ADMINISTRATIVE REPORT
Date: March 29, 2001
Author/Local: B.Pearce/6276
RTS No.01967
CC File No. 3143
CS&B: April 12, 2001
TO: |
Standing Committee on City Services and Budgets |
FROM: |
General Manager of Corporate Services |
SUBJECT: |
Vancouver Economic Development Commission - 2001 Business Plan and Budget |
RECOMMENDATION
A. THAT Council approve renewal of the annual contract with the Vancouver Economic Development Commission for the 2001 fiscal year at a cost of $220,000 plus an additional $30,000 to cover inflation and to cover core expenses in 2001, for a total of $250,000 plus applicable net GST. Source of funds to be $223,300 from the 2001 Operating Budget, $26,700 from Contingency Reserve.
B. THAT the Director of Legal Services be instructed to amend the contract with the Vancouver Economic Development Commission to reflect provisions of Recommendation A.
CITY MANAGER'S COMMENTS
The City Manager recommends that Council provide sufficient funding for the core services carried out by the VEDC. These are activities identified by the VEDC Commissioners as means to achieving the VEDC mandate. The VEDC Business Plan contemplates annual financial support of $340,000 from the City of Vancouver. As almost one third of 2001 has passed with reduced spending levels at the VEDC, $250,000 will be sufficient to cover core operating costs in 2001.
Costs additional to core services, such as special projects and loan repayment, should be addressed through alternative sources of funding to be identified by the VEDC.
COUNCIL POLICY
Council has adopted a policy of contracting with the Vancouver Economic Development Commission for the provision of economic development services, and approval of its Annual Business Plan.
PURPOSE
The purpose of this report is to seek approval for the Vancouver Economic Development Commission 2001 Business Plan (Appendix 1), and to enter into a contract with the VEDC for the provision of economic development services.
BACKGROUND
The Vancouver Economic Development Commission is an independent, non-profit organization created by Council in 1997 as a focus for economic development in the City. The Commission seeks to unite the private and public sectors in the active and progressive management of Vancouver's economic growth.
The Commission consists of up to fourteen volunteer members drawn from the Vancouver business community. Collectively, the Commissioners bring an array of knowledge and contacts in such areas as urban planning, recreation, transportation, international finance, high technology, economic development, communications, international trade and urban development. Commissioners are appointed by Council, and in general, serve two year terms. In addition, two members of Council serve as ex-officio members.
The VEDC provides economic development services to the City, which are funded through a fee for service contract. Renewal of the services provided by the Commission are subject to annual review by Council, and are contingent upon review of the results of Commission's activities including reporting of the Commission's accomplishments, operating and financial results for the past year (Appendix 2: VEDC Year End Report) and a review of the audited financial statements. The Commission must also present the City with the upcoming year's business plan and operating budget for Council consideration and approval.
2000 Year End Review
During 2001, the VEDC carried out a number of activities in line with the 2000 Business Plan. The following summarizes these activities and highlights their achievements during 2000:
Core Functions
Responding to Inquires:
· Provided point of contact for business information in Vancouver;
· Responded to over 800 information requests, 200 in-depth location information requests;
· Met with 20 companies, site selectors and location managers to promote Vancouver as a business location. These actions helped to bring two call centres to Vancouver.
Promotions:
· Publications including 1) "City of Opportunity: A guide to Business Opportunities in Vancouver", 2) information inserts on industry specific opportunities, and 3) demographic and economic information regarding Vancouver.
· Electronic promotions include 1) VEDC web-site and 2) electronic newsletter.
· Promotion of Vancouver at international events such as 1) Globe 2000 and 2) Hong Kong Information Infrastructure Expo and Trade Show 2000.
Policy Advice:
· Presented commentary on issues before Council, such as 1) Regional Transportation Plan and 2) TransLink Financing.
· Researched key factors related to Vancouver's economy and economic outlook, resulting in the publication of the "Economic Outlook".
Secretariat Duties in support of Council:
· Met with and made presentations to twenty-five foreign delegations and incoming trade missions
Securing Alternate Sources of Funding:
· Attracted alternate funding from Federal Government for projects in DTES.
· Secured $500,000 in enterprise development funding from Western Economic
Diversification.
International City Project
· Coordinated an outgoing trade mission to China and hosted numerous incoming delegations.
· Translation of VEDC promotional materials into a variety of languages, in large part funded through in-kind and volunteer support.
· Research was carried out to market Vancouver as a sustainable and livable city.
