Municipal Finance Authority of British Columbia

A Credit Union for Local Government The MFA was formed in 1970 to promote the financial well-being of local governments throughout British Columbia

Regional District – Purpose?  Geographical areas  Coordinate common infrastructure needs: ~ Sewer, water, transportation  Each municipality has a representative on the Regional District Board

MFA Governance 9 Trustees Annually elected from the Members of the Authority Chair Annually elected from The Members of the Authority 35 Members Annually appointed from the Regional Districts 27 Regional Districts Representing 156 Municipalities

MFA – At a Glance Trustees10 2.Staff Size9 3.Total Debt managed - Annual debt issuance - # of issues outstanding $3,581 million $ million approx. 200

MFA – At a Glance Total Investments Managed$1,300 million 5.Operating Fund: Revenues - Tax Based - Expenditures $2,406, % of revenues $1,699,000

MFA – At a Glance ClientsAll Programs: Municipalities, Reg. Districts, Utilities, E-COMM, Reg. Hospitals, TransLink Optional Programs: Universities, Colleges, School Districts, First Nations and other Associations

Credit Ratings Provincial Moody’sS&P Municipal Finance Authority AaaAAA Province of BC Aa1AA+ Province of Alberta AaaAAA Province of Saskatchewan Aa3A+ Province of Manitoba Aa2AA Province of Ontario Aa2AA as of January 2005

Credit Ratings Provincial Moody’sS& P Municipal Finance Authority AaaAAA Province of Quebec A1A+ Province of New Brunswick A1AA Province of Nova Scotia A3A- Province of Prince Edward Island A1A+ Province of Newfoundland A3A- Canada AaaAAA as of January 2005

MFA Programs  Capital Financing  Pooled Investments Bond Fund Intermediate Fund Money Market Fund  Interim Financing  Leasing  Municipal Investment Plan

Capital Financing

MFA Capital Financing Program The basic purpose of the capital financing program is to lend cash for capital projects at an interest rate set by the MFA The MFA can offer competitive rates because:  Collective borrowing results in larger bond issues that are easily traded and therefore more attractive to bond investors  AAA credit rating – the highest rating possible – allows the MFA to raise funds in even the most difficult markets

MFA Capital Financing Program The MFA structure is collective yet flexible:  With the use of optional financial products local government has the ability to set different rates than the interest rate set by the MFA For example if your project is for a 15 year term but the current MFA bond issue is only for 10 years, you can request a financial product that will secure a rate for the full 15 year term

What is MFA’s borrowing costs?  MFA’s borrowing cost is the same as the Province of BC  All 210 Members, regardless of size, receive this interest rate

Does MFA Need Collateral?  No collateral needed  MFA security is based upon General Credit of the municipality

Pooled Investment Program

MFA Pooled Investment Program Three programs for Local Government’s investment needs:  Bond Fund – for investments of more than three years  Intermediate Fund – for investments from one to three years  Money Market Fund – for investments of less than one year For MFABC Members to invest surplus cash at competitive rates with great liquidity and limited risk

MFA Pooled Investment Funds – Usage ($ x 1,000)

Leasing Program

MFA Leasing Program For members who wish to lease equipment, but do not want to get tied into costly, long-term agreements For members who wish to lease equipment, but do not want to get tied into costly, long-term agreements Lease assets at interest rates below prime Rates = Bank Prime less 1%  The MFA oversees the program and provides low- cost funds to an independent lease administrator  Clients not locked-in: can payoff on one day’s notice without penalty

Monthly Usage $ millions Leasing Program Usage Overall January, December,

MFA Leasing Program

Interim Financing Program - Short Term Loans -

MFA Interim Financing Program For communities who need access to short-term funding for capital projects or operating budgets The Interim Financing program can lend you money in as little as 24 hours Clients are not locked-in: can pay off on one day’s notice, without penalty Short term funds at lower than the prime rate Rates = Bank Prime less 1.25%

Interim Financing Program  Revenue Anticipation ~ Regional Hospital Districts – 9 months to repay ~ Municipalities/RD’s – 1 year to repay ~ School Districts – 1 year to repay  Short Term Capital ~ Capital projects to be repaid within 5 years  Temporary Borrowing ~ Done under loan authorization bylaw for capital projects destined for long term financing (5+ yrs)

Monthly Usage $ millions Interim Financing Program January 1998 to Date

AdditionalPrograms

Community Workshops  free service; voluntary  help municipalities with economic game plans  attempts to address economic challenges

Len Traboulay Education Fund

Municipal Investment Plan What is the plan?  A group RRSP / Investment Program negotiated by the MFA  All municipal employees, elected officials and their spouses / partners throughout BC are eligible  A variety of ways to contribute to the plan including: ~ convenient contributions through payroll ~ deductions for municipal employees

Municipal Investment Plan How did the MFA become involved? The MFA was approached by both mutual fund companies and municipal staff asking if an investment plan could be offered to BC’s elected officials and municipal staff

Rates of Return Retail PlanMFA Perigee Global Bond2.37 %3.00 % TDAM Cdn Bond Index14.92 %15.77 % Fidelity True North14.49 %14.70 % Prices based on December 31, 2004 Year to date results

2006 MFA Staff SteveShelleyGrahamAllison JaneLornaRenataMeagan

Municipal Finance Authority of British Columbia