City of Port Coquitlam Capital Improvement Program May 1993

Internal borrowing from land sales reserve

Funds received from the sale of city owned land are deposiied in a reserve account and as the city has a
limited supply of land available for sale and cash in the land sales account City Council has
established a policy that any withdrawals from the land sales (or tax sale) reserve, with the exception
of bare land purchases, are repaid to the reserve.

City Council has further established policy which suggests that projects which are critical to
completion of the city's goals should be financed at reduced interest rates. Council policy is:

Maintenance of existing services - expenditures within this category are to be repaid to the Land
Sales Reserve without interest.

Expanding services to a basic level - expenditures in this category are to be repaid to the Land
Sales Reserve with interest at one-half the current borrowing rate.

Enhancement of services - expenditures in this category are to be repaid to the Land Sales
Reserve at the current borrowing rate less 2 percentage points.

The majority of capital works are proposed to be funded from the Land Sales Reserve in this fashion.