Correspondence – Capital Regional District re: Bylaw No. 4142, Regional Parks Loan Authorization

Letter to City of Langford

January 30, 2017
File 3900-03

Mr. Jim Bowden
Chief Administrative Officer
City of Langford
877 Goldstream, 2nd Floor
Langford, BC V9B 2X8

Dear Mr. Bowden:

RE: Bylaw No. 4142, Regional Parks Loan Authorization Bylaw No. 1, 2016

Attached is a copy of CRD Bylaw No. 4142 at third reading. Please place this Bylaw on your next Council agenda with a request to give consent to the adoption of the Bylaw in accordance with Section 346 of the Local Government Act.

The purpose of the Bylaw is to authorize the borrowing of up to $6.1 Million in order to complete the E&N Rail Trail - Humpback Connector by 2019. The estimate cost to service the debt over 15 years will be approximately $507,316 per year. The estimated annual cost per $100,000 of assessed value for this debt is $0.51.

As background, please find attached staff reports to the CRD Board dated November 30 and November 9, 2016, and a staff report to the Regional Parks Committee dated October 19, 2016.

If you require additional information prior to forwarding this request to Council, or if you wish to have CRD staff present when Bylaw No. 4116 is presented to Council, please let me know.

Yours sincerely,

Brent Reems
Senior Manager
Legislative and Information Services
T 250.360.3128
F 250.360.3130
E breems@crd.bc.ca

(End of letter)

Bylaw No. 4142

CAPITAL REGIONAL DISTRICT
BYLAW NO. 4142

A BYLAW TO AUTHORIZE THE BORROWING OF SIX MILLION ONE HUNDRED THOUSAND DOLLARS ($6,100,000) TO PROVIDE FUNDING FOR COMPLETION OF THE E&N RAIL TRAIL - HUMPBACK CONNECTOR

WHEREAS:

A. The Board of the Capital Regional District adopted Bylaw No. 1749, "Regional Parks Extended Service Establishment Bylaw No. 1, 1989" for the functions of acquiring, developing, operating, and maintaining Regional Parks, subject to the Park (Regional Act);

B. The Board of the Capital Regional District requires financing completion of the E&N Rail Trail— Humpback Connector by 2019;

C. The portion of the project cost to be funded by debt servicing is the sum of Six Million One Hundred Thousand Dollars ($6,100,000), which is the amount of debt intended to be authorized by this bylaw;

D. Pursuant to the Regional District Liabilities Regulation, elector approval is not required if borrowing for a regional park service and consent on behalf of the participants is obtained pursuant to section 349(1 )(b) of the Local Government Act;

E. The approval of the Inspector of Municipalities is required under Section 403 of the Local Government Act; and

F. It is proposed that the financing of the Project is to be undertaken by the Municipal Finance Authority of British Columbia pursuant to proposed agreements between that Authority and the Capital Regional District.

NOW THEREFORE the Board of the Capital Regional District in open meeting assembled enacts as follows:

1. The Board is hereby empowered and authorized to undertake and carry out regional trail infrastructure development including completion of the E&N Rail Trail - Humpback Connection (the Project), in connection with the service established under Bylaw No. 1749, and to do all things necessary in connection with the Project and without limiting the generality of the foregoing:

   (a) To borrow upon the credit of the Regional District a sum not exceeding Six Million One Hundred Thousand Dollars ($6,100,000);

   (b) To acquire all such real property, easements, rights-of-way, leases, licenses, rights or authorities as may be requisite or desirable for or in connection with the Project.

2. The maximum term for which debentures may be issued to secure the debt intended to be created by this bylaw is fifteen (15) years.

3. This Bylaw may be cited as the "Regional Parks Loan Authorization Bylaw No. 1, 2016".

READ A SECOND TIME THIS 30th day of November 2016
READ A THIRD TIME THIS 30th day of November 2016
APPROVED BY THE INSPECTOR OF MUNICIPALITIES THIS [text truncated]
RECEIVED CONSENT OF THE PARTICIPANTS THIS [text truncated]
ADOPTED THIS [text truncated]

(Chair, Corporate Officer lines and filing with Inspector of Municipalities follow in the original document.)

