Agenda Index City of Vancouver

APPENDIX 2 - to Council Report

1997 to 1999
Engineering
Capital Budget

Close-Outs

City of Vancouver
April 2002

1997 to 1999 Engineering Capital Budget Plan
Close - Outs Summary

The close-outs include the following programs:

- Traffic Signals
- Communications
- Street Lighting
- Sewer
- Waterworks
- Yards

The Street Capital Programs (except for Traffic Signals) are not covered in this close-out process and will be carried out at a later date.

The close-out balances for each of the above capital programs are shown on
Table 1 and the proposed allocation of the surplus or deficits resulting from the close-outs is shown on Table 2.

Details for the close-out of each program area are provided in the sections following Table 1 and 2.

Appendix 2

Capital Account Close-outs

Section A - Traffic Signals

To close and balance the accounts for the 1997-1999 Traffic Signals Capital Plan for work completed as of April 11, 2002, the following summary has been prepared. The accounts that are being closed represent projects for which, as a group, funding occurred over the period of the 1997-1999 Capital Plan. Included in this funding are carry-forward budgets from the pre- 1994 Capital Budget close-out and the 1994-1996 Capital Plan.

The account summaries are based on the Cycle 14, December 31, 1998 Capital Expenditure Statement generated by the LGFS accounting system and the Capital Expenditure Statement for the 1997-1999 Capital Plan generated by SAP system as of April 11, 2002.

The account close-out details for each category of work are shown on the following page. Explanations are provided for projects where variances are greater than $50,000 and 15% of the budget.

The net overall unexpended balance resulting from the close-outs of the Traffic Signals pre-1997 and 1997-1999 Capital Plan is $2,104,346. Included in this balance is $409,157 credit resulting from overhead variance adjustments and $370,546 unallocated balances from pre 1994 and the 1994-1996 capital plans.
The surplus funds will be transferred forward to the 2000-2002 Traffic Signals Capital Plan as summarized in Table 2.

Proposed allocation of funding to be carried forward to 2002-2002 Plan

Total 2,104,346

Close- out Summary

Budget $ 9,834,140 Expenditure: $7,729,794 Balance: $2,104,346

Provided below is a summary of the account closures by capital program:

New Signal Construction

Funding remains within New Signals which will allow outstanding work to be completed. Communication cabling between the Traffic Signal Management System (TSMS), located at City Hall, and the individual intersections has been completed where possible but capacity limitations associated with the old TSMS have not allowed connections to all signalized intersections. Cabling, line testing and re-termination of the communication lines to intersections will be completed as the lines are converted to operation with the new Central Traffic Computer System.

Signal Modifications

A number of projects remain outstanding and this signal modification funding will be utilized in several locations delayed due to construction coordination concerns. Improved detection, and in turn, operation of intersections will be implemented as work on the new Central Traffic System continues.

Replace Aging Signal Plant

Replacement and upgrading of traffic signals on several major streets in the City is being planned for the coming year. Rebuilding signals includes not only the poles and the traffic lights but requires the computerized equipment on the street to be replaced. Funds remaining in this account will be utilized for work planned in 2002.

ICBC - Road Safety Programs

The City of Vancouver and the Insurance Corporation of British Columbia partnered on a number of road safety projects between 1997 and 1999. The budget estimates outlined for these cost shared projects included the recoveries from ICBC. With actual costs being billed to ICBC, the outstanding positive balance relates to predicted recoveries. No further recoveries are expected as the related work for the Road Safety programs have been completed. Therefore, these accounts have been closed and the remaining positive balance will not be recovered.

Pre 1994-1996 Capital Plan

Upgrades to fire signals have been completed at all locations in the City with one location outstanding. Equipment will be re-used upon completion of the upgrade work underway at the fire signal at Broadway and Balaclava. Funds remaining will be utilized to bring the remaining fire signal to current standards.

1994-1996 Capital Plan

Upgrades to the traffic signal communications network is being coordinated with the implementation of the new computerized central system. The funding remains due to delays in the receipt of the software relating to the signal controllers and the central system. With the implementation of the software and hardware now underway this work will now be initiated.

