ADMINISTRATIVE REPORT

Date: November 13, 2001
Author/Local: RScobie/7399

RTS No. 02401

CC File No. 3201

Council: November 20, 2001

TO:	Vancouver City Council
FROM:	Director of Development Services in consultation with the Director of Legal Services, General Manager of Engineering Services, Director of Current Planning and the Chief Building Official
SUBJECT:	Draft Protocol for Greater Vancouver Regional District (GVRD) Capital Projects

RECOMMENDATION

A. THAT Council express its support for the importance of having GVRD capital projects located in a responsible manner within the region, with the ability to avoid municipal frustration of a capital project provided the GVRD makes reasonable efforts to address municipal concerns;

FURTHER THAT Council supports in principle the "Greater Vancouver Regional District Capital Projects Protocol" for application to water, sewer and solid waste capital projects, for implementation on an initial five year term;

AND FURTHER THAT staff , in consultation with GVRD staff, work out the details of implementing a "voluntary permits" process for the City of Vancouver, as provided in the Protocol, in lieu of formal development and building permits, and addressing other permits required by City by-laws.

B. THAT staff report back with recommended amendments to the Zoning and Development By-law and the Building By-law to exempt GVRD water, sewer and solid waste capital projects from development and building permit requirements, including terms and conditions of release and indemnification to be satisfied by the GVRD prior to enactment of these amendments.

C. THAT pending completion of B, staff report any GVRD capital project applications for development/building permits to Council for its advice whenthe GVRD advises it will have difficulty satisfying emerging conditions or requirements of permit approval/issuance.

D. THAT Council does not support retroactive payments of monies in lieu of permit application fees or DCCs.

GENERAL MANAGER'S COMMENTS

The General Manager of Community Services RECOMMENDS approval of the foregoing.

COUNCIL POLICY

As a member of the Greater Vancouver Regional District, having representation on the GVRD Board of Directors and being a major financial contributor to the GVRD, the City has clear interests on a diversity of regional policy matters, including capital projects undertaken by the GVRD in seeking to serve the needs of its member municipalities within its mandate of services and responsibilities.

PURPOSE

At the request of the GVRD Board of Directors, a Protocol for GVRD capital projects is presented for Council's review, for input prior to further action. Ancillary to the Protocol is a proposition that the GVRD pay municipal charges on regional structures retroactively to 1995.

BACKGROUND

The GVRD has legal responsibility for various inter-municipal services that are most consistently and cost-effectively provided on a regional basis, such as sewer and water services.

For various historical, geographic, demographic and economic reasons, the infrastructure to provide these services extends throughout the region but requires more significant facilities of different types at various locations within the member municipalities of the GVRD, such as:

· water storage and initial treatment within the Capilano and Seymour watersheds;
· potable water reservoir and re-chlorination facilities throughout the region; and
· facilities for sewage treatment and discharge, located on Iona Island, Annacis Island and elsewhere.
Most of the GVRD trunk sewers and re-chlorination facilities within Vancouver are located within City streets and, as is the case for all public utilities placed in City streets, exempt from development permit requirements pursuant to Section 5.5 of the Zoning and Development By-law. There is no exemption in the By-law from development permit requirements for any portion of a public utility that is not in a "public thoroughfare or public utility easement". The Building By-law is more limiting in terms of exemption from the By-law and building permit requirements.

Within the City, the only major GVRD capital facility is the reservoir at Little Mountain. It is located on property owned by the GVRD. This reservoir is the subject of current planning for major upgrading/ replacement. This represents one of the capital projects the GVRD would like see dealt with under the proposed Protocol.

The GVRD has increasing concerns that some member municipalities may utilize their regulatory powers and related application/permit/inspection processes to frustrate regional capital projects, particularly when the facility or its construction/maintenance will have adverse local impacts. These impacts may be aesthetic and principally affecting nearby residents or businesses. The impacts may also be financial in terms of displacing other land uses which would generate property tax revenue for the municipality.

Some municipalities may also believe they host a disproportionate share of the GVRD's water or sewer facilities or are inadequately compensated financially by either the GVRD or those member municipalities benefiting from these facilities but not hosting them within their boundaries.

