RDN seeks amendment on temporary borrowing

The Regional District of Nanaimo is trying to level the playing field when it comes to transferring funds between capital reserves.

The Regional District of Nanaimo is trying to level the playing field when it comes to transferring funds between capital reserves.

The authority to move money between capital reserves to reduce borrowing costs, as provided to municipalities under Section 189 of the Community Charter, does not extend for regional districts, which must treat each service as if it were the only service provided.

The RDN board last week issued a resolution to the Ministry of Community, Sport and Cultural Development, requesting regional districts be given that same authority to transfer funds between reserves as municipalities.

“Because regional districts have different taxpayers paying for different services, the legislation has a wrinkle that doesn’t allow using money from one service for another service,” said Nancy Avery, RDN general manager of finance and information services. “In a municipal context, because it’s one homogeneous taxpayer, the legislation assumes it’s not an overwhelming concern. We’re saying that should be no more restrictive in a regional district than it is a municipality.”

Thinking the section of the charter applied to all local governments, the RDN transferred funds in 2010 from the Southern Community Wastewater Reserve in Nanaimo to undertake repairs at the Ravensong Aquatic Centre in Qualicum.

“The swimming pool is not paid for by people in the southern portion of the regional district, but we were in a situation where we pretty much needed to do immediate repairs. We had a grant available, but we didn’t  have enough money in the swimming pool reserve to get it all done,” said Avery. “We could have gone through the borrowing, but it was going to be the time involved. In order to meet the grant, we had to get the project done in a certain period of time.”

Despite starting to pay the transfer back with interest, the RDN soon realized it did not have the authority to go ahead with the move.

“We thought we read the Act and it seemed all straightforward,” said Avery. “But there was a way one sentence was phrased – when we looked at it more closely – that said each reserve fund must be treated as if it stands alone.”

Avery said the regional district model provides extensive checks and balances with regards to using reserves of one service temporarily for the purposes of another service.

“We think there think there is enough transparency that the government should allow regional districts to use that mechanism in the same way,” she said.