Explanations are provided where variances are greater than $50,000 and 15% of the budget as follows:

Pedestrian Signals 1997-99

Budget: $ 1,344,000 Balance: $235,109 Variance: +17.49%

Funding remains allocated within New Pedestrian Signals due to outstanding work associated with communication between the Central Traffic Computer system and a number of intersections. With the implementation of the new system, connections and reterminations are being completed on signals which we were unable to connect due to capacity limitations. This work will begin in this summer and will be completed in 2003.

Left Turn Phasing 1997-99

Budget: $ 555,000 Balance: $438,800 Variance: +79.06%

Funding is to be used to cover our portion of cost shared projects already completed for Left Turn phasing. Further analysis of the accounts in the Road Safety Program Projects will be undertaken.
The remainder of funds will be used for left turn signal phasing at any outstanding projects that may have been put on hold due to coordination of infrastructure construction work. Improved operation and detection at intersections will be available with the implementation of the new Central Traffic Computer System.

Tertiary Heads 1997-99

Budget: $275,000 Balance: $84,118 Variance: +30.59%

Funding remains in this category due to several cost sharing arrangements that were implemented during the 1997-99 Capital Plan.

Undergrounding Overhead Spans 1997-99

Budget $150,000 Balance: -$ 50,883 Variance: -33.92%

Over expenditure in the "Undergrounding Overhead Spans" accounts is due to several factors. A number of projects involving the undergrounding of spans were completed in response to construction coordination and upgrading of existing traffic signal plant when damaged or removed as part of utility construction. Cost sharing and allocation between "Undergrounding Overhead Spans" and "Rebuilding Intersections" for these projects was inappropriate with additional charges being made to undergrounding when the rebuild account would have been more appropriate. Remaining funds in the 1997-1999 Signal Rebuild Intersections accounts will balance the over expenditure in the Undergrounding
Overhead Spans accounts.

ICBC Programs (1996-1999)

Budget: $1,471,140 Balance: $ 272,878 Variance: +19.26%

The positive balance identified in this budget item refers to an anticipated cost recovery from ICBC as part of their Road Safety Program. As is the case with these programs, actual costs are billed and this additional recovery budget will not be received and therefore, should be closed out. Individual project items such as left turn improvements have been cost shared with the City and are funded from the left turn phasing account noted above.

Siren Activated Signals 1992

Budget: $62,000 Balance: $61,916 Variance: +99.86%

All existing fire signals have been reviewed for compliance to existing standard. One project remains outstanding which is being coordinated with the new signal construction at the existing signal at Broadway and Balaclava. Outstanding work relating to traffic signals and warning lights near Fire Station is to be implemented with the remaining funds.

Signal Modifications 1994-96

Budget: $99,000 Balance: $67,124 Variance: +67.8%

Signal modifications include improvements such as left turn phasing, pedestrian indicators, minor modifications and audible signals. The combined remainder of funds in this category will be used for projects such as these. Work will be completed in 2002.

TSMS System Upgrade 1994-96

Budget: $280,000 Balance: $280,000 Variance: +100%

Communication lines used for the traffic signal system are to be maintained and upgraded where necessary as the new central traffic control system is implemented. The work relating to the communication lines has been delayed due to delays in software delivery and product compliance testing. With the implementation of the software and hardware now underway this work will be initiated.

Appendix 2

Capital Account Close-outs

Section B - Communications

To close and balance the accounts for the 1997-1999 Communications Capital Plan for work completed as of April 11, 2002, the following summary has been prepared. The accounts that are being closed represent projects for which, as a group, funding occurred over the period of the 1997-1999 Capital Plan. Included in this funding are carry-forward budgets from the pre- 1994 Capital Plan and the 1994-1996 Capital Plan.

The account summaries are based on the Cycle 14, December 31, 1998 Capital Expenditure Statement generated by the LGFS accounting system and the Capital Expenditure Statement for the 1997-1999 Capital Plan generated by SAP system as of April 11, 2002.

The account close-out details for each category of work are shown on the following page. Explanations are provided for projects where variances are greater than $50,000 and 15% of the budget.

The net overall unexpended balance resulting from the close-outs of the Communications pre-1997 and 1997-1999 Capital Plan is $706,525. The surplus funds will be transferred forward to the 2000-2002 Communications Capital Plan as summarized in Table 2.

