Example financial year
Here are three versions of a sample financial year for the Bridge, to show how the basic formula works. For these examples we'll assume the full $5 million of Invested Equity has been provided by the DCBC. The rest of the numbers are fairly plausible for the first year of the agreement, but have been made up for the purpose of the example.
|Component||Bad Year||Good Year||Very Good Year|
|Annual Operating Costs||$600,000||$600,000||$600,000|
|Base Return Amount||$225,000||$225,000||$225,000|
(Base Amount minus Annual Requirement)
|Additional Funds (loan from GNWT)||$845,000|
|Shared Return to DCBC||$202,500|
|Shared Return to GNWT||$202,500|
In the "Bad Year", there isn't enough toll revenue to cover all the costs for the year, leaving a shortfall of $845,000 (the negative Excess Amount). The GNWT will advance this money if necessary, but will charge the DCBC interest until it is repaid. Note that even in this case, the DCBC still get their guaranteed 4.5% Base Return.
In the "Good Year", there is enough revenue to cover everything, leaving an excess of $155,000. Any excess up to 15% of Invested Equity goes to the DCBC, so they get the money. However, if there was still any Additional Funds Outstanding balance (like the funds advanced in the Bad Year example), the money would go to paying back the GNWT for that first.
In the "Very Good Year", there is a nice whopping amount of tolls, and a big excess of $1,155,000. As in the previous example, the DCBC gets dibs on 15% of equity, and in this case there is enough to pay the full $750,000. That still leaves $405,000, which is split equally between the GNWT and the DCBC. So the DCBC in this case has made $225,000 + $750,000+ $202,500 for a total of $1.177, 500.