In an effort to balance the needs of both the region and a municipality hosting a regional facility, the GVRD has proposed a Protocol (attached as Appendix A). If implemented, the Protocol would essentially exempt GVRD capital projects from municipal permitting, substituting instead voluntary compliance with municipal requirements. The Protocol addresses procedural matters at what are referred to as the "Planning", "Design" and "Construction" stages of a project. It also addresses the payment of monies to a host municipality in lieu of permit application fees. Development Cost Charges and other fees normally payable would be paid. If disagreement arises between the GVRD and the host municipality, the Protocol outlines dispute resolution procedures, with the final determination resting with the GVRD Board, subject to municipal appeal to the Inspector of Municipalities.

Staff have not reviewed the legal status of the GVRD and its capital projects in the context of the Local Government Act. It is unknown whether municipal "development permits" (which differ from those in Vancouver) are of particular concern since the Protocol does not specifically reference development permits. However, it would appear that issues commonlyaddressed through the City's development application process would be dealt with under the Protocol at the "Design Stage" and "Construction Stage".

Several municipal Councils have endorsed the Protocol, some with conditions respecting the proposition of retroactive payment of compensation to 1995.

DISCUSSION

Staff acknowledge that the City's development application process may be troublesome to the GVRD. As a consequence of project review by staff and the immediate community, the possibility exists that design modifications and off-site impact mitigation may be required by the DP Board/Director of Planning, prior to DE issuance, to achieve a facility that is acceptably compatible with its surroundings. While such requirements would unlikely
diminish the functional capability of the facility, they might well incur additional project costs and delay. Although the GVRD fears that some municipalities might impose significant design modifications or other limitations on the permit approval, incurring unnecessary project costs perhaps even intended to frustrate the project, staff believe the City's DE process culminates in reasonable decisions cognizant of both project and community needs. The GVRD is also troubled by the potential for DE approval decisions to be appealed by aggrieved neighbours to the Board of Variance.

Staff also acknowledge that the City's regular building permit application process may not be entirely appropriate for the relatively specialized civil engineering structures and advanced water treatment facilities typically constructed by the GVRD. In this scenario, the City's role would be more appropriately focused on confirming that an independent quality management system has been established for the project with spot checks or audits to confirm that this system is operating as intended. In the event that building code issues are identified in this process, it is understood that these issues can be forwarded to GVRD under the Protocol, with the confidence that these will be professionally and effectively addressed. The Protocol is designed to encourage such an approach and, if necessary, allows for unresolved issues to be referred to an appeal process.

In addition to building code issues, the City's building permit process is a vehicle for assuring conformance with the issued development permit and other City by-laws (e.g., electrical, gas), together with the operational requirements of other City departments such as Fire & Rescue Services and Engineering Services. Staff believe that these issues can similarly be satisfactorily resolved under the principles of the Protocol when approached with good will and mutual respect on all sides. Staff note that further refinement of the process may be required, in collaboration with GVRD, to ensure consistent application of Provincial regulations pertaining to gas and electrical services.

The Protocol has some similarities to the existing protocol between the City and the Vancouver Port Authority (VPA) for projects on Port lands. However, the VPA is legally exempt from City or municipal requirements. Nonetheless, and seeking a cooperative relationship with the City, the VPA has accommodated project review/input by the City into its decision-making process at what we would call the development permit stage of a project. The VPA neither makes application for nor receives development permits from the City. It does pay monies equivalent to the development application fee otherwise payable. The VPA can choose not to heed City comments and suggestions on projects. There is provision for a non-binding arbitration process with the VPA having ultimate decision-making authority.

The City is not involved at all with VPA projects at the construction stage; the City does not process/issue building permits or inspect projects on Port lands.

The GVRD is essentially seeking the same type of relationship with the City: voluntary permits (but preferably no formal development or building permit review); provision for non-binding dispute resolution; decision-making ultimately resting with the GVRD Board.

Unlike the VPA, the GVRD is not legally exempt from City requirements and this gives rise to some difficulties staff have with the Protocol:

· Could City by-laws provide for GVRD exemption?
· What liability would still attach to the City?

Exempting the GVRD

It is one thing for the Province to pass legislation exempting the GVRD from city permit requirements and something quite different for the City to try to provide such exempt status. However, in the absence of provincial legislation, staff have reviewed various by-laws to determine the conditions under which GVRD capital projects might currently be exempt and whether widening the scope of exemption is possible.

Section 5 of the Zoning and Development By-law lists various activities that may be carried out without the requirement for a development permit, "....so long as they are carried out in compliance with all relevant provisions of the By-law and any Official Development Plan". One of the listed activities is "The construction and maintenance of that part of a public utility placed in or upon a public thoroughfare or public utility easement;" (Section 5.5).

