HomeMy WebLinkAboutAFC 2021-06-14 Agenda.pdfCity of Maple Ridge
Audit and Finance Committee
MEETING AGENDA
Monday June 14, 2021 from 1:00 -2:30 pm
Virtual on line meeting including the Blaney Room
Participants are asked to join the meeting using the following Zoom access information:
Meeting ID: 959 3795 9935 Passcode: 392688 Phone: 778-907-2071
https://ma pleridge -ca .zoom. us/j/9593 7959935? pwd =bm pu0VB0TWtFN U 1oZn BrM m FsdXNaZz09
1. CALL TO ORDER
2. APPROVAL OF THE AGENDA
3. ADOPTION OF MINUTES -May 3, 2021
4. DELEGATIONS -Nil
5. NEW AND UNFINISHED BUSINESS
5.1. Fee for Service Agreements
Staff report dated June 14, 2021 recommending an update of Financial Support
Process Policy No. 5.49 and Community Grants Policy No. 5.56, the rescinding of
Partnership Agreements -Leases and Fee-for-Service Proposals Policy No. 4.15,
and the drafting of a new policy to address Fee for Service Agreements be
supported.
5.2. Review of Community Amenity Contributions Programs
Staff report dated June 14, 2021 providing a background on the City's Community
Amenity Contribution programs and a financial update on the amenity contributions
collected and which amenities the funds have been allocated to.
5.3. 2O21 Investment Report -Quarter 1
Staff report dated June 14, 2021 providing information on the City's investment
portfolio for the period ending March 31, 2021.
6. QUESTION PERIOD
7. NOTICE OF CLOSED MEETING -Nil
8. ADJOURNMENT
Next Audit and Finance Committee Meeting -July 12, 2021 at 1:00 pm
QUESTION PERIOD
Question Period provides the public with the opportunity to ask questions or make comments
on agenda items. Each person will be given 2 minutes to speak. Up to ten minutes in total is allotted for Question Period.
em/
Composition
City of Maple Ridge
Audit and Finance Committee
Terms of Reference
• The Audit and Finance Committee will be comprised of the Mayor and two Councillors.
• Quorum for the committee will be two members.
• Members will be appointed annually by the Mayor.
• The Committee Chair will be elected by the Committee Members.
• The Chief Administrative Officer, or designate, and the Chief Financial Officer will attend
meetings to provide input and answer questions.
Authority
• The Audit and Finance Committee is a standing committee appointed by the Mayor.
• The proceedings of the Committee are to.be conducted in public, unless the subject matter
being considered falls within an applicable subsection of Section 90 of the Community
Charter.
• The Committee has the authority to investigate any activity of the City.
• The Committee may retain persons having special expertise to assist it in fulfilling its
responsibilities.
Meetings
• The Committee meets at least twice per year. The meetings are scheduled to permit timely
review of the annual financial statements and reports. Additional meetings may be held
as deemed necessary by the Chair of the Committee or as requested by the external
auditors.
• The Chair of the Committee will constitute a meeting as per the requirements of the
Community Charter.
• The Committee Chair will be included in the agenda setting process.
• The person designated by the Committee to act as Secretary will prepare minutes for all
meetings.
Responsibilities
• To meet with the external auditors appointed by Council and with the Finance Department
Staff to review that:
• The City has implemented appropriate systems to identify, monitor and mitigate
significant business risks;
• The City has implemented appropriate systems of internal control to ensure
compliance with legal, ethical and regulatory requirements and that these systems are
operating effectively;
• The City has implemented appropriate systems of internal control to ensure
compliance with its policies and procedures and these systems are operating
effectively;
• The City has implemented appropriate systems of internal control over financial
reporting and that these systems are operating effectively;
Rev. 10/2020
Doc#2656466
Page 1 of 2
City of Maple Ridge
Audit and Finance Committee
Terms of Reference cont'd
• The City's annual financial statements are fully presented in all material respects in
accordance with generally accepted accounting principles, the selection of accounting
policies is appropriate and the annual financial statements should be approved by
Council;
• The information contained in the City's annual report and other disclosures is accurate,
complete and fairly presents the financial position and the risks of the organization;
and
• The external audit function has been effectively carried out and any matter that the
external auditors wish to bring to the attention of Council has been given adequate
attention.
• To review interim financial reports as deemed appropriate by the Chair of the Committee.
• To recommend to Council the reappointment or appointment of external auditors.
• To review the Business Planning framework.
• To review organizational metrics.
• To inquire into any matters referred to it by Council.
Rev. 10/2020
Doc#2656466
Page 2 of 2
-~--~
maple ridge.ca
City of Maple Ridge
Audit & Finance Committee
MEETING MINUTES
The Minutes of the Special Meeting of the Audit & Finance Committee
held virtually and in the Blaney Room, City Hall on May 3, 2021 at 1:00 pm
COMMITTEE MEMBERS PRESENT
Councillor Robson*
Councillor Dueck*
Mayor Morden, Chair
COUNCIL MEMBERS PRESENT
Councillor Meadus
Councillor Yousef
STAFF MEMBERS PRESENT
Al Horsman
Christina Crabtree*
Catherine Nolan
Trevor Thompson
Darrell Denton
Scott Hartman*
Erin Mark
GUESTS
Chief Administrative Officer
General Manager Corporate Services
Corporate Controller
Director of Finance
Deputy Corporate Officer
General Manager Parks, Recreation & Culture
Clerk 3
Brian Szabo Partner, BDO Canada LLP
*Participated remotely due to the COVID-19 pandemic.
Note: Councillor Robson was not present for the beginning of the meeting.
1. CALL TO ORDER
2. APPROVAL OF THE AGENDA
R/2021-AFC-007
It was moved and seconded
That the agenda for the May 3, 2021 Audit & Finance Committee Special Meeting be approved
as circulated.
CARRIED
3. ADOPTION OF MINUTES
R/2021-AFC-008
It was moved and seconded
That the minutes of the March 8, 2021 Audit & Finance Committee Meeting be adopted as
circulated.
CARRIED
Note: Councillor Robson joined the meeting at 1:05 pm.
3.
Audit & Finance Committee Meeting Minutes
May 3, 2021
Page 2 of 2
4. DELEGATIONS -Nil
5. NEW AND UNFINISHED BUSINESS
5.1. 2020 Consolidated Financial Statements
C. Nolan, Corporate Controller, provided a presentation on the 2020 Financial Statements and
the audit completed by BD0 Canada LLP. Ms. Nolan shared the auditor's opinion statement on
the consolidated financial statements, reviewed several prior period adjustments that were
required, and provided an overview of the financial statements. Highlights included that the
results for 2020 are within the approved financial plan, the net financial position was
$124.2 million, accumulated surplus was $1.26 billion, and general revenue accumulated
surplus was $11 million. Ms. Nolan indicated that the 2020 Consolidated Financial Statements
would be provided to Council at the May 4, 2021 Committee of the Whole Meeting, and
considered for approval at the May 11, 2021 Council Meeting.
Committee members enquired about the debt that is included in the financial statements,
investment funds, and about changes in reserve fund policies.
R/2021-AFC-009
It was moved and seconded
That the staff report dated May 4, 2021 titled "2020 Consolidated Financial Statements" be
received.
CARRIED
At this point B. Szabo, Partner, BD0 Canada LLP provided a verbal overview of BD0 Canada's
LLP 2020 Audit Letter and highlighted some of the notes including impacts of C0VID, prior
period adjustments, and tangible asset management software.
Committee members asked staff about the current tangible asset management software.
6. QUESTION PERIOD -Nil
7. NOTICE OF CLOSED MEETING
The Committee determined that the Closed Meeting was not required.
8. ADJOURNMENT at 1:55 pm
Mayor Mike Morden, Chair
/em
TO:
FROM:
His Worship Mayor Michael Morden
and Members of Council
Chief Administrative Officer
CITY OF MAPLE RIDGE
MEETING DATE: June 14, 2021
FILE NO: 05-1880-20
MEETING: Audit & Finance
SUBJECT: Fee for Service Agreements
EXECUTIVE SUMMARY:
On January 12, 2021, Council received a report regarding Fee for Service Agreements and referred it
to the Audit & Finance Committee for further discussion. On January 20, 2021, the Committee
discussed the report in detail and agreed that a policy review was needed. This report provides the
Committee with recommendations for next steps.
RECOMMENDATION:
That the recommendations in the staff report dated June 14, 2021 to update the Financial Support
Process Policy No. 5.49, update Community Grants Policy No. 5.56, rescind Partnership Agreements
-Leases and Fee-for-Service Proposals Policy No. 4.15, and draft a new policy to address Fee for
Service Agreements be supported.
