Experts say raise taxes 20 per cent over three years 

Council will review blue ribbon panel’s proposal before adopting financial guide

click to enlarge House of Pain It’s always been cheaper to be homeless. If the a blue ribbon panel gets its way, it may be more desirable, as well.
  • House of Pain It’s always been cheaper to be homeless. If the a blue ribbon panel gets its way, it may be more desirable, as well.

Top economic experts have advised Whistler council to raise property taxes 20 per cent over the next three years.

The tax increase, concluded the 10 members of a blue ribbon panel convened by the municipality, would bridge the $5.7 million shortfall they calculated would develop between now and 2012.

"I think it does need to be emphasized that the committee reached this conclusion after much discussion and hair pulling, and they were very reluctant to simply go to tax increases to fill this gap," said panel member Allan Neilson-Welch, from Neilson-Welch Consulting Inc., during Tuesday night's council meeting at MY Millennium Place.

"The reality is that under existing legislative constraints... the RMOW, like every other municipality in B.C., really does not have other options at this point for raising sufficient amounts of revenue beyond property tax increases."

Mayor Ken Melamed said council will reflect on the recommended long term financial plan and could make changes before adopting it as policy.

The proposed 20 per cent increase over the next three years comes after a 5.5 per cent increase in property taxes last year.

The municipality put together the blue ribbon panel last summer to update Whistler's long-term financial plan. The previous plan, developed in 1999, is outdated now that Whistler has reached build-out.

Councillors reacted to Neilson-Welch's presentation with a series of questions.

Top of mind was how to manage expenses. Specifically, Councillor Eckhard Zeidler asked about where the line is drawn between investing in tourism and "just living the dreams and the hopes and wishes of things we would like to have."

And Councillor Ted Milner asked to have the phrase "managing expenses" added to the guiding principles.

Taking a different approach, Councillor Tom Thomson asked Neilson-Welch if he, personally, would expect people in Whistler to pay a premium to live here.

"Yes," answered Neilson-Welch.

"I believe my view would be representative of the other people on the steering committee. The steering committee paid a lot of kudos to Whistler for everything it has done but also recognize very clearly these things are done at a cost. The community, in choosing Whistler 2020 as its vision, has made a conscious decision as well that it is willing to pay the costs to achieve those visions and priorities."

In his presentation, Neilson-Welch explained the panel arrived at the 20 per cent figure by assuming Whistler's growth cap would remain in place.

The panel also assumed the municipality would increase its contributions to reserves while maintaining "a business as necessary" way of operating.

"The 2008 to 2012 financial plan that council would have adopted about a year ago actually did begin with a shortfall of $4.1 million in the general fund, which is reflective of the new environment the municipality is operating in," said Neilson-Welch.

"We used the $4.1 million as a starting point and added to that a series of costs. For example, the increased contribution to reserves. We were also about to subtract some revenue that had not been included in the five-year financial plan. For example, the full six per cent hotel revenue.

"The results came to a $4.4 million shortfall in the general fund and a $5.7 million shortfall overall."

The panel also recommended a "pay as you go" approach, explained Neilson-Welch, to balancing the revenue peaks and valleys the municipality will now experienced with the hotel tax.

"That involves making contributions once a year to... reserves, and then drawing money from those reserves on an as needed basis," said Neilson-Welch.

"That allows the municipality to lessen a reliance on borrowing and reducing debt servicing."

He cautioned though that borrowing in the future might be necessary since the reserves will probably not be sufficient enough to cover all future needs.

"When you borrow, make it very clear on tax notices," he said.

Other financial experts on the panel are Jamie Bruce from Capital West Partners, Bill Cox from BDO, Peter Adams from Victoria Consulting Network Ltd, Tamara Vrooman from Vancity and Ken Dobell from VANOC.

Whistler residents Fiona Famulak, from the chamber of commerce, and Scott Riley, from the Royal Bank of Canada, also sat on the group.

More information on the Long Term Financial Plan will be available next week at the Municipality's open house at the Squamish Lil'wat Cultural Centre on Thursday March 12.

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