SUPPORTS ITEM NO. 1  
                                            CS&B COMMITTEE AGENDA
                                            MARCH 28, 1996       


                         ADMINISTRATIVE REPORT


                                            Date:  March 20, 1996


     TO:       Standing Committee on City Services and Budgets

     FROM:     General Manager of Corporate Services

     SUBJECT:  Tourism Vancouver - 1996 Business Plan



     RECOMMENDATION

          A.   THAT Council approve the portion of Tourism
               Vancouver's 1996 Business Plan funded from the 2%
               Hotel Tax in the amount of $6,809,629 ($6,360,000
               projected and $449,629 carried forward).

          B.   THAT Council approve a contract with Tourism
               Vancouver for publication and distribution of
               tourism-related material for 1996, in an amount not
               to exceed $600,000 before GST, subject to an
               agreement satisfactory to the Director of Legal
               Services.

          C.   THAT Council approve the cost-sharing arrangement
               described in this report between the City and
               Tourism Vancouver in connection with the Asia
               Pacific Economic Cooperation summit (APEC) to be
               held in Vancouver in 1997, on the understanding
               that this arrangement and the $350,000 cost
               contribution ceiling will apply to the total of the
               hosting costs incurred by the City for the summit
               and not to a more restricted subset of those costs.


     COUNCIL POLICY

     City Council must approve the portion of the Business Plan of
     Tourism Vancouver which deals with the allocation of the 2%
     Hotel Tax.

     City Council has supported tourism promotion by way of grants
     to Tourism Vancouver up to 1990 and, thereafter, by way of a
     contract for the publication and distribution of promotional
     material.



     PURPOSE

     This report recommends approval of the portion of the 1996
     Business Plan submitted by Tourism Vancouver dealing with the
     allocation of the 2% Hotel Tax and a fee for service contract
     for the publication and distribution of tourism-related
     material.  Additionally, the report recommends a qualified
     approval of Tourism Vancouver's proposed cost-sharing
     arrangement with the City for the 1997 Asia Pacific Economic

     Cooperation (APEC) summit as described below.
     DISCUSSION

     In accordance with Council policy, Tourism Vancouver has
     submitted its 1996 Business Plan and its 1996 publication and
     distribution services contract proposal for Council
     consideration and approval.  The Business Plan and publication
     contract proposal are attached as the Appendix to this report.

     Council will note that the Business Plan contemplates the
     continued receipt and expenditure of the 2% Hotel Tax.  The
     plan also anticipates municipal contract revenues in addition
     to the 2% tax.  As in prior years, Tourism Vancouver will
     conduct its business activities for the year in accordance
     with the approved plan and budget.  Additionally, the
     Association will file its annual audited financial statements
     with the City for review by the Director of Finance in the
     normal manner.

     An analysis of Tourism Vancouver's 1996 budget indicates the
     following changes from 1995.

                             1995          1996       Percent
                            Actual       Planned      Change 

     Total Budget         $7,947,829   $8,501,179       7.0%
     2% Hotel Tax          5,725,000    6,360,000      11.1%
     2% Hotel Tax Reserve    426,936      449,629       5.3%
     Other Revenues        1,795,893    1,691,550     - 5.8%

     The Association expects to realize a surplus of $1,015 for the
     1995 business year.


     HOTEL TAX

     In order to recognize the lead time between the collection of
     the 2% Hotel Tax and its receipt by the City and Tourism
     Vancouver, the Association has based its 1996 Business Plan on
     the 2% tax revenues to be collected during the 12 month period
     from October 1, 1995 through to September 30, 1996.  This
     collection period treatment is consistent with the business
     plans presented in prior years.

     The following table shows the actual 2% Hotel Tax revenues as
     collected from October 1, 1994 to September 30, 1995 and
     compares those against the 1995 Business Plan.  As indicated,
     the majority of the 2% Hotel Tax revenues have been taken up
     in the 1995 Business Plan, with the remaining funds ($449,629)
     carried forward to 1996.

