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LOCAL GOVERNMENT ACT — Continued
[RSBC 1996] CHAPTER 323
Part 13 — Special Funds
Division 1 — Sinking Funds
480 The municipal officer assigned responsibility under section 199 [financial administration] must keep separate accounts to show at all times
(a) the state of each debt for which sinking fund debentures have been issued, and
(b) the amount of money raised and appropriated for the annual sinking fund requirement for the debt.
481 [Repealed 1999-37-109.]
482 (1) The municipal officer assigned responsibility under section 199 [financial administration] must deposit all money to the credit of a sinking fund in a separate account in a savings institution.
(2) The same institution account may be used for a number of sinking fund accounts.
483 (1) If money in a sinking fund account is invested under section 336 [investment of municipal funds], the securities and their revenues must be held to the credit of the applicable sinking fund account.
(2) If more than one sinking fund account is involved, the securities and revenue referred to in subsection (1) must be allocated in proportion to the money from the accounts used for the investment.
484 [Repealed 1999-37-110.]
485 (1) A council may, by bylaw adopted with the approval of the inspector, borrow money by pledging as security any securities purchased and held under section 483.
(2) An obligation given by a municipality to a lender under subsection (1) must
(a) be in writing, in a form approved by the council and signed by the mayor and the municipal officer assigned responsibility under section 199 [financial administration],
(b) state the rate of interest, and
(c) be due and payable on a named date in the year in which it is given.
(3) An obligation under subsection (1) may give the lender the authority considered proper by the council to sell any of the securities pledged.
(4) The council must place all money received from borrowing under this section to the credit of the applicable sinking fund.
486 [Repealed 1998-34-88.]
487 (1) The minister may, by order,
(a) direct that any money to the credit of a sinking fund account, instead of being invested, be used for the purchase, payment, redemption and cancellation, at a price agreed on and stated in the order, of the municipality's outstanding sinking fund debentures specified in the order, even if they are not then due and payable, or
(b) direct a municipality to cancel its sinking fund debentures held to the credit of a sinking fund account, even if they are not then due and payable.
(2) An order under subsection (1) must direct readjustment of the sinking fund account affected by the order.
(3) A special assessment and a special or other rate imposed under any Act in a municipality subject to an order under this section continues valid and enforceable, except as adjusted by the order, even though the debentures for which the assessment or rate was imposed have been redeemed and cancelled under this section.
488 (1) If, because of an increased value of real property liable to assessment, it is found unnecessary to collect the full tax imposed by a bylaw to raise
(a) the instalment of the sinking fund and interest required in any year, or
(b) the instalments for future unexpired years of the debentures,
the council may, by bylaw, reduce the rate for that year or for the future years so that no more money is collected than is required.
(2) A bylaw under subsection (1) must not be adopted unless, having regard to the time the debentures have to run, a proper proportion of sinking fund and interest has been collected under the intention of the original bylaw.
(3) If a bylaw provides for raising each year a larger sum for a sinking fund or interest than is necessary to pay off a debt, the council may, by bylaw, reduce the amount to be raised each year.
489 (1) If there is a surplus in a sinking fund account above the amount required for the fund under the bylaw creating the debt, the council may, by bylaw, provide for the application of the surplus to
(a) the payment of the amount required for the fund, or for interest on the debt, in a succeeding year, or
(b) the payment of charges incidental to payment or remission of the principal or interest due on the debt for which the fund is held.
(2) If there is a surplus in a sinking fund account after the debt authorized by a loan bylaw is repaid, the surplus may be disposed of under section 498.
490 If the amount in a sinking fund does not meet requirements, the council may apply part of the current revenue to the deficiency.
491 (1) The inspector may require a municipal officer assigned responsibility under section 199 [financial administration] to submit a report showing the state of the sinking fund for any debt.
(2) A report under subsection (1) must include full particulars of financial transactions for each sinking fund account during a specified period, and indicate the basis of valuation of securities held at the credit of each account.
492 (1) On receipt of evidence of inefficient or improper administration of a sinking fund account, the minister may, by order, direct that the sinking fund accounts of the municipality, and the money and securities held for them, be transferred to and administered by the Minister of Finance and Corporate Relations.
(2) An order under subsection (1) is binding on and applies to all persons affected by it.
(3) A council that is subject to an order under subsection (1) must remit annually to the Minister of Finance and Corporate Relations the money required annually for the funds.
Division 2 — Debt Retirement Funds
493 The municipal officer assigned responsibility under section 199 [financial administration] must keep accounts necessary to show at all times the amount of money raised, obtained and appropriated for each debt retirement fund.
494 (1) A council may proceed under this section if
(a) for any cause it appears expedient to provide money in advance of the requirements for retirement at maturity of outstanding municipal debentures, or
(b) the proceeds from the sale of assets are required to be held for debt retirement.
(2) In the circumstances described in subsection (1), the council may, by bylaw, provide for the following:
(a) setting aside in each year amounts considered necessary for a proposed scheme of debt financing;
(b) setting aside the proceeds of a sale of assets, as specified in the bylaw, for a debt retirement fund to meet in full or in part, at or before maturity, outstanding debentures issued for the assets;
(c) the administration and investment under this Part of money set aside under the bylaw.
