Ｓａｐｐｏｒｏ Ｃｉｔｙ Ｆｉｎａｎｃｅｓ

Transcription

1 Ｓａｐｐｏｒｏ Ｃｉｔｙ Ｆｉｎａｎｃｅｓ

2 Contents Overview of Sapporo... 2 Sapporo Genki Vision Stage Main Policies. 7 Fiscal & Administrative Reforms. 9 Ratings 11 Financial Conditions. 12 Municipal Bonds 22 Contact Information. 25 1

3 Overview of Sapporo 1 A City Full of Possibilities Easy Access, Efficient Distribution Home to 1/3 of Hokkaido s Population Total freight transported by vehicle in Hokkaido is 48 billion tons (2nd in Japan after Aichi Prefecture). Sapporo is a key hub in a vast network of main roads and expressways. Seoul Shanghai HongKong Otaru Muroran Hakodate Wakkanai Ishikari Sapporo Chitose Tomakomai Yuzhno-Sakhalinsk Asahikawa Obihiro Kitami Abashiri Kushiro Guam Nemuro Source: Basic Citizen Registry as of late September 28 Sapporo Population 1,898,473 Hokkaido Population 5,569,252 Percentage of Hokkaido s Population in Sapporo Approx. 34.1% 53 Daily Flights to Tokyo(as of November 28) Osaka(Kansai): 8 flights/day Osaka(Itami) : 3 flights/day Fukuoka: 3 flights/day Domestic Airport Flights to Tokyo, Haneda New Chitose 53 Fukuoka Fukuoka 46 Itami (Osaka) 29 -Total marine freight for Hokkaido is 6,, tons (3rd in Japan after Aichi and Fukuoka prefectures). Tokyo Osaka There are direct flights linking Sapporo with Seoul, Yuzhno- Sakhalinsk, Shanghai and other international destinations. Kansai (Osaka) 16 Okinawa 25 Sapporo is near many key ports and harbors such as Ishikari, Otaru, Tomakomai and Muroran. There is only a 36 minutes commute between New Chitose Airport and Sapporo Station. Nagoya: 12 flights/day Tokyo: 53 flights/day 2

4 Overview of Sapporo 2 A City Where is Continuously Growing Gross Product of City(real) Approx. 7.5 trillion 5th among govt ordinance cities Population of Approx. 1.9 Million(current) 4th among govt ordinance cities Working Population of Approx. 91, 4th among govt ordinance cities (billion yen) 7,5 Gross City Product 7,463 (1, persons) 25 Sapporo Population (1, persons) 125 Working Population 7,4 7,3 7,2 7,167 7,192 7,226 7,261 7, , , (1, persons) Source : 5 Sapporo City Annual Economic Report (Real: chain-linking method) Under 4 Population by City No Source : Population Census, Statistics Bureau, Ministry of Internal Affairs and Communications (1, persons) 1,95 1,925 1,9 1, Population Forecast Future Population Growth by City (%) (2 = 1%) Source : Population Census, Statistics Bureau, Ministry of Internal Affairs and Communications Sapporo Sendai Yokohama Nagoya Osaka Fukuoka Source : 25 Population Census, Statistics Bureau, Ministry of Internal Affairs and Communications 1, National Institute of Population and Social Security Research official data(december 23)(Actual results for 25) Sapporo Nagoya Osaka National Institute of Population and Social Security Research official data(december 23)(Actual results for 25) 3

5 Overview of Sapporo 3 A City Where People Gather Most Appealing City Major Tourist Destination No. of Tourists No. of Foreign Tourists Voted No. 1 in Japan for 3 rd straight year Festivals during every season Approx. 14 million annually Roughly doubled in 4 years Regional Brand Survey Major Annual Events Tourist Estimate Foreign Tourists Staying Overnight Regional Ranking City Prefecture Sapporo Hokkaido Late May Early June July Lilac Festival Yosakoi Soran Festival Pacific Music Festival (1, ) 1,6 1,5 1,5. (1, ) Hakodate Hokkaido 3 2 Kyoto Kyoto 4 3 Yokohama Kanagawa 5 5 Otaru Hokkaido July-Aug July-Aug Early Sept Sept-Oct Sapporo Summer Festival Sapporo City Jazz Sapporo International Short Film Festival and Market Sapporo Autumn Fest 1,4 1,3 1, ,33.2 1,41.4 1, Kobe Hyogo 7 8 Furano Hokkaido 8 7 Kamakura Kanagawa Oct-Nov Nov-Dec Sapporo Chrysanthemum Festival German Christmas Market in Sapporo 1,2 1, Karuizawa Nagano 1 9 Kanazawa Ishikawa Nov-Feb Early February Sapporo White Illumination Sapporo Snow Festival 1, (target) (target) Source : Brand Research Institute Source : Sapporo City survey Source : Sapporo City survey 4