Proposed allocation of funding to be carried forward to 2000-2002 Plan $
Earthquake Preparedness 159,370
Radio Systems Upgrade 184,091
Underground Cable Replacement 84,795
Cable Expansion 154,090
Communications Unallocated 124,179
Total 706,525

Explanations are provided where variances are greater than $50,000 and 15% of the budget as follows:

Pre 1994-96 Plan

Earthquake Preparedness

Budget $305,000. Balance $159,370 Variance: 52.25%

Funds were approved to harden Police, Fire, and Engineering radio sites to increase the odds of survivability of the communication systems in the event of an earthquake. After the funds were approved, the Police and Fire Departments signed on to switch their radio system to the ECOMM system. The project to harden their radio sites was discontinued since they would be abandoning their existing radio system. The balance will be reallocated to Traffic and Electrical -Underground Cable Expansion and Replacement Unallocated.

Cassiar Connector System

Budget $177,000 Balance $64,569 Variance: 36.48%

The Ministry of Highways constructed the new Cassiar Connector, and as a consequence of the construction, new radio equipment was needed to extend coverage of the existing systems into the connector. Originally, the City was going to get funding for this expansion from the province, but there was a dispute on the funding. The City purchased used equipment and refurbished it instead of purchasing new equipment. The balance will be reallocated to Traffic and Electrical - Underground Cable Expansion and Replacement Unallocated.

1994-96 Capital Plan

Engineering Radio System Upgrade

Budget $312,000 Balance $184,090 Variance: 59.00%

Funds were approved to upgrade the existing Engineering Radio System to provide better coverage for the mobile equipment used throughout the various divisions of Engineering. During that timeframe, Engineering considered participating in the ECOMM project instead of keeping their own radio system. The project was put on hold pending this decision. Eventually, Engineering decided to develop their own system and the project was restarted in 1999/2001. The balance will be reallocated to the current capital plan.

City Hall Switchboard Upgrade

Budget $210,000 Balance $93,846 Variance: 44.69%

The responsibility for the City Hall Switchboard was transferred to Information Technology. The balance will be reallocated to Traffic and Electrical - Underground Cable Expansion and Replacement Unallocated.

Underground Cable Expansion

Budget $477,000 Balance: $ ($72,147) Variance:-15.13%

This program addresses the need to expand the Underground Cable Plant to meet the increasing demands of voice and data services of our customers. The Cable Plant investment results in significant operational cost savings to the City of Vancouver. The demands of the services from the Cable Plant are always increasing. The extra expenditures came from the 1997-1999 capital plan as a result of the merging of two financial systems. The over-expenditure will be reallocated to Traffic and Electrical - Underground Cable Expansion and Replacement Unallocated..

1997-99 Capital Plan

Underground Cable Replacement

Budget $85,000 Balance: $ 84,795 Variance: 99.76%

This program addresses the need to replace portions of the Underground Cable Plant to meet the increasing demands of voice and data services of our customers. The Cable Plant investment results in significant operational cost savings to the City of Vancouver. The demands of the services from the Cable Plant are always increasing. A portion of the expenditures were merged with the 1994- 1996 capital plans as a result of the merging of two financial systems. Further expenditures were then postponed pending a comparison of the cost of City of Vancouver provided services versus leasing services. The review has been completed and confirms that it is more cost effective to continue with the use of the cable plant. The balance will be reallocated to Traffic and Electrical - Underground Cable Expansion and Replacement Unallocated.

Underground Cable Expansion

Budget $155,000 Balance : $154,090 Variance: 99.41%

This program addresses the need to expand the Underground Cable Plant to meet the increasing demands of voice and data services of our customers. The Cable Plant investment results in significant operational cost savings to the City of Vancouver. The demands of the services from the Cable Plant are always increasing. A portion of the expenditures were merged with the 1994 - 1996 capital plans as a result of the merging of two financial systems. Further expenditures were then postponed pending a comparison of the cost of City of Vancouver provided services versus leasing services. The review has been completed and confirms that it is more cost effective to continue with the use of the cable plant, The balance will be reallocated to Traffic and Electrical - Underground Cable Expansion and Replacement Unallocated.

