ADMINISTRATIVE REPORT

TO: City Services and Budgets Committee

FROM: General Manager of Corporate Services / Director of Finance

SUBJECT: 2001 Basic Capital Budget

RECOMMENDATIONS

It is Council policy to identify capital funding priorities in three year Capital Plans. These Plans and the associated Capital Financing Plan are developed such that the plan and necessary borrowing authority can be put to the voters at the time of triennial civic elections.

The Capital Plan forms the framework within which annual capital budgets are prepared. The two components of the annual capital budget are:

· Basic Capital, which includes project/program - specific items that were included in the Capital Plan, and
· Supplementary Capital, which includes items which had not been anticipated in the Capital Plan but which have become a priority during the course of the Plan.

The 2000 - 2002 Capital Plan includes provision for $38.0 million in capital expenditures to be funded from the Operating Budget (Capital from Revenue) over the three years of the plan. The 2000 component of this funding was $10.5 million. The 2001 component is $12.6 million.

PURPOSE

The purpose of this report is to summarize the 2001 Capital Budget and to seek Council approval for the allocation of Capital from Revenue funding and for debenture authority necessary to complete the funding of the 2001 Capital Program.

BACKGROUND

The 2000 - 2002 Capital Plan guides the development of annual capital budgets in 2000, 2001 and 2002. Funding for the plan is derived from borrowing authority approved by plebiscite ($85,955,000) and by Council for sewer and water projects ($109,995,000). In addition, the plan includes provision for $38.0 million in capital expenditures to be funded from the Operating Budget (Capital from Revenue) over the three years of the plan.

Borrowing authority from prior Capital Plans has been carried forward into the 2000-2002 Capital Plan and is in addition to the totals indicated above. Authority from the 1991-1993 Capital Plan ($1,038,500) and the 1994-1996 Capital Plan ($1,083,500) has been included in the tables in this report. With the exception of $226,500, this authority was exercised with the February 2001 debenture issue.

Capital from Revenue of $10.5 million was approved in 2000 and $12.6 million was approved as part of the 2001 Operating Budget on April 26, 2001. The balance of $14.9 million will be allocated in 2002.

Council has approved funding for three programs in advance of the 2001 Capital Budget as follows:

· Park Board's capital expenditures related to the re-paving of the 2nd Beach andTotem Pole parking lots in Stanley Park ($380,000).
· A capital grant to Britannia Community Services Centre for construction of a joint facility with Eastside Family Place ($260,000).
· Approval of the Denman Street Reconstruction Project ($942,000).
· City participation in the 2001-2002 Provincial / Municipal Housing Agreement that committed funds from the Affordable Housing Fund ($1.8 million).

Funding for these projects has been included in the recommendations in this report and in the accompanying Engineering and Park Board Capital Budget Reports.

DISCUSSION

1. Funding for the 2001 Basic Capital Budget.

The following table summarizes the total funding for the 2000 - 2002 Capital Plan, as adjusted by Council actions detailed in the Background Section of this report and as proposed in Recommendation A. The table also shows the portion to be allocated to the 2001 Capital Budget and the balance of funding to be available for the remaining year of the Capital Plan.

($`000)

Capital Plan Summary

  

2000
Budget

2001
Budget

Unallocated Balance

 

Capital from Revenue:(1)(4)

$38,000

  

$10,500

$12,600

$14,900

 

Debenture Authority:

Plebiscites (prior years)

2,122

  

1,896

226

0

Plebiscite 2000 - 2002(2)(3)

85,955

  

29,050

30,289

26,616

Sewer

51,045

  

17,015

17,015

$17,015

Water

58,950

  

18,350

20,050

$20,550

Total Debentures

198,072

  

$66,311

$67,580

$64,181

 

Total Funding ($'000)

$236,072

  

$76,811

$80,180

$79,081

1. On July 13, 2000 Council approved a capital grant of $260,000 to Britannia Community Services Centre for construction of a joint facility with Eastside Family Place in advance of the 2001 Supplementary Capital Budget.
2. On March 27, 2001, Council approved $380,000 of funding for the Park Board Asphalt program in advance of the 2001 Capital Budget.
3. On February 15, 2001, Council approved $940,000 of funding for the Denman Street Reconstruction project in advance of the 2001 Streets Capital Budget.
4. On February 20, 2001, Council approved the City's participation in the Provincial Municipal HousingAgreement and committed up to $1.8 million to specific projects from the Affordable Housing Fund.
A summary of the projects/programs and funding in the 2000 - 2002 Capital Plan and in the 2001 Capital Budget is included in Appendix 1. Appendix 2 provides additional detail about the projects/programs funded in the Public Safety, Community Service Initiatives and Other categories of the 2001 Capital Budget. Details of the Engineering and Park Board capital budgets are included in accompanying reports.