6 Overview of Sapporo 4 A City with Few Natural Disasters Typhoon Landfalls per Year Roughly half the number of Kanto / Koshin regions Probability of Magnitude 6+ Earthquake over Next 3 Years.5% Thunderstorms 8.3 days / year Annual No. of Typhoons in Vicinity by Region (1971 2) No. of Magnitude 3+ Earthquakes Over Past 3 Years Annual Average No. of Thunderstorm Days (1971~2) (typhoons/year) (quakes) 16 8 (days) Hokkaido Tohoku Kanto/ Koshin Tokai Kinki Northern Kyushu Okinawa Sapporo Sendai Tokyo Nagoya Osaka Fukuoka Sapporo Sendai Tokyo Nagoya Osaka Fukuoka Source: 27 Chronological Scientific Tables Source: Japan Meteorological Agency s Earthquake Database Source: 27 Chronological Scientific Tables 5

7 Sapporo Genki Vision Stage 2 Creating a vibrant city that harnesses the strengths of its residents to create an exciting living environment Good environment for raising healthy and active children Overflowing with economic vitality Striving to be a city with active citizens and full of culture and pride Safe and stable, kind to both people and the environment Warm and caring for the elderly and disabled Lively and appealing, rich in culture 6

8 Main Policies 1 Attracting Businesses and Developing New Industries that Complement Sapporo s Unique Character Promoting Sapporo as a Food Town Plan to establish the Sapporo Food brand for sweets and other foods. Sapporo Style Promotion Project Create a representative brand that utilizes key designs and the city s strong image Attracting Industry Inviting IT, digital contents and bio industries, as well as call centers and other new businesses. Participated in Tokyo Big Site fair for attracting businesses together with Ishikari City, which has large areas of low-cost commercial land. Supporting the People and Industries that Drive Sapporo s Economy Genki Ganbare Loans Small loans for operations and equipment are provided to support small businesses, which make major contributions to developing the region and providing employment. Sapporo Digital Contents Market Project Since 26 the city has sponsored the Sapporo International Short Film Festival and Market in order to promote the development of a short film industry in the city. This year s festival had 2,336 entries from 76 countries and attracted 1,371 tourists (both were No. 1 among the 16 cities in Japan sponsoring similar short film festivals). Working together with Pusan, South Korea, in the three areas of filming and staff development, international joint film production and international joint film distribution. Supporting People and Companies Looking to Start New Businesses and Develop New Fields Supporting new business launched by women and members of the baby-boomer generation. Providing individual advice from coordinators, as well as other support. Holding workshops to help women and members of the babyboomer generation start their own businesses. 7

9 Main Policies 2 Boosting Capacity for Holding and Attracting Conventions Sapporo hosted 952 conventions and international conferences this year thanks to advertising, events to generate customer traffic and efforts to attract convention sponsors(57% improvement over 23) Appealing Qualities that Link Municipalities throughout Hokkaido Create a Center for Promoting Hokkaido s appealing qualities Sapporo Autumn Festival 28 Joining with municipalities throughout Hokkaido to share the charms of Hokkaido and Sapporo through food. A total of 114 municipalities participated in this event that attracted 72, visitors. Establish the Antenna Shop HUG for Hokkaido Brand Products Sells special products that are the pride of municipalities throughout Hokkaido. Used as means to transmit information about Sapporo and broadly convey the appeal of Hokkaido both inside and outside Japan Domestic Conventions International Conferences Promote Energy Conservation and New Energies Sapporo Energy Eco Project Help citizens and industry to adopt energysaving and new energy equipment. Japan s first joint project involving financial institutions and energy providers. Supporting Contributions to Society, Expanding Opportunities to Participate in Society Hatsu-ratsu Seniors Support Project Supporting a new age of meaningful activities that allow seniors to contribute more to the society. Supporting Career / Family Life Balance Project to support businesses that help employees balance their careers and family life Support for businesses creating working environments that allow employees to balance careers, personal and family lives 8

