Willoughby Will Never Get its Pool
The Case of How a $120M Off-Balance-Sheet Loan Helped Kill the Willoughby Rec Centre
I orginally published this article on the Strong Towns Langley substack; I now present it here as a place to refer back to it for future articles. The financial position the township is in is deeply troubling and solutions/analysis needs to continue.
If you live in Willoughby, you know the lot next to the tennis centre. It’s the one that was promised to be a community centre, a place for our kids to swim, courts to play basketball, and a library for our students. Year after year, the community centre lot sits empty.
When asked why, the Township points to “complexity,” “land swaps,” and “school district negotiations.” They make it sound like an architectural puzzle that just needs more time and more “vision.” They need to figure out a bigger lot to make it the size the community needs.
The math tells a different story.
While we wait for a pool, the Township is quietly filing reports admitting our financial reserves are “depleted.” We have become a municipality that has to take out 10-year loans just to fix the roofs on our fire halls.
The truth is the Township of Langley has maxed out its credit card. We have lost the ability to finance new amenities. We are borrowing to fix old ones and getting close to a fiscal cliff.
Behind the talk of building a legacy is a reality of Functional Insolvency and a $120 million taxpayer backed off-balance-sheet loan that explains exactly where your community’s future went.
The Napkin Math
The first thing to understand is that debt isn’t limitless. The Province sets a credit limit for municipalities. This limit is called the liability servicing limit and it says that the Township cannot spend more than 25% of its revenue servicing debt.
It’s important to note too that the 25% is based only on what is considered sustainable revenue, so revenue from things like selling land and developer payments do not count because they cannot be relied on in the future. Think of it like applying for a mortgage at the bank: they only care about your salary, not that you won big in the casino last year because that can’t be counted on in the future to help you pay it off.
A Very Brief Timeline Through to the Start of 2025
At the start of this council session the Township had $177.1M1 of debt issued and authorized. This is a healthy balance, very serviceable. Lots of room for expanding infrastructure or building a community centre in Willoughby.
At the start of 2025 total debt had ballooned to $653.4M2 in issued and authorized. This represents a 268% increase in the Township’s debt over just a 2 year period and alarmingly it had eaten up almost all the debt servicing room under our ‘credit limit’. At the start of this year, the Township could only take out enough debt to service $24.5M,3 which is roughly another $300M of debt room. This is the maximum amount of new borrowing the Township can authorize.
The Township does not publish or share periodic updates on borrowing, so from here on out we have to do our own math.
Spring 2025 Borrowing
The Township advanced 4 borrowing bylaws in the Spring of 2025, as detailed below.
At the start of 2025, they had roughly $300M in borrowing capacity and used only $50M. Then, in the fall sitting, something changed: not a single new borrowing bylaw passed. For a council that had been borrowing aggressively for two years, the silence was deafening. You might think, ‘Well, $250M left sounds like plenty of room. Maybe they’re saving it for the community centre?’ Not quite, let’s introduce one more character to this story.
The Township of Langley Housing Trust Society
The Township Housing Trust was set up by this council. Its goal is to provide much needed affordable rental housing. The trust isn’t a department of the Township though, it’s a separate legal entity with its own board of directors, a municipal corporation.
It’s seen quite a bit of success in the first few years of operation too. There are now three projects in Aldergrove, 78th Ave in Willoughby4 and on 199 St5.
The Township has been very excited to announce the housing trust’s success too issuing a press release noting:
The Province is providing $14,459,837 in capital funding through BC Builds towards the Firehall site and $27,946,372 in capital funding through BC Builds towards the Alder Inn site, representing the largest investment in affordable housing in the Township’s history and the largest provincial grant in Township history.(⁴)
On the face of it, this press release offers great news, the Township has received tens of millions in grants, so what is the problem?
How BC Builds Actually Works
Here’s what those announcements didn’t explain.
BC Housing doesn’t write blank cheques. The BC Builds program operates on a specific funding model clearly outlined in their program guidelines: grants plus loans.
