Opinion » Editorial

Five year plan shows financial problems


The week before Christmas didn’t bring any cheer for Whistler taxpayers, nor for anyone keeping an eye on Whistler’s long-term financial picture.

The municipality’s five year financial plan, which includes the 2001 budget, was adopted by council this week. For taxpayers – and that means everyone who lives here, whether they own or rent their place of abode – the first thing to note is that property taxes are going up, again. The average home will see a 3.8 per cent increase in taxes this year. This follows a 2.1 per cent increase in 2000, 1.5 per cent hike in 1999 and a 1.6 per cent increase in 1998. The 3.8 per cent figure is derived from a 2.8 per cent adjustment to offset inflation and 1 per cent for the phasing in of RCMP costs, which the municipality has assumed.

All of this was announced at the beginning of October, when budget guidelines were adopted by council. So painful as it may be, it shouldn’t be a shock.

As reported in October, the series of tax increases in recent years reflects the slowdown in municipal revenue from development, and the increasing demand for municipal services.

But the detailed five year financial plan offers a glimpse of how serious this financial imbalance could become in the next few years. For instance, the plan shows that the General Fund and the Sewer Fund are not meeting their targets for contributions to capital reserves over the next five years. What that means is there is insufficient capital funding to maintain municipal infrastructure.

In addition, some of the major capital projects facing the municipality in the next few years, such as the $19 million wastewater treatment plant upgrade, are based on the assumption the provincial or federal government will cover half the cost. But as the 1990s have shown, there is no guarantee senior governments can or will help with such costs. Indeed, most of the last decade has seen a steady downloading of costs from senior governments to local governments.

The municipality is also faced with the uncertainty of how condo-hotels will be classified for taxation purposes. Should they be considered commercial properties, and pay a higher rate, or residential properties, and pay a lower rate? And are non-stratified hotels paying their fair share? The employee housing fund is winding down. The municipality can only afford to provide half the funds for the new library and museum building.

What the five year financial plan really brings home – again – is that a new or modified method of financing a resort municipality is needed.

By far the largest single source of revenue for the Resort Municipality of Whistler is property taxes, which account for 42 per cent of this year’s $44 million operating budget. Property taxes work for most municipalities, but most municipalities don’t provides services and infrastructure for a population of visitors far greater than the population of residents.

While residents and property owners are contributing 42 per cent of the budget, the hotel tax paid by most visitors to the resort amounts to just 8 per cent of the municipal budget.

True, some visitors are also taxpaying property owners, and visitors may also be contributing to the municipal bottom line in other ways. But more of the financial burden needs to be shifted from property owners and residents to visitors, as is the case in American resorts. If this doesn’t happen much of the community side of the resort-community is going to find it too expensive to live here.

The problem has become more acute as Whistler has approached buildout and development has slowed. With fewer development projects there has been less municipal revenue from development cost charges. Now, many are looking at the large, estate homes that are currently in demand as a source of increased property tax revenue for the municipality.

That may be part of the solution, but the five year financial plan clearly shows a new funding formula is required for Whistler, or any other resort municipality, to maintain its standards over the long term.

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