Is the municipality wasting $2 million a year through poor financial management? Yes says council candidate Ted Milner. Definitely not, says Mayor Ted Nebbeling. Milner, who spent 25 years in banking and finance before retiring to Whistler, issued a press release Monday that said due to "poor return on our cash investments and the high interest cost on our debt, we are missing an opportunity for about $2 million, an equivalent of 15 per cent of our total annual tax revenue." Milner made his assessment after reviewing the municipality’s consolidated financial statements for 1995. They showed the municipality had more than $20 million in cash in the bank but because it was in short term — usually 30 day — deposits it was only earning interest of between 3 and 4 per cent. "Last year we should have earned at least 5 per cent more than we did. That’s over $1 million," Milner said. "We could put some of it in 90 days and get at least an extra 3 per cent." As well, the municipality has long-term debts — about $11.6 million in 1995 — and interest on those debts averaged 14.8 per cent. He added, some of the debt is in U.S. funds. "Conservatively speaking, we are paying another $1 million too much on this debt," Milner said, suggesting pre-payments — even with penalties — would make more financial sense. However, Nebbeling said Milner doesn’t understand municipal financial management. "If he had read the Municipal Act he would have seen we can have only secured investments," Nebbeling said. He acknowledged most of the municipality’s money was in 30-60 day deposits, but said "We are getting the best rate we can within the guidelines of the Municipal Act. We are not allowed to risk shareholders’ — taxpayers’ — money." Nebbeling said there was never any denial the municipality had long-term debts, but said it was used to finance sewage treatment plant upgrades in the 1980s. Those debts have to be repaid according to a fixed schedule and can’t be fast-tracked, he said. Nebbeling added the municipality hasn’t borrowed any money since 1990 and the latest sewage treatment plant upgrade is being financed by works and services charges and the province. Milner stands by his earlier statements. He said he has read the Municipal Act and checked with officials in other municipalities. He agrees investments have to be secured, but money can be put in 90-day treasury bills rather than 30 day bills. "Burnaby, North Vancouver they make a pile of money on cash investment programs. Why can’t we?" Milner said. He said the municipal loan authority is also approachable on repayment plans. Milner, who held a number of executive positions with various banks and financial institutions, added he was not trying to point a finger at anyone at municipal hall in making his announcement. However, he feels the municipality can exercise better financial management.