As noted in the table, $67,580,000 of the funding for the 2001 Basic Capital Budget comes from debenture authority, including $30,515,000 from plebiscite authority and $37,065,000 is requested as sewer and water authority to be approved by Council.

2. Funding for the 2001 Supplementary Capital Budget

The 2000 - 2002 Capital Plan includes $5.0 million for the Supplementary Capital Budget. Of the $1.9 million allocated in 2000, $1.6 million was used to provide equipment for the Police CIS unit. The allocation recommended for 2001 is $1.5 million. The balance of $1.6 million will be allocated in 2002.

Subject to Council approval of the capital from revenue allocation to Supplementary Capital, recommendations for funding of specific projects will be presented to City Services and Budget Committee on May 17.

COMMENTS ON THE BASIC CAPITAL BUDGET REQUESTS

5. Engineering Basic Capital Budget

The 2001 Engineering Basic Capital Budget has been submitted as an accompanying report and includes the recommendations necessary to provide funding for identified projects . The Engineer has requested funding totalling $59,288,500 which fits within the 2000-2002 Capital Plan allocation. This funding is provided from 1994 - 1996 Capital Plan borrowing authority approved by plebiscite ($226,500); 2000 - 2002 borrowing authority approved by plebiscite ($21,997,000) and by Council for sewer and water ($37,065,000).

6. Park Board Capital Budget

The Park Board has brought forward a request for its 2001 Capital Budget at $8,131,417. Funding for this capital budget is provided from plebiscite authority ($5,951,417) and from capital from revenue ($2,180,000). Details of the Park Board Capital Budget were approved by the Park Board on February 12, 2001 and are included in the accompanying report from the General Manager of Parks and Recreation.

Operating costs associated with the 2001 Park Board Capital Budget will begin to impact the Operating Budget in 2002.

3. Public Safety

The 2000 - 2002 Capital Plan includes funding of $4,357,000 for Fire and Police capital programs.

The plan includes funds for the replacement of the existing two-bay Firehall #13 (790 East 24th Avenue) which is 88 years old. This year's capital budget request of $2,340,000 provides funding for continuation of conceptual design work and construction costs. This project is funded from plebiscite authority.

4. Community Services Initiatives

The 2000 - 2002 Capital Plan includes funding of $9,850,000 for projects related to social and cultural facilities owned by the City and by others. These include: upgrading or relocation of social service, daycare and cultural facilities; a contribution to the Affordable Housing Fund; funding for the Downtown Eastside revitalization program; and continuation of the Public Art program. All of these projects are funded from Capital from Revenue.

The 2001 Capital Budget includes funding of $5,740,000 allocated to the following projects/programs:

· Upgrading City-owned social & cultural facilities $ 675,000
· Capital Grants to privately owned social & cultural facilities 150,000
· Little Mountain Neighbourhood House 830,000
· Affordable Housing 1,850,000
· Downtown Eastside Initiatives 1,985,000
· Public Art Program 250,000

Approval of expenditures under some of these allocations have already been approved by Council (Affordable Housing Fund) or will be the subject of future reports.

5. Other

The Other Category of the Capital Plan includes allocations for maintenance of the City Hall Precinct (City Hall, East Wing and West Annex buildings), and for conceptual and design work related to a replacement branch library. All of these projects are funded from Capital from Revenue.

The 2001 Capital Budget includes allocation of $3,180,000 as follows:

· City Hall Precinct Facilities $680,000
· Civic Buildings: Major Maintenance Program $1,680,000
· Roof Replacement Program $520,000
· Library Facilities $300,000

Funding for major building maintenance and upgrading in the City Hall precinct includes projects identified as part of the comprehensive facilities strategic plan. The available funding will provide for ongoing capital maintenance of major building systems and compliance with WCB standards at the City Hall precinct and at other civic facilities and for renovation/upgrading work necessary as a result of service improvements or reorganizations.

CONCLUSION

The 2001 Capital Budget represents the second annual budget arising from the 2000 - 2002 Capital Plan and provides for the allocation of funding included in that Plan to individual projects and programs.

LINK TO APPENDIX 1

 

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