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Volume 47, No. 12

B.C. Reg. 254/2004

The British Columbia Gazette,

Part II

June 15, 2004

B.C. Reg. 254/2004, deposited June 11, 2004, pursuant

to the COMMUNITY CHARTER [Sections 174 (3), 175 (4) and

180 (2)]. Order in Council 550/2004, approved and ordered June 10, 2004.

On the recommendation of the undersigned, the Lieutenant Governor,

by and with the advice and consent of the Executive Council, orders that the

attached Municipal Liabilities Regulation is made.

— M. COELL, Minister

of Community, Aboriginal and Women's Services; G. COLLINS, Presiding

Member of the Executive Council.

MUNICIPAL LIABILITIES REGULATION

Definitions and

interpretation

(1) In this regulation:

"annual expenditure" means, in relation to a commitment,

(

a) in respect of actual costs, the average annual actual costs, calculated as

(

i) the total of the actual costs associated with financing the commitment over the term of the commitment,

divided by

(ii) the number of years in the term of the commitment, and

(

b) in respect of commitments that are not yet realized, the average annual implied costs, calculated as

(

i) the total amount of the commitment that might be realized over the remaining term of the commitment,

divided by

(ii) the number of years remaining in the term of the commitment;

"calculation liability" means a calculation liability within the meaning of

section 3 of this regulation;

"revenue sharing taxes" means Class 4 property value taxes imposed by one municipality, a portion of which is paid over to another municipality as tax sharing revenue;

"tax sharing revenue" means revenue

(

a) paid to another municipality as referred to in

section 4 (a) (ii)

of this regulation, or

(

b) received from another municipality as referred to

section 4 (

b) of this regulation.

(2) Except as otherwise provided in this regulation, the terms used in this regulation are to be interpreted consistently with the recommendations and guidelines issued by the Public Sector Accounting Board as authorized by The Canadian Institute of Chartered Accountants.

Part 1 — Liability Limit

Liability limit

2 For the purpose of

section 174 (2) [limit

on borrowing and other liabilities] of the Community Charter , a municipality

may not incur a liability if

(

a) at the time it proposes to incur the liability,

(

i) the annual cost of servicing the aggregate liabilities

of the municipality for the year, as determined in accordance with

section 3

of this regulation,

exceeds

(ii) 25% of the annual calculation revenue of the municipality

for the previous year, as determined in accordance with sections 4 and 5

of this regulation, or

(

b) incurring the liability would cause the annual costs

referred to in paragraph (a) (

i) to exceed the limit established by

paragraph (a) (ii).

Annual costs of servicing aggregate liabilities

3 The annual cost of servicing the aggregate liabilities

of a municipality for a year is the total of the annual expenditures for the

year, determined for each of the following types of calculation liability:

(

a) Type 1 — general capital commitments:

in relation to a liability of the municipality that

(

i) is or includes a non-current commitment,

(ii) is of a capital nature, and

(iii) is not covered by paragraphs (

b) to (e),

the calculation liability is the current and non-current commitments in relation to the liability;

(

b) Type 2 — contingent capital commitments:

in relation to a liability of the municipality that

(

i) is a contingent commitment,

(ii) is of a capital nature, and

(iii) is not covered by paragraphs (

c) to (e),

the calculation liability is the commitments in relation to the liability;

(

c) Type 3 — debts under loan authorization bylaws:

in relation to a liability of the municipality that is the amount of debt borrowed

under a loan authorization bylaw, the calculation liability is the outstanding

amount of that debt;

(

d) Type 4 — unused borrowing under loan authorization

bylaws: in relation to the amount of debt that is authorized by a loan

authorization bylaw but not yet borrowed, the calculation liability is the amount

not yet borrowed, excluding any amount authorized to be borrowed under

section 179 (1) (c)

[guarantees of borrowing by others] of the Community Charter ,

for which the borrowing authority has not yet expired;

(

e) Type 5 — loan guarantees: in relation

to any loan guarantee given by the municipality the calculation liability is

the total amount the municipality would be or is required to pay under the guarantee.

Annual calculation revenue

4 The annual calculation revenue of a municipality

for a year is the total revenue of the municipality from the following sources

for the year:

(

a) subject to

section 5 [cap on Class 4 property

revenue] of this regulation, revenue referred to in

section 192 (

a) to (

f) of the Community Charter , other than

(

i) revenue received under

section 197 (1) (b) [municipal

taxes for others] of that Act, and

(ii) tax sharing revenue paid to another municipality as provided for by letters patent;

(

b) subject to

section 5 [cap on Class 4 property

revenue] of this regulation, tax sharing revenue received from another municipality

as provided for by letters patent;

(

c) unconditional grants under the Local Government

Grants Act ;

(

d) payments in place of taxes that are made by a public authority;

(

e) revenue received under an agreement, other than gifts or grants received under an agreement or amounts included as revenue under another paragraph of this section;

(

f) revenue received under the Memorandum of Understanding between the Province of British Columbia and the Peace River Regional District as revenue under the Oil and Gas Revenue Reallocation Program;

(

g) revenue received under an agreement between the Provincial government and the municipality under which the Provincial government pays amounts in relation to a casino operating in the municipality, other than any portion paid over to another municipality under an agreement respecting this revenue;

(

h) revenue received from another municipality as referred

to in paragraph (g);

(

i) revenue received under

section 5 [compensation

to local governments] of the Ports Property Tax Act ;

(

j) investment income, other than

(

i) revenue from the disposition of assets, and

(ii) Municipal Finance Authority actuarial adjustments.