DISCUSSION:
a) Background Context
Staff brought a report to Council Workshop on January 12, 2021, providing information on the
history of Fee for Service Agreements in the City and current recipients of funding through this
particular funding mechanism. Council referred the matter to the Audit & Finance Committee
for further discussion. On January 20, 2021, the Audit & Finance Committee reviewed the
report, and following a comprehensive discussion, agreed that a policy review was needed.
Staff were asked to bring back recommendations in late Spring 2021.
Concerns raised by the Committee were generally categorized around accountability, duration
of agreements and ensuring there was Council oversight embedded in the process. The
Committee also expressed an interest in bringing the Community Grants policy into the review.
Following the January 20, 2021 meeting, staff identified a 1998 policy, (Policy No. 4.15
attached as Appendix A), addressing partnership agreements and incorporated it into the
subsequent review process. Having reviewed the Financial Support Process policy, the
Community Grants policy and Policy No. 4.15 addressing partnership agreements, staff
recommend the following next steps:
• Update the Financial Support Process Policy No. 5.49 as follows:
o Refine the definitions for both Grants and Fee for Service Agreements to better
clarify the differences between each funding mechanism; and
o Update the decision trees attached to the Policy to clarify intent and update
references to refer to current organizational structure and policies.
2766469 Page 1 of 2
5.1
• Update Community Grants Policy No. 5.56 as follows:
o Update the eligibility criteria;
o Update evaluation criteria to refer to Council's strategic priorities;
o Include language to require repayment of grant funding if the recipient is
unable to use the funding as outlined in the application; and
o Update reporting requirements.
• Rescind 1998 Policy No. 4.15 Partnership Agreements -Leases and Fee-for-Service
Proposals
o This policy was drafted with the Parks, Recreation and Culture operations in
mind and staff are of the opinion that the preferred approach would be to draft
a policy that encompasses the organization as a whole.
• Draft a new policy for Council consideration that specifically addresses Fee for Service
Agreements and incorporates the following:
o Eligibility criteria;
o Links to Council's strategic priorities;
o Evaluation criteria;
o Duration of agreements;
o Termination clause;
o Accountability mechanisms; and
o Council approval of initial funding and any subsequent renewals.
CONCLUSION:
Following a review of the Financial Support Process policy, the Community Grants policy, and the
Partnership Agreements policy, staff are of the opinion that updates to the Financial Support Process
and Community Grants policies are required. Staff also recommend that Policy No. 4.15 addressing
partnership agreements be rescinded and that a new policy specifically addressing Fee for Service
Agreements be drafted to address the concerns raised by the Committee regarding this funding
mechanism.
Prepared by: Catherine Nolan, CPA, CGA
Deputy Director of Fina e
----Reviewed by: revor ompson, BBA, CPA, CGA
Director of Finance
C1$0
Approved by: Christina Crabtree
('.lkt~ces
Concurrence: Al Horsman
Chief Administrative Officer
Attachments:
(A) Policy No. 4.15 Partnership Agreements -Leases and Fee for Service Proposals
2766469 Page 2 of 2
l -
Brit ish Columbia
TITLE:
Dee p Ro ots
Greater Hei gh ts
POLICY NO.
APPROVAL DATE:
POLICY STATEMENT:
Attachment A
DISTRICT OF MAPLE RIDGE
PARTNERSHIP AGREEMENTS -LEASES AND FEE-FOR-SERVICE
PROPOSALS
4.15
February 24, 1998
All proposals for partnership agreements with the municipality involving leasing land or facilities or
fee for service contracts will be reviewed in accordance with guidelines established for that purpose.
PURPOSE:
The purpose of this policy is to ensure fair and consistent treatment of proposals made to the
municipality by businesses, agencies or community groups.
DEFINITIONS:
The policy should be applied to proposals initiated by the municipality itself as well as to those
proposals initiated by others.
REFERENCE:
Guidelines for Municipal Partnerships (attached)
Page 1 of 5 Policy 4.15
Guidelines for Municipal Partnerships
PURPOSES:
The purpose of these guidelines is to ensure the fair and consistent treatment of proposals received
by or initiated by the Municipality for partnering with "not for profit" groups, agencies, or businesses.
For the purpose of these guidelines, partnerships are identified as those relationships which result in
the Municipality entering into a lease or fee for service agreement with a "not for profit" community
group, an agency, or a business for the ongoing provision of a community service.
Decision Steps:
If municipality has a leg
obligation
Negotiate Agreement
Establish best leans
Sign and monitor
agreement
If request for Municipal
resources at a net cost t
Municipality or if it is
proposed that the Distric
initiate a service not
previously provided.
Establish need
Establish proposed
seNce is within M.micipal
mandate
Ensure no duplication
Prow that M.micipal
resoun:es are required
Deteanine if the proposed
Seo.ice is a greater pliolity
than other unfunded
sel\1ces
Deteanine if the proposed
partner has required
qualifications
Detennine if a competitive
process is necessary
Establish agreement
on required tenns
including reporting
Sign and monitor
agreement
Page 2 of 5
If simple business
arrangement for use of
surplus Municipal resourc
Tender the opportunity
Select proposal pro\iding
best return
Negotiate agreement
Establish best leans
Sign and monitor
agreement
Policy4.15
1. Receive a written requestjproposal from a group to partner with the municipality.
2. If the request is for a renewal or formalization of an existing arrangement, review the history
of the relationship with the municipality to determine any legal obligations the municipality
may have as a result of previous council decisions. If there are legal obligations, develop the
required documentation to define and implement the agreement.
3. If the request is for a new agreement or relationship not previously entered into by the
municipality for a simple business relationship for use of surplus municipal resources (i.e.
such as the rental of surplus land for a commercial purpose) which does not require a
municipal contribution to meet a demonstrated community need, then establish fair market
value for the resource and provide others with a competitive opportunity to use the resource.
Once the opportunity has been advertised and bids have been received on a competitive
basis, complete the analysis, selection and final negotiation. If it is established that a service
is viable as an independent business, the municipality should determine the fair market
value of the resources the municipality is being asked to commit and ensure that this return
is achieved. Anything less than fair market value should not be considered (to ensure other
similar businesses not utilizing municipal resources are not undermined by unfair
competition.)
4. If the request is for a contribution of municipal resources at a net cost to the municipality
such as a lease of land at rates below market value or the delivery of a public service:
a) Establish the degree of need in the community for the service. Critical questions to
establish need include determining the number of residents who will benefit directly
and indirectly over the time of the agreement along with any background reports
which document the need. If an acceptable level of need is established, proceed to
the next test.
b) Establish if the proposed service fits within the municipal government mandate.
Critical questions to be asked to establish the appropriateness for municipal
involvement include determining whether there will be an indirect benefit to all
residents (regardless of their direct participation) and whether or not the Municipal
Act mandates the municipality to participate in or support the provision of the
service. Another question related to the appropriateness of municipal involvement
and the relative priority of providing the requested support is the degree to which the
proposed service meets established municipal goals and objectives. If it is
determined that the municipality has a mandate to become involved, proceed to the
next test.
c) Establish whether or not other local agencies or businesses are already successfully
meeting the needs. If there are qualified agencies or businesses who are coming
close to meeting the need, the proponent should be asked to explore specific service
gaps with them to determine if those needs which remain unmet can be addressed
by the existing group. If so, acknowledge that municipal resources are not required
to meet the need and proceed no further. If no business, agency or group is qualified
or able to meet the need, proceed to the next test. With respect to the required
qualifications, refer to Paragraph (g) below for the list of qualifications for not for
profit groups. The qualifications for commercial businesses include a requirement
that the business in question hold a valid business license, has the verifiable
capability to follow through with the work to the required standard.
Page 3 of 5 Policy 4.15
d) Establish the degree to which municipal support/subsidy is required for the service to
be viable and accessible to the general public. A long-term operational plan and
budget (three to five years) supported by comparisons to other similar services
provided in other communities (including an indication of the municipal support
provided in those communities) should be obtained to prove the service would not
otherwise be viable and to prove the requirement for municipal support. A long-term
budget should also identify the resources typically available through user fees and
other sources of revenue. The municipality should establish the degree of support
required to provide the proposed service by analyzing the operating budget in detail.
