Improvement District Finance
Improvement districts have the power to finance their operations by assessing and
collecting taxes and charges as well as, by borrowing.
Improvement districts finance their operations and services through a combination of
taxation and/or tolls (user fees). Taxation in improvement districts is usually done on a
parcel tax basis. Tax and toll collection dates can be at any time during the year.
Improvement districts levy and collect their taxes and tolls directly from the
landowners in their boundaries, except for fire protection and street lighting. In
those cases, they have the ability to have the Provincial Surveyor of Taxes levy on their
Tolls are user charges fixed and payable by all landowners
in the improvement district to which a service is provided. Revenue raised from tolls
is generally used to meet the administrative and operating costs for a service. Tolls
may be a flat rate, a metered rate (where applicable) or a combination of both. The
amount of a toll is based on the estimated or actual use of the service. Tolls are generally
used as a method of cost recovery for water, sewer and garbage collection services, but they
may be used for other services as well.
In addition to all other remedies for the recovery of taxes, such
as percentage additions and interest charges, an improvement district holds a tax sale
where there are taxes owing to the improvement district for 24 months or longer at
the date of the sale.
Local Government Act authorizes the
board of trustees to make bylaws for borrowing, by way of loan, from a financial
institution. Short-term borrowing is used for terms of up to five years. For long-term
borrowing, a board of trustees can enact bylaws to borrow money by the issue and sale of
notes, bonds, debentures and other securities in principal amounts the board believes are
necessary. These bylaws require approval of the ministry and often the require the approval
of the landowners.
The Local Government Department has developed the Improvement District Manual (235 KB) as a resource
for improvement districts which provides additional information about the topics on this page.