Vancouver Economic Development Commission

2001 Business Plan

Table of Contents

	Executive Summary	2
Part I	Introduction	3
Part II	Year 2000 in Review	4
Part III A B	2001 Business Plan Core Services Investment Promotion	6 6 12
Part IV	Financial Plan	14
Part V	Challenges & Opportunities	16

Executive Summary

The Vancouver Economic Development Commission in 2001:

The role of the Commission is to promote Vancouver's economic growth and to encourage a healthy business environment for the City through coordinated action by the private and public sectors.

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 its mandate, the Vancouver Economic Development Commission has identified a number of objectives for 2001:

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.

In addition to the core activities, the VEDC will also carry out the following project, subject to attainment of resources from alternate sources:

¨ The City of Vancouver Investment Promotion Initiative, focusing on those sectors and industries critical to Vancouver's capacity to compete in the global new economy.

Part I: Introduction

The Role of the Commission

The role of the Commission is to promote Vancouver's economic growth and to encourage a healthy business environment for the City through coordinated action by the private and public sectors.

The Commission works with the business community and all levels of government to urge economic development of the City while preserving the cultural and environmental values our citizens treasure.

The 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.

In order to focus on this mandate, the VEDC has identified six objectives for 2001:

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.

In 1999, Vancouver City Council mandated the VEDC to lead the Downtown Eastside Revitalization Strategy. This mandate lapsed December 31, 2000. Since that time, the VEDC has continued work on DTES initiatives. It is anticipated that these activities will be transitioned over to a new organization in the coming months. This organization, Partners for Economic and Community Help ("PEACH"), is focused solely on Downtown Eastside activities, and will continue the valuable initiatives begun by the VEDC. The VEDC will continue to play an advisory role in Downtown Eastside revitalization.

Part II: Year 2000 in Review

In 2000, the Vancouver Economic Development Commission carried out numerous activities to fulfill the 2000 Business Plan.

The following summarizes the activities of the Commission in these areas and highlights their achievements during 2000. For a more complete version of VEDC 2000 Activities and Accomplishments, a Year End Report is available from the VEDC.

Core Functions

¨ Responding to Inquiries: Provided point of contact for business information in Vancouver. Responded to over 800 information requests, 200 in-depth location information requests, and met with 20 companies, site selectors and location managers to promote Vancouver as a business location.
¨ Promotions: Published numerous publications including "City of Opportunity: A guide to Business Opportunities in Vancouver", information inserts on industry specific opportunities, and demographic and economic information regarding Vancouver. Electronic promotions include the VEDC's web-site and electronic newsletter. Promoted Vancouver at international events such as Globe 2000 and the Hong Kong Information Infrastructure Expo and Trade Show 2000.
¨ Economic Policy & Research: Presented commentary on issues before Council, such as Regional Transportation Plan and Translink Financing. Researched key factors related to Vancouver's economy and economic outlook, resulting in the publication of the "Economic Outlook".

International City Project

¨ Coordinated an outgoing trade mission to China and hosted numerous incoming delegations. International City projects also included the 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 and funded by the three levels of government.

2000 Financial Results
A budget of $1,190,000 was projected for 2000, and as at December 31, 2000, revenues received amount to $634,817. However, VEDC expenditures in 2000 were $704,794, resulting in an operating shortfall of $69,977 in 2000.

The shortfall has resulted primarily from the absence of proper project accounting controls in place at the VEDC in 1999 and early 2000, resulting in overspending on certain projects. Staff were hired to carry out project activities, but in fact, there were inadequate committed revenues for some project staff. Subsequently, the anticipated revenues for projects did not materialize as expected, which resulted in the shortfall. The VEDC also incurred expenses which were not contemplated at the beginning of 2000. Audit and Legal fees were much higher than originally anticipated, and the implementation in May 2000 of a benefits plan for VEDC employees, not anticipated in the original 2000 Budget, increased staffing costs for the year.

Part III: 2001 Business Plan

A. Core Services

The Commission has identified the need to address and achieve the VEDC mandate in 2001. To this end, a number of objectives have been developed which focus VEDC activities for this year.

Objectives to address this mandate in 2001 are:

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.

Following are activities and deliverables for each of these Objectives.