For example, if a not for profit group has agreed to raise the required funding to build
the facility, they require and they agree to cover all the operating costs, the
municipality may determine it is appropriate to contribute the land at little or no cost
and, possibly, the long-term major mechanical and structural repairs. If it is
established the revenue potential of a required service is extremely limited, the
municipality may determine that an even greater degree of support should be
provided (such as the Maple Ridge Museum.) In these cases it may well be
determined that providing the service through a not for profit organization is
preferable and more cost-effective than providing the service directly through the
municipal work force. Once the required degree of support is defined (in a municipal
budget if necessary), proceed to the next test.
e) Establish that the proposed service is a greater priority than other unfunded services
considered by the municipality. Despite the justification for supporting a proposed
service sufficient funding may not be available to provide the required level of
support. The municipality should ensure that such requests are considered at the
same time as other requests to ensure that the available funding is used to support
the service which is determined to have the highest priority. A ranking exercise
should be undertaken to establish the relative priority of all requests. If the proposed
service enjoys a sufficiently high ranking and it is established that the required
resources are available, then proceed to the next test.
f) Establish that the proponent being considered has the required qualifications. For
example, a not for profit group should prove that it is registered and in good standing
with the registrar. The group should also prove that its constitution and bylaws are
acceptable. The conditions of acceptance should include a requirement that a
majority of the group's members are local residents, that membership is open to all
residents of the appropriate age, that the group's Board of Directors is elected by the
members on a regular cycle, that there is a limit on the number of terms a board
member can serve, that the group's assets on dissolution will go either to another
similar organization located in the municipality or to the municipality itself, and that
the purposes of the organization as described in its constitution match the contract
being entered into with the municipality. Commercial businesses should only be
considered for partnering if they hold a valid business licence, can demonstrate
through references, certification and current or recent performance and/or credit
reviews and/or bonding that they have the capability of carrying out the proposed
contractual obligations. The qualification should be required in advance of the
submission of a bid for a contract. Once a group proves it is qualified, proceed to the
next test.
Page 4 of 5 Policy 4.15
g) Establish if a competitive process is necessary to ensure the most deserving
proponent is awarded the partnership. A competitive process may not be
appropriate for not for profits such as neighbourhood associations wishing to build
facilities on municipal land to serve the needs of their specific neighbourhood
populations (since there are no other neighbourhood groups serving their
neighbourhood). Other examples of not for profit groups which should not be
required to compete for a limited resource might include the Historical Society
preserving an important heritage building for a municipal museum, or a new
volunteer group established specifically by the municipality to operate a facility or
provide a needed service because a suitable organization did not previously exist.
Examples of proposals which should be made competitive include those in which the
proponents wish to partner with the municipality in order to meet their specific goals
which are distinct from the municipality's public service goals. For example, a church
group wishing to construct a facility on municipal land with the dual purpose of a
church and a public assembly area when it is not in use as a church, should compete
with others for the opportunity to use the municipal land. They should do so since it
is not within the municipal mandate to support church facilities at anything other
than fair market cost. What the municipality will receive in return for use of the
municipal land should be assessed against the fair market rent a land lease would
generate. Qualified commercial groups should compete for opportunities to partner
with the municipality given their profit motive. Sole source negotiations with potential
commercial partners should only take place where the partner is the only provider of
an essential aspect of the service. When this approach is taken, care must be taken
to ensure fair value is achieved by the municipality. A third party evaluation may be
required to establish that "fair value" has been achieved. Once an appropriate level
of competition has been carried out and a proponent is being considered, proceed to
the next test.
h) Establish agreement on the required terms of the contract. All of the standard lease
requirements must be included where leasing is involved, such as sufficient
insurance coverage naming the municipality as an insured party, re-entry on default,
lien protection, inspection, defined uses and services, reporting requirements on
activities and the provision of independently prepared or audited annual financial
statements to the municipality. The length of term of the agreement and the
conditions under which the agreement can be terminated must also be established
and will vary depending upon the initial capital investment made by the municipality's
partner. A group or company which raises the majority of the funding to build a
facility will require a long-term lease or series of options to renew which total the life
expectancy of the building to justify their efforts. Conversely, a group which
contributes very little capital will not require a lengthy term to make their investment
of volunteer time worthwhile. All agreements should include reference to a minimum
standard of service which is acceptable to the municipality.
i) Once the required terms are agreed upon, adopt the required bylaws, sign and
monitor the agreement.
Page 5 of 5 Policy 4.15
CITY OF MAPLE RIDGE
TO: MEETING DATE: June 14, 2021 His Worship Mayor Michael Morden
and Members of Council FILE NO: 01-0110-01-2021
FROM: Chief Administrative Officer MEETING: Audit & Finance
SUBJECT: Review of Community Amenity Contributions Programs
EXECUTIVE SUMMARY:
Maple Ridge currently has the following three Community Amenity Contribution (CAC) programs in
place and each were introduced with varying approaches and goals in mind:
• Albion Area Plan Density Bonus Program;
• Community-Wide CAC Program; and
• Community-Wide Density Bonus Program.
The City's first foray into CAC's was through the adoption of a Density Bonus Program in the Albion
Area Plan, which Council adopted on October 8, 2013. Subsequently, on March 14, 2016, Council
established the Community-Wide CAC Program, through the endorsement of Council Policy No. 6 .31
Community Amenity Contribution Program that was adopted on March 14, 2016.
As part of the City's ongoing commitment to transparency and to assure Council that the community
is benefitting from the collection of CACs, the purpose of this report is to provide:
• background on the City 's CAC programs;
• a financial update on all of the amenity contributions collected; and
• which amenities these funds have been allocated towards to date.
RECOMMENDATION:
For information.
DISCUSSION:
a) Background:
First, a brief overview of Community Amenity Contributions:
What are they?
Community Amenity Contributions (CACs) are enabled through Section 482(1) and (2) of the
Local Government Act, as a voluntary in-kind or cash amenity contribution agreed to by a
2785564 Page 1of7
5.2
developer and local government for a development application, typically obtained at the
rezoning stage.
There are two approaches that may be taken when creating a CAC program within a
municipality:
1) Direct cash or amenity contribution, based on a per unit or per square metre rate; and
2) A density bonus, which is an incentive-based tool to allow developments a level of density
greater than what the property is currently zoned for in exchange for in-kind cash or an
amenity. The density bonus approach is built upon the fact that a base density for each
property/parcel of land is defined for each zone in the City's Zoning Bylaw. Developers then
have the option to either retain the existing density permitted in the zone, or provide a
contribution (cash or amenity) proportionate to the increase of the bonus density.
The key difference between a direct cash/amenity CAC and a density bonus is that a direct
CAC is facilitated solely through the rezoning application process and a density bonus may
occur through a rezoning or through a development application on a property that is already
appropriately zoned.
What are the permitted uses of CACs?
CA Cs are able to be received in two forms, cash-in-lieu payment or the direct provision of an
amenity.
1. Funds contributed may be used in whole or in part for:
o civic Facilities;
o public art;
o acquisition of land for the provision of affordable or special needs housing, parks,
trails, and significant ecological features;
o park or trail construction and/or maintenance;
o affordable or special needs housing units;
o heritage conservation; and
o conservation of significant ecological features.
2. Amenities contributed may be used in whole or in part for:
o public art;
o heritage conservation;
o land for the provision of affordable or special needs housing, parks, trails, and
significant ecological features;
o affordable or special needs housing units; and
o park or trail construction or improvements.
What is the difference between CACs and Development Cost Charges (DCCs)?
Two essential differences between CACs and DCCs are: 1) existing legislative support, and 2)
the purposes for which the funds are collected. Under the Local Government Act, DCC Bylaws
must be approved by the Inspector of Municipalities before they can be legally adopted, which
is not the case with CACs.
DCCs are monies that are collected from land developers by a municipality to offset the
infrastructure expenditures incurred and to service the needs of new development. Imposed
by bylaw, the charges are stringently allocated for roads, drainage, sewers, water and parkland.
On the other hand, although CACs are permitted under the current provincial and local
2785564 Page 2 of 7
government legislation, there is no legal requirement for developers to make contributions.
Municipalities are increasingly establishing CAC programs to deliver community amenities that
are not otherwise allowable through the collection of DCCs.
Key Highlights of CAC Programs in Maple Ridge
Density Bonus in Albion Area Plan
On October 8, 2013, Council adopted amendments to the OCP and the Zoning Bylaw to
establish the Albion Area Density Bonus Program, which, wherein a per lot cash contribution is
made for each new single-detached lot created or townhouse density increase achieved using
the density bonus option, as shown in Table 1 bf::low.
Table 1: Albion Area Plan Density Bonus Options
Designation in Corresponding Den$ity llonus
Albion Area Plan Existing Zone
Low Density
Low/Medium
Density
Medium Density
RS-id -(Min.
1/2 acre lot)
RS-1b -(Min.
