Municipalities and local authorities requiring approval to start projects or enter into financing arrangements will make application to the Local Government Committee (LGC). These include:
- local improvements;
- utility rates;
- borrowing; and
- debt limits.
Municipalities require approval from the LGC to start a local improvement project.
Municipalities and public utility boards require approval for:
- additional amounts or percentages for water and sewer services
which come into effect only after approval is given.
Municipalities and local authorities may require approval from the LGC to borrow money to fund projects or operations, or guarantee the loan of a controlled corporation. Also, public utility boards may require approval to borrow money to pay for operating costs.
Cities may apply to have a debt limit established. The SMB recommends a city have an established debt limit in order to avoid the requirement for approval of every borrowing it undertakes. A city’s debt limit is determined by its own source revenues from the previous year.
Newly updated legislation allows for municipalities other than cities to apply to the SMB to establish a debt limit that exceeds their own source revenues from the previous year. Municipalities interested in establishing a debt limit should consult with the SMB to determine the anticipated benefits.
Establishing a debt limit will allow a municipality to borrow money for a term of over three years without approval from the SMB. However, if the municipality would like to borrow or guarantee money in excess of its debt limit, approval would be required for the additional amount.
Municipalities may invest surplus money in:
- Government of Canada Bonds;
- Guaranteed Investment Certificates;
- Saskatchewan municipal securities;
- Saskatchewan school division securities; and
- deposit certificates.
Any other type of investment may require approval from the SMB.