Region of Peel. BMO Canadian Fixed Income Conference. May 1 & 2, Spring

Transcription

1 Region of Peel BMO Canadian Fixed Income Conference May 1 & 2, 2018 Spring

2 Meet the Region of Peel Table of Contents Who we are 2 Economy 5 Finances 14 Debt Issuance.. 27 Spring 2018 Who we are Economy Finances Debt Issuance 2

3 Responsibilities Infrastructure Water Wastewater (Sewer) Storm Water Roads (Arterial) Roads (Local) Waste Collection & Disposal Parks & Recreation Peel * Member Municipalities include the Cities of Mississauga and Brampton, and the Town of Caledon Member Munis* Services Police Paramedics Fire Transit Public Health Long-Term Care Social Assistance Social Housing Children s Services Debt Issuance Libraries Licensing Economic Development Peel Member Munis* Planning & Development Parking Spring 2018 Who we are Economy Finances Debt Issuance 3

4 Governance Peel Region is governed by the Regional Chair and 24 other members of Council comprised of the Mayors and Councillors from Mississauga, Brampton and Caledon Regional Chair Members of Regional Council (25) Regional Chair (1) Mayors of Mississauga, Brampton, Caledon (3) Councillors representing City of Mississauga (11) Councillors representing City of Brampton (6) Councillors representing Town of Caledon (4) Executive Leadership Team (7) Chief Administrative Officer; Commissioner, Finance & Chief Financial Officer; Commissioner, Corporate Services; Commissioner, Digital & Information Services; Commissioner, Health Services; Commissioner, Human Services; Commissioner, Public Works. Spring 2018 Who we are Economy Finances Debt Issuance 4

5 Peel s Strategic Advantages Location Situated in GTA, largest economic hub in Canada Close to large US market (within 200 km / 120 miles) Transportation network Five major highways Toronto s Pearson Int l Airport Regional, national & international rail Young and well educated population Peel s median age of 38.1 years is lowest in GTA (2016 census) 65% of Peel s working age population have a postsecondary certificate, diploma or degree (2016 census) Spring 2018 Who we are Economy Finances Debt Issuance 5

6 Millions Strong Population Growth 1.48 million residents in 2017, 2 nd largest in GTA & Ontario, 4 th largest in Canada An estimated 32,147 new residents ( ) Future population forecasted to reach 1.77 million by 2031 Future population forecasted to reach almost 2 million by 2041 Peel Region Population Growth Peel Region Population Share 2.5 Caledon 5% Brampton 44% million (2017) F 2031F 2041F Mississauga 51% Spring 2018 Who we are Economy Finances Debt Issuance 6

7 Thousands Labour Market Conditions Strong labour market performance in 2017 Total labour force increased by 2.1% to remain strong at 873,000 persons Employment at 812,500 positions, up 2.5% Unemployment rate fell to 6.9% in 2017 Employment growth was broad-based Employed Labour Force Unemployment Rate Goods Producing Services All Industries 10% % 6% 8.9% 8.1% 7.7% 7.3% 6.9% % % % Source: Statistics Canada and Peel Data Centre Spring 2018 Who we are Economy Finances Debt Issuance 7

8 Diversified Labour Market 812,500 strong employed labour force in Peel in 2017 Peel s well-diversified labour market supports a resilient economy Labour Market Breakdown by Sector 2017 Trade 18.2% Manufacturing and other Goods Producing 15.1% Transportation and Warehousing Health Care and Social Assistance Finance, Insurance, Real Estate and Leasing Professional, Scientific and Technical Services 9.7% 9.4% 8.9% 8.5% Construction Educational Services Business, Building and Other Support Services Accommodation and Food Services 6.0% 5.1% 5.0% 5.0% Other Services Information, Culture and Recreation 2.8% 3.7% Public Administration 2.6% % 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Source: Statistics Canada Spring 2018 Who we are Economy Finances Debt Issuance 8

9 Thousands Household Income Peel at almost $76,000 in median after-tax household income is about: 10% higher than Toronto CMA median and 25% higher than the national median Median Household Income (After-Tax) Canada Ontario Toronto CMA Peel Source: Statistics Canada, Census of Canada, 2016 Spring 2018 Who we are Economy Finances Debt Issuance 9