557m2 SF lot)
RM-1-Max. 0.6
FSR
Min. 557m2 SF lot
(similar to RS-1b zone)
Min. 371m2 SF lot
(similar to R-1 zone)
Max 0.75 Floor Space
Ratio (FSR) (similar to
RM-4 Zone)
Contribt.1tipn Ar:nour:it
$3,100 per lot less than
2,000m2 (not permitted to
be less than 557m2)
$3,100 per lot less than
2,000m2 (not permitted to
be less than 371m2)
$3,100 for each unit where
the FSR is more than 0.6
(not permitted to be more
than 0.75)
Amenity funds received from the Albion Density Bonus Program may be applied in whole or in
part towards:
• park construction;
• park maintenance;
• multi-use trail construction;
• multi-use trail maintenance;
• civic facility/community gathering place construction; and
• civic facility/community gathering place maintenance.
City-wide CAC Program
A City-wide CAC Program was approved by Council resolution on March 14, 2016, through
Council Policy No. 6.31 Community Amenity Contribution Program (Appendix A), which
established an amenity contribution framework, that includes:
2785564
• where and for what forms of development the contributions will be applied;
• the contribution rate; and
• the types of amenities the contribution may fund through a cash contribution or a
specific amenity contribution.
Page3 of7
At the March 2016 Council meeting, Council directed staff to provide a report on integrating
the newly established Policy No. 6.31 Community Amenity Contribution Program with the
existing Albion Density Bonus Program.
A review of the City-wide CAC Program and exploration of a City-wide Density Bonus Program
continued through 2018 and while no further changes have been made to Policy No. 6.31, a
City-wide Density Bonus Program was adopted into the Zoning Bylaw on December 10, 2019.
City-Wide Density Bonus Program
Table 2 below shows the residential components of the Density Bonus Program adopted into
the Zoning Bylaw on December 10, 2019.
Table 2: Residential Components of City-Wide Density Bonus Program
■ Housing Form
Eligible for Bonus
■ Townhouse
..
Apartment
Apartment
Apartment
Base Density
0.60 FSR
0.75 FSR
0.80 FSR
1.8 FSR
1.2 FSR
1.6 FSR
* Other existing density bonus options included
Maximum
Density Bonus
0.75 FSR
0.90 FSR
0.95 FSR
2.4 FSR
2.8 FSR*
3.65 FSR*
Cash Contribution Rate
$344.34 m2 ($32 ft2)
$161.46 m 2 ($15 ft2 )
$161.46 m2 ($15 ft2 )
$161.46 m2 ($15 ft2)
-----
Table 3 below shows the density bonus components of the City-wid e Density Bonus Program
adopted into the Zoning Bylaw in December 2019.
Table_ 3:■C. om. mercial Components of City-Wide Density Bonus Program . :
•
: . ... .
: .
-
Base Density
-
Maximum
Density Bonus
Townhouse Measured in terms
of height, with 7 ,5 m
or 1 storey
maximum
Apartment 1.0 FSR with existing
. density bonus
• provisions for
underground
parking and building
height above 2
storeys.**
Base height is increased to
permit 1 extra storey (2
storey maximum), to a
maximum height of 10 m.
2.8 FSR outside of Port
Haney
Cash Contribution Rate
$161.46 m2 ($15 ft2)
$161.46 m2 ($15 ft2)
** This replaces the prior bonus provisions for affordable housing.
2785564 Page4of7
It should be noted that if a development application falls within the parameters of both the
CAC and density bonus programs, both contribution rates will apply. Also of note is that any
project geared towards the permanent provision of rental housing is exempt from paying the
CAC charges is they enter into a Housing Agreement.
Evolution of CAC Programs in Maple Ridge
The graphic below details many of the steps undertaken by Council over the past several years
to establish the three CAC Programs currently in place today.
November 2012 -Council approved the Albion Area Plan be used as a pilot project for amenity zoning
2011: CAC/amenity zoning concept
arose in relation to Albion Area Plan
and in response for multiple rezoning
applications seeking higher densities
Discussion deferred to business
planni ng in fall of 2011 and Review of
Amenity Zoning approved as part of
2012 Work Plan to include a study and
information regarding Legislative
authority to collect CACs
October 2015 -Council determined the components of the Community
Amenity Program (included Decision Table)
October 2013: Council aproved OCP
Amending, Zone Amend ing and
Amenity Reserve Fund Bylaws to
establish the policy & regulatory
framework for CACs within the Albion
Area Plan boundaries
March 2016 -Council established
CAC Program, Bylaw & OCP
December 2015: Council requested
feedback on proposed CAC program
Jan to Mar 2016: Consultation by staff
June 2014: Council provided Albion with developers, community, UDI
November 2012: CitySpaces Consultant ~menity Program Update as requeste d Mar 14, 2016 : Maple Ridge CAC
rep~~ presented and Cou~cil_ Report m October 2013 Program and Policy established by
outlin!ng pr~cess to establishing an June 15, 2015 Workshop: City-wide Council and accompanying Bylaw
amenity Zoning Fram ework Amenity Zoning Overview and Options adopted
November 2012: Council approved that Report p resented to Council as
Albion Area Plan boundaries be used as outlined in Council's 2015 Work Plan
a pilot project for amenity zoning June 15, 2015 Workshop: Council
directed staff to bring a follow-up
report outlining CAC Program
December 12, 2017: Council amended
CAC Program Policy to remove Town
Centre Development and fourplexes as
exemptions
March 6, 2018 to June 4, 2019: CAC
Allocations and Options for Affordable
Housing Reports considered by Council
July 17, 2018: Council approved in-
principle draft framework of density
'-----------------1 bones regulations
June 9, 2019: Report outlined potential
Density Bonus Framework seeking
Council's direction
July 23, 2019 -CAC and Density Bonus
Analysis and Outcome follow-up report
requested by Council
December 10, 2019: City-wide Density
Bonus Program adopted into Zoning
Bylaw
Status of CAC Funds
A summary of the funds collected and the authorized draws to the end of November 2020 was
provided at the March 8, 2021 Audit and Finance Committee meeting.
2785564 Page 5 of7
The table below is the updated figures to end of April 2021.
Community (CACs) Albion (AAC) Affordable Housing
Collections
2015 210,800
2016 229,500 64,400
2017 958,200 148,800
2018 3,605,300 291,000
2019 1,852,500 86,800 256,000
2020 2,021,300 55,800 326,400
2021 (to April) 328,300 34,100 60,900
Total Collections 8,995,100 891,700 643,300
Interest 220,704 39,630 21,560
Total Collections and Interest 9,215,804 931,330 664,860
Authorized Draws
Albion Community Centre
Telosky Stadium Synthetic Turf and Fieldhouse
Additional Sheet of Ice
Total Authorized Draw
Unencumbered Balance (Funds Available)
b) Desired Outcome:
(2,600,000) (1,000,000)
(3,000,000)
(1,500,000)
(7,100,000) (1,000,000)
2,115,804 (68,670) 664,860
The Audit & Finance Committee discussed the desire to discuss potential amendments to the
CAC programs. This report is designed to inform the Committee of the current CAC context to
assist with these discussions.
c) Strategic Alignment:
CACs are a tool used to have development help pay for community amenities that will help
support growth. This aligns with the focus area of Growth in the Strategic Plan and helps
deliver on the philosophy that growth should pay for the infrastructure required for growth.
d) Citizen/Customer Implications:
CACs are a valuable tool wherein development can be leveraged to help provide community
amenities that cannot be covered through Development Cost Charges. Prior to the relatively
recent introduction of CACs in Maple Ridge, these amenity costs would have been covered
primarily through property taxation. Any changes to the CAC programs would likely have
implications to the development community.
e) Interdepartmental Implications:
While the Planning Department created the CAC programs and implements the collection of
CACs, the use of the funds from the CAC Reserves involves various departments. Most of the
amenities approved to date have been utilized for recreation facilities and community centres.
f) Business Plan/Financial Implications:
Collection of CACs is tied to development that is either taking advantage of the density bonus
provisions or requires Council approval of rezoning. In addition, collection only occurs upon
final reading of the development bylaw. As such, the collections vary for any time period.
2785564 Page 6 of 7
As of the end of April 30, 2021, the funds collected for Affordable Housing totalled
approximately $665,000; funds collected for the Albion Density Program collections totalled
approximately $930,000 and the City-wide CACs has generated $9,200,000.
The total historic and planned draws from CACs both City-wide and the Albion Density total
$8.1 million. This leaves approximately $2 million available to fund projects that fit into the
categories noted in Policy No. 6.31 itemized earlier in this report. This, along with future
collections, can either fund new initiatives or further subsidize previously approved projects,
reducing the reliance on property taxation. The use of CACs will be highlighted for discussion
as Council considers the 2022-2026 Business Plans and the associated Financial Plan.
g) Policy Implications:
CACs are set in policy and bylaw. Changes to rates, exemptions or allowable expenses would
require amendments to the policies and accompanying bylaws.