REPORT TO THE CRD BOARD — MEETING OF WEDNESDAY, NOVEMBER 30, 2016

SUBJECT

Bylaw No. 4142: Loan Authorization Bylaw (Regional Parks Service)

ISSUE

As directed by the Board this report brings forward the loan authorization Bylaw No. 4142, to provide funding for completion of the E&N Rail Trail - Humpback Connector (E&N Rail Trail) by 2019.

BACKGROUND

At its meeting of November 9, 2016, the CRD Board authorized staff to develop a loan authorization bylaw for borrowing up to $6.1 million in order to complete the E&N Rail Trail - Humpback Connector by 2019 (agenda Item No. 16-1003).

This project has been included in the 2017 Financial Plan. The bylaw is being presented now in preparation for future borrowing as required, to enable timely progress toward completion of the E&N Rail Trail, which is included in the 2017 Capital Plan.

ALTERNATIVES

1. That Bylaw No. 4142, "Regional Parks Loan Authorization Bylaw No. 1, 2016" be introduced and read a first and second time, and read a third time.
2. That Bylaw No. 4142 be referred back to staff for further information.

IMPLICATIONS

It is estimated that the annual cost to service the $6,100,000 debt over 15 years will be approximately $507,316 per year based on the Municipal Finance Authority of BC (MFA) current indicative market interest rate of 2.94%. The estimated annual cost per $100,000 assessed value for this new debt is $0.51. The rates used in the analysis are estimates based on the information currently available and are subject to change.

Pursuant to the Regional District Liabilities Regulation, elector approval is not required if borrowing for a regional park service. The required approval can be obtained with the consent of at least 2/3 of the participants as per Section of 349 (1) (b) of the Local Government Act.

CONCLUSION

In its commitment to complete the E&N Rail Trail - Humpback Connector by 2019, the CRD Board has directed staff to prepare a loan authorization of $6.1 million to fund the project. The bylaw is being presented now in preparation for future borrowing as required to enable timely progress toward completion of the E&N Rail Trail by 2019.

RECOMMENDATION

That Bylaw No. 4142, "Regional Parks Extended Service Loan Authorization Bylaw No. 1, 2016" be introduced and read a first and second time, and read a third time.

Submitted by:
Rajat Sharma, MBA, CPA, CMA, Senior Manager, Financial Services

Concurrence:
Larisa Hutcheson, P.Eng., General Manager, Parks & Environmental Services
Nelson Chan, MBA, CPA, CMA, Chief Financial Officer
Robert Lapham, MClP, RPP, Chief Administrative Officer

Attachment: Bylaw No. 4142

REPORT TO CAPITAL REGIONAL DISTRICT BOARD — MEETING OF WEDNESDAY, NOVEMBER 9, 2016

SUBJECT

Supplementary Information - Funding for the Completion of the E&N Rail Trail

To consider funding options for the completion of phases 3 and 4 of the E&N Rail Trail.

BACKGROUND

At its meeting of October 19, 2016, the Regional Parks Committee recommended that the Capital Regional District (CRD) Board borrow up to $6.1 million under a new loan authorization bylaw to complete construction of phases 3 and 4 of the E&N Rail Trail - Humpback Connector by 2019 (Attachments 1 and 2).

At that meeting, staff were directed to provide additional information regarding the estimated annual costs per household of borrowing the $6.1 million, and regarding the number of roads in each municipality that the E&N Rail Trail would cross once completed.

ECONOMIC IMPLICATIONS

Completion of phases 3 and 4 of the E&N Rail Trail is estimated to cost $6.1 million. Phase 3 is estimated to cost $3.63 million. Phase 4 is estimated to cost $2.49 million. If $6.1 million were borrowed for this initiative, the total payment over a 15-year period is estimated to be $7,609,742 based on the current Municipal Finance Authority indicative market interest rate of 2.94 per cent. The annual debt servicing cost for such a loan would be approximately $507,316.

