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 behalf.
 

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.
 

The 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.