Sechelt councillor Noel Muller had some sobering comments about the district’s financial situation before council approved third reading of its 2016 budget on April 13.
“We now know in the wake of the McElhanney report and as well the Urban Systems report there are somewhere in the tune of, and I’m going to speak in generalities here, $40 million in capital requirements over the next five years that we need to consider,” Muller said.
“We have an operating budget that is currently $3.8 million over our annual revenue, so currently all capital funding is coming from reserves, grants or borrowing.”
The picture he painted got even more bleak when he talked about Sechelt’s ability to borrow money to help get the district out of its financial distress.
He said the district had a debt saturation, “which means that without a referendum Sechelt cannot borrow any more money to debt service above $500,000 a year, which is not very much, not enough in the least to consider what’s in front of us.
“So what these represent are large-scale threats to our financial position that will take years to fix and it’s going to require very strict council oversight as well as public and private support and the full support of our staff to realign the district in the types and orders of magnitude that are required,” Muller said.
He wrapped up his comments on a slightly hopeful note, saying new CAO Tim Palmer has experience dealing with financial challenges in other municipalities and may be able to help.
“We’re going to be looking to him as well as the public to support the District of Sechelt to get back to what I would call some type of reality, which may involve large-scale changes in fees and just a general financial realignment,” Muller said.
“I am looking in the final two years [of our term] that we really start to get on track and make some of the big decisions that we have to make.”
Coun. Doug Wright agreed, calling the 2016 budget “a disappointment at best … Our only hope is that our new administration and management team will take us in the right direction so this community can move forward in a positive direction.”
Mayor Bruce Milne said he agreed “to some degree” with the concerns voiced by councillors. “Somehow we have to make sure that our operations at the very least match our total revenue. It would be good if our service and programs actually met our property taxes, but that would be a gap too far to go,” Milne said.
“There’s going to be some significant fiscal realignment in the next two years and our work will be to prepare the community for that.”