CONCLUSION:
Community Amenity Programs have become an important element in ensuring that development funds
more of the development related amenity needs of the community. CAC programs have evolved over
time and it is worthwhile reflecting on these programs and considering if any fine tuning or larger
adjustments are required.
Executive Assistant, Corporate Services a~
Approved by: Christina Crabtree
G
I Horsman
Chief Administrative Officer
Attachments:
(A) Policy No. 6.31 Community Amenity Contribution Program
(B) 2020 Amenity Contributions Report to Audit & Finance Committee (March 8, 2020)
2785564 Page 7 of 7
ATTACHMENT A
I
POLICY MANUAL
Title: Community Amenity Contribution Program
Policy No: 6.31
Supersedes:
AMENDED December 12, 2017
Authority: ~ Legislative D Operational Effective Date:
Approval: ~ Council D CMT December 13, 2017
D General Manager
Review Date:
December 2017
Policy Statement:
The City of Maple Ridge is committed to providing a variety of amenities throughout the
municipality, Including the provision of affordable and special needs housing, in a financially
sustainable manner.
The Community Amenity Contribution Program (CAC Program) is comprised of the following
components:
1. The CAC Program will apply city-wide.
2. Each CAC will be based on a contribution rate as follows:
a) $5100 per single family lot created;
b) $4100 per townhouse or other attached ground-oriented dwelling unit;
c) $3100 per apartment dwelling unit.
3. The CAC Program applies to the development of all residential dwellings, including those
that are included in a mixed-use development (such as commercial and residential) with
the following exceptions:
a) Affordable and special needs housing that are secured through a Housing
Agreement as established in Section 483 of the Local Government Act;
b) Rental housing units that are secured through a Housing Agreement established
under Section 483 of the Local Government Act will also be subject to a covenant
enacted under Section 219 of the Land Titles Act;
c) Single family residential subdivisions proposing fewer than 3 lots -only the original
lot is exempt, after which the CAC program applies to each additional lot;
d) Accessory dwelling units, such as a secondary suite or detached garden suite;
e) Duplex, triplex and fourplex dwelling units, where only one building is being
constructed -only the first dwelling unit is exempt, after which the CAC program
applies to each additional dwelling unit;
Page 1 of 3 Policy6.31
f) Courtyard dwelling units, located on a single property -only the first dwelling unit is
exempt, after which the CAC program applies to each additional dwelling unit.
4. The Density Bonus Framework established in the Albion Area Plan will continue to apply, in
addition to the city-wide CAC Program.
a) For developments that take advantage of the density bonus provisions included in
the Maple Ridge Zoning Bylaw for the Albion Area Plan, the amenity contribution
rate will be:
i) $5100 per single family lot created;
ii) $4100 per townhouse or other attached ground-oriented dwelling unit;
iii) $3100 per apartment dwelling unit;
in addition to the $3100 density bonus rate.
b) For developments that do not take advantage of the density bonus provisions
included in the Maple Ridge Zoning Bylaw, the CAC rate will be the rate established
in Section 2 of this policy.
5. The Official Community Plan may also establish additional or alternative community
amenity contribution policies, guidelines and density bonus provisions for each Area Plan.
6. Development applications that are in process (in-stream) at the time of enactment of the
CAC Program Council Policy, will:
a) be subject to the provisions of this Policy unless the applicable Official Community
Plan or Zoning Bylaw amending bylaw has received Third Reading; OR
b) be subject to the provisions of this Policy if a condition for the Policy to apply was
included in the first or second reading report of the applicable Official Community
Plan or Zoning Bylaw amending bylaw.
7. All development applications that are seeking an extension under Development
Procedures Bylaw No. 5879-1999 (as amended), may be subject to the city-wide
community amenity contribution program at the discretion of Council.
8. Council will establish one or more Reserve Funds and identify those amenities that may
benefit from the community amenity contributions.
9. Community Amenity Contribution funds received will contribute to any of the following
eligible amenities:
a) Civic facility;
b) Public art;
c) Acquisition of land for the provision of:
o Affordable or special needs housing;
o Parks
o Trails
o Significant ecological features
d) Park or trail construction and/or maintenance;
e) Affordable or special needs housing units;
f) Heritage conservation; or
g) Conservation of significant ecological features.
Page 2 of 3 Policy 6.31
10. The provision of a specific amenity, rather than a cash-in-lieu contribution may also be
considered by Maple Ridge Council. If Council determines that the provision of an amenity
is more desirable, the following list is to be used as a general guide for determining the
type of community amenity:
a) Public art;
b) Heritage conservation;
c) Land for the provision of:
o Affordable or special needs housing;
o Parks
o Trails
o Significant ecological features
d) Affordable or special needs housing units; or
e) Park or trail construction or improvements.
Purpose:
To provide direction on the implementation of a city-wide community amenity contribution (CAC)
program, including the process to determine the contribution amount.
Definitions:
• "Community Amenity" means any public amenity that provides a benefit to the residents of
the city or a specific neighbourhood as the result of increased residential density.
Key Areas of Responsibility
Action to Take Responsibility
Page 3 of 3 Policy 6.31
ATTACHMENT 8
CITYOFMAPLEHIDGE
.·~---··-··-~ •
111apleridge~ca
TO: Audit & Finance Committee MEETING DATE: March 8, 2021
FILE NO: 05-1880-20
FROM: Chief Administrative Officer MEETING: Audit & Finance Committee
SUBJECT: 2020 Amenity Contributions
EXECUTIVE SUMMARY:
This report provides a summary of the Amenity Contributions and the authorized uses of these funds for
specific projects. It should be noted that at the time of writing the financial results for 2020 were not
finalized. The 2020 Contributions shown reflect those made from January 1, 2020 to the end of November
2020.
The City has three amenity programs: Albion Area, Community Wide and Housing Affordability. Annual
collections and interest earned on these funds are summarized. Collections to date are sufficient to cover
the planned draws to fund the projects previously approved by Council. Future collections can be directed
towards initiatives within the parameters of the amenity program. Community Amenity Contributions (CACs)
spending has been focused on Parks and Recreation Infrastructure.
CACs advanced new parks and recreation infrastructure to better serve citizens' needs. CACs assist with
funding infrastructure that cannot be funded through Development Cost Charges (DCCs).· DCCs and the
rate update process will be reported on at a future Audit & Finance Committee meeting.
RECOMMENDATION:
For information only.
DISCUSSION:
a) Background Context:
This report focuses on the financial results of the Amenity Programs. The amenity programs' design
and rates are best informed through Planning Policy.
The following table shows Amenity Contributions since the inception of these programs. These
contributions assist with funding of projects specifically authorized by Council. In each case, the
project is only partially funding through Amenity Contributions.
Doc# 2555304
Page1of3
Community (CACs) Albion (AAC) Affordable Housing
.... ······collect10ns . ···········---··-·· ........ ~ ..... ~~ .....
2015 210,800
2016 229,500 64,400
2017 958,200 148,800
2018 3,605,300 291,000
2019 1,852,500 86,800 256,000
2020 (to Nov.) 669,600 55,800 159,000
Total Collections 7,315,100 857,600 415,000
Interest 211,040 30,902 19,758
Total Collections and Interest 7,526,140 888,502 434,758
Authorized Draws
Albion Community Centre {2,600,000) {1,000,000)
Telosky Stadium Synthetic Turf and Fieldhouse {3,000,000)
Additional Sheet of Ice (1,500,000)
Total Authorized Draw (7,100,000) (1,000,000)
Unencumbered Balance (Funds Available) 426,140 (111,498) 434,758
Community Amenity Contributions by Area
When the CACs were initiated, it was asked that the area of collections be tracked. The rational at
the time was likely a desire by the developers to ensure that over time the areas that contribute
benefit from the amenities.
CACs by Collection Area
Albion 1,229,000 17%
Central Haney 257,900 4%
Central Maple Ridge 355,300 5%
Cottonwood 2,839,900 39%
East Maple Ridge 6,200 0%
Rothsay 5,100 0%
Silver Valley 1,515,600 21%
Spilsburry 5,100 0%
Thornhill 10,200 0%
Town Centre 828,600 11%
Websters Corners 20,400 0%
West Haney 117,300 . 2%
West Maple Ridge 83,700 1%
Whonnock 40,800 1%
Total Collections 7,315,100 100%
Doc# 2555304
Page2of3
Future Contributions and Uses
The annual value of CACs will fluctuate with development. CACs will continue to be a significant
funding source as we are a growing community. Other than the projects already mentioned, that
are already funded with existing CAC funds, there are no further draws on the CACs included in the
5 year Financial Plan (2021-2026).
Development currently under application represents Amenity Contributions of approximately $16.5
million. The vast majority of the applications are at first or second reading. A portion of the
applications will not proceed and others may take several years.
