3 $1,520.5 $1,262.8
Stormwater $525.3 $27.8 $234.7 $787.8 $106.7 $681.1
Transit $899.8 $0.0 $730.1 $1,629.9 $563.7 $1,066.2
Cons. Authorities $4.4 $3.2 $0.0 $7.6 NA $7.6
Solid waste mgt. $316.5 NA $77.4 $393.9 $291.1 $102.8
Totals $5,261.4 $2,244.5 $2,355.1 $9,861.0 $3,942.2 $5,918.8
Source: Ministry of Energy and Infrastructure. Excerpted from PMFSDR Infrastructure Table Report:
www.amo.on.ca/Content/NavigationMenu/PolicyIssues/ProvincialmunicipalFiscalServiceDeliveryRe
view/default.htm
Note: Estimate was calculated using average annual estimates from 2006 to 2045, in 2006 dollars.
Does not include an analysis of other municipal infrastructure such as libraries, arenas, parks and
recreational facilities, and other public buildings.
48. Tools to Help Address the Gap
Addressing this investment gap represents a significant burden on
municipalities
ƒ Modeling results show the financial impact of addressing the
infrastructure deficit on the average Ontario family is roughly $1,200
per year over the first 10 years and $700 per year over the next 30
years.
There is no single solution. Both the province and municipalities have a
role to play, and a combination of measures will be required.
Possibilities include:
ƒ Best practices in municipal asset management;
ƒ Increased investment from all levels of government;
ƒ Use of “user pay”, particularly in sectors such as solid waste
management and transportation;
ƒ Where appropriate, alternative financing and procurement (AFP) or
alternative service delivery models (eg. municipal service
corporations).
August 18, 2009 Municipalities and Infrastructure 7
49. Municipal Service Corporations
Municipal Act, 2001
ƒ Section 203 of the Act provides municipalities with the authority to
create corporations for most services that the municipality is able to
provide.
Ontario Regulation 599/06: Municipal Service Corporations
ƒ The regulation outlines the general powers of municipalities in
relation to corporations, in addition to the duties and rules for the
municipality, and the rules by which corporations must follow.
Corporations Authority
ƒ Councils continue to determine how best to provide services and
facilities for their citizens;
ƒ Municipalities have broad authority to establish services corporations
and can determine the method of financing and operating, including
alternative financing.
August 18, 2009 Municipalities and Infrastructure 8
50. Summary
Infrastructure remains a core business for Ontario municipalities
Ontario must see a continuing partnership on infrastructure issues between the
Province and municipalities.
All orders of government need to be involved in finding a solution to the
infrastructure gap
ƒ Deteriorating infrastructure reduces quality of life in Ontario and threatens
economic competitiveness.
The Province has been making considerable investments in infrastructure
ƒ 2009 Provincial Budget committed $32.5 billion over the next two years for
new infrastructure that will support more than 300,000 jobs;
ƒ Infrastructure Ontario’s role in providing project management, loans program
and implementation strategies for AFP programs.
Municipalities need to make full use of the tools already available to them,
including municipal service corporations and potentially alternative
financing/delivery models.
August 18, 2009 Municipalities and Infrastructure 9