Revenue Anticipation Borrowing Bylaw timing

For those municipalities that have a revenue anticipating borrowing bylaw in place, I was wondering why it must be redone each year? Why is it generally at the end of the fiscal year? It sounds like the timing of borrowing funds would be impacted by the collection of revenue from taxation. So if we wanted to borrow, say in August, and we have collected nearly all of our property taxes for the current year our unpaid taxes per 177(2) would be much smaller than if we had borrowed in May-July (based on adoption of annual property tax bylaw) and again different from borrowing between Jan-April per 177(3) which would use 75% of all property taxes imposed for all purposes in the preceding year. It also doesn't sound like the borrowing must be paid by the end of the current year - it states when property tax revenue is collected is when repayments must be made. Any help in understanding would be appreciated. Thank you

Comments

  • Our bank requires this bylaw in place to allow us to have overdraft protection on our account. We generally do this during the first meeting of the fiscal year to cover that year. I have yet to use it but for example if there was an error and funds did not get transferred as they should have been and we needed to use our overdraft or we need to make a big payment prior to some of our short term investments maturing, we could use this bylaw.

    The borrowing must be repaid as soon as the anticipated funds are collected. So in most cases for municipalities - July 2 or Regional Districts - Aug 2. Either way, not intended to carry through the year end.

    If you are borrowing in August, I would suggest that would be short term borrowing, not under the revenue anticipation.

  • You have the Revenue Anticipation bylaw in place in case for some reason you cannot collect taxes on time. Examples of when delayed collection could occur are:
    - a strike which would delay sending out the tax invoices.
    - a natural disaster which prevent notices going out or payment coming in or both.
    Most places never have to use it but it is there if you do need it. In some cases the bank requires it for your overdraft if you have one.
    Most places I have worked do the bylaw in early January for the current year.

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