CITY COUNCIL – $40 million ‘line of credit’ won’t affect property taxes

The City will borrow up to $40 million to tide it over until property taxes are collected later this year but council was told Tuesday (March 10, 2026) it amounts to a line of credit rather than a typical loan.

And, City council was told, property taxes won’t be affected.

Council approved the borrowing on the advice of staff, who noted there is an almost six-month delay between the start of the City’s fiscal year and tax collection May to July.

“This delay significantly impacts the City’s ability to pay employees and vendors,” a report from corporate services director Dave Hallinan stated.

“In the past, the City could rely on significant investments tied to reserves for future operational expenditures and capital projects. As the City has begun using reserves to lower tax rates and has begun to implement high cash flow projects, the purchasing and selling of investments cannot continue to absorb the revenue timing delays.”

The borrowing is for operational expenses only, he said.

The Community Charter allows municipal councils to borrow under such circumstances without asking voters for approval.

While such borrowing is not uncommon in Kamloops, the amount has raised some eyebrows in the community. The City’s short-term borrowing limit from 2014 through 2017 was $6 million a year. In 2020 it went up to $15 million due to COVID-caused delays in tax collection.

Revenue manager Lewis Hill told council there’s some cushion in the $40 million figure and it’s not expected all of it will be used. He explained it’s based on monthly expenses and is comparable to a line of credit to be used as needed.