The next municipal election is in 12 months time, although in Whistler the campaigning will start shortly after we ring in the New Year, ’round about Jan. 2.
But much of the foundation for next year’s elections, and the nearly 11-month campaign that leads up to it, will be established in the next few weeks as municipal staff and council set the budget guidelines for the next year. And, as you may have heard, they are looking for public input on how to balance next year’s budget.
Budgets are generally scrutinized in one-year cycles even though each budget is built on the previous year’s revenues and spending. Needs and revenues beyond the next 12 months are also anticipated, as much as possible, and so the municipal budget is now called a five-year financial plan — although council members, whose positions are re-evaluated on a three-year cycle, have admitted that the final couple of years in a five-year financial plan are best guesses of the town’s financial picture.
The budget dilemma facing Whistler has been nicely simplified: The municipality’s anticipated spending for 2008 is 14.5 per cent greater than its revenue, if tax increases are kept to the rate of inflation. With some belt-tightening, including no increases at the rate of inflation for any municipal department, cutting some capital projects and eliminating supplemental requests, the difference can be brought down to 8.5 per cent. If nothing else is done that deficit would have to be made up by increasing property taxes. The alternative is to cut spending further. So before that decision is made there will be an open house Friday to gather public input on how to tackle the 2008 budget.
But a reminder for all those thousands of Whistlerites who have been on the edge of their seats waiting for the opportunity to discuss the costs/benefits/value of patching potholes and paving parking lots: this is more than a one-year problem.
Three culprits have been identified as messing up Whistler’s 2008 budget: the province’s decision on the class 1/6 condo-hotel issue, which will mean approximately a $2 million loss in property tax revenue; increased labour costs, estimated at $1 million; and increased costs of operating utilities, specifically the new waste transfer station and compost facility. None of these are going to go away in 2009 or any subsequent year.
Neither is the approximately $6 million in new revenue Whistler has been receiving, retroactive to July 1, 2006, when the province turned over an additional four per cent of the hotel tax. However, as the administrator’s introduction to the 2007-2012 Five Year Financial Plan stated: “The General Fund Summary in Chapter 9 shows the hotel tax fund already oversubscribed, as we prepare for the hosting of the 2010 Winter Games…” And that was before dipping into the hotel tax pool for an extra $1.65 million for the gym in the athletes’ centre.
That was a warning issued in the introduction to the present budget. It should be heeded — because the demands on the municipal budget are likely to increase in the years ahead.
Some of the strains on the capital budget, like the gym in the athletes’ centre and the escalating cost of the library, were not anticipated, but at this point there’s not much that can be done except to cough up the extra money and finish the projects.
The 2010 deadline has accelerated capital spending by the municipality in a number of areas, which has an impact on budgets, but that will drop dramatically in a couple of years. However, there will then be additional operating costs that the municipality doesn’t face right now. For example, as municipal staff has pointed out the $2.5 million operating budget currently anticipated for the Whistler Legacies Society is enough to operate the Nordic centre and sliding centre; there’s nothing for the athletes’ centre, nothing for administration or marketing.
Whistler is balancing more than just a budget; at a time when the community is “maturing” — i.e., nearing buildout and an end to annual budget increases facilitated by an ever-expanding property tax base — it has to balance wants with necessities. That applies to taxpayers as well as elected officials.
And Whistler has to take a long-term view. The class 1/6 tax issue was identified as a problem years ago. And while it was difficult to predict what solution the provincial government would come up with and the extent of the impact on municipal revenues, preparing for some decrease in revenues would not have been unreasonable.
So look at next year’s budget guidelines on Friday, and at the current five year financial plan, and start thinking about what you could do without.