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