10 000 Growing Business Sector Approximately 717,000 jobs in Peel in 2017 Region of Peel Employment Forecast 1000 An estimated 34,000 new jobs in 2017, up 5.0% from F 2031F Source: Statistics Canada and Draft Growth Management ROPA Oct 2017 Allocation Spring 2018 Who we are Economy Finances Debt Issuance 10

11 Diversified Business Sector Peel s business sector is broadly diversified Business growth has been led by the Transportation & Warehousing sector Distribution of Business Sectors in Peel Region Transportation & Warehousing Financial, Insurance, Real Estate & Leasing 20.0% 19.8% Professional, Scientific & Technical Services 14.8% Trade Construction 10.3% 9.5% Other Services 6.7% Management, Administrative & Other Support Healthcare & Social Assistance 5.4% 5.0% Manufacturing and Other Goods-Producing 3.8% Accommodation and Food Services 2.6% Information & Culture 1.1% Educational Services 1.0% % 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Source: Statistics Canada, Canadian Business Patterns Spring 2018 Who we are Economy Finances Debt Issuance 11

12 '000 Strong Business Sector Strong and growing business sector Business Establishments by Category The largest employers in Peel include Royal Bank (RBC) Financial Group, Suncor Energy, Rogers Communications, and Hewlett- Packard (Canada) Ltd With strong location and infrastructure advantages, Peel will continue to be an attractive destination for businesses New University approved for Brampton Goods Producing Services Source: Statistics Canada and Peel Data Centre Spring 2018 Who we are Economy Finances Debt Issuance 12

13 $ Billions Units Housing Market A total of 6,739 residential housing starts in Peel in 2017 Building permit issuance at $2.8 billion Building Permits Issued Housing Starts Residential Non-residential , ,000 6,000 4,000 2, ,100 6,739 6,298 5,362 4, Source: Statistics Canada and Peel Data Centre Spring 2018 Who we are Economy Finances Debt Issuance 13

14 $ Billions Sustained Growth in Assessment Peel s total assessment base continues to grow at a healthy pace Both residential and non-residential sectors contribute to growth Peel region represents about 10% of the Province of Ontario s assessment base for property taxes Taxable Assessment Residential & Farm Commercial & Industrial Source: Municipal Property Assessment Corporation Spring 2018 Who we are Economy Finances Debt Issuance 14

15 Planning Financial Sustainability Council and Management Actions Long-term Financial Planning Strategy Includes 10 year operating budget model Commitment to funding infrastructure replacement from reserves Tax: 1% average annual increase for State of Good Repair reserves since 2008 Water/wastewater: 4% average annual increase for SOGR reserves since 2009 Commitment to integrated Growth Management Creation of Growth Management Committee overseeing land use planning, master services planning and DCs for 2041 growth forecasts Includes earlier and more integrated consultation with area municipalities and develop community in part to minimize debt Term of Council Priority Development Charges (DC) By-law updated in 2015 Collection of residential DCs for hard services (97% of DC rate) at subdivision approval expected to offset $100 million in borrowing Cash Management Strategy adopted Spring 2018 Who we are Economy Finances Debt Issuance 15

16 Budgets and Borrowing Debt can only be issued for capital 2018 Total Budget $3.1 Billion (Gross) Operating Capital $177 $286 $134 $54 Water Wastewater Transportation/Roads Police Other $72 OPERATING BUDGET $2,374 (77%) $ millions CAPITAL BUDGET $723 (23%) Spring 2018 Who we are Economy Finances Debt Issuance 16

17 Investing in Growth Infrastructure Water, Wastewater and Roads at 75% of the Capital Budget Expenditures Repair and replacement funded from reserves External funding from: York Region for joint water/wastewater projects and Clean Water and Wastewater Fund (CWWF) for proposed projects Capital Expenditures $7.2B Capital Funding $7.2B Water (36%) $1,421 Transportation (20%) Reserves (57%) $2,583 $1,388 $398 $455 Wastewater (19%) Police Services (6%) Housing Support (6%) $4,124 $2,786 Development Charges (39%) External Sources (4%) $488 Other (7%) $434 Waste (6%) $257 $ millions $ millions Spring 2018 Who we are Economy Finances Debt Issuance 17