10 Fiscal & Administrative Reforms 1 Approaches to Fiscal and Administrative Reforms Fiscal year 24~26 Sapporo Genki Vision Sapporo New City Building Plan Sapporo City Office Reform City Office Managerial Resource Reform Fiscal Reform Financial Structure Reform Plan Aim of Financial Structure Reforms Reform of Financial Management Methods 6 Target: Balance sheet improvement of 26.5 billion yen Organization Status billion yen billion yen Target Period Target Approaches Fiscal year 27~21 Genki Vision Stage 2 Sapporo New City Building Plan Stage 2 Fiscal and Administrative Reform Plan Realize efficient government administration in step with the times. Switch to a sustainable fiscal structure 7~1 Improve balance by 3.6 billion yen Review organization(management of regular staff, managerial positions) Promote utilization of private sector Review affiliated organizations, others Achieved improvement of 27.3 billion yen Breakdown of improvement target (3.6bn yen) Internal efforts Project Selection & Consolidation Service Level Review Effective Asset Utilization 11.5bn yen 2bn yen 5.6bn yen 11.5bn yen Main Approaches Fiscal year 25~29 Affiliated Organization Reform Plan Eliminate three organizations including land development public corporations. Merge 8 organizations into 4. Of 182 registered temporary workers dispatched by the city, 95 will be promoted to regular positions with affiliated organizations. Eliminate 16 positions for 14 organizations through rehires and the promotion of city temporary staff to full-time positions with affiliated organizations. 9

11 Fiscal & Administrative Reforms 2 Status of Fiscal & Administrative Reform Plan Aim to eliminate the 3.6 billion balance sheet shortfall by 1. In 8 made revisions in accordance with the direction of the plan s approaches, realizing a 17.8 billion yen improvement(sustainable effect amount: 7.3 billion) Item Fiscal & Administrative Reform Plan 8 Implementation Approach with sustainable effect Internal Efforts Clerical work review (internal efficiency) Personnel expense review Account transfer reviews Project Selection & Consolidation Main Approaches (Unit : 1 million yen) Reduce general office expense and review facility operating expenses Review staffing levels, temporary worker expenses and special employee allowances Reduce expenses at public organizations, issue standardization bonds for sewage and waterworks account Items Impacting Citizens Clerical work review (service level) Make beneficiary burdens more appropriate (Review user fees, other charges) Abolish inefficient facilities Effective Asset Utilization Total Impact from Reviews Review garbage disposal fees *Start fees for disposing of household garbage from July 29 Sell land, draw down land development funds and urban development funds 1

12 Ratings Obtained debt rating from Moody s Investors Service on November 17, 28. Local Currency Rating Moody s Ratings for other Public Organizations (as of November 17, 28) Rating BCA Rating BCA Region Govt Ordinance City Aa1 (Outlook: Stable) Factors (from Moody s Investors Services press release) 1 Sapporo s overall debt burden has declined over the past four years, with the interest payment costs also trending lower. The outstanding debt balance is expected to continue shrinking steadily over the midterm with the city maintaining fiscal management that keeps the amount of new municipal bond issuance each year below the principal redemption amount. 2 Sapporo continues to cut expenses, including personnel costs and investment expense. These efforts have resulted in some major results and big fiscal effects. 3 Sapporo s investment and debt management policies, including those for affiliated organizations, are considered to be prudent, accurate and very transparent. Sapporo s credibility is a supporting factor. 4 Sapporo serves the important role of center for the Hokkaido economy and its population is expected to keep growing due to social influxes. 4 Aa1 (stable) 3 Tokyo Sapporo 4 Fukuoka Shizuoka Pref Hamamatsu Hiroshima Pref Nagoya Fukuoka Pref Sakai Fukuoka 5 Niigata Pref Kyoto Osaka 11