The annual cost per average household to repay the loan is estimated to be $2.72, based on the above interest rate and term, and current assessment roll data. Staff would continue to seek grant funding to support the construction of the trail and reduce the need for borrowing.

SOCIAL IMPLICATIONS

The table below and Attachment 3 show the municipal roads crossed by the E&N Rail Trail corridor in each municipality where upgrades to the crossing are required due to the trail project, and the number of upgrades remaining to be constructed. When trail or road improvements are within 30 m of a railway track at a level crossing, Transport Canada's Canada Wide Grade Crossing regulation requires that certain safety upgrades are made. Typically, warning signs and signal equipment, and in some cases barrier gates, are required to ensure user safety. Phase 3 includes one rail crossing at Atkins Road, for which required improvements are estimated to cost $450,000. Phase 4 includes 5 rail crossings, which are estimated to cost a total of $1 million.

The type of safety improvements needed at individual crossings and the associated actual costs of the crossings in Phase 4 will depend on future decisions about the speed at which the train will travel on each portion of the rail line and where the train will stop.

LEVEL GRADE CROSSINGS (All phases)

CONCLUSION

Completing phases 3 and 4 of the E&N Rail Trail is estimated to cost approximately $6.1 million. Completing these phases would provide residents and visitors with an active transportation option connecting the rapidly-growing Westshore communities to Victoria and enhance the quality of life of CRD residents.

RECOMMENDATION

That the Capital Regional District Board receive this report for information.

Submitted by: Mike Walton, Senior Manager, Regional Parks
Concurrence: Larisa Hutcheson, P.Eng., General Manager, Parks & Environmental Services
Concurrence: Nelson Chan, MBA, CPA, CMA, Chief Financial Officer
Concurrence: Robert Lapham, MCIP, RPP, Chief Administrative Officer

Attachments: Attachment I - October 19 Staff Report on Funding for Completion the E&N Rail Trail; Attachment 2 - E&N Development Plan Map; Attachment 3 - Level Grade Crossings

ATTACHMENT I — REPORT TO REGIONAL PARKS COMMITTEE (MEETING OF WEDNESDAY, OCTOBER 19, 2016)

SUBJECT

Funding for the Completion of the E&N Rail Trail

ISSUE

To consider funding options for the completion of phases 3 and 4 of the E&N Rail Trail.

BACKGROUND

The E&N Rail Trail - Humpback Connector links 6 communities within the Capital Regional District (CRD) and will be 17 km when complete. Construction of the E&N Rail Trail is taking place in phases; a map showing completed and future phases of the Rail Trail is attached (Attachment 1).

The CRD Board did not dedicate funding to this initiative as the goal was to fund the project from grants as they became available. To date, a total of $18.2 million has been granted to the CRD for the E&N Rail Trail. Staff continue to seek grant opportunities for future sections.

Phases I and 2 are substantially constructed and funding is in place to complete these sections. Segments of Phase I are located in Langford, View Royal, Esquimalt and Victoria. The CRD recently received a Bike BC grant to assist with completion of the outstanding 1 km of Phase I between Hallowell and Maplebank roads. Phase 2 of the trail, between Hallowell Road and the Four Mile Bridge in View Royal, was completed in 2015.

Phase 3 is a 1 km section in the City of Langford between Atkins Avenue and Savory School. This section of the trail will connect existing sections of the trail between Savory School and the Galloping Goose Regional Trail, creating a continuous 11 km off-street route between Langford and Victoria. Phase 4 is a 1.3 km section between Esquimalt Road and the Johnson Street Bridge.

ALTERNATIVES

That the Regional Parks Committee recommend to the Capital Regional District Board:

Alternative 1

1. That up to $6.1 million be borrowed under a new loan authorization bylaw to complete construction of phases 3 and 4 of the E&N Rail Trail - Humpback Connector by 2019.
2. That staff be directed to assess and report back on the merit and opportunities of extending the land acquisition fund beyond 2019, to enable funding of both future regional parkland acquisitions and other major parks infrastructure assets.

