Council for the District of Squamish struggled to avoid piling debt onto the next generation as they reviewed Community Development capital plan budget items line by line during the final days of deliberation Friday (April 24).
Budget priorities will be finalized this week, and the total deficit of funds will determine what kind of tax increase - if any - will be required.
On Friday, council watched long term debts increase for projects such as $25,000 in sidewalk repair and $150,000 to stabilize Skyline Drive. Council members questioned why reserve funds could not be used to pay for the costs.
Following a council request, director of financial services Ralph Hughes provided members with the total amount Squamish has in reserve funds, which are derived from such revenue as Development Cost Charges (currently totaling $11,419,975), affordable housing contributions ($119,324) and land sales ($2,609,752).
The list showed a total of more than $20,000,000.
However bylaws dictate that each portion of the funds must be allotted toward very specific uses. For example Skyline Drive is not an arterial road, said Community Development director Mick Gottardi, so its upgrade can't be funded through Development Cost Charges (DCCs). Council ended up endorsing Skyline Drive funding under long term debt, but a $25,000 long term debt for unidentified traffic calming measures was not received as warmly.
"If this is for a third bump on Skyline Drive, I'd rather not," said Coun. Rob Kirkham to laughter.
Gottardi said projects have not yet been identified, but details would be fleshed out in discussions with local Parent Advisory Councils.
Coun. Corinne Lonsdale said she is "philosophically opposed to borrowing money for unnamed items."
"Any new [traffic calming] initiatives need to come before us," she said.
She suggested the cost be removed from capital budget long term debt and funded out of the operational budget. Coun. Paul Lalli took it a step further in a motion as he requested the amount be reduced by $10,000. Council unanimously endorsed the motion to spend $15,000 in traffic calming out of the operational budget.
Council also questioned the decision to put $25,000 in long term debt for as-yet unidentified sidewalk repair.
"This should come out of revenue since fixing sidewalks is on-going," said Kirkham.
"It's more about new installation," said engineering manager Doug French.
"Well then, reserves," responded Kirkham.
Mayor Greg Gardner asked whether DCCs reserves could fund sidewalk repair.
"We couldn't take it out of DCCs if it's a stop-gap measure to address an urgent need and not the rebuilding of that road," said French.
Lalli said DCCs must be better utilized.
"We need to start using the DCC fund rather than taxation or borrowing," he said.
Heintzman said she didn't have a problem with the "modest amount" since it could be viewed as a "contingency fund of sorts."
Kirkham ended the issue by putting forward a motion instructing staff to find the appropriate reserve fund that would pay for sidewalk repair. Lonsdale was the lone dissenter, saying a project needs to be identified to be in the capital budget.
Lonsdale also opposed a motion to place $500,000 in long term debt for the Kingswood pedestrian Highway 99 overpass, suggesting it be placed in a shorter five-year debt since a Building Canada grant may end up quickly paying for it.
Kirkham said if that occurs, they could simply retire the debt early, but Lonsdale pointed out it didn't work that way. Hughes agreed.
Gardner said the district could simply end up borrowing less if it's discovered a grant would be available. Council overrode Lonsdale, supporting the motion to place the cost in long term debt.
In a follow-up interview, Heintzman said borrowing in this economy may actually be the smart way to go.
"I think the economic crisis has scared a lot of people and council member," she said. "Ironically it's probably the best time ever we could probably think about borrowing and not use our reserves up."
By the end of the meeting, council and staff were successful in slashing back the Community Development capital budget.
Among the items cut were $23,000 in IT survey equipment, which was discovered to have already been paid for, a $100,000 project to bury Industrial Park hydro lines was postponed until 2010, and $30,000 allotted to the Centennial Way underpass was deleted since Highway 99 improvement contracting company Kiewit is doing the entire job.
Council returned to the table again Tuesday (April 28) for another 12-hour day, completing the capital budget review for departments such as Engineering, Parks and Recreation and Operations.
A number of initiatives were taken out Tuesday, including arguably one of the most requested amenities: a fitness centre for Brennan Park. Composting pick-up is also off the table. And water metering may not happen this year.
As of Wednesday (April 29), the budget reflected a five per cent tax increase, according to Heintzman.
Council returned Thursday (April 30) for some fine-tuning before settling on a final draft budget. The final draft should be ready for first reading Tuesday (May 5). Before the final budget is submitted, the public will have a chance to get informed and make comments.
