Budget and Taxes
Financial Principles and Policies
The Resort Municipality of Whistler’s (RMOW) financial principles and policies, as set out in the Long-Term Financial Plan, were developed to help guide decision makers on financial matters.
The RMOW’s financial principles are broad statements that address the values, beliefs, and philosophy of the organization.
The nine principles set a framework for financial decision-making, and serve as a platform for the more specific financial policies. These include:
- Whistler Experience
- Financial Prudence & Responsibility
- Efficient & Effective Government
- Fairness & Equity
- Building Community
- Openness & Transparency
The RMOW’s financial policies and decisions will support and promote Whistler2020.
Whistler2020: Moving Toward a Sustainable Future was profiled earlier as the ambitious, long-term plan that commits Whistler to pursuing its vision of resort community excellence in a way that promotes sustainability. Whistler2020 was created by the community to reflect the community’s values and to direct the community’s actions. All decisions taken by the RMOW and its partners are guided by Whistler2020. All policies developed by the municipality—including the financial policies put forward in the Five-Year Financial Plan—are informed by the Whistler2020’s vision and priorities.
The RMOW will make the necessary investments in services and facilities required to maintain the Whistler experience.
As a destination resort, Whistler’s continued prosperity is dependent on the community’s ability to attract visitors. Additionally, continuous attention and investment from all public and private sector interests are needed to ensure ongoing success. All sectors of the local economy must work together to provide the high-quality, unique experience—the Whistler Experience—that helps set Whistler apart from its competition.
The RMOW will take the financial measures necessary to provide for Whistler’s needs.
All partners are committed to ensuring that adequate resources are in place to fund the services and infrastructure demanded by residents, businesses, and visitors to the resort. The RMOW does not defer necessary expenditures, and does not allow liabilities to go unfunded.
The RMOW is committed to cost-effective and efficient service delivery, and to providing services that are valued by stakeholders. The municipality will provide services that are valued by stakeholders and that are delivered in a cost-effective and efficient manner.
Those who benefit from municipal services contribute to the cost of providing such services. Those who benefit, directly and indirectly, from municipal services and facilities should contribute towards the cost of providing the services and facilities. The total cost burden should be shared by all groups of beneficiaries —permanent residents, second-home owners, visitors to the resort, the business sector—in a fair and balanced way using property taxes, hotel room taxes, user fees and charges, and other forms of payment.
Whistler is a community as well as resort.
Steps taken to promote Whistler and enhance its status as a world-class destination resort are clearly important. Equally important, however, are ongoing efforts aimed at enriching Whistler as a community. A vibrant community is an integral part of the Whistler Experience. A strong, confident local community adds to Whistler’s unique appeal for both residents and visitors.
The RMOW will develop innovative approaches to service provision and revenue generation in order to meet its future financial challenges.
In the coming years, as Whistler faces new financial challenges and increased competition, this spirit of innovation will be more important than ever. The RMOW will need to apply its creativity to develop new approaches to service and infrastructure provision, and to secure new sources of municipal revenue. New sources of revenue will be particularly important to help Whistler make the investments needed to promote the Whistler Experience.
The RMOW’s leaders will rely on financial policies and their own judgement to choose the best courses of action available under prevailing circumstances.
The financial policies outlined in the Long-Term Financial Plan (LTFP) are intended to assist the RMOW’s decision-makers in their efforts to address the specific financial challenges anticipated for Whistler in the coming years. The policies are not presented as instructions to decision-makers, nor are they intended to preclude courses of action that decision-makers may determine to be necessary. In using
the LTFP policies, it is expected that the RMOW’s decision-makers will be pragmatic, and will exercise their own judgment.
All partners in the community will have the opportunity to understand trade-offs inherent in financial decisions and rationales behind choices made.
The RMOW is committed to openness and transparency in its decision-making processes, including those that deal with financial matters. Communication with stakeholders will be emphasized so that everyone can be made aware of the trade-offs inherent in tough decisions, and the rationales behind chosen courses of action.
- Infrastructure Financing
- Cost-Revenue Gap
- Property Taxes
- Revenue Uncertainty
- Private Investment In Overnight Properties
The cornerstone of the RMOW’s infrastructure financing strategy will be a savings approach. The RMOW will fund the bulk of its future infrastructure needs by saving for the expenditure using accumulated capital reserve funds.
Each year, a portion of the municipality’s revenues will be placed into capital reserves. Monies will be withdrawn from these reserves, rather than borrowed, to pay for infrastructure projects.
Municipal accounting standards have recently changed, such that municipalities are now required to amortize (depreciate) their capital assets (infrastructure, machinery, buildings, equipment, etc).
Amortization is expensed every year, and given the community has over a half billion dollars of public capital assets, amortization is a significant charge: $10 million per year.
The intent of amortization is to spread the one-time historical cost of an asset over the years of life of the asset. It is important to note, the standards require the use of historical cost, not the asset’s current value nor its replacement value.
Given general inflation that occurs over the life of an asset, and particularly considering that construction costs over the decade of 2000-2010 far outstripped general inflation levels, historical costs will likely prove insufficient to provide for future replacement costs. For example, we will likely not be able to replace Meadow Park Sports Centre when it needs to be rebuilt decades in the future for the same cost as the original building in 1992.
Accordingly, the RMOW will ensure that contributions to infrastructure replacement reserves take into account the actual, present-day cost of replacing existing works.
In keeping with its principle of financial prudence and responsibility, the RMOW will provide for its assets on a replacement-cost basis, and not just on their historical cost basis.
The RMOW will provide some funding each year for new projects to enable decision-makers to make ongoing, capital investments aimed at enhancing the resort community’s offerings and its appeal to visitors.
