City of Vancouver Investor Presentation September 10, 2019 - - PowerPoint PPT Presentation

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City of Vancouver Investor Presentation September 10, 2019 - - PowerPoint PPT Presentation

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City of Vancouver Investor Presentation September 10, 2019 Disclaimer This presentation and subsequent discussion, contains certain forward-looking information, forecasts, projections, goals and strategies (the forward-looking

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September 10, 2019

City of Vancouver Investor Presentation

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Disclaimer

  • This presentation and subsequent discussion, contains certain forward-looking

information, forecasts, projections, goals and strategies (the “forward-looking information”) with respect to revenues, funding, expenses, the financial condition, results of operation and business of the City of Vancouver (the “City”). This forward- looking information represents the City’s expectations or beliefs concerning future events and involves known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Past performance cannot be relied on as a guide to future

  • performance. This material is for information purposes only.
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High quality credit ratings Thriving and robust economy Stable revenue sources and property tax base Strong fiscal management Commitment to regular issuance

Investment Proposition

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Aaa (stable) AAA (stable)

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Maintaining Highest Quality Credit Rating

May 09, 2019

  • “The affirmation of the Aaa ratings is based
  • n positive operating outcomes which are

supported by reliable revenues and a large, diverse economic base.”

  • “The ratings also reflect the city's high

levels of liquidity.”

  • “The stable outlook reflects Moody’s

assumption of continued strong fiscal performance over the next 18-24 months from predictable sources of income, and continued excellent levels of liquidity and strong debt affordability.” February 07, 2019

  • “Continuity of sound management under new

government and steady, but milder, economic growth will support creditworthiness.…”

  • “The stable outlook reflects our assumption that

a solid economy and comprehensive fiscal planning will facilitate operating and after- capital fiscal surpluses over the next two year.”

  • “We believe that Vancouver's detailed long-

term financial planning, as well as its experienced financial management team, will provide a solid fiscal policy anchor as the city's new government looks to implement its policy agenda.”

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Economy

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Metro Vancouver – Positive Economic Indicators

3.9% 4.2% 4.0% 4.4% 2.5% 2.5% 2.4% 2.3% 2.2% 2.4% 2.6% 0.9% 1.1% 3.0% 2.1% 1.9% 2.1% 1.7% 1.6% 1.7%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F

Metro Vancouver Canada

Real GDP Growth (%)

5.9% 5.9% 5.4% 4.6% 4.3% 4.3% 4.5% 4.5% 4.5% 4.5% 6.9% 6.9% 7.0% 6.3% 5.8% 5.6% 5.5% 5.5% 5.5% 5.5%

3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

2014 2015 2016 2017 2018 2019F 2020F 2021F 2020F 2021F

Unemployment (%)

1.5% 1.0% 1.3% 1.1% 1.2% 1.2% 1.1% 1.3% 1.4% 1.5% 1.1% 0.9% 1.0% 1.2% 1.3% 1.1% 1.1% 1.1% 1.1% 1.1%

0.0% 0.5% 1.0% 1.5% 2.0%

2014 2015 2016 2017 2018 2019F 2020F 2021F 2020F 2021F

Population Growth (%)

1.1% 1.2% 2.2% 2.2% 3.1% 2.4% 2.0% 2.0% 2.0% 2.0% 1.9% 1.1% 1.4% 1.6% 2.4% 2.3% 2.0% 2.0% 2.0% 2.0%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%

2014 2015 2016 2017 2018 2019F 2020F 2021F 2020F 2021F

CPI (%)

Source: The Conference Board of Canada Winter 2019; Statistics Canada; CMHC Housing Time Series Database

Metro Vancouver continues to be a thriving and robust economy.

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Neighbourhood Energy Strategy Zero Emission Buildings Plan Transportation 2040 Vancouver Food Strategy Healthy City Strategy Climate Change Adaptation Strategy Greenest City Action Plan Electric Vehicle Ecosystem Strategy

A FAMILY OF STRATEGIES

GREENEST CITY ACTION PLAN 7

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2019 Greenest City-Wide Success

Source: City of Vancouver Greenest City 2020 Action Plan, which can be found at vancouver.ca/GreenestCityActionPlan

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Task Force for Climate-Related Financial Disclosures (“TFCD”)

In 2018 the annual financial report, the City was the first municipality to include climate-related financial disclosures that align or partially align with TCFD recommendations

TCFD Recommended Climate Related Disclosures City of Vancouver Disclosures

Governance

  • Governance on risks and opportunities

Strategy

  • Impacts to business, strategy and financial

planning where material

Risk Management

  • Disclose how risk is identified, assessed and

managed

Metrics & Targets

  • Disclose metrics & targets to assess and

manage risks and opportunities

  • Vancouver’s Climate Strategies and Governance (page

32 & 33, 2018 CoV Annual Report)

  • Climate Risk and Adaptation in Vancouver (page 34 & 35

2018 CoV Annual Report)

  • 2019-2022 Capital Plan
  • Climate Metrics and Targets in Vancouver (page 37 2018

CoV Annual Report)

  • Climate Risk and Adaptation in Vancouver (page 34 & 35

2018 CoV Annual Report)

  • 2019-2022 Capital Plan
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Strong Fiscal Management

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Long-term Capital Planning

The 2019-2022 Capital Plan was approved in Dec 2018

Strategic choices about investments Every 4 years Identifies objectives to be achieved

