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budget directions

"Last year’s budget wasn’t really ours — this is." That was part of Councillor Nancy Wilhelm-Morden’s assessment of what she called a "good news; good news" budget. As Wilhelm-Morden said Monday, the 1998 municipal budget starts to deliver on a number of promises made to the electorate, provides municipal staff with more opportunities and, perhaps most importantly, initiates long-term funding commitments. The long-term picture is becoming increasingly important as municipal revenues from development begin to decline and buildout approaches. For example, anticipated revenues from development fees in 1998 are $1,057,697. That’s down from $1,249,000 last year and $1,633,212 in 1996. Similarly, funds raised through the various Works and Service charges, which are designed to ensure the cost of new facilities and infrastructure are shared fairly with new development, are declining with the slow down in construction activity. Other challenges the municipality faces in its quest to maintain financial sustainability include a reduction in transfer funds from the province (the reduction, from more than $300,000 annually to about $80,000, actually occurred last year but there is little chance of the funding being restored) and additional costs, including paying for RCMP services. The long-term approach to finance adopted with this week’s budget was introduced last November, when council adopted provisional budget guidelines. The new budget approach ties in with the Whistler 2002 strategic planning initiative, also introduced last November, and a long-term financial plan, which will be presented this summer. There are four principles that guide the new budget approach: future funding will be limited; the municipality must become more effective and efficient in the provision of services; financial risk must be limited; every effort should be made to maintain service levels. These principles are behind the municipality’s efforts to encourage innovation, creativity and entrepreneurialism. Under the new plan municipal department heads are provided with more flexibility and autonomy in their spending. They are also given incentives to save money, rather than the "spend it or lose it" approach traditionally found in government. Fifty per cent of any savings generated through improved productivity or innovation will be retained by that department, to be used in accordance with guidelines approved by council. Twenty-five per cent of the savings will be allocated to an Innovation Fund and 25 per cent to a Continuous Improvement Fund, to support initiatives designed to make the municipality more effective and a better place to work. The Innovation Fund is intended to provide the investment capital required to explore innovative and creative ways to make the municipality more efficient and effective. The fund may be used to make loans to departments and/or work groups and will be repaid through retained savings on a pre-defined repayment schedule. The fund should also mean departments don’t have to come back with supplemental budget requests. Another area the municipality is working on to increase revenues is its investments. Conservative estimates, based on a new investment policy adopted last month, project revenues from investments of about $1 million this year. Part of the new budget process includes reducing the municipality’s dependence on property tax revenues. A number of strategies are being used to meet that objective, including ensuring that fees and charges bring in as much revenue as possible. Existing fees and charges will be increased. However, a locals-only program is also planned for fees and charges, where possible. One of the foundations of the new budgeting system is the Annual Adjustment Formula. This is used to adjust each department’s operating budget by 50 per cent of new growth in assessment. The original estimate of natural growth used to calculate the AAF was 5.4 per cent, which translated into $269,072 of additional funding to departments (with the exception of the RCMP and the Planning Department) to fund inflation and natural growth in services. The actual growth in assessment is greater than anticipated. New growth is now estimated at 11.8 per cent. The increase in new growth has provided some of the funding required to offset the phasing in of the RCMP costs as well as the swings in development activity being anticipated in the Planning Department.

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