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Apply to Borrow Money for a Municipality

The Local Government Committee (LGC) reviews and makes decisions about municipal applications to borrow money. 

Below are the steps to apply for municipal borrowing.

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1. Overview

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.

The LGC will review and make a decision regarding the application.

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2. Guidance

A municipality must apply to the LGC to borrow money if the borrowing:

  • will cause the municipality to exceed its debt limit;
  • is not repayable within three years after the borrowing is made (if the municipality hasn’t established a debt limit); or
  • is to be secured by the issue of debentures of the municipality.

Approval-in-Principle

A municipality may apply to the LGC for approval-in-principle in cases where total funding hasn’t been finalized, or all required permits and approvals haven’t been obtained. 

Debentures

A municipality may borrow through debenture if a bylaw for borrowing through debenture is approved by the LGC.

Debentures are available from the Municipal Finance Corporation of Saskatchewan (MFC).  Through discussions with the financial analyst, the municipality will contact the MFC and receive a letter of offer indicating the debenture interest rate and repayment schedule.

After the debenture is approved by the LGC, it will be sent to the municipality to sign, seal and register.  Once this is complete, the municipality will return the debenture to the LGC to sign and seal along with the fee, calculated per the schedule below:

Base Fee

+

Debenture Face Fee

+

Coupon Fee

x

GST

=

Total Debenture Fee

<=$12,500

$187.50

$100

$10/coupon

5% (GST)

*for Debenture Face Fee and Coupon Fee only

>$12,500 but<$100K

1.5%

>$100K but<$200K

$1,500

>$200K but<$500K

0.75%

>$500K but<$1M

$3,750

> $1M

0.375%






Base Fee + ((Face Fee + Coupon Fee) x GST) = Total Debenture Fee (to a maximum of $5,000)

Local Improvements

A municipality may borrow money to finance a local improvement project if:

  • you prepare a Final Assessment Schedule and financing summary; and
  • a bylaw for borrowing to finance a local improvement is approved by the LGC.

Borrowing to Finance Operating Expenses

A municipality may borrow money to finance operating expenditures if the amount borrowed, along with other operating loans, is less than the increase in tax revenue and grants for that year.

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3. Eligibility

You may apply to the LGC if you submit:

  • a completed Application for Municipal Borrowing; and
  • Criteria:
  • a certified copy of the resolution of council requesting authorization to borrow; and
  • a certified copy of a bylaw to incur debt that has received first reading from council.

If you are borrowing by way of debenture, after you receive LGC approval, you will submit a letter from the financial institution indicating the interest rate and repayment schedule.

If you are borrowing to finance a local improvement project, you must submit the Final Assessment Schedule and a financing summary to the LGC before passing a resolution and giving a borrowing bylaw first reading.

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4. How to Apply

If you are eligible to apply:

  1. Complete the application to the LGC and include all required documents listed in the application.
  2. Note: If you are borrowing to finance a local improvement, include the final assessment schedule and a financing summary.

  3. Submit your application and required documents:
    • personally by emailing, submitting online, or delivering;
    • by registered mail; or
    • by regular mail,
    to the Local Government Committee.
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6. Further Information

Legislation that applies to municipal borrowing includes:

Sample resolutions and bylaws are available to guide municipalities. A template is also available for preparing the Final Assessment Schedule. These samples and templates are for information purposes only and should be revised to suit your situation:

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