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Council struggling to balance 2008 budget

Increasing construction costs, labour costs and $2 million hit from province all contributing factors

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Whistler property owners could be facing tax increases as the municipality struggles to balance its 2008 budget.

It’s still very early in the process, cautioned Mayor Ken Melamed, but the spectre of increasing property taxes has raised its head at the council table.

“That’s an unpalatable option,” said the mayor of increasing property taxes. “(It’s) an option.”

No one factor is causing the strain, which became obvious during this week’s council meeting. But the combination of rising labour costs, rising construction costs and the hit from the provincial government’s recent decision on Class 1/6 properties are all playing a role, leaving council with the struggle of trying to balance a tight budget.

Council made several allusions to the tough budgeting process at Monday’s meeting.

It was the reason Councillor Nancy Wilhelm-Morden gave for opposing the new Whistler Centre for Sustainability (see related story on page XX.)

To get the centre — which will be virtual until after the 2010 Winter Games — off the ground the municipality has pledged a grant of $120,000 annually for the next five years, for a total of $600,000.

“I just don’t think we should be taking on more financial requirements and financial obligations at this time,” said Wilhelm-Morden, who reluctantly withheld her support for the centre.

Later, Councillor Tim Wake also addressed the problem, during a small housekeeping amendment in what he said was an effort to keep the community informed.

“We are having struggles with the five year financial plan,” he said briefly.

He pointed specifically to the new Class 1/6 tax legislation, approved by the provincial government in April, as having a significant impact. That legislation grandfathered all Class 1 hotel/condo owners, allowing them to pay the residential tax rate, while those units assessed at Class 6, the much higher commercial rate, would begin to pay a blend of commercial and residential rates based on the amount of commercial use of that property.

While the municipality will not know the exact impact of that change until the end of this month, it is estimated to be between a $1.8 million and $2.5 million hit to the budget.

And while that $2 million hit is significant, it’s not the only thing exacerbating the budgeting process.

“It’s hard to put a finger on one thing only,” said Melamed after the meeting. “There are a number of other things that are causing pressure.”

Rising construction costs are a significant concern, particularly at a time when the municipality is in one of its busiest, and most expensive, capital spending years.

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