Objective #1 Provide Economic Information on Vancouver

Activities:

a) Produce a variety of publications which provide economic information relevant to Vancouver;
Deliverables:
¨ Fact Sheets on specific business sectors (One per quarter): Film & Television; Research and Development; Biotechnology; High Tech Business Parks;
¨ Economic Outlook 2002 (To be produced in 4^th Quarter, based upon attaining sponsorship);
a) Provide economic information on the Internet;

Deliverables:

¨ Ongoing updates and maintenance of the VEDC web-site (Ongoing);
a) Respond to Inquiries received by phone, fax, letter and email;
Deliverables:
¨ Target 24 hour turn around on information requests;
¨ Provide detailed information on a fee for service basis;
¨ Contacts Tracking System will be installed by June 30, 2001. (To log all instances of requests for information). A follow-up process will be implemented to determine impact of responses received;
a) Carry out Research on economic issues of importance in Vancouver in order to provide relevant information for dissemination;

Deliverables:

¨ Acquisition and Analysis of data from Conference Board of Canada, Statistics Canada, and other sources, which will be used to update VEDC publications (Print and electronic) on an ongoing basis, and to determine other economic issues which should be investigated.

Value of Objective #1 Activities
The attainment of the foregoing will provide relevant information to prospective business/investors, with the anticipated impact of attracting investment and jobs to Vancouver. Measurement of success may be obtained by means of customer surveys to identify impact of VEDC activities.

Objective #2 Promote Vancouver locally, nationally and internationally

Activities:

a) Develop VEDC identity to facilitate increased Vancouver and VEDC profile;
Deliverables:
¨ Creation of VEDC Logo/Brand (Summer 2001);
¨ Application of logo/brand to VEDC materials (Fall, 2001);
a) Proactive promotion of economic opportunities in Vancouver through electronic means;
Deliverables:
¨ Identify key sectors for targeted email outreach quarterly to raise awareness of economic opportunities in Vancouver (Quarterly);
a) Promotion of Vancouver through advertising in relevant publications;

Deliverables:

¨ Advertisement in three high profile publications in 2001, including "Moving to Vancouver". Other publications (site selection publications) to be identified (Deadlines dependent upon publishers timelines);
a) Participate in relevant Trade Shows to increase awareness of economic opportunities in Vancouver;

Deliverables:

¨ Participation in 3 major trade events in 2001. IDRC (Seattle, April 2001), World Education Market (Vancouver, Spring 2001), and one further event to be identified in second half of 2001;

Value of Objective #2 Activities
The attainment of the foregoing activities is intended to have the impact of increased business interest in Vancouver, demonstrable by increase in inquiries, hits on web-site, requests for VEDC publications, detailed information requests.

Objective #3 Provide advice on economic issues of substance to the City

Activities:

a) Respond to Council's requests on economic issues;
Deliverables:
¨ Documentation summarizing key issues of interest for Council's information (Timelines as determined by Council requirements);
a) Provide commentary and bring attention to issues of economic importance to the City and business community;

Deliverables:

¨ In 2001: Commentary to be provided on Downtown Transportation Plan and the Vancouver Trade and Convention Centre (Summer 2001);
a) Respond to media requests and provide commentary on economic issues;

Deliverables:

¨ Documentation summarizing issue of interest provided in a timely manner.
a) Advise Council on retention/attraction strategies for major businesses and events of economic substance to the City

Deliverables:

¨ Commissioners will be identified to prepare a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to be used in an annual in camera meeting with Council.

Value of Objective #3 Activities
The attainment of the foregoing activities will provide advice on economic issues which reflects business community perceptions and opinions.

Objective #4 Forge strategic relationships with public and private entities in order to enhance economic development in the City of Vancouver

Activities:

a) Participation in events which pertain to Vancouver's economic development, such as Regular Board of Trade luncheons, Economic Development Association of British Columbia Conference, others to be identified;
b) Organize VEDC sponsored events to introduce the Corporate sector to the work done by the VEDC;
Deliverables:
¨ Year End Wrap Up Event (Late Fall, 2001), Breakfast with the Mayor (Fall 2001);

a) Strengthen links with City Hall;
Deliverables:
¨ Identification of ways City Hall can aid the VEDC in reaching business community (Summer 2001), such as provision of VEDC publications in City mailings.
a) Meet with public and private entities on a regular basis to determine opportunities to support or undertake specific mutual actions to promote economic activity in the City so as to not replicate functions;

Deliverables:

¨ Commissioners will be identified to forge working partnerships with other organizations to undertake various mutual activities and update the Commission and Council on all actions which are initiated to promote economic activity in the City.