(3) The bylaw may contain directions
(a) to impose during specified years the amounts established under subsection (2) (a), by rate sufficient in addition to other rates, and
(b) not to impose in any future year all or part of the annual amounts required to repay the principal of outstanding debentures.
(4) A bylaw with directions under subsection (3) (a) to impose a rate for the purposes of this section must receive the assent of the electors.
(5) A bylaw under this section must not extend the term of a debenture debt beyond the period originally set for it.
495 A council may invest or reinvest all or part of the money to the credit of a debt retirement fund in the manner provided for sinking funds.
Division 3 — Reserve Funds
496 (1) A council may by bylaw establish reserve funds for the following purposes:
(a) expenditures for or in respect of capital projects and land, machinery or equipment necessary for the capital projects and extension or renewal of existing capital works;
(b) the purchase of machinery and equipment to maintain municipal property and to protect persons and property;
(c) depreciation and obsolescence of any machinery and equipment.
(2) Money from current revenue or, as available, from general revenue surplus, or as otherwise provided in this Act, may be paid into a reserve fund under this section.
(3) Money set aside for the purpose of subsection (1) (c), and interest earned on it, must be expended solely to purchase machinery and equipment.
(4) A council may, by bylaw adopted by at least 2/3 of its members, provide for the expenditure of any money in a reserve fund under subsection (1) (a) or (b) and interest earned on it.
497 (1) A council may, by bylaw, establish reserve funds for enterprises owned or operated by the municipality.
(2) Money from current revenue, as available from general revenue surplus, from the surplus from operation of the enterprise, or as otherwise provided in this Act, may be paid into a reserve fund under this section.
(3) Money set aside in a reserve fund under this section, and interest earned on it, must be used only for
(a) a capital expenditure for the enterprise for which it is established, and
(b) redemption of debentures issued for the enterprise.
498 (1) All money received from the sale of tax sale properties must be set aside in a reserve fund.
(2) The municipal officer assigned responsibility under section 199 [financial administration] must deposit the money referred to in subsection (1) in a savings institution when received.
(3) Until required under this section, the money of the reserve fund may be invested in the manner provided by section 336 [investment of municipal funds].
(4) The money of the reserve fund under this section, and interest earned on it, may be used only for
(a) first, bringing sinking funds up to requirements, and
(b) then, reduction of debenture debt, capital expenditures, transfer to a debt retirement, reserve or local improvement fund or expenditures of a special nature.
(5) A council may, by bylaw adopted by 2/3 of its members, provide for the use or expenditure of money in the reserve fund under this section.
499 (1) A council may, by bylaw, establish a special reserve fund for a specified purpose that is within the powers of the municipality under this or another Act.
(2) As an exception, the authority under subsection (1) may not be used to establish a reserve fund for a purpose for which reserve funds may be established under another section of this Act or under another enactment.
(3) Before adopting a bylaw under subsection (1), the council must provide a counter petition opportunity in relation to the proposed bylaw.
(4) The following may be paid into a special reserve fund:
(a) amounts that are to be raised by a rate under section 359 (1) (a) [municipal property taxes] in respect of the special reserve fund;
(b) amounts that may be paid into the reserve fund as otherwise provided in this Act;
(c) amounts received by the municipality in relation to the specified purpose of the special reserve fund, subject to any terms and conditions attached to their use.
(5) Money in a special reserve fund, and interest earned on it, must be used only for the purpose for which the fund was established.
Division 4 — Local Improvement Fund
500 (1) A council may, by bylaw, establish a local improvement fund.
(2) The council may, by bylaw, set aside money for the local improvement fund out of general revenue, or as otherwise provided in this Act.
(3) The money set aside from general revenue, money transferred to the fund under section 498, and money expended from and repaid to the fund, together with interest earned, must be used only to finance the construction of works payable by special charges under Part 19.
Division 5 — General
501 (1) If the amount to the credit of a reserve or local improvement fund is greater than required, the council may, by bylaw, transfer all or part of the amount to another fund established under this Part.
(2) As an exception, a bylaw under subsection (1) authorizing the transfer of an amount from a reserve fund that is established for the purpose of acquiring park lands may only be adopted with the approval of the minister.
502 A council may, by bylaw, authorize the use, for a lawful purpose of the municipality, of money on hand that
(a) was raised to pay interest on debentures authorized under a municipal bylaw or to repay principal of those debentures, and
(b) the municipality is unable to use for the purpose designated in the bylaw because the bylaw is no longer in force or because all principal and interest on the debentures has been paid or provided.
503 [Repealed 1999-37-118.]
504 (1) Money collected by a municipality for interest on a debt of the municipality or for the sinking fund or instalments of principal for a debt of the municipality must not be used for a purpose other than that for which it is collected.
(2) Money held by a municipality subject to a trust or reserve must not be used for a purpose other than under the terms of the trust or of the bylaw creating the reserve or special fund.
505 and 506 [Repealed 1999-37-119.]
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Copyright (c) 2001: Queen’s Printer, Victoria, British Columbia, Canada