THE CORPORATION OF THE CITY OF PORT COQUITLAM

MEMO

TO: Finance Committee _ DATE:’ September 26, 1980

FROM: J. Maitland,
City Treasurer.

RE: INTEREST ON PREPYAMENT OF TAXES

At the present time our by-law #1573 allows us to pay interest on tax
prepayments at a rate equal to the bank prime lending rate on the first
business day in the year. The logic behind the paying of interest on
fax prepayments is that at the start of the year the City has had to
borrow money at prime rate From the bank and if some property owner's
wish to prepay their taxes we should pay them at least the. same rate we
pay the bank. In 1980 we paid out some $6,090 however, for the first
time we did not have to borrow any money at all. The main reasons we
did not have to borrow this year were:

1.) Advanced Water & Sewer billings.

2.) The size of our reserves, ,however we have budgeted
to spend about $450,000 out of these reserves in 1980.

At this time I cannot recommend not paying interest on Prepayments as:

1.) With our reserves decreasing this year due to larger
than usual expenditures out of them we may not have
that extra cushion to fall back on.

2.) If we proceed with any major capital works early in
1981 such as Broadway reconstruction again we may not
have that extra cushion to fall back on.

‘1979 History
Interest cost (11.5%) $ 3,844
Taxes prepaid $81,397
Number of people prepaying 106

1980 History

Interest cost (15%) $ 6,090
Taxes prepaid $100,042
Number of People prepaying 110

Mibbbal

J. Maitland

Len

.