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Transcript of Keynote presentation
The City of Saskatoon’s use of
Public Private Partnerships
Building Bridges for Success Prince Albert, Saskatchewan
Wednesday, October 7, 2015
Murray Totland, City Manager
City of Saskatoon
Overview of Presentation
Setting the Context
Saskatoon’s Infrastructure Approach
Saskatoon’s P3 Evolution and Experience
Lessons Learned
Comments/Questions
THE PACE OF GROWTH
Saskatoon Population Growth Projections
The Fiscal Challenges for Growing Cities
Paying for Growth
Capital Infrastructure
Operation/Maintenance
Rapid Expansion of Services and
Infrastructure
A larger footprint/more people increases
costs faster than revenues
Limited revenue sources
City Operating Revenue Sources
City Revenues
Own - Source External
Tax Non-Tax Government
Transfers
Property Tax User Fees Licences
Fines Penalties
7
Property Tax Revenue Growth
New
Inventory
Rate Increases
Illustrating the Issue
38
39
40
41
42
43
44
45
46
47
2008 2009 2010 2011 2012 2013 2014 2015
Property Tax Other Own Source
Percentage Share of Operating Budget Revenues
9
“Triple-Double” of Urban Infrastructure
Financing:
Pay as You Go
Borrowing
Funding:
Taxes
User Fees
Delivery
Public
Private
Federal/Provincial Partnerships
Leveraging financial resources through federal
and provincial partnerships
Since 2007:
City has partnered with federal and provincial
governments to invest over $700 million on various
infrastructure projects
The challenge:
Cities do not have control over the timing and the
level of investment for projects
A New Fiscal Framework?
Existing tax and fee structure will not meet
our infrastructure needs
Current Federal/Provincial infrastructure
programs will not resolve the infrastructure
issues
New and innovative revenue tools to
pay/charge for infrastructure
Evolution of Innovation
Circle Drive South Civic Operations
Centre North Commuter/
Traffic Bridge
June
2008
January
2013
June
2014
Design/Build Finance/Maintain Operate
Circle Drive South
Highlights
Design/Build
$300 million
Federal/Provincial/Municipal
Funding
6 lane bridge
5 interchanges
12 kms of freeway
Completed August, 2013
Civic Operations Centre
Highlights Saskatoon’s first P3 Project
$128 million Capital Cost
Up to $42.9 million from P3
Canada Fund
Design/Build/Finance/Maintain
City Transit Operations
Snow Storage
Decontamination
180 acres of land
Completion: End of 2016
25 year concession period
Date Event
March 2010 Project Concept Finalized
January 2011 Preparation of Business Case
March 2012 City Council directs Administration to submit project to the Federal P3
Canada Fund
January 2013 PPP Canada makes funding announcement for project
May 2013 Council approves RFP for Financial, Legal, Technical, and Fairness
Advisors
June 2013 Council approves awards for advisors
September 2013 Council approves issuance of RFQ for Project Proponents
March 2014 Council authorizes RFP to be issued for short-listed proponents
October 2014 Council approves the award of the RFP to winning proponent
January 2015 Council approves Financial/Commercial Close
May 2015 Project Design Finalized
June 2015 Project Construction Begins
September 2016 Facilities Commissioning
December 2016 Substantial Completion (Contractually Obligated)
Timeline of Major Events for the COC Project
Financial Details of the COC
Highly competitive procurement
Affordability threshold of $185 million, including capital
and operating costs
Winning base project bid was $160.1 million, or $24.9
million savings over 25 years
P3 Canada Fund = $35.4 million (25%)
NPV Project Cost = $195.5 million
VFM Savings = $92.3 million (risk adjusted vs. public
sector comparator)
Lump sum payment upon completion, then series of
annual payments for 25 years
North Commuter Parkway and
Traffic Bridge Replacement Project
Highlights
First “Bundled” Bridge Project
in Canada
$270 million
$66 million P3 Canada Fund
$50 million Government of
Saskatchewan
New 6 lane 400 metre Bridge
Replace 2 lane existing Bridge
Completion: October 2018
Lessons Learned
Have an
open mind
Plan and
Prepare Follow the
Business Case
Understand
Risk & Delivery
Implications
Mitigate the
Risks
Inform &
Communicate