Alternative 2 That staff be directed to assess and report back on the merit and opportunities of extending the land acquisition fund beyond 2019, to enable funding of both future regional parkland acquisitions and other major parks infrastructure assets.

PROJECT COSTS AND FINANCING

Completion of phases 3 and 4 of the E&N Rail Trail is estimated to cost $6.1 million. Phase 3 is estimated to cost $3.63 million. Phase 4 is estimated to cost $2.49 million.

If $6.1 million were borrowed for this initiative, the total payment over a 15-year period is estimated to be $7,600,592, based on a 2.9 per cent interest rate. The annual debt servicing cost for such a loan would be approximately $506,706. If approved, the loan authorization bylaw will be prepared and brought back to the Board for approval. Staff would continue to seek grant funding to reduce the amount of internal funding required to complete the E&N Rail Trail.

The Land Acquisition Fund was established in 2000 for a 10-year period at a rate of $10 per average household assessed value. In 2010, the Fund was extended for another 10 years and the rate was increased gradually to its current level of $20 per average household value. The Land Acquisition Fund now generates approximately $3.7 million per year. The Fund expires in 2019.

The Fund is used to purchase lands for the completion of the regional parks system, as directed in the board-approved Regional Parks Strategic Plan (2012-2021) and the Land Acquisition Strategy (2015-2017). Between 2000 and 2014, the CRD, with its partners, has purchased 4,485 hectares of land totalling $48 million. The CRD contributed $35 million (73%) from the Land Acquisition Fund and partners contributed $13 million (27%). In 2015, an additional 86 hectares with a value of $2.5 million were acquired through donations and transfers from partners.

SOCIAL IMPLICATIONS

Completing phases 3 and 4 of the E&N Rail Trail provides opportunity for residents and visitors to enjoy uninterrupted pedestrian and cycling experiences. Additionally, short cycling rides and walks or longer full-day excursions are possible as a result of connections to the Galloping Goose Regional Trail. Completing phases 3 and 4 will contribute to the quality of life enjoyed by CRD residents and encourage business opportunities related to sustainable tourism. Cycling commuters will have access to a continuous corridor for travel purposes.

INTERGOVERNMENTAL IMPLICATIONS

Phase 3 will close the gap between the existing trail ending at Savory School and a new segment of trail along Atkins Road built by the City of Langford with Bike BC funding in 2016.

A section of Phase 4 from Esquimalt Road to Johnson Street Bridge through the Roundhouse area will be constructed by developers. Alignment of this section has not been confirmed with all stakeholders, including the City of Victoria.

CONCLUSION

Construction of the E&N Rail Trail was originally intended to be grant funded. Completing phases 3 and 4 of the E&N Rail Trail is estimated to cost approximately $6.1 million. Completing these phases would provide residents and visitors with an active transportation option connecting the rapidly-growing Westshore communities to Victoria, and enhance the quality of life of CRD residents. In order to expedite progress on the project independent of revenue from grants, it is recommended that approval be granted to borrow up to $6.1 million under a new loan authorization bylaw to complete construction of phases 3 and 4 of the trail by 2019 while continuing to actively seek grants to off-set the cost.

RECOMMENDATION (Regional Parks Committee)

That the Regional Parks Committee recommend to the Capital Regional District Board:

1. That up to $6.1 million be borrowed under a new loan authorization bylaw to complete construction of phases 3 and 4 of the E&N Rail Trail - Humpback Connector by 2019.
2. That staff be directed to assess and report back on the merit and opportunities of extending the land acquisition fund beyond 2019, to enable funding of both future regional parkland acquisitions and other major parks infrastructure assets.

Submitted by: Mike Walton, Senior Manager, Regional Parks
Concurrence: Larisa Hutcheson, P.Eng., General Manager, Parks & Environmental Services
Concurrence: Nelson Chan, MBA, CPA, CMA, Chief Financial Officer
Concurrence: Robert Lapham, MCIP, RPP, Chief Administrative Officer

Attachments: Attachment 1 - E&N Rail Trail - Humpback Connector - Development Map