District of West Vancouver council is dipping into the municipality’s financial reserves in order to cover an operating deficit and deliver a smaller-than-expected tax increase for 2025.
Council voted March 3 for a three per cent overall property tax increase – two per cent for the municipality’s operating budget and one per cent for the repair and replacement of the district’s aging infrastructure.
The district’s operating costs are up by $4.5 million in 2025, primarily driven by negotiated wage increases for municipal employees, which would require a 4.7 per cent increase in taxes to balance the budget.
A large portion of that shortfall will be covered by closing out the district’s $953,000 innovation fund set up in previous budgets for projects that would reduce costs, increase efficiency or raise revenue.
Council will also be taking $1 million of the municipality’s $3-million wage contingency fund, which is held onto in case the district faces unexpected costs from staffing up or paying out severances.
And council will take $620,000 in expected surplus finances from 2024 (expected because the financial statements for the 2024 year are still not completed) and apply them to this year’s operating budget.
On the asset levy, two per cent would have been the “optimal” amount finance staff said would help close the gap in the district’s expected infrastructure costs in the coming years.
Using reserves to cover operating expenses and the smaller asset levy came at the recommendation of council’s newly formed finance and revenue advisory committee.
Committee chair Don Smith told council the recommendations should be considered in light of the financial hit coming, thanks to the over-budget North Shore Wastewater Treatment Plant.
“This is also in the context of the highest utility tax increases that the public has seen, maybe ever. While you could say it is prudent for the district to be raising more money rather than less money, the other side of the coin is, is it prudent for people to be paying more in terms of taxes?”
District finance director Isabel Gordon said, under normal circumstances, she would not advise structuring budgets that way, but with the expected spike in utility fees residents must pay along with other inflationary pressures, it would be workable in short-term.
But Gordon’s recommendation came with two big caveats. Spending reserve funds on wages isn’t something that can be repeated, she cautioned.
“[The committee] is suggesting that perhaps we don’t need those savings as much as perhaps we thought we did, and that a better use of them would be to subsidize the tax rate increase. That is a one-time use of funds. In other words, you spend that money out of the savings account, it’s gone. It’s not there next year,” she warned.
And Gordon also cautioned that continuing to lag behind on asset maintenance may be penny-wise but pound-foolish, especially considering that construction costs rise much faster than general inflation, and the prospect of tariffs impacting prices.
“There’s only so much you can do to kind of patch things up and keep them going,” she said. “What you can do today, if you don’t do it, may cost you a great deal more tomorrow, and that’s just a fact of the way the world seems to be working right now.”
In their deliberations, council members acknowledged the trade-offs that were being made, particularly when it came to the asset levy.
Coun. Sharon Thompson, who described herself as both practical and conservative, said the common sense approach may be more aligned with staff’s preferred direction, but she added that for 2025, council needed to try new methods.
“I also feel this year is extraordinary, and we’ve got a really innovative way of looking at things," she said. "I’m not sure that this is going to be a pattern we’re going to create for the future, but it does seem like an exciting time. We’ve got a staff that seems really committed to creating efficiencies, which is really the fundamental part of what we’re trying to achieve here. We’ve got a council that promised that we would make sure we’re spending money effectively, and I think the only way we can actually achieve that is to create this tension and go into this year with an open mind and see how it works.”
Mayor Mark Sager said there is some optimism that 2026 would bring “significantly” more revenue to the municipality following council’s approval to rezone Cypress Village – a new neighbourhood of 3,700 homes and businesses off Cypress Bowl Road – and the reassessed value of the land there that would bring.
Coun. Linda Watt also flagged the staff wage increases that are driving growth in the operating budget and said, with more efficiencies, council could put more money into aging assets in 2026.
“It’s an absolute, indisputable fact that taxation has, at all three levels of government, outstripped inflation, and at this point, it may just be on a wing and a prayer, but I really hope that the Metro mayors and CAOs are able to collectively rein in some of these bargaining situations with the unions that have put us all in this position. I mean, that cannot continue,” she said.
Coun. Nora Gambioli and Peter Lambur were the only votes against portions of the budget.
“I think we’re cutting too close to the bone for my liking,” Gambioli said. “And if we’re going to agree to use an extra $620,000 from the surplus, it should be going into the asset levy.”