Discussing the future use of CACs would be useful prior to setting the 2022-2026 Business
Planning Guidelines and refining the Capital Program. CACs could be committed to fund a larger
portion of existing debt funded recreation projects. This could reduce the property tax increase
needed to service the debt. Alternatively, the funds could be used to advance additional
investments in Parks and Recreation or in other areas permitted within the CAC program.
CONCLUSION:
Amenity Contributions are a relatively new funding source in Maple Ridge and provide funding for amenities
that cannot be funded through Development Cost Charges. During the Business Planning sessions, there
was significant discussion about the rate of collections and where the funds were allocated. This report
provides additional clarity on what has been collected to date and the projects that Council authorized
spending CACs on. Future amenity contributions provide Council with some flexibility to consider additional
amenities or reduce the debt servicing costs of previously approved projects.
Prepared by: r?e'vor T~CPA, CGA
Director of Finance
Approved by: Christina Crabtree
General Manager: Corporate Services
Concurrence: Al Horsman
Chief Administrative Officer
Doc# 2555304
Page3 of3
[,_-_, .•. I CITY OF MAPLE RIDGE
mapleridge.ca _
TO: Audit and Finance Committee MEETING DATE: June 14, 2021
FILE NO: 05-1615-20
FROM: Chief Administrative Officer MEETING: Audit and Finance
SUBJECT: 2O21 Investment Report -Quarter 1
EXECUTIVE SUMMARY:
The return on investment (ROI) for the City of Maple Ridge's investment portfolio was 1.1% exceeding
the benchmark of (0.1%). Money is invested and prudently managed in order to achieve the objectives
of safety, liquidity and return. The Investment of Municipal Funds Policy No. 5.44 outlines the
parameters to manage the City's investments. It also calls for regular updates to the Audit and Finance
Committee s·ummarizing the investments and any deviations from policy.
An Investment Portfolio Summary is attached which shows that the holdings are within the parameters
set in the Investment of Municipal Funds Policy. The duration of the investment holdings is shorter
term than typical to provide additional liquidity and minimize risks.
An economic and market update, as well as an article on ESG Investing (Environmental, Social and
Governance), and how this relates to the Municipal Finance Authority (MFA) Pooled Funds are attached
to this report for reference.
The MFA has increased the number of pooled funds offered and is exploring an additional fund to
provide an opportunity to increase the earnings while diversifying the investment holdings.
RECOMMENDATION:
For information only.
DISCUSSION:
a) Background Context:
Under the Community Charter, one of the categories of investments that municipalities are
permitted to purchase is debt that is guaranteed by a chartered Canadian bank. Canadian
banks continue to be very strong. However, as a result of the Financial Crisis of nearly a decade
ago, banking regulations have and continue to be introduced and/or strengthened.
2791123 Page 1 of 5
5.3
Investment returns generate a significant amount of revenue for the City, and more
importantly, the investments are safe and funds are available when needed. Council last
revised the Investment of Municipal Funds Policy No. 5.44 in June of 2011. There is currently
no need to amend the policy. Later this year, once the parameters around the new MFA Growth
Fund are announced, a review of the Investment Policy will be required.
The calculated ROI includes unrealized gains or losses due to market price fluctuations.
Including these price fluctuations is appropriate, as it more accurately reflects the value one
could receive if the investments were sold. It reflects the investment decisions with respect to
the timing of when different investment terms are entered into. The benchmarks also include
market value changes so the comparison is relevant.
As mentioned, the market value of the bonds held in our investment portfolio fluctuates. It is
important to note that all our investments will mature at par at which point they will have no
gains or losses. Market gains or losses are only realized if the bond is sold.
Several municipalities in the lower mainland share information and investment approaches.
Maple Ridge participates both with this group and on the Municipal Finance Authorities Pooled
Fund Advisory Group.
Socially Responsible Investing (SRI) and Fossil Free Funds have received a fair amount of
discussion in the media, and given the narrow parameters of the Community Charter of what
municipalities can invest in, our investment fits within these parameters. The MFA has
launched a new fund as a Fossil Free Bond Fund as well as a new Mortgage Fund. A
description of what SRI and ESG Criteria (Environmental, Social and Governance) and how they
pertain to the MFA Pooled Funds is attached for information.
A significant development underway is the opportunity to expand the investments available to
Municipalities. Municipalities in several other provinces are able to invest in a broader
spectrum of asset classes. Burnaby initiated the conversation with a UBCM resolution to bring
similar options to BC. This initiative received support from elected officials and municipal staff.
Several municipalities have been working with the Province and MFA to develop parameters
and conditions to achieve this. Much of the conversation is around governance and ensuring
municipalities understand the time horizon and volatility of different asset classes. This will
be facilitated through the MFA and is expected in late 2021. The MFA Pooled Investment Fund
Quarterly Market Update and is attached for information.
b) Business Plan/Financial Implications:
A significant portion of the funds invested are from Reserve Funds, Reserve Accounts,
Development Cost Charges (DCCs) and Water and Sewer Utility Funds. The interest earned
helps address inflationary costs. The budgets for capital projects planned are not increased
each year due to inflation. The budgets are increased, with Council approval, at the time of
tender award when the costs are more certain.
The General Revenue Fund relies on returns from investments. These returns are
conservatively budgeted. The budget for Investment Revenue was increased slightly in recent
years. A more aggressive reliance on investment earnings in the Financial Plan is not advised.
2791123 Page 2 of 5
CONCLUSIONS:
The schedules attached highlight the return on investments and how the holdings compare to the
parameters set out in the Investment Policy. There are currently no deviations from policy. The return
on investments of 1.1% exceeded the benchmark return of negative 0.1%. The negative benchmark
return is a function of longer-term interest rates increasing which reduces the market value of the
bonds.
The primary focus of our investments is safety and being able to meet our cash flow requirements.
Active management by staff, advice from our investment contacts and engagement in municipal
investment groups ensures that funds are invested appropriately and continue to produce relatively
competitive returns.
Prepared by: Treva .h mpson, BBA, CPA, CGA
Directo of Finance (CFO)
App~Crabtree
General Mana er Corporate Services
Concurrenc I Horsman
Chief Administrative Officer
Attachments:
A) Investment Portfolio ROI
B) Investment Portfolio Summary
C) MFA Pooled Investment Fund Quarterly Market Update
D) MFA -ESG and MFA Pooled Investment Funds
2791123 Page 3 of 5
Term
Long
Mid.
Short
Total
City of Maple Ridge
Investment Portfolio Return on Investment (ROI)
For Qi 2021
Investments (avg.) Return ROI Benchmark
$36,277,778 $39,639 0.4% -0.7%
20,123,307 163,291 3.3% 0.0%
153,807,814 384,527 1.0% 0.0%
$ 210,208,899 $587,457 1.1% -0.1%
Attachment A
Term means the term to maturity from the purchase date, not the term remaining to maturity. For
example, a 7 year investment bought in 2015 would always be classified as Long Term even when it
has less than a year to maturity. Short Term is a year or less, Mid. Term is over a year and less than
three years and Long Term is anything over three years.
Investment (avg.) is the average daily balance for the period.
Return or earnings are calculated differently than current accounting standards, as unrealized capital
gains (losses) are included. By taking the market price fluctuations into account, the management of
the investments are better measured. Benchmarks are calculated on the same basis allowing for a
more relevant comparison.
ROI is the annualized return on investment.
Benchmark used is the Municipal Finance Authority (MFA) Money Market Fund, MFA Intermediate
Fund and MFA Bond Fund & benchmarks MFA reports against.
2791123 Page 4 of 5
Term to Maturity
Long Term (>3 Years)
City of Maple Ridge
Investment Portfolio Summary
As of March 31, 2021
Holdings % Holdings
$ 46,000,000 23%
Attachment B
Policy Max. Within Policy
35% Yes
Mid. Term (>1 year to 3 yrs.) 3,093,882 2% 40% Yes
Short Term 151,438,725 75% none Yes
$200,532,607
Issuer Holdings % Holdings Policy Max. Within Policy
Banks
BMO $ 3,000,000 1% 25% Yes
BNS 25,130,000 13% 25% Yes
CIBC * 47,134,998 24% 25% Yes
National* 51,124,105 25% 25% Yes
TD 16,974,461 8% 25% Yes
Credit Unions None, Prov. Guarantee
Blue Shore 13,093,882 6% Yes
Envision 5,503,030 3% Yes
Vancity 15,000,000 8% Yes
Westminster 23,572,130 12% Yes
Government
Fed. None Yes
Prov. BC None, others 25% Yes
Muni/Reg. District 25% Yes
Municipal Finance Authority 25% Yes
Total $200,532,607
* The majority of the funds in both CIBC and National are in a High Interest Saving Account. The funds
are accessible within a day and as such having holdings near the policy maximum is much less of a
concern.
