Financial Overview

October 22, 2009

1. Economic Update2. Financing Strategies

Multi Sport FacilityEMS HeadquartersBrookdale WatermainRINC ProjectsSecondary Waste Water Treatment FacilityInfrastructure Ontario

3. Progress Fund

Overview

Economic Update

Consumer Price Index (CPI)

2008 2009 2010 2011

Consumer Price Index (year over year) 2.4% 0.2% 1.4% 2.3%Core CPI (excludes food & energy) 1.7% 1.7% 1.6% 2.1%

*Source CIBC World Markets - Sep '09

Forecast*

The Bank of Canada has a target for inflation (CPI) to be maintained between 2% and 4%.

Interest Rates

July '08

Oct '08

Dec '08

Jan '09

Mar '09

Apr '09

Jun '09

Jul '09

Sept '09

Oct '09

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Bank of Canada Overnight RateChartered Bank Prime Rate

July '08 Oct '08 Dec '08 Jan '09 Mar '09 Apr '09 Jun '09 Jul '09 Sept '09 Oct '09

Bank of Canada Overnight Rate 3.00% 2.50% 1.50% 1.00% 0.50% 0.25% 0.25% 0.25% 0.25% 0.25%Chartered Bank Prime Rate 5.00% 4.50% 3.50% 3.00% 2.50% 2.25% 2.25% 2.25% 2.25% 2.25%

Summary of Recent Interest Rate Cuts by the Bank of Canada

Short term interest rates are at historical lows. The Bank of Canada has committed to keep the overnight rate at current levels until July 2010. There is a risk that interest rates will rise in the later part of 2010 depending on economic indicators such as inflation (CPI).

Financing Strategies

Multi Sport FacilityEstimated Project Cost:

Land $ 1,321,921Engineering, Design, Consulting 1,367,500Other Project Costs 997,667Estimated Class “D” Construction Budget 28,751,000

Total $ 32,438,088

Sources of Funding:Federal Funding $9,221,465Provincial Funding 9,221,465“3 + 1” Fundraising Commitment 2,000,000City of Cornwall 11,995,158

Total $ 32,438,088

Multi Sport Facility con’t

Financing required $11,995,158

20 Year Term 25 Year Term 30 Year Term$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$11,995,158 $11,995,158 $11,995,158

$6,994,998

$9,367,372 $11,788,812

Principal

Interest

Multi Sport Facility con’t

EMS Headquarters

Estimated Project Cost:Land $ 0Engineering, Design, Consulting 403,495Estimated Class “D” Construction Budget 4,696,505

Total $ 5,100,000

Sources of Funding:Federal Funding $1,700,000Provincial Funding 1,700,000City of Cornwall 1,700,000

Total $ 5,100,000

EMS Headquarters con’tFinancing required $1,700,000

Rate Annual Payments

20 Year Term 4.84% $135,00050% = $67,500

25 Year Term 5.04% $121,10050% = $60,550

30 Year Term 5.14% $112,40050% = $56,200

* Rates effective October 19, 2009

NOTE: This could be financed by annual lease

payments charged to EMS. The lease payments

will be shared 50% with the Ministry of Health

and the remaining would be shared between

the City of Cornwall and the SD&G Counties at

the cost sharing ratio.

Annual Principal & Interest Payments

Brookdale Watermain

Estimated Project Cost:Total $ 2,100,000

Sources of Funding:Federal Funding $ 700,000Provincial Funding 700,000City of Cornwall 700,000

Total $ 2,100,000

NOTE: The City’s portion of the cost for this project could be funded by the Waterworks 2010 budget.

RINC ProjectsEstimated Project Cost:

Multi-Purpose Room (Aquatic Centre) $ 250,000Gymnasium (Aquatic Centre) 1,850,000Splash Pad - St. Theresa Park 250,000Lights – Reg Campbell Park 225,000

Total $ 2,575,000

Sources of Funding:Federal Funding $ 857,475Provincial Funding 857,475City of Cornwall 860,050

Total $ 2,575,000

RINC Projects con’t

NOTE: Annual principal and interest payments could be funded via the Parks and Recreation operational budget.

Project City Portion

Multi Purpose Room (Aquatic Centre) $83,500Gymnasium (Aquatice Centre) $617,900

$701,400

Splash Pad - St. Theresa Park $83,500Lights - Reg Campbell Park $75,150

$158,650

These two projects could befinanced through a long termloan see below.

These two projects could befunded in the 2010 CapitalBudget for Parks &Recreation.

Secondary Waste Water Treatment Facility

Estimated Project Cost:Total $ 55,500,000

Sources of Funding:Federal Funding $18,500,000Provincial Funding 18,500,000City of Cornwall 18,500,000

Total $ 55,500,000

Secondary Waste Water Treatment Facility con’t

Approximate Financing required $11,260,000

The City has a restricted reserve for the Secondary Waste Water Treatment Facility. In 2009, there was a contribution to reserves in the amount of $950,000. If the same approximate budget was established in 2010, 2011 & 2012 there should be the capability to match the same contribution to reserves without having a significant increase in sewer rates.

Secondary Waste Water Treatment Facility con’t

The annual principal and interest payments above could be funded through the Sewer budget. These payments could be offset by the amounts that have already been incorporated in sewer rates that were used historically as contributions to the reserve.

Project Summary

Total Projects = $96,713,088

Long Term Financing:Multi Sport $11,995,158EMS 1,700,000RINC 701,400WWTP 11,260,000Total $25,656,558

Infrastructure Ontario

Provides the most competitive rates for municipalities for long term financing up to a term of 40 years

Fixed rates are guaranteed for the term of the loan Fixed rate loans are “closed” meaning there is no ability to make lump

sum payments or prepay the loan Construction loans are available for a term of up to 5 years at a floating

rate which is currently less than 1% A construction (variable) loan can converted to a long term loan at any

time, this can also be done in increments or as one lump sum The approval process takes 6 to 8 weeks once a completed application

has been submitted by The City of Cornwall

www.infrastructureontario.ca

Progress Fund

Past Utilization of the Progress Fund Interest

Current Status of Progress Fund & Future Commitments

There is a commitment to use interest from the Progress Fund as a contribution to the Hospital Reserve in the amount of $4,400,000. The City of Cornwall is paying monthly installments of $200,000 and will continue until July 2012.

History of Investment Income on the Progress Fund