13 Financial Conditions 1 98~7 Revenue & Expenditures (Unit : 1 million yen) Municipal Tax 2,853 2,841 2,693 2,688 2,682 2,584 2,583 2,611 2,66 2,824 Local Allocation Tax 1,246 1,356 1,444 1,349 1,248 1,157 1,125 1,128 1,131 1,18 Municipal Bonds 1, Treasury / Prefecture Disbursements 1,27 1,488 1,212 1,239 1,276 1,392 1,468 1,415 1,327 1,44 Others 2,3 2,196 2,38 2,44 2,69 2,57 2,162 2,141 2,131 1,896 Total Revenue 8,534 8,852 8,44 8,535 8,215 8,19 8,67 7,918 7,684 7,67 Personnel 1,266 1,295 1,274 1,266 1,195 1,185 1,149 1,145 1,121 1,13 Public Assistance 1,128 1,195 1,183 1,244 1,334 1,491 1,589 1,636 1,657 1,717 Debt Servicing Investment Expense 2,98 2,19 1,675 1,633 1,492 1,129 1, Other 3,228 3,367 3,347 3,436 3,199 3,38 3,288 3,286 3,254 3,136 Supplies Subsidies Transfers Total Expenditures 8,485 8,778 8,325 8,464 8,136 8,41 8,3 7,882 7,644 7,588 Balance(Revenue- Expenditure) Rounded to the nearest 1 billion yen

14 Financial Conditions 2 Revenue Municipal tax has been growing and accounting for a larger portion of the general account. Implementing special measures to reduce the amount of unpaid tax. Tax collection rate has been steadily increasing. (1 mil yen) 1, 8, 6, 4, 2, (%) ,19 8,67 7,918 7,684 3,449 3,63 3, , ,157 1,125 1,128 1,131 1,18 2,584 2,583 2,611 2,66 2,824 Tax Collection Rate 7, , Municipal Tax Local Allocation Tax Bonds Others Municipal Tax Ratio (Fiscal & Administrative Reform Plan target) (%) (Target) Example of Policy to Increase Tax Revenue Promote Development of the City Center Constructing an underground pedestrian area near Sapporo Station has linked the three areas of Sapporo, Odori and Susukino and stimulated economic activity for the city overall. Numerous above-ground private sector facilities are being rebuilt. This type of private-sector urban development is expected to boost tax revenue and have a big impact on Sapporo s economy. Sapporo Station Area City linked by underground pedestrian space Unaffected by weather Easily accessible for everyone including the disabled Approaches for Improved Tax Collection Odori Station Area New 3-Year Plan for Recovering Unpaid Taxes(8-1) Promote a planned approach for recovering unpaid taxes involving thorough progress management. Examples include the use of Internet-based asset auctions, asset seizures and a year-round nighttime tax consultation center (open every Thursday). 13

15 Financial Conditions 3 Expenditures General account expenditures have fallen for six straight years. The ratio of mandatory expense(personnel + public assistance + debt servicing)has been increasing, but personnel and debt servicing expenses are expected to peak and then begin declining in 9 and 1, respectively. Investment expense(normal construction projects + disaster recovery + unemployment countermeasures)has been in a downward trend due to efforts to restrain public works investment. (1 mil yen) 9, 7,5 6, 4,5 3, 1,5 8,41 8,3 7,882 7,644 7,588 1, , ,665 1,612 1, ,129 1, ,636 1,657 1, , , (%) ,185 1,149 1,145 1,121 1, Personnel Social Assistance Debt Service Normal Construction Investment/ Financing/Loans Transfers other Mandatory Expense Ratio Investment Expense Ratio 14

16 Financial Conditions 4 Balance of ~24 billion yen in 19 Funds Maintain level of 1 billion yen as of end of 1 Cash portions which exceed necessary amounts are drown down 71.8 billion yen Land Development Fund (Est. September 1969) 14.3 billion yen Fiscal Adjustment Fund (Est. April 1964) 19 billion yen Others(15 funds) billion yen Sinking Fund (Est. September 1978) 16.3 billion yen Urban Development Fund (est. March 1989) Steady Accumulation based on Rules Since 3 surplus funds from sinking funds that have not reached the draw down(maturity)period have been used to help hold down the issuance of refinancing bonds. The sinking fund is only used for its intended purpose of lowering debt, not as a general financing source to offset income shortfalls. The amount used in 7 was 1 billion yen (savings of about 3 million yen by reducing refinancing bond issuing fees, other steps). Used to fund large projects Total: 19 funds trillion yen :2.5 billion yen Fiscal Adjustment Fund Balance (1 mil yen) (1 mil yen) 1,4 1,2 1, Sinking Fund Balance 1,236 1,213 1,15 1,178 1,74 (433) (482) (514) (34) (157) Borrowing from fund shown in brackets() 15

