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  • OffWhyte
    replied
    Originally posted by SP59 View Post
    The cities debt limit is currently $5.587 billion and the current debt used is $3.046 billion or 54.5% (page 32).

    With the dissolving of Alberta Capital Finance Authority the way municipalities borrow money will continue by borrowing through the provincial government.
    Yes, thanks. I didn't explain myself very well because the figure I posted was for debt servicing (for which there's also a limit) but my analysis was describing total debt. Either way--total debt or debt servicing--you get close to the limits by 2023. Here's the 2019-2022 capital budget total debt estimations and you can see how close the total debt limit is approached by about 2023. It's not as bad as the debt servicing limit figure but it's not great either.

    Source: https://www.edmonton.ca/city_governm...al-budget.aspx

    So it's possible for Council to do this--indeed they probable will do this--but it's not without risk.

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  • SP59
    replied
    The cities debt limit is currently $5.587 billion and the current debt used is $3.046 billion or 54.5% (page 32).

    With the dissolving of Alberta Capital Finance Authority the way municipalities borrow money will continue by borrowing through the provincial government.
    Last edited by SP59; 21-11-2019, 04:54 PM.

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  • GizmoForMayor
    replied
    ^ thanks for that OffWhyte. You are right, it certainly makes things more complicated and expensive for the city. If I was Iveson I would simply propose to add 1% to everyone's property tax to cover the costs and squarely place the blame for that on Kenney, which is where the blame belongs of course.

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  • OffWhyte
    replied
    Originally posted by GizmoForMayor View Post
    Originally posted by kkozoriz View Post
    "Delayed" until just before the next election. Total coincidence I'm sure.
    Not delayed but provincial funding is now kicking in later than anticipated. The CoE has yet to determine how they will approach this however I'm fairly certain that construction will start largely on time (Spring 2021) with the city on the hook for the extra interest payments that will now need to be paid with the provincial funding coming later.
    It may well play out that way but it's not without risk. The most substantial risk is that the UCP has not actually promised exactly when the funding will be coming: all they've said is sometime after after 2022-23. (source). Many people seem to be interpreting this as funding starting in 2023 but it could be years later. Even if the funding does ever start to flow, there’s also the infamous guillotine clause that allows the funding to the withdrawn unilaterally with only 90 days notice.

    Even if the city does go it alone, there’s also genuine risk involved. Council has already committed to borrowing $621M under the belief that provincial funds will be coming in the form of $1000M of carbon tax revenue. Were the city to commit to borrowing that additional billion for a total of $1600M (with no guarantee when the province will come to the table) they will start to push close to their statutory debt limit under the Municipal Government Act and perilously close to their self-imposed debt limit.

    In fact, looking at the 2019-2022 capital budget, they might not even have room in their debt limit to make up the shortfall. As per the figure below, that budget included a potential range of debt required for LRT expansion of what looks to be about $800M (eyeballed) by 2023 at which time the debt limit is reached. Looking at this figure it's hard to understand how to squeeze in an additional $800M of debt to reach the $1600M required.

    Source: https://www.edmonton.ca/city_governm..._2019_2022.pdf

    This could lead to other potential risks include bond agencies downgrading the city’s credit rating (Standard and Poor’s already changed the City of Edmonton’s outlook from Stable to Negative in 2017) which would increase the cost of borrowing. There are also risks of procurement challenges too if bidders start to worry about the project not being fully financed.

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  • envaneo
    replied
    ^ Before construction happens procurement and the bidding for operations (P3?) of the WLRT needs to happen to give the City a clear path forward. Lots of time to get both done and or underway.

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  • kkozoriz
    replied
    The UCP government has delayed it once. They can do it again next year when the next cut in business taxes blows another hole in the budget. Already the budget deficit is $2 billion higher than the NDP would have run. Now double the cut in business tax from what it was this year as the rate drops from 11% to 10%. Add to that that the UCP based their budget on oil going up when, in fact, it's been stagnent or dropping in price.

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  • GizmoForMayor
    replied
    Originally posted by kkozoriz View Post
    "Delayed" until just before the next election. Total coincidence I'm sure.
    Not delayed but provincial funding is now kicking in later than anticipated. The CoE has yet to determine how they will approach this however I'm fairly certain that construction will start largely on time (Spring 2021) with the city on the hook for the extra interest payments that will now need to be paid with the provincial funding coming later.