2791123 Page 5 of 5
Attachment C
i
Municipal Finance
Authority of BC
MFA Pooled Investment Fund Quarterly Market Update
As of March 31., 2021
Interest Rates
Global economies continued to experience strong and swift recoveries as vaccine roll-outs allowed for
lockdown restrictions to ease, and as a result, most central banks' growth projection for 2021 improved
materially. In light of the robust economic rebound, rising inflation pressures permeated the market and caused
bond yields to increase meaningfully over the quarter. The volatility in bond yields was further exacerbated by a
number of technical factors at the end of February; as a result, that month the 10-year Government of Canada
(GoC) bond yield experienced its largest one-month increase in over a decade. Goe bond yields increased
precipitously across all tenors of the yield curve during the first quarter, and the yield curve steepened as a
result of the improved economic outlook. Overall, the rise in yields is partly a function of the normalization of
yields back to pre-pandemic levels.
Looking ahead, the majority of bond market participants have revised their expectations, and now anticipate
yields will be modestly higher over the next year as a result of the improving economic outlook. Our view is
generally in line with what is priced into the bond market; however, we do believe that yields are likely to
exhibit modest volatility in the near term as rising inflation, especially in year over year measures, is likely to
contribute to investors' apprehension that central banks' commitment to allowing inflation to run higher than
2% could lead to longer term inflation risks. Ultimately, the concept of average inflation targeting could be the
correct course of action to revive the economy, but that doesn't preclude a lapse in investor confidence in the
interim.
Real Return Bonds
The market's expectations for long-term inflation (estimated as the difference in yield between a nominal and
real return bond) rose alongside nominal bond yields, moving 0.2% higher to end the quarter at 1.7%. The
damage to liquidity conditions in the real return bond (RRB) market in early 2020 has now been fully repaired,
primarily as a result of the BoC's continued support via its asset purchase program. While market-implied long-
term inflation expectations have risen, they remain below the BoC's 2% target and in line with levels of the past
decade.
Actual inflation, as measured by the Consumer Price Index (CPI), has stabilized mainly due to the recovery in the
price of oil, though it remains muted. Inflation is anticipated to print higher over the next few months, which is
in part a reflection of the current low CPI base level as a result of the significant price declines at the onset of
the pandemic. However, the anticipated higher inflation print is expected to be transitory. Overall, we believe
market-implied long-term inflation expectations are likely to continue moving higher over the medium term.
Quasi-Government Bonds
The outlook for provincial economies has gotten brighter as vaccination campaigns accelerate and government
stimulus measures continue to provide a significant boost to the recovery. That being said, the damage done to
the labour market will take some time to fully heal, and the resumption of activity in certain industries such as
the hospitality sector could be a bumpy process. As such, the provinces stayed active in the primary market,
issuing approximately $30 billion of new supply during the quarter to help mitigate any potential setbacks on
the path to recovery. Provincial bond spread levels were resilient despite the ample new supply coming to
market, with broad spreads unchanged quarter over quarter. One notable development during the quarter was
the BoC's announcement that it would let its Provincial Bond Purchase Program (PBPP) expire in May, as bond
market conditions remain robust and the liquidity environment remains healthy. Note, the Boe only bought
around $17 billion of provincial bonds since the initiation of the program last May (program size limit was $50
billion). Overall, the announcement was broadly expected by market participants and therefore had minimal
impact on provincial bond spreads.
Investment Grade Corporate Bonds
Canadian investment grade corporate bond spreads were
broadly unchanged over the first quarter. With the healthy
functioning of markets and corporate bond spreads hovering
near pre-pandemic levels, the BoC announced that it would let
its Corporate Bond Purchase Program (CBPP) expire in the
coming months. Overall, the Boe purchased 76 corporate
bonds for a total of only $250 million out of a program size of
$10 billion. Despite the fact that only few purchases were
made, the corporate bond market was able to thrive on its
own. Looking forward, there is comfort in knowing that the BoC
has the ability to re initiate the CBPP should the bond market
come under stress again. In terms of new issue supply,
corporate issuers continued to capitalize on robust demand
Corporate Bond Spreads
3_0
2-5
-Universe Corporate Bond Spread
Average Spre ad 2011-2021
o_s .__ __________ _
~ ~ ~ ~ ~ ~ ~ m ~ ~ a ~ ~ a a a ~ ~ ~ ~ ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Source: FTSE Global Debt Capital Markets Inc
from investors, with approximately $33 billion of new supply coming to market during the quarter, which is
roughly 6% ahead of last year's strong pace.
_ From a fundamental standpoint, the elevated levels of debt in the Canadian economy among both consumers
and corporations remain a key concern. Canada's household debt to gross domestic product (GDP) is one of the
fastest growing in the world, reaching about 110% in Q3 2020. Compared to our U.S. counterparts, the
divergence is unusually large -but hasn't always been. The ratio of household debt to GDP in the U.S. was 78%
in Q3 2020, about 32% lower than Canada. Only 10 years ago, Canada was flat to the U.S. As for corporations,
mergers and acqui sitions are off to their fastest-ever start to a year in Canada, driven by a combination of low
interest rates, high valuations, and an improving economic outlook. It appears as though an increasing number
of issuers are willing to assume more debt in order to access funding at low rates, even at the risk of a rating
downgrade, with the expectation of reducing leverage in the future.
High Yield Corporate Bonds
The recovery in high yield bonds extended into 2021 as high
yield spreads tightened a further 50 basis points over the first
quarter to approximately 335 basis points, well below the
peak of 1,087 basis points witnessed last spring . The broad
high yield market returned 0.9% in the first quarter. While
U.$, High Yi!!ld Bood Sproads
2500
this return seems modest, it compares favourably to
investment grade bonds which generated negative
performance as they faced the headwind of r ising interest
rates.
2000
11: 1500
e,
u
«l
~ 1000
Cf)
Investor confidence in financial markets and the companies that
issue bonds within them continued to improve during the
0
quarter. This confidence, along with a fear of higher interest rates
.,.... L.n
0 0
,!. ,!.
«l «l
;:§: 2
0)
0
,!.
(J.l
;:§:
-us High Yield Bord
Spread -Average Notmal Bear
Ma-ket Peak Spread
--.. l.Dng-term Average
Spread
-------~
in the future, prompted corporations to continue shoring up
repr f<S(l,1~ t he lCf/!k,f/\ LI$ filg!1 '(i eld l;l,o,id ln(fel( 9S ~t M ,m;h
balance sheets at affordable rates by issuing a record amount of ai, w:u . t-J qrm<ll be,wn1ilr'.:et ~xd'lll d1;,~th~g<e<1tfi!1;!;ncial,r1,i ",
high yield bonds in the first quarter. This meaningful issuance was met by
equally strong demand by yield-hungry investors in this low rate environment. In the past, issuance spikes like
this one have often coincided with increases in risk-seeking behaviours such as mergers and acquisitions.
However, high yield issuers have demonstrated reasonable financial discipline by using bond proceeds for risk-
reduction activities such as refinancing short-term bank lines, replacing existing higher coupon debt, or adding
to cash reserves.
High yield bond defaults continued to subside, having peaked last summer at 7% before improving steadily to
an annual rate of 5% by the end of the first quarter. This is still above the long-term average of 3-4%, but well
below what was feared during the early days of the pandemic. With global vaccine roll-outs underway and the
potential end to COVID-19 in the not-too distant future, we believe that the peak in defaults is behind us.
Mortgages
The social and economic restrictions imposed in response to COVID-19 have impacted many commercial real
estate tenants across Canada, but the experience has differed by sector despite widespread and significant
support from the federal government. Demand for the highest quality industrial and multi-residential
commercial mortgages has exceeded the supply . This has increased competition for new opportunities, and
mortgage spreads tightened a further 24 basis points during the first quarter as a result . The sharp rise in
underlying GoC bond yields has been supportive of higher coupons on new deals, but this has been partially
offset by tighter spreads. All-in coupon rates continue to be attractive for borrowers, as well as to lenders
relative to other income-generating asset classes.
The office sector experienced some weakness over the past year, but we continue to watch this area of the
market closely as it evolves. We are actively pursuing attractive opportunities where tenant structure is sound ,
underwriting parameters are conservative, and borrowers are strong.
Within industrial, we are biased towards the light industrial and industrial flex segments, which is positive given
these building types are adaptable to a wide variety of uses. Industrial flex space in Canada is increasingly
sought after by tech companies and retailers building out their logistics networks. We are aggressively pursuing
opportunities based on the fundamentals of this sector, but the challenge is earning a return commensurate
with the credit fundamentals in a highly competitive pricing environment.