17 Financial Conditions 5 Revenue & Expenditures for General / Special Accounts and Balance Sheet The general account has a net surplus of 6.7 billion yen. Of this, 45 million yen was added to the Fiscal Adjustment Fund. The national health insurance deficit was reduced by more than 2%. (Unit : mil yen) General Account Revenue 86, , ,433 76,719 Expeditures 82, , , ,78 Gross Inc & Exp 3,76 3,69 4,77 1,939 Funds carried over 2,836 2,12 1,754 1,72 Net Balance 87 1,489 2, Reserves ,2 45 Expenditure 197,86 23, , ,6 81,141 85,81 6,613 6, Difference -7,773-6,153-1,628-2,438 1,674 1,686 Funds Soil Erosion Projects Parking Public Bonds (Unit : 1 mil yen) Welfare Fund for Mothers and Children Revenue 1,235 1, , , Expenditure 965 1, , , Difference May not be an exact total as figures are rounded. May not be an exact total as figures are rounded. Balance Sheet(as of March 31, 27) When comparing the consolidated balance sheet that includes all affiliated organizations (all accounts, 3 associations, 1 independent administrative organization, 1 public corporation, 25 affiliated organizations)with the balance sheet for all accounts (general, special, corporate), assets are 1.2X and debts are 1.3X. This means that the fiscal conditions of affiliated organizations have little impact on Sapporo s overall fiscal standing. (Unit : 1 mil yen, %, multiple) 5 Consolidated 6 Consolidated Change 6 All Accounts Comparison w ith All Accounts A Ratio B Ratio B-A C Ratio B-C B/C Assets 48, , , Tangible fixed assets 44, , , Investments 1, , , Liquid assets 1, , , Deferred assets Debts 23, , , Fixed debts 21, , , Liquid debts 1, , , Net assets 24, , ,

18 Financial Conditions 6 Financial Status of Corporate Accounts Sapporo has six corporate accounts. The three regional public corporations are all land development public corporations(plan to abolish in 14). Rapid Transit (Subway) and waterworks projects are in the black. Earnings are also improving for the central wholesale market and sewage projects. Corporate Accou nts (Unit : million y en) 3 regio nal public corporations Prof itable Rev enue and Expenditures Borrowing & Lending Balance Sheet Prof its ,362 2,225 1,772 2,217 1,266 1,254 48,23 47,73 42,988 42,582 43,265 42,696 4,733 3,589 Operating prof it 17,32 16,881 1,469 1,523 1,7 1,46 39,494 39,278 42,313 42,6 43,68 42,391 4,716 3,568 Non-operating prof it 3,253 3, ,733 8, Special prof it Expenditures Net 21,169 21,91 4,364 2,919 1,27 1,27 47,888 46,347 41,655 39,58 44,197 43,41 4,662 3,523 Operating expense 19,724 19,72 3,935 2,329 1,256 1,255 32,254 31,887 33,213 33,13 32,424 32,268 4,659 3,521 Non-operating expense 1,379 1, ,634 14,46 8,382 6,35 11,712 1, Special loss Assets , ,355 1,333 3, ,945 35,223 39,74 38,69 3,41 3,55 421, ,3 33, , , ,794 19,69 18,76 Fixed assets 29,746 29,441 34,974 35,232 2,788 2, , ,63 315, ,35 844, , Liquid assets 4,795 5,386 4,1 2, ,9 2,94 14,655 12,321 17,7 14,65 19,677 18,748 Debt 3,253 3, ,21 181,63 12,631 14,258 14,86 14,17 16,41 15,416 Fixed debt 1,393 1, , ,733 5,182 7,897 6,124 9,717 5, 4,45 Liquid debt 1,86 2, ,834 4,33 7,449 6,361 8,736 4,453 11,41 1,966 Capital 31,691 31,555 38,881 37,852 3,195 3, ,77 232, ,86 315,97 846, ,624 3,279 3,345 Capital funds 35,169 34,723 29,639 29,132 1,6 1,75 399, ,9 216, ,49 363, , (corporate bonds) 3,497 3,42 23,392 22, , , , , , ,98 Surplus -3,478-3,168 9,242 8,72 1,595 1, , ,7 11,744 14,48 482,576 49,11 3,259 3,325 Hospital project assets include def erred accounts. Hospi tal Central Wholesale Market Streetcar Rapid Tran sit (Subway) Waterwo rks Sewerag e Land Development Public Corp 17