    Leave a comment:


  • envaneo
    replied
    kkozoriz & Ian: Thanks: By that time, the money raised for the WLRT project so far might generate enough interest/revenue to get the project going again

    Leave a comment:


  • IanO
    replied
    2019 2020 2021 2022 total

    Calgary and Edmonton LRT 150,791 192,354 484,572 568,686 1,396,403

    Leave a comment:


  • kkozoriz
    replied
    "Delayed" until just before the next election. Total coincidence I'm sure.

    Leave a comment:


  • envaneo
    replied
    Ha, ha.

    So is WLRT procurement still going ahead, or is that portion of the project dead in the water?

    Leave a comment:


  • Edmcowboy11
    replied
    That's the simple version, lol.

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  • envaneo
    replied
    ^ Looks complicated

    Leave a comment:


  • IanO
    replied
    6.
    9
    Valley Line West Procurement Update
    Recommendation
    1. That the November 18, 2019, Integrated Infrastructure Services report
    CR_7711, be received for information.
    2. That Attachment 1 of the November 18, 2019, Integrated Infrastructure
    Services report CR_7711, remain private pursuant to sections 16 (disclosure
    harmful to business interests of a third party), 24 (advice from officials), 25
    (disclosure harmful to economic and other interests of a public body) and 27
    (privileged information) of the Freedom of Information and Protection of
    Privacy Act.
    Executive Summary
    On July 23, 2019, Administration advised City Council that as a result of the withdrawal
    of two of the three shortlisted proponents, Administration would re-evaluate the Valley
    Line West Procurement options and update the market sounding.
    The market feedback and analysis indicated an increased reluctance in the
    construction marketplace to take on risks relating to light rail vehicles and systems
    integration and a recognition that Owners must be willing to share, or take on, risks if
    they are to attract bidders.
    As a result, Administration has revised its procurement approach to generate the
    greatest market interest and positive value for money for the City. Administration will
    terminate the previous Design-Build-Finance-Vehicles procurement and proceed with
    two new procurements: one for the Valley Line West infrastructure as a
    Design-Build-Finance and a separate procurement for light rail vehicles.
    Attachment 1 contains commercially sensitive information of a third party which the
    City is obligated to keep confidential. It also contains advice from officials regarding
    contractual or other negotiations as well as legal advice; public disclosure may
    prejudice the City’s competitive position.
    Report
    Valley Line West Procurement Update
    On February 11, 2019, Administration presented a report to Council (Integrated
    Infrastructure Services report CR_6677), that provided an update on the Valley Line
    ROUTING - Executive Committee | DELEGATION - J. Meliefste / B. Ferguson
    November 18, 2019 – Integrated Infrastructure Services CR_7711
    Page 1 of 4
    Valley Line West Procurement Update
    West procurement strategy. Administration reported that its market sounding process
    and preliminary value for money assessment had determined that the best contract
    structure for delivering the Valley Line West project was a Design-Build, with partial
    private financing and Light Rail Vehicle Supply.
    Administration initiated the procurement process with the launch of a Request for
    Qualifications (RFQ) in March 2019. The RFQ attracted a number of interested parties
    and, following an evaluation process, Administration shortlisted three Proponent teams
    to participate in the Request for Proposal (RFP) process in May 2019.
    The shortlisted Proponents were:
    ● Flatiron | AECON | Dragados Valley Line West Joint Venture (FAD);
    ● Urban Mobility Partners (UMP); and
    ● WestLINK Group.
    In July 2019, the City received a formal withdrawal notice from Urban Mobility Partners
    and the WestLINK Group. These withdrawals left only one shortlisted proponent for the
    project.
    As a result, Administration paused the procurement process in order to reach out to
    the industry to better understand current market conditions. Administration conducted
    a new market sounding process and value for money analysis in August and
    September 2019 in order to determine the next steps.
    Market Sounding Key Findings
    The market sounding process involved detailed discussions with 24 participants,
    representing a cross-section of the industry (local, national, international). The process
    revealed that there was sufficient interest from the market to proceed with a
