Kelowna looking to borrow as much as $150 million to keep city running - InfoNews

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Kelowna looking to borrow as much as $150 million to keep city running

Kelowna City Hall
April 16, 2020 - 4:46 PM

Kelowna city council is being asked to approve a bylaw that will let it borrow up to $150 million as property taxpayers struggle financially during the COVID-19 pandemic.

A staff report on the borrowing bylaw came out today, April 16, in council’s agenda package for its meeting on Monday, April 20.

“Given the potential financial difficulties experienced by many local businesses and residents, it is anticipated that cash flows may need support through other financial tools, such as short-term borrowing,” the report states.

Cities are allowed to borrow money to keep operating as they wait for taxes to come in.

They can borrow up to 75 per cent of what they collected in the previous year. In Kelowna’s case, that was just over $250 million.

Taxes are expected to be paid by July 2 or taxpayers are normally charged a 10 per cent late fee.

The City of Kelowna has already waived the late fee for residents until the end of August and, today, the provincial government extended the deadline for certain commercial businesses to Oct.1. That, essentially, extends the deadline for paying taxes far beyond July 2.

Mayor Colin Basran is pleased with the announcement from the province.

“The deferral of payments for school taxes and borrowing will help with our short-term cash flow in light of anticipated reduction in revenues," Basran said in a media release.

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