19 Financial Conditions 7 Rapid Transit (Subway) Account The long downward trend for passenger numbers bottomed in 3 and has since started to recover. In 99 the net loss hit 27.6 billion yen, but since then the account has steadily improved thanks to management streamlining and reduced interest on project debt. The first profit in 25 years(net profit of 3 million yen)was achieved in 6. In 8 the first budget surplus in 33 years was achieved. Avg Daily No. Subway Passengers and Size of Rapid Transit (Subway) Account Annual Net Loss(minus sections = surplus) (1 mil yen) (1, people) Accumulated losses have been shrinking Insurance service personnel making progress in collecting late payments. 7 collection rate improved to 87.93%(+1.64 from previous year) Net Loss Improved collection of late payments Avg daily No. of Passengers 666 cases 33,721, yen(property Survey : 6,598 cases) 98 ~97:Results 8 : Initial budget 7121 cases 61,293, yen(property Survey : 13,862 cases) National Health Insurance Account (1 mil yen) Accumulated Losses Targets in 1-year Sapporo City-Operated Subway Project (initial (results) (results) (results) (results) budget) 62 7 (Unit : 1 mil yen) Operating balance Operating balance before amortization Amount Transferred from General Account (1 mil yen) Goal Current balance Bad debts Improvement year total Return to surplus Eliminate all bad debt

20 Financial Conditions 8 Financial Indicators Financial Capability Indicator Debt Service Ratio (%) Govt ordinance city average Sapporo Govt ordinance city average Sapporo The financial capability indicator for Sapporo is below the average for other government ordinance cities, but has been in upward trend recently. (%) Current Balance Ratio Sapporo s current balance ratio, a benchmark of financial health, has remained below the average for government ordinance cities Govt ordinance city average Sapporo The current balance ratio for Sapporo is calculated with borrowing from the sinking fund considered as refinancing bonds The debt service ratio has consistently remained below the average for government ordinance cities. The debt service ratio for Sapporo is calculated with borrowing from the sinking fund considered as refinancing bonds. No. of General Administrators per 1, Citizens and Laspeyres Index (Federal civil servants = 1) (people) Number of general administrators per 1, citizens is lowest among all government ordinance cities. The Laspeyres Index has also remained below the average for government ordinance cities Employees(govt ordinance city avg.) Laspeyres Index(govt ordinance city avg.) Employees(Sapporo) Laspeyres Index(Sapporo) 19

21 Financial Conditions 9 Primary Balance The bond issuance amount is kept within a range equivalent to the amount of principal to be repaid on outstanding bonds for that year. The percentage of the standard financial scale held by the primary balance has remained at a fixed level*. General definition (Total revenue-city income)-(total expenditures-principal and interest) Definition under Fiscal & Administrative reform plan (Total revenue - City income)-(total expenditures - only principal) 6.7% based on the initial budget for 7 when the Sapporo Fiscal & Administrative Reform plan was enacted. Primary Balance(general account) (1 million yen) (%) General Definition(A) Definition under Fiscal & Administrative Reform Plan(B) (A) Standard financial scale (B) Standard financial scale

22 Financial Conditions 1 Financial Health Assessment Ratios for 9 Results None of the fiscal health assessment ratios for 7 results exceeded the standards. 19 年度決算に係る健全化判断比率は 基準を超える比率はなし Real debt service ratio ranked 4 th among government ordinance cities(weighted average of 14.2%), and the future 実質公債費比率は政令市第 burden ratio ranks 7 th (weighted 4 位 average ( 加重平均 of 28.7%) 14.2%) 将来負担比率は同 7 位 ( 加重平均 28.7%) In calculating the financial deficit ratio there are no public corporation accounts generating deficits. Deficit Ratio Consolidated Deficit Ratio Debt Service Ratio Future Burden Ratio Fiscal health assessment ratio for 7 results (-.31%) (-3.8%) 1.8% 156.9% Fiscal health assessment ratio for 6 results (-.61%) (-4.13%) 1.7% 156.% Financial health restoration standard 11.25% 16.25% 25% 4% Fiscal reconstruction standard 2% 3% 35% All local governments are required to calculate ratios for assessing their financial health in accordance with the Law regarding the Fiscal Health of Local Public Entities. 21