Value of Objective #4 Activities
The attainment of the foregoing activities will help to ensure the community is aware of and understands the VEDC mandate and the benefits and opportunities VEDC can provide to the business community.

Objective #5 Identify and communicate key economic indicators to gauge economic progress.

Activities:

a) Carry out a bench-marking exercise to compare VEDC activities, funding levels and performance measures relative to other economic development organizations;
Deliverables:
¨ A Report on other economic development organizations, their activities, funding, funding sources, and performance measures (Summer 2001). Benchmarks would assist the VEDC in future planning and budgeting;
a) Formulation of a VEDC Strategic Plan;

Deliverables:

¨ Documentation of VEDC priorities, funding requirements, and long-term strategies to attain priorities (Fall 2001);
a) Identify key measures of success in Vancouver's economy;

Deliverables:

¨ A report identifying economic indicators by which to gauge economic progress (Fall 2001).
a) Develop internal performance measures and set long term and short term targets and objectives;

Deliverables:

¨ Framework to which measurement of VEDC performance can be made.

Objective #6 Provide secretariat duties in support of the Commission and members of Council

Activities:

a) Coordination of Meetings with Commissioners;
Deliverables:
¨ Monthly meetings to provide updates on activities, receive guidance on future direction, and to provide a forum for discussion on economic issues of importance to the VEDC;
a) Coordination of VEDC Executive Committee meetings to brief, prepare, and solicit input from Executive Committee members in advance of monthly Commission meetings;
b) Coordination of Advisory Board meetings;

Deliverables:

¨ Two Advisory Board meetings will be held during 2001 (June and October) to expand linkages with business, academics and public sector in Vancouver;
a) Provide information regarding status of VEDC objectives and activities to interested parties;

Deliverables:

¨ Quarterly reports will be presented to apprise stakeholders of VEDC activities and financial status;
¨ Quarterly meetings will be held with the City of Vancouver's Corporate Services staff to provide updates on financial status and activities;
a) Provision of ongoing administrative support to Commissioners and staff;

Deliverables:

¨ Operation of VEDC office (Ongoing).

FINANCIAL REQUIREMENTS
In order to support all of the identified objectives and activities discussed above, the VEDC will require annual financial resources of $350,000.

The City of Vancouver has, in the past, provided funding for the core elements of the VEDC Business Plan. In 2000, $220,000 was provided for this purpose. The ongoing core operating costs have been supplemented in the past by corporate sponsorship, revenue generation, and by support from other project activities.

Going forward, the VEDC will focus on activities intended to fulfill its mandate. This focus limits the VEDC's ability to raise other revenues in support of the core activities. For this reason, the VEDC requests financial support in the amount of $340,000 from the City of Vancouver for the six objectives and corresponding activities as outlined in this Business Plan.

Limited revenues will be generated through corporate sponsorship; as of the end of March 2001, VEDC staff have generated $10,000 in sponsorship through the web-site. Further corporate sponsorship will pursued, but as these are not guaranteed revenues, should not be used to off-set ongoing core expenditures. Instead, if achieved, additional revenues will be utilized to off-set publication costs for VEDC documents, such as the Economic Outlook. VEDC publications will primarily be undertaken on a cost recovery basis. To the extent that further revenues can be generated, they will be used to augment core activity expenses and create a financial reserve.

In order for the VEDC to successfully meet the activities and objectives discussed above the following expense budget is estimated:

Revenues					Core annual operating costs
Service Contract CofV			220,000		Audit			3,500
Requested increase			120,000		Bank charges/interest			200
Corporate Sponsorship			10,000		Communications			8,000
Total revenue			350,000		Dues and subscriptions			1,000
					Hospitality and entertainment			4,300
					Accounting services			7,000
					Legal services			2,000
					Insurance			1,000
					Maintenance/Parking			3,000
					Meetings and conferences			1,000
					Office supplies			10,000
					Office equipment			10,000
					Printing and publications			5,000
					Promotion			25,000
					Rent-gross			50,400
					Research/Data Purchase			5,500
					Salaries /benefits			190,000
					Travel			3,000
					Total core costs			329,900
					Other costs
					Loan Repayment			20,100
					Total 2001 Costs			350,000

It is recommended that a request be made to council for the following:

¨ Consider increasing the annual services contract to $340,000 to address the core operating expenses.

