Powell River CAO recommends settlement before tax deadline
The City of Powell River (CAO) CFO recommends that council consider its annual income-anticipating borrowing bylaw, which allows borrowing before the property tax deadline.
At the October 28 Finance Committee meeting, Managing Director Adam Langenmaier presented the regulation, which aims to ensure liquidity and continuity of services to access short-term loans based on anticipated tax revenues for the year. In progress.
“This annual by-law allows the City to borrow money during the period preceding the collection of property taxes in July. Langenmaier said. “Normally our tax revenue comes in July and we spend it throughout the year. Sometimes you can run out of resources in March, April, and May, and municipalities have the option of passing income advance borrowing by-laws that allow them to access municipal finance authority cash for these situations. Once taxes are collected, these loans are repaid.
“The city only pays interest if it withdraws an amount. Until now, we have never needed these loans and have never had access to them. They are good to put in place if something goes sideways that is out of our control. “
Finance committee chairman George Doubt said this is a bylaw the board gets used to seeing each year and makes sure there is money in the bank if necessary to pay the running costs of the city.
“It’s very short term if we actually borrow the money and it will be repaid when we receive the tax revenue from the taxpayer,” said Doubt.
In a report to the committee, Langenmaier said the maximum borrowing amount allowed for the income advance loan settlement is deemed to be 75 percent of all property taxes imposed for all purposes during the previous year. . Langenmaier said 25 percent of the 2021 tax levy would amount to $ 15,158,883 in qualifying borrowings. The proposed settlement amount is $ 14.5 million.
“The city is not required to borrow funds if it is deemed unnecessary, however, it is prudent to put in place adequate measures if unforeseen problems arise,” Langenmaier said.
The committee gave unanimous consent to send it to council for the first three readings and to be considered for final adoption.