23 Municipal Bonds 1 Amount of Newly Issued Bonds and Outstanding Balance The upper limit for new bond issuance in the general account is set at the prevailing redemption amount. General account outstanding bond balance is expected to be under one trillion yen by end of 1. Municipal Bond Issuance and Outstanding Balance Outstanding balance(1 million yen) 11,2 Issuance amount (1 million yen) 2,9 2,25 11, 1,824 2, 1,8 1,6 1,4 1,568 1,382 1,483 1,161 1,258 1,625 1,75 1,5 1,25 1,2 1, 9, , ,6 9,4 1,951 1,941 1,721 1,948 1,485 1,86 1,228 1,569 9,926 1, Corporate/special account balance General account balance New issuance / general account New issuance / all accounts Municipal bond issuance / all accounts(includes refinancing bonds) For outstanding balance, the amount in the reserve fund for lump-sum redemption at maturity is seen as the redemption and borrowing from funds is seen as part of the municipal bond amount

24 Municipal Bonds 2 Public Subscription Bond Issuance Fund procurement mainly via public subscription issuance Public subscription bonds(mainly 5-year and 1-year) account for 34% of the total issuance amount for all accounts and 54.8% for the general account. A fixed amount is issued each year, including refinancing bonds. No issuance of private placement bonds from 2. 7 Municipal Bond Issuance (by funds) All Accounts General Account 4.1%.%.% 4.9%.1%.% 14.8% 38.2% Total Total 29bn 34.% 12.3bn yen 54.8% yen 3.2% 18.8% Govt fund Japan Finance Corporation for Municipal Enterprises Joint issuance bond Bank underwritten bonds Others Public subscription bonds Public Subscription Bond (all accounts)issuance by Maturity Public Subscription / Private Placement (all accounts)issuance by Maturity ,912 2,628 2,73 1,445 4,72 4,52 4,37 4,22 9 8,62 1,2 8,468 1,3 7,993 1,4 7, (plan) yr 5-yr 2-yr 3-yr 4-yr Issuance(1 million yen) 7 1,89 4,52 1,4 7,564 2, 4, 6, 8, 1, Private placement 1-yr 5-yr 2-yr 3-yr 4-yr Balance(1 million yen) 23

25 Municipal Bonds 3 Public Subscription Bond Issuance Conditions Balanced and consistent issuance throughout the year. In 9 plan to issue roughly the same amount as in 8 with roughly the same issuance schedule. Quarter Ⅰ Ⅱ Ⅲ Ⅳ Issuance Month April No. Maturity Issuance Yield No. Maturity Issuance Yield No. Maturity Issuance Yield May year 1bn yen 1.4% year 1bn yen 1.45% Jun year 1bn yen 2.% year 1bn yen 1.55% year 1bn yen 1.93% 4x 2y 2-year 1bn yen 2.42% Jul year 2.5bn yen 1.12% year 2bn yen 1.24% year 3bn yen 1.6% Aug Sept year 1bn yen 1.77% year 1bn yen 1.18% Oct year 1bn yen 1.76% Nov year 1bn yen 1.8% year 1bn yen 1.64% Dec year 1bn yen 1.21% (planed) 1-year 1bn yen Jan year 2bn yen 1.43% Feb year 2bn yen 1.12% year 4bn yen.82% (planed) 3-year 3bn yen 2 x 2y 2-year 1bn yen 2.31% 3 x 2y 2-year 15bn yen 2.22% (planed) 2-year 1bn yen 24

26 Contact Information City of Sapporo, Finance Bureau, Finance Department, General Affairs & Funds Management Section TEL : FAX : kousai@city.sapporo.jp URL : The purpose of these materials is to explain the financial conditions of Sapporo to investors considering purchasing Sapporo municipal bonds. The intent is not to sell a particular bond or to solicit buyers. 25