18 Development Charges (DCs) (a.k.a. System Impact Fees) Levy DCs against new development to fund growth-related infrastructure (Provincial legislation) Peel Council: growth pays for growth philosophy to ensure existing tax base not impacted by cost of development DC rates must be updated at least every 5 years Peel DC by-law updated Sept with a new DC by-law review scheduled for 2019/2020 Borrowing needs are for long life projects Water, wastewater, roads are major programs funded from DCs Spring 2018 Who we are Economy Finances Debt Issuance 18

19 Growth Projects funded with Development Charges Key Key DC Related Capital Projects Expensed/Committed($ mm) Planned Investment($ mm) Wastewater G.E. Booth Plant Expansion & Upgrades $35.3 $32.5 Clarkson Plant Expansion & Improvements $34.3 West Trunk Sewer Twinning $189.7 $38.8 East to West Diversion Forcemain & Pumping Station $22.4 $230.2 Water West Caledon Elevated Tank / Transmission Main $51.5 West Brampton Transmission Main & Pumping Station $26.4 Williams Parkway / Central Brampton Transmission Main $54.9 $174.0 Hanlan Transmission Main & Pumping Station $228.0 Lakeview Treatment Plant $41.5 $24.3 Alloa Reservoir & Pumping Station $82.1 Victoria Transmission Main & Reservoir $56.6 $127.2 Mississauga City Centre Feeder Main $224.5 $34.9 East Brampton Transmission Main $43.7 $162.0 Meadowvale North Transmission Main $170.5 Streetsville Transmission Main $166.5 Mayfield Road Transmission Main $31.2 Total Key Water/Wastewater Capital Projects $1,013.0 $1,270.0 Total Water/Wastewater Capital Projects $1,584.3 $1,834.2 Total DC Related Capital Projects $2,050.5 $2,836.3 Spring 2018 Who we are Economy Finances Debt Issuance 19

20 Hanlan Water Project Section of 8 foot (diameter) water pipe Spring 2018 Who we are Economy Finances Debt Issuance 20

21 Hanlan Water Project Tunnel boring machine Spring 2018 Who we are Economy Finances Debt Issuance 21

22 000 Peel s Development Charges Peel DC rates are competitive with our peers in the GTA. Per Person Residential Development Charges in the GTA $ $ $ $10 $5 $0 Caledon (Peel) Brampton (Peel) Mississauga (Peel) Oakville (Halton) Milton (Halton) Vaughan (York) Markham (York) Whitby (Durham) Note: Values represent Regional, Area, Education and GO Transit Development Charges - As of February, 2018 Spring 2018 Who we are Economy Finances Debt Issuance 22

23 000 Peel s Development Charges Higher Persons Per Unit drive Peel s residential dwelling rates higher. Development Charges for a Single/Semi-Detached Family Dwelling Unit in the GTA $100 $90 $80 $70 $ $ $40 $30 $20 $10 $0 Caledon (Peel) Brampton (Peel) Mississauga (Peel) Oakville (Halton) Milton (Halton) Vaughan (York) Markham (York) Whitby (Durham) Note: Values represent Regional, Area, Education and GO Transit Development Charges - As of February 2018 Spring 2018 Who we are Economy Finances Debt Issuance 23

24 Peel s Development Charges Peel DC rates are competitive with our peers in the GTA. Development Charges for Industrial Development ($ per m 2 ) in the GTA $350 $ $/m 2 $250 $200 $ $100 $50 $0 Caledon (Peel) Brampton (Peel) Mississauga (Peel) Oakville (Halton) Milton (Halton) Vaughan (York) Markham (York) Note: Values represent Regional, Area and Education Development Charges - As of February, 2018 Whitby (Durham) Spring 2018 Who we are Economy Finances Debt Issuance 24

25 Future Development Peel Region is well positioned to attract growth given its central location and land base that will be serviced and available for development. Greenbelt Plan 2005 Provincial legislation has an impact on land development. Future development is restricted in the Greenbelt. Spring 2018 Who we are Economy Finances Debt Issuance 25