Staff believe the wording in Section 5.5 does not exempt GVRD capital projects such as the Little Mountain reservoir. Furthermore, Section 1.1(c) of the Protocol states that: "The GVRD will strive to ensure the project complies with municipal land use bylaws and official plan provisions." Striving but falling short of ensuring compliance would void any development permit exemption provided in Section 5, noted above. Even with thecommitment of reasonable accommodation by the GVRD in the Protocol, the Director of Current Planning has some reservations but nonetheless recommends further work be done on amended by-law wording to allow for permit exemption without by-law compliance, for a report back.

Under the Building By-law, "sewage, water, electrical, telephone, rail or similar systems" are exempt from the By-law but only if "located on a street or a public transit right of way" [Section 1.1.2.2(1)(a)]. This current wording would clearly not provide sufficient scope as to exempt the Little Mountain reservoir from being subject to the Building By-law and thus the requirement for a building permit. The Chief Building Official would only recommend By-law amendment to provide building permit exemption for GVRD capital projects located on real property if: (i) an alternate process such as outlined in the Protocol is available to address building code issues; and (ii) liability protection is provided to the City, achieving the current level of protection afforded the City by the Vancouver Charter.

City Liability

The best manner in which the City might be free of all liability for GVRD projects proceeding without City permits would be for the GVRD to obtain the requisite legislative exemption from the Province. Amending current City by-laws to exempt GVRD capital projects from City permit requirements may not absolve the City from all liability.

Section 2.1(e) of the Protocol speaks to the circumstance in which a municipality agrees to not apply a formal building permit process, stating that the GVRD will "execute a liability waiver to the member municipality saving them harmless from consequences of the absence of such a process". This is inadequate without release and indemnification in a form drawn to the satisfaction of the Director of Legal Services.

Protocol Provisions

Staff are supportive of the Protocol, believing it represents an appropriate approach demonstrating the cooperation required amongst member municipalities to address regional needs. The Protocol references "best efforts" to be made by the GVRD to address local concerns. While staff are encouraged by this there is insufficient City experience to conclude how this will be implemented. Consequently, it is recommended that the City support the Protocol for a five year period, for review at that time for possible continuance.

The structure of the Protocol also does not make it readily apparent how it's Planning, Design and Construction stages would correspond with the scope of normal City reviews through the development application and building permit processes. For example, some of the matters identified in the "Construction Stage" would commonly be considered at the City's development application stage. It is therefore recommended that City and GVRD staffwork in collaboration to document more detailed implementation procedures to ensure effective administration of the Protocol.

Retroactivity

Although several municipalities have supported the Protocol, some have done so on the condition that the contemplated payment of fees and DCCs not be applied retroactively to 1995 but only to future capital projects. One municipality has made its support of the Protocol contingent on retroactive payment for capital projects since 1995. Staff recommend Council not support retroactivity since:

- the Protocol did not exist when existing capital projects were commenced;
- it would be arbitrary to select any particular date back to which retroactivity would apply (providing retroactive compensation for some, denying it for others); and
- retroactive compensation would amount to substantial costs for capital works already completed or currently underway.

Staff believe that the payment of fees and DCCs as outlined in the Protocol should apply to projects undertaken only once the Protocol is in place, so these costs can be understood and reflected in a project's budget prior to project approval.

CONCLUSION

The GVRD proposes a Protocol for future GVRD capital projects that would place ultimate decision-making in the GVRD Board and replace mandatory municipal permit processes with "voluntary permits". The City is unable to sign the Protocol at this time for legal and liability reasons. However, staff appreciate the compelling need for these capital projects. Staff also believe that City permitting processes consistently yield reasonable project improvements, when they are required, responding not only to the locational and budgetary constraints of the project but also its need to compatibly fit its context and satisfy basic life safety requirements. Nonetheless, it is recommended that the City pursue by-law amendments that would exempt GVRD capital projects, subject to acceptable release and indemnification, the details of which will be reported back to Council. Until this has been completed it is recommended that Council advice be sought on any future GVRD capital projects where permit requirements are raising project modifications of concern to GVRD staff.

Staff also recommend that fees and DCCs, payable on a retroactive basis as if the Protocol had been in effect in 1995, not be supported.

