Editorial 

Affordability more than a budget item

The municipality is apparently tightening the reigns with this year’s budget, due to the economic uncertainty that is facing most of the world today. Whistler council and staff have decided not to set this year’s property tax rate until they absolutely have to, in the hope that the economy will stabilize a bit in the meantime.

The municipality has also taken a cautious approach in establishing its annual adjustment formula at -1 this year. That means all municipal departments will have to trim their spending by 1 per cent.

The economic climate post-Sept. 11 also means insurance premiums are on the rise and income from municipal investments is less than usual. As well, there’s the ongoing uncertainty of the Class 1/6 hotel tax issue. Whether certain properties are considered residential or commercial has a substantial impact on municipal revenue, and the rules seem to have changed (or new loopholes have been discovered) each of the past several years.

But in this climate of uncertainty, capital spending is up $1.5 million over last year, to $24 million. In 2000 capital spending was about $11.5 million. In some instances it’s a matter of timing. Projects started have to be completed and some new ones are urgently needed. Still, one has to wonder whether the new firehall at Spring Creek really has to cost $1.8 million, or whether development of an e-commerce Web site is worth $1 million.

The capital funds are particularly daunting when considering some of the enormous capital projects scheduled for 2003, including nearly $2.5 million for the first phase of construction of the library/museum, $2.5 million for the conference centre renovations, $3.2 million for improvements to the municipal water distribution system, and $9.2 million for a wastewater treatment plant upgrade. It is true federal-provincial infrastructure grants may cover a good portion of some of these items, and there may even be some additional government funds if the Olympics or some other mega-event comes Whistler’s way. But for the past two years financial planners have been warning that the municipality is not meeting its targets for contributions to capital reserves, the funds that make future capital projects a reality.

For purposes of developing this year’s five year financial plan the municipality used a 0 per cent increase in property taxes. That doesn’t necessarily mean property taxes won’t go up this year when council finally sets the rate in May, but it seems unlikely. If that’s the case it will be the first time in five years property taxes haven’t gone up.

Still, even with no increase in the property tax rate figured into the budget, municipal revenue from property taxes will be up. Not just up over last year, but up over last year’s projections for this year. New development is part of it but a big part of it is that property assessments continue to skyrocket – up an average of 9-20 per cent this year. And of course this means the amount of school tax Whistler property owners pay will also be up this year. Some early estimates are school taxes will be up $200 on average this year.

It all points to an item that was on the list of key "deliverables" in last year’s five year financial plan: affordability. An affordability strategy for locals and small businesses was in last year’s budget (as of course was the upgrade of Lake Placid Road, which has been a standard promise in budgets for years). It’s in this year’s budget as well, but for many reasons, including several beyond municipal control, affordability remains elusive.

Part of the problem, as the municipality knows all too well, is that additional sources of revenue are needed to keep this place going, specifically something that puts the hand on the visitor rather than the local. The Liberal government’s Municipal Charter is supposed to deliver such tools, but they likely won’t be available in time for next year’s budget.

This year’s five year financial plan notes that, "Whistler will begin discussions with the Province about alternative financial tools in conjunction with lasting legacies for the Vancouver/Whistler 2010 bid process." Affordability might be the greatest legacy the Olympics could leave.

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