“The municipality’s revenue will flow more in the peaks and
valleys of the business cycle. What that means is our revenue is going to be
more variable…. This is a new thing. This was not seen in the past.”
– Lisa Landry, RMOW manager of fiscal planning, March 2008
If the 18 candidates for council, and five for mayor, didn’t know it already, we are now deep in the valley of the latest business cycle. Tourism Whistler’s best-case scenario is that business will be down 5 per cent this winter. The worst-case scenario is down 12 per cent.
Of course, things are changing so fast that those forecasts may already be obsolete. Even if the financial crisis has bottomed out and begun to rebound, the economic problems in much of the United States, Ontario, and the U.K. are going to be with us for some time. Jobs have been lost, personal savings and credit are stretched. Pray for snow.
But back to the people who have bravely put their names forward as candidates to run this town for the next three years. They will inherit a bureaucracy, much of which seems to be working flat out to meet the deadline of the 2010 Olympics and Paralympics. And, of course, Whistler must be ready for the Games in 2010.
However, two-thirds of the way through the next council’s mandate, the Olympics will be over. Olympic-related funding will have come to an end and Whistler will be on its own, albeit with more than $1 billion invested in infrastructure prior to the Games, including the highway upgrade, the athletes’ village, the Nordic centre, a fibre optic line, the sewage plant upgrade, the conference centre upgrade and a new hydro substation.
All that investment in infrastructure will benefit the town for years to come. But Whistler’s capital reserves have been drawn down significantly to pay for some of the infrastructure. And contributions to reserves, the funds needed to maintain the water, sewage and other systems, have been less than they should be for several years now.
And it’s the new council that will have to come to deal with the fact that municipal revenues have changed substantively. The present council had to grapple with the reality that revenues from new developments, which have so long sustained expansions of municipal budgets and services, are finally winding down. The next council will have to find a way to live without those development revenues and with the fact that municipal revenues are now more closely tied to hotel occupancy.
That is just as Whistler has wanted it for some time: a cap on development and additional “financial tools” in the form of more hotel tax revenue.
With municipal revenue more dependent on occupancy levels, is it reasonable to suggest that the next council should take a greater interest in filling hotel rooms? That doesn’t necessarily mean the municipality should have more seats on the Tourism Whistler board, but perhaps place more emphasis on policies that will help reduce the half million vacant hotel room-nights that Whistler experienced in the first three months of this year.
Year-round occupancy has never been much above 50 per cent. Would a secondary industry, complementary to tourism, have a role to play in helping fill hotel rooms? Maybe the arts, and all the arts funding that is coming with the Olympics, can help in this regard. Maybe the Centre for Sustainability will help do this. Those are things the next council should evaluate and determine.
Many owners of condo-hotel rooms in Whistler bought their units as investments. In the current business cycle valley, which could last a couple of years, their investments may not be what they once were. If there are owners looking to sell there may be buyers looking to consolidate the ownership within buildings. This could be a long-term benefit to Whistler, eliminating the problem of multiple front desks in buildings. Perhaps one of the jobs of the next council is to set the parameters for consolidation of ownership and the likely upgrades new owners would want to do.
When Tourism Whistler President Barrett Fisher spoke to council last year she was asked what council could do to help her organization fulfill its mandate to bring visitors to Whistler. Her answer was fix the condo-hotel front desk issue and ensure there are places for staff to live.
Those issues remain, but the question is one that should be at the forefront of the next council’s deliberations.