DocumentsBylawApr 19, 2021Pages 269–270
BYLAW NO. 1977 - Revenue Anticipation Borrowing Bylaw No. 1977, 2021
Revenue anticipation borrowing bylaw (Bylaw No. 1977) authorizing short-term borrowing for cash flow; background report attached and scheduled for readings.
Key facts
- Bylaw No.: 1977 (Revenue Anticipation Borrowing)
- Pages: 269-270
- Listed for first, second and third readings (background report attached)
BYLAW NO. 1977 - Revenue Anticipation Borrowing Bylaw No. 1977, 2021
2nd Floor · 877 Goldstream Avenue · Langford, BC Canada · V9B 2X8
T · 250-478-7882 F · 250-478-7864
Staff Report to Council
Date: 19/04/2021
Department: Finance
Subject: Revenue Anticipation Borrowing Bylaw – Bylaw No. 1977
Commentary
Bylaw No. 1977 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. 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.
Options
- That Council give first, second, third reading to “Revenue Anticipation Borrowing Bylaw No. 1977, 2021” ; or
- That Council not proceed with Bylaw No. 1977.
Respectfully Submitted,
Submitted by:
Michael Dillabaugh, CPA, CA Director of Finance
Concurrence:
Marie Watmough, Manager of Legislative Services
Concurrence:
Braden Hutchins, Director of Corporate Services
Concurrence
Darren Kiedyk, Chief Administrative Officer
CITY OF LANGFORD
BYLAW NO. 1977
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.
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. 1977, 2021".
READ A FIRST TIME this day of April, 2021.
READ A SECOND TIME this day of April, 2021.
READ A THIRD TIME this day of April, 2021.
ADOPTED this day of May, 2021.
MAYOR
(Certified Correct)
CORPORATE OFFICER