Small Business Initiative
· Established a small business E-Office, which offers a range of resources to help small business grow in Vancouver. Since May 2000, this web-site has attracted 12,400 visitors, and averages 120 visitors per day.
· Offered over 40 workshops and seminars on topics such as e-commerce and investing in Vancouver to over 2,000 businesspeople.
· Provided other resources for business, such as Business Improvement Resource Guide (in cooperation with City staff) and a financing guide for small and medium sized businesses.
Downtown Eastside Economic Revitalization
· Completed Phase One of the Downtown Eastside Capacity Study.
· Launched the Lease Subsidy/Tenant Improvement Programs.
· Participated in a number of DTES committees and teams.
· Provided workshops intended to stimulate economic activity in the DTES.
· Launched Partners for Economic and Community Help ("PEACH"), an initiative of the Vancouver Agreement.
2000 Financial Results As documented in the Council report of November 29, 1999, City staff considered the VEDC's 2000 Business Plan and Budget aggressive. A revenue budget of $1,190,000 was projected. At 2000 year end, total revenues achieved was $634,000; this is primarily due to revenue generation and corporate sponsorship revenues falling below target. Expenditures exceeded revenues in 2000 by $70,000 (as per unaudited financial statements), resulting in an operating shortfall at the year end. On March 27, 2001, Council provided a loan to the
VEDC to address the operating shortfall; these funds are repayable with interest over a maximum of four years.
DISCUSSION
2001 Business Plan and Budget
In past years, the VEDC has undertaken a number of projects in addition to their core activities. While many of these projects have been worthwhile and were aimed at economic development, they reduced the emphasis on those activities which are key to addressing the VEDC core mandate. In 2001, Commissioners expressed a desire to return to those activities which directly achieve the VEDC mandate. The Commission's mandate is:
¨ to promote economic development for the City;
¨ to serve as a link between City Hall and the business community; and
¨ to be a vehicle for leadership in the definition and realization of Vancouver's economic potential.
To achieve this mandate, the VEDC has identified key objectives in their Business Plan which will focus VEDC efforts in 2001.
The 2001 Business Plan proposes activities which address six primary objectives:
1. Provide economic information on Vancouver;
2. Promote Vancouver locally, nationally and internationally;
3. Provide advice on economic issues of substance to the City;
4. Forge strategic relationships with public and private entities in order to enhance economic development in the City of Vancouver;
5. Identify and communicate key economic indicators to gauge economic progress; and
6. Provide secretariat duties in support of the Commission and members of Council.
Specific activities and measurable deliverables for each of these objectives are detailed in the 2001 Business Plan. Achievement of these objectives are intended to provide the following benefits to Vancouver:
· Attraction of investment and jobs to Vancouver.
· Increase global knowledge and business interest in the City as a place to do business.
· Provide advice to Council on economic issues relevant to the City.
· Provide feedback to Council on perceptions and opinions from the business community.
FINANCIAL IMPLICATIONS
The cost to deliver the activities identified in the 2001 Business Plan is approximately $329,900 annually. In addition, the 2001 Budget includes a provision for loan repayment to the City of Vancouver in the amount of $20,100. The total budget for 2001 is therefore $350,000.
Out of the $350,000, $10,000 is to come from limited corporate sponsorship. The VEDC's 2001 Business Plan contemplates financial support from the City of Vancouver in the amount of $340,000. This support would provide full funding for the core services as well as coverage of the debt repayment in 2001. The ability of the VEDC to generate significant sponsorship or revenue generation funding has been shown to be limited and the 2001 Budget does not contemplate any further financial support from alternate sources.
Although the Business Plan contemplates $329,900 for core activities, early 2001 has been a transitional period for the VEDC and expenditures have not been made to this level. A cash flow projection to 2001 year end has been carried out by city staff, and this indicates the actual need of the VEDC in 2001 to be $250,000, excluding loan payment. This is based upon reduced spending in the months of January to April, and full spending from May to December.
The City of Vancouver's 2001 Operating Budget contains provision for $223,300 for the annual operating contract with the VEDC. Provision for the incremental amount of $26,700 has not been made in the City's budget. This additional funding would be provided from the 2001 Contingency Reserve, subject to Council approval.
CONCLUSION
The VEDC has submitted its 2001 Business Plan and Budget and has requested that the City of Vancouver renew the annual operating contract and provide the funding necessary to fund core activities. Staff recommend approval of funding in the amount of $250,000 for 2001.
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