    competitive procurement; however, there was a shift in the market approach to risk
    and risk-sharing on large infrastructure projects such as LRT, specifically, the market
    tolerance for competitively pricing various risks, including risks related to Light Rail
    Vehicles’ supply and system integration.
    Overview of Procurement Option Analysis
    The original Design-Build-Finance-Vehicle value for money assessment was positive.
    Due to subsequent changes in market conditions, the revisited
    Design-Build-Finance-Vehicles value for money assessment is now negative. This
    assessment, coupled with the market sounding results, indicate that there is an
    increased reluctance in the construction marketplace to take on risks related to LRT
    vehicles and system integration. Owners must be willing to share, or take on, risks if
    Page 2 of 4 Report: CR_7711
    Valley Line West Procurement Update
    they are to attract bidders. As such, the Design-Build-Finance-Vehicles method is no
    longer preferred.
    Multiple procurement options ranging from re-issuing the procurement as originally
    planned or with slight modifications to the risk regime, using different forms of
    agreement and separating the infrastructure and light rail vehicle procurements were
    evaluated.
    Administration has determined that the procurement approach that will generate the
    greatest overall positive value for money and market interest is for the City is to
    terminate the previous Design-Build-Finance-Vehicles procurement and to proceed
    with two new procurements: one for the Valley Line West infrastructure as a
    Design-Build-Finance and a separate procurement for light rail vehicles.
    A detailed analysis of the procurement options is outlined in Attachment 1.
    Next Steps
    Administration is currently updating its procurement documents and preparing to
    launch the new procurement processes in early 2020. Administration will review the
    new procurement approach with industry to generate maximum interest and
    participation in preparation for the Valley Line West procurement.
    Administration will launch the infrastructure Design-Build-Finance procurement
    process by Q1 2020 and will select a preferred proponent in Q4 2020, with design and
    construction commencing immediately thereafter. Administration does not anticipate
    that this shift in procurement timelines will impact the target 2026-2027 project
    completion date.
    Enabling works such as land acquisition, access closures, building demolitions and
    utility relocations will continue throughout 2020.
    Valley Line West updated procurement schedule
    Milestone Updated Procurement Approach Schedule
    Formally conclude Design-Build-Finance-Vehicles procurement Q4 2019
    Design-Build-Finance Request For Qualification (RFQ) launch Q1 2020
    Design-Build-Finance Request For Proposal (RFP) launch Q2 2020
    Light rail vehicle procurement strategy Q2 2020
    Design-Build-Finance contract award Q4 2020
    Page 3 of 4 Report: CR_7711
    Valley Line West Procurement Update
    Budget/Financial
    The Valley Line LRT: Downtown to Lewis Farms Project (Capital Profile 16-66-7017)
    currently has approved funding of $2.61 billion for preliminary design, land acquisition,
    project procurement, construction of the infrastructure and supply of the light rail
    vehicles.
    Legal
    The City has the ability to terminate the existing Design-Build-Finance-Vehicle
    procurement process.
    Corporate Outcomes and Performance Management
    Corporate Outcome(s): Edmontonians use public transit and active modes of transportation
    Outcome(s) Measure(s) Result(s) Target(s)
    Edmontonian use public transit and
    active modes of transportation
    Journey to Work Mode
    (percent of survey
    respondents who select auto
    passenger, transit, walk,
    cycle or other)
    26.1% (2016) 25.9% (201
    Corporate Outcome(s): The City of Edmonton has a resilient financial position
    Outcome(s) Measure(s) Result(s) Target(s)
    The City of Edmonton has a resilient
    financial position
    City Asset Sustainability
    (actual expenditure on capital
    infrastructure divided by
    required expenditure)
    0.94 (2017) 1.00 (201
    Attachment
    1. Valley Line West Procurement Update (PRIVATE)
    Others Reviewing this Report
    ● A. Laughlin, Acting Deputy City Manager, Financial and Corporate Services
    ● C. Owen, Deputy City Manager, Communications and Engagement
    ● B. Andriachuk, City Solicitor
    Page 4 of 4 Report: CR_7711

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  • GreenSPACE
    replied
    Treed boulevards are currently being taken out this week on 104 Avenue and temporarily paved.

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