In today’s world, municipal and public sector entities must be cognizant of the issues surrounding changing social and economic aspects within their municipalities. Financing within their municipalities must include not only the needs of the rate-payers today, but the anticipated future needs of the municipality. A balance must be reached to allow for economic growth now together with advancing growth in the future.
The DD West LLP team has experience creating, reviewing, and advising on many aspects of municipal and public sector financing including:
Municipal finances must be open and transparent. Municipalities have obligations each year to budget and estimate the funds required to operate the municipality. The four main classes of expenses are:
Once the number of expenses is calculated, a rate is calculated to be levied upon tax assessable property in the municipality in order to generate revenue to cover the expenses. This is the main source of revenue for municipalities. However, other means of revenue include:
Most municipalities cannot operate on a cash alone basis. The need for capital expenditures such as building roads, water/waste treatment plants, etc. have to be financed over time by a municipality. Municipalities are granted borrowing powers under legislation. In order to act on these powers, Councils must pass borrowing by-laws. These by-laws are to be passed in strict accordance with the legislation that authorizes them.
Municipalities often use debentures and local improvements to finance debt. Many situations require municipalities to seek approval of the board who oversees municipal affairs, in order to have the borrowing approved. Lawyers at DD West LLP have represented many municipalities at hearings before these boards.