Financial Information Necessary for Bylaw Review

Circular No. 08:17
ARCS File#: 195-20

 
August 18, 2008
To: All Municipal and Regional District Financial Administrators
 
Re: Financial Information Necessary for Bylaw Review
 

Many bylaws that are sent to the Ministry of Community Development receive a financial review before they are forwarded for an approval decision by the Inspector of Municipalities. Most common among these are, for municipalities, loan authorization bylaws and, for regional districts, service establishment bylaws.
 

Certain information is required in order to complete the review; when these details are provided as part of the bylaw package, the review process is expedited and more efficient.
 

This circular summarizes the information required, in addition to the bylaw itself, for the review of these bylaws.
 

Municipalities: Loan Authorization Bylaws

• The Liability Servicing Limit Certificate: Boxes A and C should contain information from LGDE form B3 from the last fiscal year for which the LGDE review by the Ministry is complete. For example, if a local government has submitted its 2007 financial statements and LGDE reports, but they have yet to be reviewed by the Ministry, it should continue to use 2006 information until notice of the completed 2007 review has been received. The certificate contains areas to enter new and discharged debt since the end of the relevant fiscal year.
• Financial Plan: evidence that the project is or will be included in the adopted five-year financial plan for the local government. This includes both capital and operating costs, where appropriate.
• Funding Sources: an indication of the additional sources of funding to be used for financing the project including taxes, fees, grants. Confirmation of grant approvals is useful.
• Capital Budget: a capital budget which indicates that engineering and contingency costs have been factored into the capital cost.
• Assessment: if the project is to be paid for by a local area service of a municipality, the assessed values of the properties in the proposed service area by property class and the number of properties in each class.
• Cost recovery: if the cost recovery of debt servicing will include property taxation, some indication of the method of taxation that will be used; either property value or parcel taxes. The tax impact on an average residential property or the impact as a rate per $1,000 of assessment should be included, as this is information also required for property owners in the Alternative Approval Process.
• Reports: provide any staff or consultant reports that provide background information to the above information.

Regional Districts: Service Establishment Bylaws

• Financial Plan: evidence that the service is or will be included in the adopted five-year financial plan for the local government.
• Operating Budget: a budget of the anticipated revenues and expenditures for the service for the next five years. This is especially important when the service will have a large operating component, like a recreation centre. The budget should indicate the methods to be used for initial financing and ongoing cost recovery for the service.
• Capital Budget: if the service will include a large capital component, a separate capital budget that indicates that engineering and contingency costs have been factored into the capital cost. Note that when a service is being established and borrowing for a capital project will occur in conjunction, the two bylaws are reviewed as one.
• Assessment: the assessed values of the properties in the proposed service area by property class and the number of properties in each class. This is crucial when the service area is a portion of an electoral area.
• Cost recovery: if the methods of cost recovery will include property taxation, some indication of the method of taxation that will be used; either property value or parcel tax.
• Requisition limit: an indication of the calculation used to arrive at the requisition limit. The legislation requires that if both a rate per $1000 of assessment and a maximum limit are provided for, the calculations must initially be equivalent.
• Reports: staff or consultant reports that provide background information to the above information.

Original signed by:
 
Talitha Soldera, CGA
A/Director
Local Government Infrastructure and Finance