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Editorial

The S word and the financial plan

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While the issues du jour are the latest library proposal – which everyone seems to have an opinion on – and the Nita Lake Lodge fiasco – which no one at municipal hall seems to have an attributable opinion on – there ARE other issues right now that may have even greater significance. Finances, for one.

The public got its first view of the municipality’s draft five-year financial plan last week. It’s not so remarkable for the property tax increase (the same as the rate of inflation, as usual) as it is for laying out the municipality’s spending priorities for the next five years. That will take us to 2009, one year before the Olympics. There’s going to be a lot of activity packed into the next five years in preparation for the Games. But if it isn’t in this municipal budget and it isn’t in the plans of the Olympic organizing committee then it’s not likely to happen until after all the Olympic hoopla has subsided, in 2011 or so.

Speaking of the budget and the Olympics, one might wonder what ever happened to the financial tools Premier Gordon Campbell promised Whistler as part of the deal for hosting the Games. Apparently the rest of the Liberal caucus didn’t have as much appetite for handing over financial tools to municipalities as the premier.

That may not be a bad thing – some have speculated that "financial tools" would have been a euphemism for a resort tax, and that any new tax would have further dissuaded tourist spending. The net result might have been hotels, retailers and restaurants covering the additional cost themselves, so as not to lose customers. It’s a theory that will be tested in Vancouver, where Tourism Vancouver was recently given the tools to implement a tourist tax.

Meanwhile the Resort Municipality of Whistler, which seven years ago resurrected the idea of tourists paying for more of the infrastructure and services they use, and thus reducing the burden on residents, businesses and property owners, seems to have simplified its quest. It’s now just looking for additional sources of revenue. A number of possibilities are suggested in the draft financial plan – the provincial sales tax, the property purchase tax, a gas tax, the tax on liquor, and a greater proportion of the provincial sales tax on hotel rooms – but all would seem to require the provincial government giving up some of its revenue.

The need for more sources of revenue (reducing spending doesn’t seem to be an option) was emphasized a few of years ago when the annual budget document stated that contributions to municipal reserves were not as high as they need to be for the long-term sustainability of the municipality.

This year’s five-year financial plan states that the municipality "will strive to contribute 20 per cent of current property tax revenue to capital project or reserve funds on an annual basis," with utility funds stocking away 30 per cent annually in capital reserves. The situation is laid out in chapter 3 of the document, where it notes that to date infrastructure has mostly been funded by fees charged on development, but that development is slowing as we reach buildout.

"With current building levels it will be difficult to cover the upcoming costs of maintaining a world class resort, while providing for product and service enhancement," it’s stated in the financial plan.

"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."

Whistler has been working on a comprehensive sustainability plan for the last two years. In the next month we should get an idea of what it will look like. For a lot of people the CSP has been boiled down to a single issue: where do we want to put future resident-restricted housing? But the draft five-year financial plan clearly indicates that financial sustainability is also going to be an issue. "The costs of maintaining a resort to world class standards will require entrepreneurial government and alternative revenue sources. Grants and sponsorship opportunities are being explored now by staff dedicated to this function."

Both the federal and provincial governments have talked about giving cities and municipalities greater means of revenue and reducing municipalities’ dependence on senior governments. Both have yet to deliver. In the meantime, the need for a sustainable long-term financial plan is becoming more urgent.

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