Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO: Standing Committee on City Services and Budgets

FROM: General Manager of Corporate Services / Director of Finance

SUBJECT: 2002 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 included 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 and $12.6 million in 2001 leaving $14.9 available for 2002.

On April 11, 2002, Council approved a reduction of $1.0 million in the 2002 provision for Capital from Revenue to assist with balancing the 2002 Operating Budget leaving a balance of $13.9 million to be allocated in 2002.

Closeouts of completed Capital projects whose expenditures exceed $50,000 and 15% of the approved budgets, require Council approval.

PURPOSE

The purpose of this report is to summarize the 2002 Capital Budget and to seek Council approval for the allocation of funding to complete the 2002 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 included 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.

The 2000-2002 Capital Plan included a provision of $38.0 million Capital from Revenue of which $10.5 million was approved in 2000 and $12.6 million in 2001. Council, on April 11, 2002, approved a reduction of $1 million to the 2002 Capital from Revenue leaving $13.9 million to be allocated in this report.

Council has approved funding for the following programs in advance of the 2002 Capital Budget as follows:

· Commencement of the 2002 Street Capital Rehabilitation Program at $1 million;
· Corner bulges to be constructed at sixteen downtown locations at $150,000;
· Commencement of the 2002 Traffic Signal Program at $1.163 million;
· Implementation of the Kent Bikeway with $710,000 in advance of the 2002 Capital Budget;
· A challenge capital grant (totaling $100,000) to the Vancouver Dance Centre, subject to securing matching private fund, of which $36,180 was in advance of the 2002 Capital Budget; and
· Streets Local Improvements by Initiative & Petition at $1,720,875 and $931,940 respectively.

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 2002 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 prior years allocations, the portion to be allocated to the 2002 Capital Budget and the balance of funding to be available in 2003.

($`000)

Capital Plan Summary

  

Prior Allocations

2002
Budget

Unallocated Balance

 

Capital from Revenue:(1)

$37,000

  

$23,100

$13,900

$0

 

Debenture Authority:

Plebiscites (prior years)

2,122

  

2,122

0

0

Plebiscite 2000 - 2002

85,955

  

59,339

26,616

0

Sewer

51,045

  

34,030

17,015

0

Water(2)

58,950

  

38,400

14,000

6,550

Total Debentures

198,072

  

$133,891

$57,631

$6,550

 

Total Funding ($'000)

$235,072

  

$156,991

$71,531

$6,550

1. The 2000-2002 Capital Plan provided $38 million Capital from Revenue. However, on April 11, 2002, Council approved a reduction of $1.0M in the 2002 provision for Capital from Revenue to assist with balancing the 2002 Operating Budget.
2. $6.55 million of funding is left unallocated in Waterworks and will remain unspent.

A summary of the projects/programs and funding in the 2000 - 2002 Capital Plan and in the 2002 Capital Budget is included in Appendix 1. Appendix 2 (limited distribution; on file in the City Clerk's Office) provides additional detail about the projects/programs funded in the Community Service Initiatives and Other categories of the 2002 Capital Budget. Details of the Engineering and Park Board capital budgets are included in accompanying reports.

As noted in the table, $57,631,000 of the funding for the 2002 Basic Capital Budget comes from debenture authority, including $26,616,000 from plebiscite authority, and $31,015,000 is from authority approved by Council for sewer and water programs. On January 22, 2002, when approving the 2002 debenture program, Council approved a total of $37,524,300 in borrowing authorities in advance of the 2002 Capital Budget..

2. Funding for the 2002 Supplementary Capital Budget

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 and 2001 Supplementary Budgets included funding of$1,906,400 and $1,500,000 respectively, therefore leaving unallocated funds of $1,593,600 for 2002.

The allocation of these funds to specific projects has been submitted as an accompanying report.

COMMENTS ON THE BASIC CAPITAL BUDGET REQUESTS

1. Engineering Basic Capital Budget

The 2002 Engineering Basic Capital Budget has been submitted as an accompanying report and includes the recommendations necessary to provide funding for identified projects . The City Engineer has requested funding totaling $54,229,100 which fits within the 2000-2002 Capital Plan allocation. This funding is provided from 2000 - 2002 borrowing authority approved by plebiscite ($16,998,100) and by Council for sewer and water (31,015,000). Council has pre-approved plebiscite borrowing and sewer and water borrowing at $10,573,600 and $22,935,000 respectively, therefore, reducing the net funding requirement to $20,720,500. The balance of the funding is provided from Capital from Revenue ($6,216,000).(see table below)

Plebiscite Borrowing Authority $16,998,100 $10,573,600 $ 6,424,500
Sewer/Water Council Borrowing Authority $31,015,000 $22,935,000 $ 8,080,000
Capital from Revenue $6,216,000 n/a $ 6,216,000
Total Funding Request $54,229,100 $33,508,600 $20,720,500

The 2002 budget will leave $6.550 million in waterworks unallocated and unspent.