Multi-residential assets are traditionally viewed as the most stable segment of the commercial real estate
market and have held up to that reputation through the pandemic so far. This has attracted significant capital
to be invested and has made multi-residential opportunities among the most sought-after sectors of the
mortgage market. While vacancy rates quoted in the media have focused on an uptick, this has primarily been
in the condo market, which is different from the purpose-built rental buildings that we focus on in your
mortgage portfolio. We continue view this sector favourably and believe the rollout of vaccines, resumption of
immigration, and the continued growth in employment and students returning to post-secondary institutions
will support this sector.
Within retail, we are focused primarily on properties anchored by grocery and pharmacy tenants {Consumer
Staples). Our strategy for retail properties has been to invest primarily in strip center retail anchored by grocers
and pharmacy tenants. These necessity-based tenancies are defensive in nature and have generally had
minimal disruptions and strong operating results amidst the pandemic. As a result, rent collections and
occupancy levels for our retail exposure within the fund remain strong, and delinquency rates have been low,
resulting in minimal disruptions to our mortgage payment collection. While the short-term outlook remains
uncertain, the medium-and long-term fundamentals for retail remain as they were before the pandemic,
especially in situations where there is potential mixed-use functionality. Retailers who are able to survive this
environment should be rewarded with pent-up consumer demand and high savings rates as Canadian
consumers have increased their household savings by an estimated $200 billion through 2020 and rising in
2021, according to RBC Economics.
We are pleased with the performance of borrowers in the portfolio throughout the pandemic and expect the
v;;iccine rollout and ensuing economic recovery to improve the operating environment further. We continue to
focus on opportunities in the industrial and multi-residential sectors, but remain interested in all opportunities
where reward-for-risk remains attractive. We believe that in the current competitive environment a focus on
deal structuring will allow us to mitigate potential risks and maintain the appropriate balance between reward
and risk.
Bond Market Outlook
Bond yields spiked during the first quarter as investors digested improving economic conditions, optimism
around vaccine rollouts, fresh U.S. fiscal stimulus, and rising inflationary pressures. Looking ahead, it would be
reasonable to expect a further move higher in bond yields considering the budding economic recovery and
news surrounding the tapering of bond purchase programs by central banks. While we tend to agree with the
market that bond yields will move higher from present levels, our sense is that the pace should moderate given
the still highly accommodative stance of central banks and in light of the fact that fiscal stimulus and inflation
pressures are increasingly being priced into the bond market.
Municipal Finance
Authority of BC
Attachment D i •
ESG and MFA Pooled Investment Funds
About the Municipal Finance Authority of BC
The Municipal Finance Awthority of British Columbia (MFA) believes that investment processes that
incorporate ESG factors and other broad systemic issues can lead to better investment outcomes. We are
committed to creating and offering be st-in-class investment products to local governments and have
been actively engaged in the Sustainable Inve sting landscape with the view of offering workable
investment solutions for local governments . As such, MFA will only partner with UN PRI signatories in our
pooled fund product line. Away from our Pooled High Interest Savings Accounts (PHISAs) which are
managed internally by MFA, all the MFA Pooled Investment Fund s are currently managed by Philips,
Hager and North Investment Management Ltd. (PH & N). PH & N is a signatory to the United Nations
Principles for Re sponsible Investment (UN PRI). As indicated in their most recent 2020 Assessment
Report's Summary Scorecard, the UN PRI rated PH&N an A+ across all categories:
A+
A
B
C
0
E
WhatisESG?
202 0
■ Strategy & Governance
■ List ed Equity -Incorporation
Listed Equity -Active Ownership
■ Fixed Income -Sovereign/Supronotionol/Agency
■ Fixed Income • Corporate Financial
Fixed Income -Corporate Non -Finonciol
0 RBC GAM's score
Peer median
ESG inve sting focuses on using three non-financial factors as a part of a framework in the evaluation of
companies for investment decision-making . Environmental criteria focus on stewardship of the natural
environment and its resources. Social criteria look at the company's treatment of people and impact on
societal issues . Governance criteria focuses on how an organization is presided over and its corporate
policies.
Although not an exhaustive list, potential issues are listed below:
Environmental Issues
Waste and Pollution
Gr een house gas emi ssions
Water management
Land use
Climate change risks and opportunities
Natural Capital
2021.03.23 vs
Social Issues
Health and Safety
Custom er engagement
Employee relations
Workforce and diversity
Community relations
Data protection and privacy
Governance Issues
Bribery and Corruption
Compliance and reporting
Board composition
Executive compensation structure
Donation and lobbying
Corporate ri sk management
Municipal Finance
Authority of BC
What is Socially Responsible Investing?
Socially Responsible Investing also known as sustainable, responsible, "green" or ethical investing, is any
investment strategy which seeks to consider both financial return and social/environmental good to bring
about social change.
United Nations Principles for Responsible Investment
The United Nations-supported Principles for Responsible Inve stment (UN PRI) is an international network
of investors working together to put six principles into practice . Its goal is to understand the implications
of sustainability for investors and support signatories incorporating these issues into their investment
decision-making and ownership practices . In implementing the Principles, signatories contribute to the
development of a more sustainable global financial system.
The Principles offer a menu of possible actions for incorporating environmental, social, and corporate
governance issues into investment practices across asset classes. The Principles are designed to be
compatible with the investment styles of large, diversified, institutional investors that operate within a
traditional fiduciary framework.
The 6 principles that guide the UN PRI are as follows:
1. We will incorporate ESG issues into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the investment
industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6 . We will each report on our activities and progress towards implementing the Principles.
PH&N and Responsible Investing
PH & N believes that being an active, engaged, and responsible owner is empowering in enhancing the
long-term, risk-adjusted performance of portfolios and is part of their fiduciary duty. Their approach to
Responsible Investing is comprised of three pillars and specific actions are taken under each of these
pillars to deliver on its duty of maximizing clients' investment returns without undue risk of loss .
Integrating relevant ESG factors. First, by tailoring ESG integration tools and processes to their investment
strategies. Second, by focusing on materiality, the attention is put towards those ESG factors that have
the potential to impact the value of the investment. Third, transparency and accountability are key, by
properly disclosing ESG risks and opportunities by the companies and countries in which we are invested
in, it shows that these issuers are accountable in managing their material ESG risks and opportunities,
leading to long-term sustainable performance. Fourth, through improvement and innovation , PH & N is
always exploring new and better ways to integrate material ESG factors into the investment process .
2021.03.23 vs
t>G Municipal Finance
Authority of BC
Active Stewardship. PH & N conveys its views through thoughtful proxy voting, engagement with issuers
and regulatory bodies, and collaboration with other like-m inded investors. As stewards of their clients'
assets, they are committed to ensuring that the issuers in which they invest act in alignment with the
long-term interests of their clients. This means conveying to issuers and regulatory bodies their views on
topics such as board structure, executive compen sation, gender diversity, and climate change. This is
done by employing the following three methods. First, voting responsibly at the general meetings of their
public equity holdings is an important way to act in the best interest of their clients. Second, their
investment teams meet with the issuers in which they invest on an ongoing basis. Third, they participate
in initiatives that will increase transparency, protect investo rs, and foster fair and efficient capital
markets .
Client Driven Solutions and Reporting. Transparency and accountabil ity are key to maintaining meaningful
r elationships with their clients and delivering on their fiduciary duty. Examples of such reporting:
responsible investment reports, climate -related disclosures, proxy voting disclo sures, reporting on their
Responsible Investment commitments, RBC GAM r esponsible investment survey, and ESG insights.
Fossil Fuel Free Short-term Bond Fund and ESG Integration
In addition to employing ESG integration, the Fossil Fuel Free Short-term Bond Fund does not invest in
any corporate securities of entities directly involved in the "extraction, processing and transportation of
coal, oil or na_tural gas". The Fund employs a commonly used screen that excludes fossil fuel-related
companies. Sustainalytics, an independent market leading ESG ratings firm, manages and provides the
definition and screening methodology.
2021.03.23 vs
The Fund excludes issuers that
have been 1dent1f1ed m the Carbon
Underground 200 list.
pg Municipal Finance
Authority of BC
Money Market Fund, Government Focused Ultra-short Bond Fund, Short-term Bond Fund and
ESG Integration.
All of MFA's pooled funds managed by PH&N employ ESG integration. In addition, like the Fossil Fuel Free
Bond Fund, the Government Focused Ultra -short Bond Fund (GFUS BF) does not invest in fossil fuel
related companies. The composition of allowable investments in the GFUS BF are primarily government
and government related securities and have a maximum 25% exposure to Big 6 Canadian Banks.
2021.03.23 vs