Whistler’s continued prosperity as a destination resort is dependent on its ability to attract visitors. Whistler’s ability to attract visitors is, in turn, dependent on its ability to provide a unique, high-quality experience. The community’s investments in major, world-class municipal facilities, works, and services constitute an important component of the visitor experience.
In its approach to funding municipal infrastructure, the RMOW will pursue and maximize available senior government contributions.
Senior government capital contributions to municipal infrastructure help to lower the cost of projects to local taxpayers. For this reason, the RMOW will pursue and attempt to maximize senior government contributions in future years. The RMOW will only pursue contributions, however, that support the community’s priorities.
Where necessary, the RMOW will borrow to finance new infrastructure projects.
The RMOW’s preferred course of action is to fund future infrastructure costs using accumulated capital reserves. The RMOW will borrow funds in cases where capital reserves for a new project are not sufficient and where the timing of the proposed project cannot be deferred.
Where possible, the RMOW will borrow internally from replacement reserves or other available funds. In keeping with past practice, the RMOW will pay interest to the fund from which monies are borrowed. On a case-by-case basis, the RMOW will consider public-private partnerships in place of conventional debt financing.
The RMOW will continue to strive for efficiency and cost effectiveness in the delivery of services.
In future years, the RMOW will continue to seek efficiencies in all parts of its operations and explore and implement innovative approaches designed to save taxpayers’ money.
The RMOW will examine service levels in an effort to close the forecasted gap between costs and revenues. The RMOW will not, however, undermine its ability to provide the municipal investment required to support the Whistler Experience or to support the community’s priorities as set out in Whistler2020.
Where possible, cuts to programs, staffing numbers, and other costs will be made. The RMOW will not, however, significantly reduce key service levels in an effort to find cost savings that would jeopardize the Whistler Experience on which the community’s success is based or cuts to services and programs that support the community’s priorities set out in Whistler2020.
The RMOW will regularly review current and potential fees and charges in an effort to raise additional monies and minimize the need for property tax increases.
Efforts to examine fee levels, fee structures, the application of fees, and the enforcement of unpaid charges will be undertaken to identify the potential for higher returns. Adjustments to fees and charges must also take into account factors such as affordability, desired participation by the community and visitors, associated costs, and, effects on business enterprises.
Despite its ongoing commitment to cost-effective service delivery (Policy 2.1) and to review current and potential fees and charges in an effort to raise revenues through non-tax sources (Policy 2.3), the RMOW will need to rely on property tax increases to raise the bulk of new revenues required to close the forecasted financial gap. Existing legislative constraints on the municipality leave decision-makers with no alternative.
The RMOW will continue to press for access to new revenue sources and revenue-generating tools in an effort to diversify the municipality’s revenue base and reduce its long-term dependence on property tax revenues.
Through UBCM and FCM, and in cooperation with other municipalities, the RMOW will support appeals to other levels of government for additional revenue sources and authorities. The RMOW will also expand other potential revenue opportunities for which it already has authority.
Direct involvement, for example, in the development and management of commercial land in Whistler Village may represent a new, ongoing source of revenue to the municipality.
The RMOW implemented the property tax increase required to close the forecasted financial gap over a three-year period, beginning in 2009.
At the time of the Long-Term Financial Plan, the RMOW expected that an overall increase in municipal property taxes of approximately 20 per cent was needed to meet short- and long-term financial requirements. The RMOW will begin to implement the required property tax increase in 2009.
The RMOW phased in 19 per cent increase over a three year period (2009-2011) in an effort to mitigate any initial impact on homeowners and businesses.
A property tax increase of 20 per cent over three years represented a departure from the RMOW’s earlier policy, under which annual adjustments were limited to increases in the Consumer Price Index (CPI) for Metro Vancouver.
The RMOW will continue to examine its options for enhancing affordability programs for resident homeowners. Since 2004, the RMOW and the provincial government have provided a degree of assistance to resident homeowners through the Residential Property Assistance Program (RPAP). The RMOW wishes to provide additional financial assistance to households that have chosen to make Whistler their community. Accordingly, the RMOW will need to work with the province to secure the proper authority and support for any initiatives.
The RMOW will not use tax ratios as the basis for setting future tax rates for different property classes.
The RMOW’s goal is to share the property tax burden between the key property classes in a way that is considered fair and balanced.
Consideration will be given to demonstrated best practices, such as those followed by the provincial government. Tax rate ratios will no longer be used as the basis for determining rates. Under this new approach, it is expected that the municipal tax bills for Class 6 properties will increase more significantly in coming years relative to the tax bills for Class 1 properties.
The RMOW will establish a Revenue Stabilization Fund to mitigate the uncertainty in municipal revenues related to the additional hotel room tax and property taxes paid on strata hotel units.
Each tax year the RMOW will calculate, based on the previous three years’ totals, the average annual municipal tax revenues generated from the municipality’s share of hotel room tax revenues, and from the municipality’s strata hotel unit property tax revenues.
Actual tax revenues that exceed the three-year average will be contributed to the reserve. The reserve will than be used to fund costs in years where actual tax revenues are less than the average.
The RMOW will work with the province, Tourism Whistler, and others to ensure that hotel room taxes are paid on all units rented to visitors.
To promote inter-property equity, and to make sure that the community receives the monies to which it is entitled, the RMOW will work with the province, Tourism Whistler and others to do what is necessary to enforce the rules that require all operators to collect hotel room taxes.
The RMOW will support new models of private investment in overnight properties in cases where the municipality is confident that the use of such models will not risk undermining the Whistler experience.
The RMOW has begun to explore its ability to address these concerns through regulation. Until the RMOW is satisfied that regulation, or some alternative measure, can provide the required protection, the RMOW will not approve further requests related to developments or investments that are expected to detract from the Whistler experience or reduce revenue opportunities.