The table below highlights the priority the Engineering Basic Capital Budget has given to Pedestrian and Cycling Facilities and Local Area Improvements. Overall, the 2000 to 2002 Basic Capital Budgets provide an additional $750,000 to Pedestrian and Cycling Facilities and $70,000 to Local Area Improvements compared to the allocations provided in the 2000-2002 Capital Plan. Capital from Revenue has been re-allocated from Streets and Bridge Infrastructure ($170,000) and Transit and Safety Improvements ($650,000) to accommodate this priority.

Comparison of 2000-2002 Engineering Basic Capital Budgets Compared to Plan

 

2000-2002

2000 & 2001

2002

2000-2002

  
 

Capital Plan

Capital Budgets

Capital Budget

Capital Budgets

Re-Allocation

 

$000's

$000's

$000's

$000's

$000's

Streets & Bridge Infrastructure

$ 10,715

$ 6,884

$ 3,661

$ 10,545

$ (170)

Pedestrian and Cycling Facilities


$ 9,900

$ 6,690

$ 3,960

$ 10,650

$ 750

Transit and Safety Improvements

$ 12,430

$ 8,711

$ 3,069


$ 11,780

$ (650)

Local Area Improvements

$ 13,000

$ 8,950

$ 4,120

$ 13,070

$ 70

Communications & Street Lighting

$ 5,147

$ 3,671

$ 1,476

$ 5,147

$ -

Sewers

$ 51,045

$ 34,030

$ 17,015

$ 51,045

$ -

Yards

$ 15,928

$ 9,000

$ 6,928

$ 15,928

$ -

Total Public Works excluding Water


$ 118,165

$77,936

$ 40,229

$ 118,165

$ -

Water

$ 58,950

$ 38,400

$ 14,000

$ 52,400

$(6,550) unallocated

Total Public Works including Water


$ 177,115

$116,336

$ 54,229

$ 170,565

$( 6,550) unallocated

2. Park Board Capital Budget

The Park Board has brought forward a request for its 2002 Capital Budget at $11,887,917. Funding for this capital budget is provided from plebiscite authority ($9,617,917 - of which $4,015,700 has been pre-approved) and from capital from revenue ($2,270,000). Details of the Park Board Capital Budget were approved by the Park Board on February 11, 2002 and are included in the accompanying report from the General Manager of Parks and Recreation.

Operating costs associated with the 2002 Park Board Capital Budget will begin to impact the Operating Budget in 2003. The annual operating costs for these projects are estimated at $94,000 as follows:

Park Development $79,000
Total Operating Costs $94,000

3. Community Services Initiatives

The 2000 - 2002 Capital Plan includes funding of $8,850,000, reflecting a $1.0M reduction in Capital from Revenue, 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 2002 Capital Budget includes funding of $2,070,000 allocated to the following projects/programs:

· Upgrade City-owned social & cultural facilities $500,000
· Capital Grants to privately owned social & cultural facilities $200,000
· Little Mountain Neighbourhood House $270,000
· Affordable Housing $650,000
· Downtown Eastside Initiatives $200,000
· Public Art Program $250,000

Approval of expenditures under some of the allocations will be the subject of future reports.

4. 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), maintenance for other civic facilities, and for conceptual and design work related to a replacement branch library. All of these projects are funded from Capital from Revenue.

The 2002 Capital Budget includes allocation of $1,750,400 as follows:

· City Hall & Civic Buildings Major Maintenance Program $1,550,400
· Library Facilities $ 200,000

CAPITAL CLOSE OUT

Capital projects are intended to be reviewed on an on-going basis to determine projects that can be closed out. Closeout of completed Capital projects involving transfers between Capital accounts of $50,000 and 15% of the budget, or more, require Council approval. Appendix 3 (limited distribution; on file in the City Clerk's Office) provides a summary of the project close outs for Building Management and Facilities Development, including a calculation of under and over expenditures, respectively. The transfers requiring Councilapproval are noted. Project close outs for Engineering are included in the accompanying Engineering Basic Capital Budget report. The Park Board will be submitting a separate capital close out report at a later date.

CONCLUSION

The 2002 Capital Budget represents the third 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

Link to Appendix 2

Link to Appendix 3

 

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