BYLAW NO. 1910: Revenue Anticipation Borrowing Bylaw No. 1910, 2020

Staff Report to Council

Date:

04/05/2020

Department:

Finance

Subject:

Revenue Anticipation Borrowing Bylaw – Bylaw No. 1910

Commentary

Bylaw No. 1910 would give authority to temporarily borrow up to $20 million to cover current expenses until taxes are collected.

The main source of revenue for local government is property taxation. Taxes are levied at the beginning of June and are due on the first business day in July. Expenses on the other hand are incurred throughout the year. This means that municipalities may face a cash flow shortage in the first six months of the year. The Community Charter resolves this issue by giving Council the authority to borrow temporarily and repay any amounts borrowed out of tax collections when they are received.

While the bylaw authorizes up to $20 million in borrowing, only the amount(s) actually required to cover current expenses will be borrowed. Council should be aware, in previous years the City of Langford has not needed to use the borrowing from the Revenue Anticipation Borrowing. In previous years the limit of the borrowing bylaw has been $10 million dollars. Staff are recommending increasing this to $20 million for 2020 given the current COVID-19 situation, however, at this point it is not anticipated that the City will need to use any of this borrowing capacity as we are in a healthy cash flow position.

Legal Implications

Revenue anticipation borrowing is authorized by section 177 of the Community Charter

Options

1. That Council give first, second, third readings and adoption to “Revenue Anticipation Borrowing Bylaw No. 1910, 2020” ; or
2. That Council not proceed with Bylaw No. 1910

Respectfully Submitted,

Submitted by:

Michael Dillabaugh, CPA, CA Director of Finance

Concurrence:

Adriana Proton, Manager of Legislative Services

Concurrence:

Darren Kiedyk, Chief Administrative Officer

CITY OF LANGFORD

BYLAW NO. 1910

A BYLAW TO PROVIDE FOR THE BORROWING OF MONEY IN ANTICIPATION OF REVENUE.

WHEREAS the municipality may not have sufficient money to meet current lawful expenditures of the municipality before receipt of current year tax revenues;

AND WHEREAS it is provided by Section 177 of the Community Charter, that Council may, by bylaw, provide for the borrowing of money that may be necessary to meet current lawful expenditures;

AND WHEREAS the debt outstanding shall not exceed the total of the unpaid taxes for all purposes imposed during the current year and the money remaining due from other governments;

AND WHEREAS Ministerial Order No. M083 under the Emergency Program Act permits the Council of the City of Langford to adopt a bylaw on the same day that it receives third reading.

NOW THEREFORE the Council of the City of Langford, in open meeting assembled, ENACTS AS FOLLOWS:

The Council is hereby empowered and authorized to borrow upon the credit of the municipality, an amount or amounts not exceeding the sum of Twenty Million dollars ($20,000,000) as the same may be required and to pay interest thereon at current market rates.

All taxes of the current year when levied or so much thereof as may be necessary, shall, when collected, be used to repay the money so borrowed.

This Bylaw may be cited as "Revenue Anticipation Borrowing Bylaw No. 1910, 2020".

READ the FIRST, SECOND and THIRD time and ADOPTED the day of May, 2020

MAYOR

(Certified Correct)
CORPORATE OFFICER