(may include specific projects)

Assigns order-of- magnitude funding

10-Year

Capital Strategic Outlook Shorter-term priorities Every 4 years Identifies program priorities and specific projects to be completed Assigns specific funding level

4-Year

Capital Plan

Project approval Every year Provides detailed information and plans about projects to be completed Assigns fixed funding level

1-Year

Capital Budget

(updated quarterly) + 4-year forecast

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Strong Liquidity Position

 Consolidated Reserves Balance as of 31 December 2018: $1,177.4 million

“strong liquidity profile” “exceptional liquidity”

339 400 424 437 471 509 637 676 761 825 844 995 1,177

200 400 600 800 1000 1200

Consolidated Reserves

12 year cumulative growth of $838M (+240%)

$ millions

  • Excludes Sinking Fund
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“The City’s budget supports a livable, sustainable and equitable city”…..Sadhu Johnson, City Manager

2019 OPERATING REVENUES $1,513 MILLION 2019 OPERATING EXPENSES $1,513 MILLION

Statutory requirement to balance budget

  • The 2019 property tax increase reflects

the cumulative items: inflation; the property tax impact of the provincial government’s new Employer Health Tax; and the additional investments in infrastructure renewal approved in the 2019-2022 Capital Plan.

  • Property tax increase
  • 2019 – 4.50%
  • 2018 – 3.90%
  • 2017 – 3.40%
  • 2016 – 2.02%
  • 2015 – 2.46%
  • Key priorities for the 2019 Budget and

Five-Year Financial Plan are:

  • Increase housing supply and

affordability, and improve availability and supports for renters and vulnerable citizens.

  • Maintain and improve operations and

service levels.

  • Invest in public safety.
  • Continue to build vibrant

communities and public spaces that support arts, culture and the environment.

  • Meet our commitments to provide

safe and healthy workplaces and public spaces

Source: 2019 Budget

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2019 – 2022 Capital Plan - $2.8 billion

Source: 2019-2022 Capital Plan, City of Vancouver

Under this Capital Plan, the Council approves in principle a borrowing limit totaling $495M.

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Financing and Debt Profile

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Legislative Framework

Vancouver Charter

  • Debt financing only for capital infrastructure
  • City Council establishes limits for public utilities
  • Electorate approves other borrowing limits

Debt servicing charges (principal & interest) for general capital program

  • 100% funded from Operating Budget, refinancing not allowed
  • Repayment of the City’s debentures are funded by the City of Vancouver’s ability to

levy taxes & fees.

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Keeping Debt at a Manageable Level

 The City takes a careful approach to its use of debt

  • Used to renew and enhance public amenities and infrastructure
  • While ensuring a balanced budget

 As part of the City’s long-term debt strategy:

  • Water and sewer transitioning from debt to Pay-As-You-Go model
  • Helps lower overall debt and save interest costs in the long run

Source: City of Vancouver 2018 Budget and 5-Year Financial Plan

Net Debt at a manageable level

Excludes Olympic Village debt fully repaid in 2014

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Consistent and Established Sinking Fund Debenture Program

125 125 140 110 105 90 90 85 85 120 20 40 60 80 100 120 140 160 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Green Bond 2052

Debenture Maturity Profile

For 2019, Council has approved a regular debenture issuance of up to $100M. Announcement will be made later this fall.

Issuance Year Face Amount Coupon (pa) Maturity

2009 $125M 4.90% 2 Dec 2019 2010 $125M 4.50% 1 Jun 2020 2011 $140M 3.45% 2 Dec 2021 2012 $120M 3.70% 18 Oct 2052 2013 $110M 3.75% 24 Oct 2023 2014 $105M 3.05% 16 Oct 2024 2015 $90M 2.90% 20 Nov 2025 2016 $90M 2.70% 15 Dec 2026 2017 $85M 2.85% 3 Nov 2027 2018 $85M 3.10% 21 Sep 2028

$1,075M - Total Issued Debentures (to date)

$ millions

Outstanding Debentures Cumulative Net Debt

346 411 477 543 582 611 622 617 616 598 589 138 87 118 77 121 178 246 326 418 395 494

200 400 600 800 1000 1200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F

$ millions

Sinking Fund Net Debt

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Contacts & Additional Information

Name Title Telephone Email

Patrice Impey Director of Finance and General Manager 604-873-7610 patrice.impey@vancouver.ca Grace Cheng Director, Long-Term Financial Strategy and Planning / Deputy City Treasurer 604-871-6654 grace.cheng@vancouver.ca Tim Leung City Treasurer 604-873-7250 tim.leung@vancouver.ca Anthony Tia Senior Analyst 604-873-7443 anthony.tia@vancouver.ca

Websites

General http://vancouver.ca/ Greenest City Action Plan http://vancouver.ca/green-vancouver/greenest-city-action-plan.aspx Investors Relations ((including Green Bond Framework and Second Party Opinion) https://vancouver.ca/your-government/investor-relations.aspx Budgets and Finances http://vancouver.ca/your-government/budgets.aspx Capital Plan for 2019-2022 https://vancouver.ca/your-government/capital-plan-2019-2022.aspx 2019 Budget and Five-Year Plan https://vancouver.ca/files/cov/2019-budget-book.pdf Vancouver Economic Commission http://www.vancouvereconomic.com/ Vancouver Charter http://www.bclaws.ca/civix/document/id/complete/statreg/vanch_00

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