Other outstanding financial liabilities at the time of the writing of this Business Plan include the extraordinary costs associated with the departure of the Executive Director in January 2001, and costs associated with the cancellation of the VEDC relocation. The former costs are addressed in a Report To Council in March 2001, while the latter costs have not been precisely identified.

A. Vancouver Investment Promotion Initiative

Objective
To lead a strategic initiative, with participation from the private and public sectors, to attract investors and high tech industries to the City of Vancouver. The initiative is intended to be a multi-year project to raise the profile of Vancouver as a prime location for high tech firms, with particular emphasis on the industrial technology parks in the False Creek Flats and Broadway-Grandview areas.

Deliverables

· To complete an assessment and develop a marketing plan to target key industries, companies and entities for recruitment to Vancouver.
· To develop a comprehensive web-site as an information resource on Vancouver's attraction as a high tech location, and to prepare a full range of promotional and collateral materials in electronic and printed formats for distribution to selected targets. Advertising will also be undertaken to reinforce the promotional effort.
· To participate in major international trade shows and other industry events and arrange visits for incoming delegations to showcase investment opportunities in Vancouver.
· To undertake research to gather statistical and comparative data in support of the above objectives.

Resource requirements: Up to $100,000

The proposed budget for the first phase of this initiative is $100,000. It is intended that the funding will be provided through an equal combination of public funds from the federal government administered Program for Export Market Development - Investment (PEMD-I) and corporate sponsorships. PEMD-I had approved $50,000 for this initiative which was to be equally matched by sponsorship funds and be completely expended by March 31, 2001. Given the late start to this initiative and a number of other factors, commitments from partners total $17,500 to date, with additional funds being sought. The plan is to utilize this federal money and an equivalent amount of sponsorship support, totaling $35,000, for the development of print and electronic promotional materials prior to the end of March, 2001.

In May 2001 additional federal government support under PEMD-II will be sought. This funding, which will require additional corporate sponsorships, will be used to complete the first phase of the investment promotion initiative. This will involve trade show attendance, advertising, selected research, updating the web-site, undertaking special events, hosting delegations, etc. As well, this initiative is being led by a Project Director who has been made available to the Commission at no charge from Industry Canada, Vancouver, through an Interchange Canada Agreement for six months from January 1, to June 30, 2001. At present there is no provision for retaining the services of the Project Director. It is highly unlikely that this "free" resource will be available beyond the six-month period. As such, alternate arrangements must be made which could potentially involve securing additional sponsorships to cover salary costs, or utilizing existing VEDC staff to continue the initiative.

For the purposes of this Business Plan, a conservative estimate of potential revenues has been set at $35,000 for this project.

Financial situation to March 31, 2001

Revenues			Expenses
Service contract - City of Vancouver	-		Printing and Publications	20,000
Special Projects - City of Vancouver	-		Website development	15,000
PEMD-I Funding (approved)	17,500		CD-ROM production
Corporate Sponsorships (committed)	17,500		Advertising
	35,000		Trade Show expenses
			Research
			Total	35,000

Preliminary Estimates, March 31 to Dec. 31, 2001 - Not included in 2001 Budget

Revenues			Expenses
Service contract - City of Vancouver	-		Printing and Publications
Special Projects - City of Vancouver	-		Website development
PEMD-I Funding (new authority sought)	32,500		CD-ROM (subject to review)	20,000
Corporate Sponsorships	32,500		Advertising	10000
	65,000		Trade Show expenses	25,000
			Research Project Director (unfunded)	10,000
			Total	65,000

Part IV: Financial Plan

The Commission's core funding is provided pursuant to the terms of an annual operating contract with the City of Vancouver. In addition, the VEDC has supplemented this core funding through a variety of other funding sources.

In the past, this augmentation of resources has been carried out through a variety of mechanisms, including:

Alternate Funding: The Commission has been successful in securing funding from various government programs, either on a project-specific basis, or through programs of general application such as Summer Student Employment. Often, projects undertaken by the Commission that utilize funding from other government programs require matching contributions from corporate partners.