Cap on Class 4 property revenue

(1) In this section:

"assessed value" means the assessed value of property, other than property that is exempt from taxation for municipal purposes;

"Class 4 calculation rate" in relation to a municipality for a year means, as applicable,

(

a) the tax rate, or total tax rates, established to

impose the municipality's Class 4 property value taxes for the year, if

this is equal to or less than the average municipal tax rate on Class 4

property in British Columbia, as determined by the inspector of municipalities, or

(

b) in any other case, the average municipal tax rate

on Class 4 property in British Columbia for the year, as determined by

the inspector of municipalities;

"Class 4 calculation value" in relation to a municipality for a year means, as applicable,

(

a) the total assessed value of Class 4 property in the

municipality for the year, if this total is equal to or less than 20% of the

total assessed value of all property in the municipality for the year, or

(

b) in any other case, 20% of the total assessed value of all property in the municipality for the year;

"Class 4 property" means property that is in the

Class 4 property class;

"Class 4 property value taxes" means taxes imposed

under

section 197 (1) (a) [municipal property value taxes]

of the Community Charter on Class 4 property.

(2) General rule: A municipality's calculation

revenue from Class 4 property value taxes for a year must be determined as

(

a) the Class 4 calculation rate for the year

multiplied by

(

b) the Class 4 calculation value for the year.

(3) Tax sharing revenue — paying municipality:

If a municipality pays tax sharing revenue to another municipality in a year,

the following apply for the purpose of determining the Class 4 calculation

value for the paying municipality for the year:

(

a) the total assessed value of Class 4 property in the

municipality for the year is deemed to be

(

i) the assessed value of Class 4 property in the municipality for the year

minus

(ii) the portion of the assessed value of Class 4 property

that is subject to revenue sharing taxes imposed by the municipality equivalent

to the portion of those revenue sharing taxes that is paid over to another municipality

as tax sharing revenue, and

(

b) the total assessed value of all property in the municipality

for the year is deemed to be

(

i) the assessed value of all property in the municipality for the year

minus

(ii) the portion of assessed value of Class 4 property

referred to in paragraph (a) (ii).

(4) Tax sharing revenue — receiving municipality:

The following apply if a municipality receives tax sharing revenue from another

municipality in a year:

(

a) for the purpose of determining the Class 4 calculation value for the receiving municipality for the year,

(

i) the total assessed value of Class 4 property in the

municipality for the year is deemed to be the total of

(

A) the assessed value of Class 4 property in the municipality

for the year, and

(

B) the portion of the assessed value of Class 4 property that is

(

I) in another municipality, and

(II) subject to revenue sharing taxes imposed by the other municipality

equivalent to the portion of those revenue sharing taxes

that is paid over to the receiving municipality as tax sharing revenue, and

(ii) the total assessed value of all property in the municipality for the year is deemed to be the total of

(

A) the assessed value of all property in the municipality for the year, and

(

B) the portion of assessed value of Class 4 property referred to in subparagraph (i) (B);

(

b) the Class 4 calculation rate for the receiving municipality for the year is deemed to be the rate that would be required in order to generate the revenue received by the municipality from

(

i) the Class 4 property value taxes imposed by the municipality, and

(ii) the revenue sharing taxes imposed by another municipality and paid to the receiving municipality.

Part 2 — Exemptions from Elector Approval

Requirement

Commitments that are not calculation liabilities

6 Approval of the electors is not required under

section 175 (2) [liabilities under agreements] of the Community Charter

unless the liability is one of the following:

(

a) a liability of a capital nature, whether or not it is or includes a contingent commitment;

(

b) a loan guarantee given by a municipality.

Approval-free liability zone

7 Approval of the electors is not required under

section 175 (2) [liabilities under agreements] or

section 180 (1)

[loan authorization bylaws] of the Community Charter if

(

a) at the time it proposes to incur the liability,

(

i) the annual cost of servicing the aggregate liabilities

of the municipality for the year, as determined in accordance with

section 3

of this regulation,

does not exceed

(ii) 5% of the annual calculation revenue of the municipality

for the previous year, as determined in accordance with sections 4 and 5

of this regulation, and

(

b) incurring the liability would not cause the annual

cost referred to in paragraph (a) (

i) to exceed the limit established

by paragraph (a) (ii).

Drinking water protection orders — installation of treatment works

8 Approval of the electors is not required under

section 175 (2) [liabilities under agreements] or 180 (1) [loan

authorization bylaws] of the Community Charter if

(

a) the liability is to be incurred for the purpose of

complying with an order of a drinking water officer under the Drinking Water

Protection Act that expressly requires the municipality to install treatment

works, and

(

b) the inspector of municipalities approves the proposed liability.

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