2001 Supplementary Capital Budget

ADMINISTRATIVE REPORT

Dated: May 20, 2001
Author/Local: Ken Bayne / 7223
RTS #02015
CC File No. 1602
CS&B: June 7, 2001

TO: Standing Committee on City Services and Budgets

FROM: General Manager of Corporate Services / Director of Finance

SUBJECT: 2001 Supplementary Capital Budget

RECOMMENDATION

A. THAT the projects identified as RECOMMENDED in Appendix 1 and totalling $1,500,000 be approved; source of funds to be the 2001 Supplementary Capital Budget.

B. THAT the following Fire Department requests as summarized in Appendix 1 and detailed in Appendix 2 be approved with funding from existing Fire Basic Capital for fire hall improvements and replacement:

11. Relocation of VFRS Training Offices/Classrooms $335,000
12. Strength Apparatus Bay Floor at Firehall #6 $50,000

COUNCIL POLICY

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 theCapital Plan but which have become a priority during the course of the Plan.

PURPOSE

The purpose of this report is to forward the projects recommended for funding from the 2001 Supplementary Capital Budget to Council for approval.

BACKGROUND

The City's Capital Plan normally provide two types of funding:

· Basic Capital provides for those projects and on-going programs that can be planned
in advance,
· Supplementary Capital deals with expenditures of a capital nature that arise during the three-year duration of a Capital Plan. Supplementary Capital has also been utilized as a source of funding for major building maintenance programs in cases where insufficient funding is available in the operating or basic capital budgets.

The 2000 - 2002 Capital Plan includes provision for $5.0 million in Supplementary Capital expenditures to be funded from the Operating Budget (Capital from Revenue) over the three years of the plan. The 2000 Supplementary Capital Budget included funding of $1.9 million.
On July 13, 2000, Council approved a grant to Britannia Community Services Society for construction of a joint facility with the East Side Family Place. Funding of $260,000 was approved in advance of the 2001 Supplementary Capital Budget.

On May 10, 2001, Council approved the allocation of $1.5 million of Capital from Revenue funding to the 2001 Supplementary Capital Budget. Of these funds, $260,000 has been pre-approved for the joint Britannia / East Side Family Place facility.

DISCUSSION

Appendix 1 summarizes the submissions to the 2001 Supplementary Capital Budget that total $5.8 million. Details of these requests are included in Appendix 2 entitled "Submissions to the 2001 Supplementary Capital Budget" (limited distribution).

Appendix 1 also summarizes the recommendations of the staff group that reviewed these requests. That group was composed of the Deputy City Manager, Director of Facilities Development, the Director of Financial Planning and the Manager of Budgets. Each of the stakeholders who submitted requests for funding were invited to participate in the reviewmeeting.

The highest priority items are recommended for funding from the 2001 Supplementary Capital Budget. In addition, funding from alternative sources have been identified for several projects submitted to the process, including existing City sources (the Operating Budget or Basic Capital Budget) as well as outside sources. As necessary, these items will be submitted to Council for specific funding approval.

1. Comments on Projects Recommended for Funding

The following comments highlight the issues related to the recommended funding levels of several projects submitted to the 2001 Supplementary Capital Budget.

City Hall Precinct Space Upgrades $393,000

There are a number of space renovation or upgrading projects ongoing within the City Hall Precinct. These include renovation of the East Wing and sub-ground to accommodate the development review process; the relocation of Corporate Service staff from the main building to the West Annex to accommodate a new customer service centre aimed at Engineering activities; upgrading of space on the upper floors of the main building to consolidate Engineering activities and accommodate a new organization structure; and, a reorganization of space at the West Annex to remedy space deficiency problems on the main floor.

Funding for these projects is from a variety of existing sources including Sundry and Engineering Basic Capital, the Building and Development Review process and the Service Improvement Reserve. The request from Supplementary Capital will complete the necessary funding for these projects.

Old Continental Elevator Replacement $85,000

The elevator at the Old Continental is due for replacement. Although the building is owned by the Property Endowment Fund, it is currently occupied by Non-Market Housing at no cost. As a result, it recommended that the upgrade be funded from Supplementary Capital.

Library Square Paver Repair $300,000

Since its completion, there has been settling of the paving stones on the Library Square Plaza. This has created a potential liability issue that requires repair. It is anticipated that the federal office tower will share in the cost estimated at $350,000.

Manitoba Yards Electrical Transformer Replacement $96,500

The transformer at Manitoba Yards is now over 40 years old. During the last inspection, it was determined that it is in need of replacement because of the risk of a total shutdown of power to the main administration building.

Police - Major Equipment Needs $153,200

During development of the 2001 Operating Budget, the Police Department indicated that it had insufficient funding to provide for replacement and upgrading of some of its basic equipment. In order to begin to address this issue, new and non-recurring funding of $160,000 was provided to the department from the Operating Budget and the balance of the request was referred to Supplementary Capital. The recommended funding addresses the highest priority needs as identified by the department.

Gas Detector Replacement $152,300

WCB Regulations require an upgrade in the City's gas detection equipment utilized in the confined space entry program. The replacement of 90 units is requested with funding from the Sewer ($67,500) and Water ($62,200) Utilities and from Supplementary Capital ($152,300).

Fire Training Site - Burn Tower Repairs $60,000

The burn tower is a critical training tool for the Fire department, including the USAR team. Water migration through the concrete block walls has damaged the mortar and repairs are necessary to ensure the integrity of the building.

2. Comments on Other Projects

There are a number of requests to the Supplementary Capital Budget that are more appropriately charged elsewhere. These include:

· a number of building maintenance requests that are more appropriately referred to ongoing maintenance budgets in the Operating Budget or to the Basic Capital provision for Major Building Maintenance.
· Relocation of the Fire Training Facility to make way for the new Engineering Yards and strengthening of the floor in Firehall #6 can be charged to existing Fire Capital funding.
· the funding request for City-owned daycare rehabilitation has been referred back to Building Management. The highest priority items will be dealt with from existing operating and capital funding. A comprehensive review of the annual funding necessary to adequately maintain these facilities will be submitted to the 2002 budget process.
· the Britannia Ice Rink roof replacement may be eligible for funding from the provincial government. Should the project proceed this year, the City's 26.1% share will be funded from the Roof Replacement Program in Basic Capital.
· the City is currently completing Compliance Plans to ensure WCB standards are met in a number of areas, including ergonomics. Funding has been provided in the Operating Budget to complete these plans and continue the necessary upgrading. Additional funding, if necessary, will be considered in 2002 following approval of the plans by WCB.
· Council has approved, in principle, a grant to the South Vancouver Senior's Centre subject to securing provincial funding. Funding for this grant will be the subject of a report back from the General Manager of Community Services and General Manager of Parks and Recreation.
· upgrading of the City Analyst Building to accommodate the Police Museum will be the subject of a future report to Council.

Appendix 3 provides a five-year history of the Supplementary Capital Budget approvals.

CONCLUSION

The 2001 Supplementary Capital Budget recommends the allocation of $1.5 million from the Basic Capital Budget to specific projects that are considered to be high priority for funding.

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Link to Appendix 1

Appendix 2 - Limited Distribution - Available from City Clerk's Office

Appendix 3 - Available from City Clerk's Office

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