Corporate Sponsorship: The Commission secures sponsorship support both in the form of cash payments and through the provision of in-kind goods and services. For accounting purposes, the Commission distinguishes between cash contributions (whether project-specific or general) paid directly to the Commission, and in-kind support, where funds are paid to third parties on behalf of Commission activities. A good example of this is advertising revenue paid in support of a Commission publication.

Revenue Income: This includes cash received in return for the acquisition of Commission products or services, such as the sale of Commission publications, or web-site advertising. It also includes flow-through funding for Commission initiatives, such as fees for participation in Commission activities (i.e. outbound trade missions). The Commission has done contract work for other organizations that have similar or complementary program objectives.

Volunteers and Donated Services
The VEDC has received substantial support from volunteers and from other donated services. Volunteers and student interns provide reception services, translations, project specific skills, as well as support for ongoing VEDC activities. Without the support of these volunteers, vital work would not be carried out without further expenditure by the VEDC. Donated services have been provided on an ongoing basis from Rogers Cable, now Shaw, in the form of cable and internet services. High quality cable provides exceptional internet capacity to the VEDC. Through Industry Canada, staff support has been donated in the form of an Investment Promotions Director; this position has been provided free of charge for a six month term (January to June, 2001). The provision of this resource will allow the VEDC to carry out the Investment Promotion Initiative without direct expenditure by the VEDC.

Financial Plan 2001
As a result of the difficulties in attaining the revenue targets in 2000, the Vancouver Economic Development Commission has identified 2001 as a transitional year. In 2001, the VEDC will focus on core activities, and will not depend upon alternate funding, revenue generation or corporate sponsorships to augment revenues for core activities. The VEDC will not undertake any activity which does not have identified and committed revenues.

Due to the operating shortfall in 2000, the City of Vancouver has provided repayable financial assistance to address financial commitments. The VEDC will repay this advance over a four year term, with interest. Annual payments to the City of Vancouver will be $20,100, based upon a lending rate of 5.75% annually.

The VEDC proposes to meet these payments by allocating a portion of the core funding to loan repayment and also where practical, the VEDC will endeavor to pursue revenues from initiatives such as web sponsorships. A portion of such revenues could be allocated to the loan repayment.

Vancouver Economic Development Commission
2001 Budget

			Core Program	Investment	TOTAL
				Promotion
Revenues
City of Vancouver Contract			220,000	-	220,000
Additional Requested from COV			120,000		120,000
Alternate Funding			-	17,500	17,500
Corporate Sponsorship			10,000	17,500	27,500
Revenue Generation				-	-
Total			350,000	35,000	385,000
Expenses
Rent			50,400
Salaries			190,000
Legal/Financial			13,700
Promotions			25,000	15,000
Publications			5,000	20,000
Loan repayment			20,100
Other Operating			45,800
Total			350,000	35,000	385,000
Surplus (Deficit)			-	-	-

Part V:Challenges & Opportunities

Review of VEDC mandate/activities

It has been five years since the Economic Development Task Force presented the report to Council that led to the creation of the Commission. Much has happened over this period and successive Commissions have expressed concern about how the organization is able to address expanding need for its services.

The Commission will initiate an independent review of its structure, mandate, organization and resource requirements relative to the emerging economic development priorities of the region. This review will be completed before the conclusion of the Commission's fifth year of operation in time to shape the 2002 Business Plan. Much of this work will be done through the auspices of the Commission's Advisory Board.

Support for Core Activities
The VEDC has been successful at achieving support from such public sector organizations as Western Economic Diversification and Human Resources Development Canada. Substantial support has also been received through sponsorship in kind. However, other alternate funding sources such as revenue generation and corporate sponsorship targets have fallen below target. Throughout 2001, concern was expressed that the Commission was under-funded relative to the level of services required to meet its core services contract with the City of Vancouver.

The City of Vancouver provides $220,000 annually for the provision of core economic development services. The cost to provide these services exceeds the annual allocation from Council. In order to continue to provide these services in an effective manner, a stable source of revenue needs to be identified.

Bench-Marking
The Vancouver Economic Development Task Force identified a number of objectives in 1996. One of these was to develop meaningful benchmarks against which to measure progress in the achievement of our economic development. Benchmarks would assist the VEDC in future planning and budgeting.

In 2000, preliminary research comparing funding levels of economic development offices in Canada and the US was initiated by VEDC. Further research should be undertaken in 2001 to evaluate an appropriate level of funding for the provision of economic development services in Vancouver.