According to BC Builds documentation, grants are calculated based on the “equity gap” which is the additional subsidy required to rent 20% of units at 20% below market rates, assuming a 35-year amortization and a debt coverage ratio of 1.1. 6
In plain language: BC Housing calculates how much money you’ll lose by renting some units below market rates, and they give you a grant to cover that gap. Everything else, you finance through loans.
Which raises an obvious question: Who’s going to lend tens of millions of dollars to a brand-new non-profit society with no assets, no revenue history, and no balance sheet? BC Housing is happy to, but only if the Township of Langley guarantees them.
It was very easy to miss but on the November 17th, 2025, Council session, Councillor Richter when asking about debt asked “Does this number include any borrowing as a result of the Langley Housing Trust Society?”. Staff answered, “It does not”. Which gives us a pretty strong indication that both staff and council are aware that the Township is taking on debt on behalf of the housing trust but isn’t saying out loud what that number is.
Here is the critical part, under our community charter, municipal loan guarantees are treated as direct liabilities for the purpose of the debt limit. Any loan we guarantee for the housing trust counts towards our debt ceiling.
Further, because it’s a separate legal entity, the housing trust operates in a grey zone. It is not subject to regular disclosure requirements. We cannot send in a freedom of information request to find out any information about this money. We are guaranteeing at least $100M in loans but have no right to know more about them.
Working the Math Backward
Because the housing trust society is a black-box of information that not even independent councillors seem to have information on, we need to try and make an estimate of what debt is outstanding inside this society.
Luckily for us, construction costs of new wood frame condos is relatively well understood. The Altus Group has a mid range new condo at $425 per square foot7 and the average new condo in metro Vancouver is 769sq ft.8 When we calculate there are also common areas, so need to gross up and add in an extra 15% to the square footage.
Finally these numbers don’t typically include underground parking, which again we have no information on. Typically, construction costs for underground parking are $100k9 per stall. Affordable housing tries to minimize underground parking because of cost, so let’s just say it includes one stall per unit.
No grant has been announced for 199 St. It’s possible there is no grant, not all projects through BC Builds get one.
Again, we have no actual way of verifying this information. We are using industry standard rates and applying them to the very limited information we have about the housing trust. Using this method, we estimate roughly $120.7M of additional debt that will need to be financed through this project—could be less, could be more.
So we started the year with $300M of space left in our credit limit, borrowed $50M through council and another $120M through the housing trust. We are now left with a credit limit of $130M. We’re already well below the cost to build a new rec centre, but wait, there’s more!
Infrastructure Renewal Deficit
While we’ve been looking for the Willoughby rec centre money, we stumbled upon a more immediate crisis. The Township is currently staring at an $86.2M infrastructure renewal deficit that needs to be dealt with over the next 5 years10. This isn’t just a number on a spreadsheet; it’s the cost of everything we own - fire halls, community centres, civic centres all falling apart.
Staff presented three options for dealing with this: do nothing, increase taxes or borrow money. In a responsible budget, you fix a roof with cash from your savings. In the Township of Langley, the piggy bank is empty, leaving additional borrowing as the default mechanism to keep our infrastructure from crumbling.
The Staff Admission
Remember that borrowing that I flagged above that we’d come back to later? In April 2025, Council authorized more borrowing. To address the infrastructure renewal deficit the Township borrowed almost $10M for roof repair and upgrades to two fire halls, WC Blair and West Langley Hall.
If you only read one thing in this section it is this as the justification for borrowing:
The need to borrow funds for capital may arise because of many factors including rising capital costs in recent years, which has depleted funding sources such as surpluses and reserves. In addition, budgets are strained as the Township continues to provide ongoing funding for infrastructure, asset maintenance and protective services in a rapidly growing community. 11
In plain terms there are no funds left to pay out future maintenance, that money is gone and has been spent elsewhere. The $86.2M, if it doesn’t come out of tax increases over the next few years, must come out of borrowing.
We are taking that $130M of room we still had left and now we’re down to under $50M. Starting to see that community centre slipping away?
The Jumbotron Absurdity
This is where the fiscal policy moves from “concerning” to “absurd.” At the exact same moment staff are telling us we are too broke to fix a roof without a loan, Council is finding tens of millions for “wants.”