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APPENDIX A
Dated: November 10, 2000

Protocol for Greater Vancouver Regional District Capital Projects

I. Process

1. Planning Stage

a) At the earliest practical opportunity in the planning stage of any project, the GVRD (staff) will communicate with the area municipality(s) in which the project is to be located, advising of the general nature and purpose of the proposed project.

b) The area municipality (staff) will respond by advising of any issues that may be of concern to the municipality in carrying out the proposed project.

c) The GVRD will strive to ensure the project complies with municipal land use bylaws and official plan provisions.

d) Based on the information generated at this stage, the municipality will advise the GVRD whether there is a need for a public consultation process at the planning stage.

e) If a public consultation process is to be undertaken at the planning stage, the GVRD will consult with local area municipality staff in the design and scope of this process. Where appropriate, as determined by local area municipal staff, GVRD staff will meet with the local area municipal council to provide information and receive advice on the need for, scope and design of a local public consultation process.

f) As necessary, the GVRD will conduct the public consultation process. Local area municipality staff will provide assistance and advice, as appropriate.

2. Design Stage

a) At the earliest practical opportunity, in the design stage of any project, the GVRD will transmit draft designs to the local area municipality in which the project is to be located.

b) The area municipality (staff) will respond by advising of any concerns the design poses for the local municipality/community and of any further information/analysis that may be needed to allow the municipality to satisfyitself with regard to the proposed design.

c) Based on the information generated at this stage, the GVRD, in consultation with the municipality will determine whether there is a need for a public consultation process at the design stage. This will follow a similar procedure as 1(d).

d) GVRD staff will make their best efforts to respond to concerns raised by local municipal staff. In the event that GVRD staff decide it cannot or is inappropriate, to make design changes requested by local area staff, the GVRD will provide a reasoned account for this decision to the local municipality.

e) If local municipal staff deem it appropriate, the final agreed upon design or any disagreement between the GVRD and local area staff shall be presented to the local area council or development review committee for their comment.

f) If the local municipal council or development review committee deem it appropriate, any outstanding disagreement on design shall be referred to the dispute resolution process outlined in the Voluntary Permit Fee System of this Protocol (Section 4).

3. Construction Stage

a) At the earliest practical opportunity in the design stage, of any project, the GVRD will transmit, to the local municipality in which the project is located, an outline construction plan, describing how construction of the project is envisaged to take place and how local impacts are expected to be mitigated/communicated to the public.

b) A parallel process to the design stage will then follow, following steps 2(b) through 2(f).

c) Where it is possible to combine the processes for design and construction, this should be done.

4. Voluntary Permit Fee System

A critical part of this protocol involves a voluntary permit fee system which would parallel the regular permit system. It includes the following elements:

a) The GVRD would apply for `voluntary permits' and pay a fee equivalent to the fee paid for regular permits, as per the established fee schedule of thespecific municipality.

b) In the event of a dispute that is not resolved during thisapplication/municipal review process, the item would be referred to a `peer review panel' by either the affected municipality or the GVRD. An example of when the GVRD might wish to use this review panel process would be if they dispute the application of fees to a specific facility. This panel would comprise of 3 members and would be appointed by the GVRD and the municipality disputing the permit but would be at arms length from both. Present or past municipal officials, or similarly qualified people would be likely panel members. Any costs which are incurred by the panel are not expected to be large and would be shared by both the GVRD and the affected municipality.

c) The peer review panel's non binding recommendations would be presented to the GVRD Board, which would then rule on the dispute;

d) Municipalities could appeal GVRD Board decisions to the Inspector of Municipalities. The GVRD and Municipalities would agree that prior to entering into this process the decision of the Inspector of Municipalities would be binding and would not be pursued further in the courts.

e) Where the GVRD and the municipality agree that the local municipality will not apply any formal building permit process, the GVRD would execute a liability waiver to the member municipality saving them harmless from consequences of the absence of such a process;

f) The GVRD would voluntarily pay DCCs and other fees according to local municipal schedules and this cost would form part of the capital project costs.

g) In the case of permits where the municipalities are exercising delegated Provincial responsibilities e.g. electrical permits, the GVRD would follow the normal prescribed procedures.

h) In the case where the GVRD already seeks and receives Provincial permits, e.g. tree-cutting permits, local municipal requirements would not apply.

II. Agreement

a) The GVRD and the local municipalities shall formally agree that this voluntary permit fee system will constitute the full discharge of any responsibilities that may exist for permits or fees and charges.

b) The implementation of this protocol shall be conditional on its endorsement by the regional Board and local municipalities and shall go into effect as soon as both the Board and a particular municipality endorses this protocol.

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(c) 1998 City of Vancouver