Appendix 2

Capital Account Close-outs

Section C- Street Lighting

To close and balance the accounts for the 1997-1999 Street Lighting Capital Plan for work completed as of April 11, 2002, the following summary has been prepared. The accounts that are being closed represent projects for which, as a group, funding occurred over the period of the 1997-1999 Capital Plan. Included in this funding are carry-forward budgets from the 1994-1996 Capital Plan.

The account summaries are based on the Cycle 14, December 31, 1998 Capital Expenditure Statement generated by the LGFS accounting system and the Capital Expenditure Statement for the 1997-1999 Capital Plan generated by SAP system as of April 11, 2002.

The account close-out details for each category of work are shown on the following page. Explanations are provided for projects where variances are greater than $50,000 and 15% of the budget.

The net overall balance resulting from the close-outs of the Street Lighting 1994-1996 and 1997-1999 Capital Plans is a negative variance of $73,334. The variance will be transferred forward to the 2000-2002 Street Lighting Capital Plan as summarized in Table 2. It is anticipated that further cost recovery will be credited to some of the Local Improvement projects and this will offset the negative variance and will result in a surplus balance for 1997-1999 capital plan.

Proposed allocation of funding to be carried forward to 2000-2002 Plan:
Engineering Charges $(73,334)

Summary

1994-1996 Plan 4,768,569 5,191,493 (422,924)
1997-1999 Plan 4,859,589 4,509,999 349,590
Total 9,628,158 9,701,492 (73,334)

The net variance of the 1994-96 and 1997-99 capital plans for Street Lighting is -0.76%
and the deficit is $73,333. However, there are further credits to come from the following Local Improvement projects that will offset the deficit. Details are provided below:

1994-96 Plan - Underground Overhead Program

This was a local improvement approved by Council in November, 1995. The project required coordination with B.C. Hydro and was completed in 2001. Locations were in the lane north of 4700 Block Elm Street and 2700 block West 30th Avenue. Invoices have been sent to the property owners for their share, which is approximately $290,000.

1997-99 Plan - Granville Mall Tree Lighting Program

This was a local improvement to install decorative tree lights and was completed in 2000. The locations were Granville Street, from Drake to Hastings. The property owners' share is approximately $275,000.

The surplus balance that results from the revenue collected for these projects will be transferred forward to the 2000-2002 Street Lighting Capital Plan to fund the Lane and Street Lighting Local Improvement program and any further surplus remaining will be transferred to unallocated account in the 2000-2002 Capital Plan.

Explanations are provided below for programs with variance greater than $50,000 and 15%
of the budget:

A) 1994-1996 Capital Plan

Street Light Pole Replacement

Budget $1,315,000 Balance -$384,417 Variance -29.23%

The pole replacements were a part of the City's preventive maintenance program to ensure the poles are structurally sound and not at risk of falling. The extra expenditures were the result of more poles being identified for replacement. The net variance of the 1994-96 and 1997-99 plans is -19%.

Infill Lighting

Budget $312,000 Balance -$101,394 Variance -32.50%

This program provided additional lighting at specific locations to address public safety concerns from the residents and the police. The Safer City Task Force also indicated the importance of making the public feel secure. Lighting levels were increased on streets, lanes and near bus stops. The extra expenditures resulted from more public and police requests than anticipated. The net variance for this program in the 1994-96 and 1997-99 plans is 13% under budget.

Undergrounding Overhead

Budget $522,300 Balance -$79,351 Variance 15.19%

This was a local improvement approved by Council in November, 1995. The project required coordination with B.C. Hydro and was completed in 2001. Locations were in the lane north of 4700 Block Elm Street and 2700 block West 30th Avenue. Invoices have been sent to the property owners for their share, which is approximately $290,000.

B) 1997-1999 Capital Plan

Conduit & Wire Replacement

Budget $1,300,000 Balance $286,337 Variance 22.03%

This program provided funding for the replacement of underground conduits during sidewalk construction, Greenway and CityPlan Neighbourhood projects, as well as for preventive maintenance. The under-expenditure was due to fewer street and sidewalk projects than anticipated. The net variance of the 1994-96 and 1997-99 plans is 13.7%

Service Panel Replacement

Budget $315,000 Balance -$131,348 Variance: -41.07%

The upgrades and panel replacements were required to ensure service reliability and public safety. There were more panels identified that required replacement than anticipated. The net variance of the 1994-96 and 1997-99 plans is -12%.

