Peel Memorial Centre for Integrated Health and … · Peel Memorial Centre for Integrated Health and Wellness Funding Considerations Town Hall Meeting ... Memorial Centre for Integrated

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CITY OF BRAMPTON

Peel Memorial Centre for Integrated Health and Wellness

Funding Considerations

Town Hall Meeting February 20, 2013

Mo Lewis, Commissioner, Financial and

Information Services, and Treasurer

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Timeline

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Purpose of Meeting and Call for Comments

William Osler Health System requested the City of Brampton fund 50% of the local capital share ($120 million) towards the new Peel Memorial Centre for Integrated Health and Wellness (PMC).

Council approved the City’s $60 million commitment in 2010.

To date, $1 million has been set aside towards this contribution.

Council now needs to make a decision on how to fund the balance of $59 million.

Before making this decision, Council wishes to obtain public input on the approach to raising the funds.

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Considerations

Health Facilities are not part of municipal operations

Need to ensure budget for municipal operations is not impacted

Tax levy should be identified separately, i.e. through a dedicated PMC levy, to be eliminated when sufficient funds have been raised

Those who benefit should pay

Debenture financing allows for repayment over time

Current and future taxpayers share the cost when spread out over a longer term horizon, reducing the overall burden per household

Infrastructure Funding from other levels of government

The City will pursue any avenues available to reduce the burden on Brampton taxpayers, but no applicable program has been identified at this time

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Funding Options Eliminated

Options considered and eliminated:

Use of reserve funds, with or without repayment from property tax

Loss of investment income => tax increase to fund City operations

Potential risk to City’s AAA credit rating

Infrastructure funding from other levels of government

No available funding program known at this time

Development Charges or other growth financing

Health Facilities are no longer eligible for municipal development funding

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Funding Options to be Discussed

Property tax will be required to fund the contribution. It can be in the form of a dedicated portion of the tax bill.

The annual impact and time frame for the property tax can vary:

1. Tax and Save – no debt; all funds raised in advance

2. Borrow – tax levy for debt repayment; extends number of years to reduce annual tax impact

3. Combination – debt financing, but with taxation now for down payment

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Funding Options to be Discussed

1. Tax and Save Option Taxation to raise total contribution in advance of payment.

Payments to be made in 2016 and 2018 (or when each phase is substantially completed).

No debt financing will be issued.

Who Pays? The cost will be borne entirely by those taxpayers who reside or

operate in the City over the next six years.

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Funding Options to be Discussed

2. Borrowing Option Debt financing issued when contribution is due (2016 and 2018 or

upon substantial completion of each phase).

Spreads the impact on taxpayers over a longer time period, reducing the annual impact.

Delays the start of the property tax impact until the first contribution is required.

Who Pays? The cost will be borne entirely by those taxpayers who reside or

operate in the City after construction of the PMC and therefore benefit from it.

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Funding Options to be Discussed

3. Combination Option - Borrow with Down Payment A combination of options 1 and 2 introduces the dedicated tax levy

immediately in 2013 to raise a partial down payment or accumulate a reserve for future debt repayment.

Debenture debt would be issued when the contribution is due and the tax levy continued in future years for debt repayment.

Who Pays? The cost will be shared by those taxpayers who reside or operate in

the City during and after construction of the PMC and therefore benefit from it.

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Funding Options to be Discussed

Chart on following page illustrates possible scenarios under the three options

Public input requested regarding preferred option(s)

Council to decide on preferred approach and details after feedback received, for example:

Start dates for taxation

Term of debt

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Funding Options to be Discussed - Summary

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* may vary depending on construction start date

** $s per household = Impact on average residential property, 2013 assessment Value = $347,000;

decreases over time as more households are added to the tax roll

Description Start Date End Date

Annual Tax

Impact

• Initiate tax levy in 2013

• Accumulate sufficient funding

• Payments: $40M in 2016 and $20M in 2018

Total $9.83M

• No debt financing required (3.3%)

• Initiate tax levy in 2016 to begin collection for

future debenture repayments

$44 => $36 per

household**

• Payments: $40M in 2016 and $20M in 2018

• Assumes debenture financing: Total $8.9M

• 10 Yrs @ 5% for both debentures (2.9%)

• Initiate tax levy in 2013 to collect for partial

down payment or reserve for future debenture

repayments

$36 => $28 per

household**

• Payments: $40M in 2016 and $20M in 2018

• Assumes debenture financing: Total $6.8M

• 10 Yrs @ 5% for both debentures (2.2%)

2013 * 2025

$52 => $47 per

household**

Tax and Save Option –

No Debt

(Option #1)

2013 * 2018

2016 2025Borrowing Option

(Option #2)

Combination Option -

Borrow with Down

Payment

(Option #3)

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Next Steps

The rest of the meeting is open for your comments and questions.

Comments can also be submitted up to March 6 by: email, through the City’s website telephone voicemail at 905-874-5901 email, letter or telephone to your Members of Council

Your feedback through all channels will be reported to Council in the near future.

Council will consider all feedback in arriving at a decision. If the Peel Memorial Centre (PMC) levy is to begin in 2013, the decision needs to be finalized no later than April.

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