Peel, Regional Municipality of

Geneviève Lavallée, CFA, Eric Beauchemin / 416-593-5577 ext.2277, ext.2252 / e-mail: glavallee@dbrs.com

DBRS is confirming the Regional Municipality of Peel’s (“the Region”) debentures at AAA, with a Stable trend.

The Region continued to record strong fiscal results in 2000, and preliminary results for 2001 indicate that the trend continued despite the slowdown in the North American economy.  The Region’s core surplus after capital expenditures increased to $264 million in 2000, led by continued strong taxable assessment growth, better-than-anticipated investment returns, and higher development charges revenue.  Its liquid assets continued to rise and the level of net tax-supported debt continued to fall.  The results for 2001 are expected to be similar given the ongoing good financial management by the Region and the continued strong construction activity and population growth, which has translated into another year of robust growth in taxable assessment and healthy development charges revenue.  In addition, a number of transactions related to the municipal electric utilities were completed in 2001, providing the area municipalities with significant one-time payments that have been invested to provide an ongoing income stream.

The outlook for the Region remains favourable, with the slowdown in the Canadian economy not expected to have a significant impact on the Region’s financial position.  The Region’s very strong financial position, its track record of good financial management and its strong economic fundamentals places it in an advantageous position to deal with ongoing challenges.  The most important challenge facing the Region continues to be managing the expenditure pressures of a rapidly growing population.  While many of the growth-related capital expenditures are financed through development charges, the operating expenditure requirements associated with these services must be financed through the taxable assessment base or drawing down internal funds.  As a result, annual property tax increases equal to the rate of inflation have been assumed for the medium term.  Other medium term challenges include provincial uncertainty in terms of funding, future changes in responsibility and dealing with the financial implications of any future legislative requirements.

Dominion Bond Rating Service Limited (DBRS) will publish a full report shortly that will provide additional analytical detail on this rating action. If you are interested in receiving this report, please contact us at: info@dbrs.com.