Infill Lighting Safer City

Budget $600,000 Balance $220,501 Variance: 36.75%

This program provided additional lighting at specific locations to address public safety concerns from the residents and the police. The Safer City Task Force also indicated the importance of making the public feel secure. Lighting levels were increased on streets, lanes and near bus stops. The extra expenditures resulted from more public and police requests than anticipated. The net variance for this program in the 1994-96 and 1997-99 plans is 13% under budget.

Luminaire Replacement

Budget $125,000 Balance $84,329 Variance: 67.46%

This program provided funding to install fuses at the bases of poles with hand holes. The fuses ensure that only the problem fixture is out when failure occurs and not the others on the same circuit. The under-expenditure was a result of other higher priority maintenance works such as rusty pole and panel replacements, and infill lighting. The net variance of the 1994-96 and 1997-99 plans is 22.6%.

Relocation Initiated by Utilities

Budget $150,000 Balance $111,069 Variance: 74.05%

The City has 13,000 lighting fixtures and 1,200 street lighting service panels attached to wood poles owned by B.C. Hydro and B.C. Tel. Periodically, these companies remove or relocate these poles. This program provided funding for relocating the fixtures and panels to the new utility poles. The under-expenditure resulted from fewer utility pole relocations than anticipated. The net variance of the 2 plans 1994-96 and 1997-99 is 38%.

Appendix 2

Capital Account Close-outs

Section D- Sewer

To close and balance the accounts for the 1997-1999 Sewer Capital Plan for work completed as of April 11, 2002, the following summary has been prepared. The accounts that are being closed represent projects for which, as a group, funding occurred over the period of the 1997-1999 Capital Plan.

The account summaries are based on the Cycle 14, December 31, 1998 Capital Expenditure Statement generated by the LGFS accounting system and the Capital Expenditure Statement for the 1997-1999 Capital Plan generated by SAP system as of April 11, 2002. For the purposes of closing out accounts, the Sewer programs
are divided into two groups : those funded by the Basic Capital Budget and those
funded by cost recovery.

The account close-out details for each category of work within the two separate groups are shown on the following page. Explanations are provided for projects where variances are greater than $50,000 and 15% of the budget.

The net overall balance resulting from the close-outs of the programs funded by the 1997-1999 Basic Capital Plan is a negative variance of $234,265 and for programs funded by cost recovery is a negative variance of $570,846. Difficulties in achieving full cost recovery had been reported to Council last November and rates increase for 2002 and program changes were approved to address the full cost recovery issue. The negative variances for the two program groups will be transferred forward to the 2000-2002 Sewer Capital Plan as summarized in Table 2.

Proposed allocation of funding to be carried forward to 2000-2002 Capital Plan:

Basic Capital Budget program $(234,265)
Cost Recovery program $(570,846) Total $(805,111)

1997-1999 Sewer Capital Plan Closeout

Sewer capital structure groupings have been re-organized into two separate groups to facilitate the preparation of the 1997-1999 capital plan closeouts: programs that are funded by the Basic Capital Budget and programs that are funded by cost recovery.

(A) BASIC BUDGET PROGRAMS

The 1997-1999 Capital Plan ended basically balanced, with an overall negative variance of $234,265 (or 0.41%) including discount on debenture of $301,336 that we did not separately budget for. At a more detailed level, negative and positive variances were noted in some budget programs and in the major budget areas. The variances can be explained as below. It is proposed that each specific account variance be carry forwarded into the 2000-2002 capital plan.

(1) Work Programs Re-Prioritization/Re-scheduling

Program/work priority in some funding areas often change subsequent to the time the budget forecast was made. In recent capital budget years, shifting in capital work priority/ schedule have taken place to better respond to changing sewer infrastructure management requirements. As a result, actual expenditures for some programs do not necessarily match with the original budget in that particular budget year. In addition, some programs which continued into 2000 were charged against the 1999 budget. Variances noted in (1) System Replacement, (2) System Management, (4) System Expansion and part of (3) Pollution Abatement are typically attributed to these factors. More specific details are described by program in a separate section that deals with individual account that has a variance greater than $50,000 and 15% of the budget.

