1. Update on MFABC Peter Urbanc, Chief Administrative Officer
November 2017

2. MFABC Introduction
Formed in 1970 under the Municipal Finance Authority of British Columbia Act
The MFA is independent of the Province of British Columbia
The Municipal Finance Authority’s main responsibility is to provide infrastructure financing to local government in the Province of British Columbia
In addition to providing clients with access to stable and low cost funding, we also offer competitive investment alternatives and high quality financial education
The MFA is profitable from operations and does not rely on taxpayer funding
Long term debt ratings of AAA/Aaa/AAA by S&P/Moody’s/Fitch 2

3. Our Mission is to provide clients with:
Strategic initiatives
2017 – 2018
Our Mission is to provide clients with:
Access to stable and low cost funding
Competitive investment alternatives
High quality financial education
2017 Priorities
Organizational Capacity
2016 focused on team and office expansion
2017/18 to focus on integration of new team members, training, and technology solutions
Operational Excellence
Program enhancements and possible new products
Expansion of educational opportunities
Increased client communication and collaboration with related entities
Financial Management
Expand investor base
Create formal policy on capital retention
Consider alternate funding options
Managerial Competency
Access to award winning programs specializing in BC local government financial management
Strong network of expertise readily available to share experience between all local government finance officers 3

4. MFABC’S MODEL IS TREMENDOUSLY VALUABLE TO THE BC MUNICIPAL TAXPAYER
Muni A
Muni B
Muni C
Annual issuance
$ 1,250,000,000
$ 100,000,000
$ 50,000,000
$ 25,000,000
Typical bond issue size
$ ,000,000
Underwriting fee
0.60%
0.65%
0.75%
UW Fee per 25 mln
$ ,000
$ ,500
$ ,500
Annual ratings agency fees
$ ,000
$ ,000
$ ,000
$ ,000
Legal fees per issue
$ ,500
$ ,500
$ ,500
Investor Relations (IR)
$ ,000
$ ,000
$ ,000
IR per $25 mln
$ ,000
$ ,250
$ ,000
Annual incremental interest -
0.07%
0.09%
0.12%
Present Value of incremental interest
0.56%
0.72%
0.96%
Total costs per $25 million borrowed
$ ,008
$ ,875
$ ,750
$ ,000
Costs & present value of incremental interest per $25 mln borrowed
$ ,875
$ ,750
$ ,000 4

5. FINANCING THROUGH MFABC LEADS TO SIGNIFICANT FINANCIAL SAVINGS RELATIVE TO A PRIVATE PUBLIC PARTNERSHIP APPROACH
MFA BC PUBLIC 10 YEAR BOND ISSUE
MFABC 30 YEAR PRIVATE PLACEMENT
P3 WITH PRIVATE SECTOR FINANCING
Size:
$ 100,000,000
$ 100,000,000
Interest rate
2.80%
3.60%
5.50%
Underwriting fee
0.60%
0.40%
1.75%
UW Fee
$ 600,000
$ 400,000
$ 1,750,000
Legal fees
4,250
8,500
350,000
Technical advisor -
150,000
Rating agency fees
10,000
Model auditor
Marketing
1,000
15,000
Incremental annual interest
$ 700,000
$ 2,700,000
Upfront costs (excluding interest)
$ 615,250
$ 419,500
$2,425,000 5

6. MFA pooled fund choices
Money Market
Fund
Intermediate
Fund
Bond
Fund
Interest Rate Risk & Returns Increase
Benchmark:
30-day T-Bills
1-Year T-Bills
FTC Short Term Bond Index
Key Guidelines:
Focus on high quality
Max. 366 day maturity
Max 2 year maturity
Max 7.25 years maturity
Investment Time Horizon:
0–9 months
9–24 months
24 months–5 years
$2.4 billion in assets as of December 31, 2016 6

7. New MFABC negotiated High Interest Savings Account
Over the last several years, B.C. municipalities and other MFA customers have been very reliant on local credit unions for their short-term investment needs
Credit union deposit yields have been very competitive with alternative investments given strong local demand for local business borrowing and especially home mortgages – but this is waning and relative attractiveness of deposit rates has been falling
The unlimited cudic deposit insurance scheme since 2009 led some investors to the inaccurate view that credit union deposits are fully guaranteed by the Province of B.C.
Unfortunately, this led to concentration of credit risk and over-reliance on local revenue sources by certain local government entities
MFA has conducted an RFI with Schedule I banks for a pooled High Interest Savings Account
MFA has leveraged existing relationships to garner competitive deposit rates relative to local credit unions
Currently, deposit rate of 1.71% available with CIBC, National Bank rate expected in coming weeks 7

8. MFABC Key Contacts
Peter Urbanc, Chief Administrative Officer Graham Egan, Director of Finance
Shelley Hahn, Director of Business Services
Renata Hale, Manager of Strategic Initiatives
_______________________________________________________
Uptown Boulevard
Victoria, British Columbia V8Z 0B9 Canada | P: 8