TAMRMS#: B06
5.2
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Debt Management Policy (C-FS-03)
Presented by: Anne Victoor, Director, Financial & Strategic Services
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RECOMMENDED MOTION(S)
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That Standing Committee of the Whole recommend to Council that the updated Council Policy C-FS-03 Debt Management, as attached to the agenda report entitled "Debt Management Policy (C-FS-03)" dated June 11, 2024, be approved.
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PURPOSE OF REPORT
The purpose of this report is to bring forward amendments to the Debt Management Policy C-FS-03 (the "Policy") for Standing Committee of the Whole's consideration, in accordance with previous Council direction and administrative recommendations.
BACKGROUND AND DISCUSSION
There are a number of external factors challenging the City's financial sustainability. The City is experiencing faster growth than we have historically experienced which has led to community pressure for new amenities while maintaining an aging infrastructure. As a result of the growth, there is an increasing expectation for the City to front end road and utility projects. The reduction in provincial funding is further compounded by escalating construction costs resulting in reduced funding for capital projects and thus requiring projects to be considered for debt funding. Over the last few years, increasing interest rates have resulted in higher servicing costs for debt funded projects. Due to the increased cost of living from inflation, residents are also more sensitive to tax increases. ?
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To address the above factors, administration is recommending changes to the Debt Management Policy. These changes will support Council in ensuring future investments are made in a financially sustainable manner for the community.
One of the more significant recommendations is to establish internal limits on debt based on total debt servicing instead of total debt. The reality is that the debt servicing payments are long term fixed costs which impact future years. The new limi...
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