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.
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.
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:
||Debenture Face Fee
||Total Debenture Fee
*for Debenture Face Fee and Coupon Fee only
|>$12,500 but <$100K
|>$100K but <$200K
|>$200K but <$500K
|>$500K but <$1M
Base Fee + ((Face Fee + Coupon Fee) x GST) = Total Debenture Fee (to a maximum of $5,000)
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.