During their October 6, 2025, meeting, council authorized spending $5.5M on various new screens throughout the Township12. So on one hand, our reserves are too depleted to fix the roofs of fire halls, but on the other there are millions to improve stadium experiences?
So where does this leave us? We have no reserves, no surplus, and are going to be out of borrowing room just to fix what we already have.
Functional Insolvency
It’s important to understand what insolvency looks like in a municipality. Unlike a business, the Township always has taxpayers to backstop what is owed, so it’s not going to declare bankruptcy. Instead, the Township is going to find itself in a situation where it will no longer have financial ability to provide what was promised to us as residents. It has lost the financial flexibility to build new things or respond to unexpected needs.
The Infrastructure Freeze
Road widenings, new parks, and water main repairs stop because there is no money to borrow and no cash in the reserves. Fundamental promises to Langley residents old and new are going to stop because there is no way to fund any of it except out of taxes.
New development is going to be built and there is going to be no possible way to build amenities for the growing population.
This risks inducing a downward spiral. The Township has a ‘growth at all costs’ mentality. We spend money to build infrastructure to attract new development, then use the developer fees to help pay back the debt. Without a constant stream of new infrastructure into new developable areas this risks collapsing and then taxpayers are on the hook for debt payments further straining finances.
Taxpayer Spikes
In normal times, municipalities use debt and reserves to flatten cost spikes. For instance, if there is a large repair that is needed or damage as the result of a disaster. With reserves depleted and no room to borrow additional funds, the onus is on the taxpayer. We risk annual spikes in tax rates to come up with the funds to maintain the Township.
The Crossroads: A Choice Between Two Langleys
If the evidence holds that the Silent Fall of 2025 is the result of a maxed-out credit card, then the era of “legacy”-spending is over. The Township of Langley is now at a fiscal crossroads, and the path we choose next will define this community for the next thirty years.
There is no detour around the math. Council essentially has two ways out of the insolvency spiral:
The Lazy Path: The Tax Hike
The status-quo response to a debt crisis is simple but painful: jack up property taxes to cover the soaring interest on past mistakes. This path treats the symptoms while ignoring the disease. It keeps the “Growth at All Costs” machine running by reaching deeper into the pockets of residents who are already struggling with the cost of living. It is the path of “Managed Decay,” where we pay more every year just to watch our infrastructure crumble.
The Resilient Path: Strong Towns Thinking
There is a better, more optimistic alternative. We can choose to fundamentally change the way Langley builds. By adopting a Strong Towns framework, we can stop chasing high-risk “Legacy Projects” and start focusing on productivity per acre.
This isn’t about austerity or doing “less”, it’s about doing things that actually work. It’s about trading “Stadium Debt” for “Walkable Streets.” It’s about shifting our investment toward “Missing Middle” housing and neighborhood-scale amenities that generate more tax revenue than they cost to maintain.
The path to financial resilience is also the path to a better quality of life. When the Township isn’t pinned against a debt ceiling, it finally has the freedom to say “Yes” to the things that matter: finished parks in Brookswood, a solvent community centre in Willoughby, and a maintenance budget that doesn’t require a 10-year loan to fix a roof.
What Comes Next?
The functional insolvency crisis has been diagnosed. The “Napkin Math” is on the table. Now, it’s time to talk about the cure.
In our next series of articles, we will move past the red flags and start mapping out what it will take to make the Township resilient. We will explore how the Township can start from the bottom up, prioritize its core infrastructure, and ensure that every new acre we build actually pays its own way.
The jumbotron era is over. It’s time to get strong.
The Case Summary (TL;DR)
The Limit: Langley has hit its maximum allowable debt ceiling.
The Cause: Massive, rapid borrowing for three Housing Trust projects has exhausted our “credit card.”
The Crisis: We no longer have enough in reserves to maintain existing facilities. We are now borrowing just to fix leaking roofs on fire halls.
The Verdict: We are entering “Functional Insolvency.” This will lead to massive tax spikes, deferred maintenance, and the cancellation of promised infrastructure like the Willoughby Rec Centre.