26 Peel s Low Water and Wastewater Rates $/Year Peel s combined water and wastewater rates are the lowest in the GTA. Peel contributes approximately 49% of its rates (or $179 million in 2018) to reserves for future repair and replacement of the system. Low water and wastewater rates help attract businesses like Coca-Cola, Pepsi and Cott Beverages to Peel Region Combined Water & Wastewater Utility Bill Residential Homeowner $1,061 $1,103 $1,173 $1,253 $1,177 $1, $ Halton Peel Toronto Vaughan (York) Based on 290 m 3 / 77k US gal usage per year Richmond Hill (York) Markham (York) Durham Spring 2018 Who we are Economy Finances Debt Issuance 26

27 Ontario Municipal Act, 2001 Safeguards Municipal debentures rank pari passu s.408(7) Annual budget provisions Debt provision: municipality shall in each year prepare and adopt a budget including estimates of all sums required during the year including amounts sufficient to pay all debts falling due within the year and amounts required to be raised annually for sinking funds and retirement funds Balanced budget: budget shall provide that estimated revenues are equal to the estimated expenditures and the municipality will levy taxes sufficient to ensure that this is the case s.289 and 290 Proceeds from the sale of a debenture issue cannot be applied towards the payment of current expenditures s.413(1) and 408(2.1) Spring 2018 Who we are Economy Finances Debt Issuance 27

28 Municipal Act, 2001 Safeguards (cont d) Debenture by-law cannot be repealed until the debt and interest have been paid s.414(1) Doctrine of ultra vires Municipalities only have borrowing powers which are expressly set out in legislation s.9 and 17 Municipal officer guilty of an offense Any municipal officer who refuses to perform his or her duty to ensure that all the obligations of their municipality s debenture by-law are fulfilled is guilty of an offence s. 422 Liability of members of council for diversion of funds Any member of Council who votes to divert funds to pay current expenditures funds that were originally raised to retire debt is personally liable for the misapplied funds and is disqualified from holding any municipal office for two years s.424 Spring 2018 Who we are Economy Finances Debt Issuance 28

29 Strong Credit Rating Long Range Financial Planning Strategy endorsed by Council commits to maintaining a strong credit rating S&P AAA since 2001 Moody s Aaa since 2011 Large, highly liquid investments of $2.4B (as of March 31, 2018) Spring 2018 Who we are Economy Finances Debt Issuance 29

30 ($) Millions Borrowing Summary Forecasted borrowing equals net of slowing growth infrastructure spending, offset by increasing DC revenues Benchmark sized bullet C$ offerings $ mm, 10 year Peel s Total Debt Issuance 300 Reduced Regional forecasted borrowing makes benchmark bullets less frequent Smaller long term bullets for social housing & Long Term Care Still expect to issue smaller serial once per year and long term bullet for lower-tier (local) municipal needs * 2020* *Region Only FORECASTED Spring 2018 Who we are Economy Finances Debt Issuance 30

31 Summary Bullet benchmark debt issues. These bridge upfront DC growth expenditures (water, wastewater and roads) with longer term DC revenue collections as development is built Peel also issuing annually for Area municipalities and forecasting occasional smaller long term bullets All Peel debt is general obligation AAA/Aaa credit ratings Strong liquidity ($2.4B) with large annual contributions to reserves Water and Wastewater rates lowest in GTA Strong and diversified Peel economy Strong financial management Spring

32 More Information Julie Pittini, MBA Director, Treasury Services Finance 10 Peel Centre Drive, Suite A, 2 nd Floor Brampton, ON L6T 4B9 julie.pittini@peelregion.ca tel: ext fax: peelregion.ca/investors Dave Bingham, MBA, CPA, CMA Program Director, Treasury Transformation Finance 10 Peel Centre Drive, Suite A, 4 th Floor Brampton, ON L6T 4B9 dave.bingham@peelregion.ca tel: ext Peel Investor Website Updated information including: credit rating reports financial statements budget tax and water/wastewater rates development charges peelregion.ca/investors Bloomberg Ticker: PEEL peelregion.ca/investors Spring