               1995 2% revenues collected           $6,174,629
               1994 reserve funds                      426,936
               Actual revenues available             6,601,565
               1995 2% revenues budgeted             6,151,936
               1995 2% funds available for 1996        449,629

     Tourism Vancouver projects the 1996 2% Hotel Tax revenues to
     be $6,360,000.  As noted above, these revenues have been
     applied to the 1996 Business Plan.


     PUBLICATION AND DISTRIBUTION CONTRACT

     The City directly contributed to Tourism Vancouver's
     activities by way of grants until 1990, when a contract for

     publications was awarded in place of a grant.  The provision
     of publication services through the 1995 contract was reviewed
     by the City's Economic Development Office during the year, and
     funds were released as Tourism Vancouver successfully met all
     of the terms and conditions of the contract.  A copy of the
     1995 contract is on file in the City Clerk's Office.  The all-
     in contract amount approved by Council after GST was $618,000.

     With the recent closure of the City's Economic Development
     Office, the Director of Finance or his designate will continue
     to review the expenditures related to the publication contract
     for conformity to its terms and conditions before release of
     funds.

     Tourism Vancouver's 1996 contract renewal submission and
     analysis is presented in Schedule A of the Appendix.


     COST-SHARING ARRANGEMENT FOR 1997 APEC SUMMIT

     The City of Vancouver was chosen to be the host city for the
     upcoming Asia Pacific Economic Cooperation summit in November
     of 1997.  The summit is expected to attract about 3,000
     delegates, including foreign dignitaries and international
     media personnel.  The summit agenda includes 3 to 4 days of
     meetings with senior officials, 2 to 3 days of meetings with
     Ministers and a one-day summit with Heads of Government.Staff
     have previously reported that the host City will have certain
     responsibilities which include security, hosting a civic
     reception, pageantry and coordination and regulatory
     assistance.  Given the aforementioned responsibilities, we
     have estimated that the APEC summit could cost the City up to
     $700,000.  Moreover, there are no direct revenues accruing
     back to the City to offset these costs.

     Staff have also suggested that the indirect effects of hosting
     the APEC summit could be significant in the area of image and
     increased world awareness of Vancouver as the Canadian Gateway
     to the Pacific Rim.  Recognizing that this publicity would be
     invaluable in promoting Vancouver as a tourist destination,
     Council instructed staff to approach Tourism Vancouver to
     discuss a cost-sharing arrangement around the City's hosting
     costs.

     Tourism Vancouver, in consultation with its Executive, have
     proposed the following cost-sharing arrangement for the APEC
     summit:

         -  that Tourism Vancouver will undertake to raise funds
            toward costs pertaining to security and related
            services for the APEC summit on a 50:50 cost-share
            basis with the City, to a maximum ceiling of $350,000;
            and,

         -  that payment to the City will be in two instalments.
            The first instalment on December 1, 1996, in the amount
            of $150,000 and the balance to be paid not later than
            July 31, 1997.

     Staff have reviewed this proposal and find it reasonable
     provided the 50:50 cost-sharing arrangement and maximum
     contribution will apply to the total of the hosting costs
     incurred by the City for the APEC summit.
     CONCLUSION

     The 1996 Business Plan submitted by Tourism Vancouver is

     consistent with Council policy and past practice.  I am
     therefore recommending approval of the 1996 Business Plan in
     the amount of $6,809,629 representing the portion of the plan
     covered by the 2% Hotel Tax.  The 1996 contract for
     publication and distribution of promotional materials
     represents the same level of funding as approved by Council in
     1995.  Approval of the proposed publication contract is also
     recommended along with a qualified recommendation on the APEC
     cost-sharing arrangement.

     Representatives of Tourism Vancouver will be in attendance to
     speak to their 1996 Business Plan submission and to answer any
     questions Council may have in that regard.



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