For nearly nine years, since the time the council of the day went on a tour of resort towns in Colorado and came back with the idea that the RMOW needs additional sources of revenue, we have been working our way towards unsustainability, at least as far as municipal finances are concerned. The draft five year financial plan released Friday confirms we are closer than we’ve ever been.
This shouldn’t come as a surprise to anyone. It’s been like watching a freight train cross the prairies: you could hear it coming, then you could see the plume of smoke, then you could feel the ground shake from the weight as it closed in.
And that damsel in distress lashed to the railway tracks ahead of the train is Whistler, waiting for Dudley Doright or Gordon Campbell to rescue us.
There have been plenty of warning signs that we’ve been living beyond our means. The most recent was the announcement a couple of weeks ago that the hotel tax reserve is now into a deficit position. More importantly, as the only municipal revenue source tied directly to business in the resort, hotel tax revenue is continuing to decline.
This year Whistler also felt the first decline in property assessments in recent memory. It may only be a one-year blip, but it is important when property taxes are the primary source of municipal revenue.
And as current municipal revenue sources are being strained spending continues to increase.
Capital spending is expected to reach record levels over the next three years – over $46 million in 2007 alone – as Whistler takes on a number of projects in preparation for hosting the 2010 Olympics. These capital projects will eat up a sizeable chunk of the municipality’s remaining capital reserves, and come at a time when development is slowing and therefore the growth in the tax assessment base is slowing. It is expected to decline from 4 per cent growth in 2005 to 3 per cent this year and 2 per cent from 2007 to 2009.
Of course, with most capital projects come increased operating and maintenance costs for the municipality.
We’ve all seen this train coming and we’ve all heard the cry for "financial tools" to solve it. But four years after "the promise" we are still waiting for Victoria to approve them.
There may be a Plan B if financial tools don’t materialize soon, but there’s no sign of it in this year’s budget. Indeed, the 2006 five year financial plan is almost a carbon copy of the last three or four budgets, right down to the wording. "The post 9/11 era has been difficult for the tourism industry…" "…pursuing alternate sources of revenue…" "With current funding levels it will be difficult to cover the upcoming costs of maintaining a world class resort community, while providing for product and service enhancement. Property taxes cannot fund these costs alone. Tough choices will need to be made between new facilities and services and the appropriate maintenance of what we have." These are all phrases that have been repeated in budgets year after year.
And, like the last few budgets, the 2006 five year financial plan continues to use antiquated statistics from 2000 and 2001 in describing Whistler’s population, average incomes, unemployment rates, skier visits and other general characteristics.
Things have changed a lot in the last five years, particularly in the tourism industry. Tourism Whistler has required more funds from the RMOW, residents have demanded more services and the Olympics are demanding more facilities. What hasn’t changed are the sources of municipal revenue.
And as expenses continue to build steam like a freight train taxpayers remain tied to the tracks, waiting for a rescue, or some tough decisions.
