By Alison Taylor
Should today’s taxpayers pay in full for long-term capital projects or should the municipality borrow money to fund them over time?
That’s the question posed by Councillor Nancy Wilhelm-Morden this week as council received the municipality’s 2007 Annual Report, which includes the financial statements from the previous year.
Those statements show Whistler has a healthy savings fund stored up in its reserves — $59 million as of January 2006. That money is used to pay for capital projects such as the new library, the sewage treatment plant upgrades and water upgrades.
“I would like to see tax levels lowered rather than amassing these huge surpluses,” said Wilhelm-Morden after Monday’s council meeting.
With support from her colleagues, she asked staff for a general review of its “pay as you go” policy which calls for the municipality to pay for its capital projects up front through reserves, rather than borrow money for them over time.
“I don’t want to sound fiscally imprudent,” Wilhelm-Morden later added. “It’s a question of fairness to taxpayers, particularly when the cost of borrowing is low.”
She used a $10 million project by way of explanation. That project may have a life cycle of 30 years but it’s today’s taxpayers who put the tax dollars up front.
“It’s just not fair to current taxpayers,” said Wilhelm-Morden.
Two examples raised by the councillor were the new library and a land purchase the municipality is considering behind closed doors.
Mayor Ken Melamed would not elaborate on that land deal other than to say staff is investigating the costs, benefits and other options.
“We’re allowed to keep things that relate to land, legal or personnel confidential until we’re finished exploring the concepts or we’re ready to purchase,” said the mayor. “Let’s just say there’s one piece of land in particular the municipality’s looking at and I can’t be any more specific than that.”
Melamed said he was amenable to having the discussion on the pay as you go policy but said he thought not paying interest and living within the municipality’s means was a good thing.
“I think they’re two fairly fundamentally different approaches to funding government,” he said later this week.
At the council meeting the mayor also highlighted Whistler’s $15 million debt, the bulk of which is incurred by the Whistler Housing Authority in mortgages on housing projects.
“We actually have extremely low debt,” said the mayor. “Really our debt is microscopic in relation to the size of the budget.”
Council supported Wilhelm-Morden’s request for a general policy review.
Councillor Ralph Forsyth said he raised the issue of borrowing money for the library and was chastised for the suggestion. Councillor Eckhard Zeidler, on the other hand, said he always admired Whistler’s current policy of not borrowing.
Staff is meeting with the Municipal Finance Authority of B.C. (MFA) this week to discuss issues related to the $130 million athletes’ village.
MFA is the central borrowing agency for the financing of long-term and short-term capital requirements for municipalities.
Municipal administrator Bill Barratt told council a policy review will be on staff’s agenda in the coming weeks.
The Annual Report is a requirement in the Community Charter. It includes the municipal objectives for 2007 and 2008 as well as a progress report for the previous year.
The report can be found online under the current council package at www.whistler.ca.