(2) Internal Re-distribution

Some internal re-distribution is required to re-allocate funds/expenditure between accounts and bring the balance to zero. This is necessary because in the 1997-1999 capital plan, we did not have a budget for some cost items such as discount of debenture, overhead costs and miscellaneous variance charges that were transferred from the operating budget. As we need to absorb these unbudgeted charges within the existing capital budget, we recommend these costs be offset by the surplus and unallocated budget items as identified in the close-out spreadsheet.

(B) COST RECOVERY PROGRAMS

We have recognized the difficulties in achieving full cost recovery in the public sewer connection program for a number of years. Staff have taken different cost saving measures to improve the financial position of this program. In a November 20, 2001 report, we reviewed the problems that the sewer connection program has been facing in recent years and Council approved a 4% connection rate increase in addition to the general inflationary increases.

With the revised rates and staff's continuing efforts, it is expected that the deficit can be eliminated and a balance position achieved by the end of 2003.

Additional details for specific accounts where variances are greater than $50,000 and 15% of the budget:

West Point Grey Basin

Sewer replacement work in the West Point Grey Basin was curtailed in 1999 in order to address the more urgent sewer replacement needs in Fraser River, Balaclava, Cambie/Heather, Hastings/Sunrise and China Creek basins. The unexpected changes in work priority were mainly due to increased arterial street paving programs scheduled in 1999. As a result, an unspent budget balance of $537,246 was noted in the 1999 budget year. Replacement work for this area was resumed in 2000 in accordance with our revised work plans.

Terminal Avenue Basin

The Terminal Avenue Basin contains one of the oldest industrial areas of Vancouver. Many of the original sewers have been replaced in the last 25 years except for the areas south of the industrial area which still have the original 1910-1920 sewers. The $1 million capital budget we allocated to this basin in 1999 was for the sewer work required in response to development proposed in the industrial area. Development, however, proceeded slower than anticipated and the required work did not get started until the end of 1999. The unspent budget balance for this basin noted in 1999 was fully spent in 2000.

Downtown Peninsula Basin

Reconstruction of the original sewer systems of the 1,300 acre Downtown Peninsula is almost complete. The 1999 planned work for this area was considered less urgent when more time sensitive replacement work came up as indicated in the West Point Grey Basin section above. As a result, some of the replacement work was deferred and this area ended with an unspent budget balance of $338,924 in the 1999 budget year. Replacement work for this area was resumed in 2000 in accordance with our revised work plans.

Hastings/Sunrise Basin

Almost all of the original sewers, which were built at various times between about 1900 and the late 1920's, are still in service in this 1,560 acre basin. We have a steady work plan to address the replacement needs in this area. While most of the work had carried out as planned, an unforseen request to complete a new storm sewer system to feed the pond in the Hastings Park was identified in late 1999 which resulted in an over-expenditure of $390,747 in this account. Staff made some minor budget adjustment and work schedule to this account in the subsequent years and it is expected this account will be on target for the 2000-2002 capital plan.

Local Repairs: Catch Basin and Spurs

There are about 45,000 catch basin inventory in the City with about 320 kilometres of spur sewers connecting them to the mains. In 1999, staff experienced higher costs in this program due to increased failures of catch basins and spurs. As a result, this account had a negative balance of $272,035 as of the end of 1999. This report recommends that some of the unallocated budget ($234,048) in the 1997-1999 budget plan be allocated to this program to offset some of the negative budget balance.

System Replacement Unallocated

This unallocated budget of $386,405 was brought forward from the 1994-1996 capital plan. We recommend this amount be allocated to offset programs that have a negative balance.

Liquid Waste Management Plan

The 1999 Liquid Waste Management Plan (LWMP) program included budget for an engineering assistant position to provide non-professional technical assistance. The cost for this position was paid out from sewer's operating budget and was transferred to the capital overhead loading account. The budget for the salary cost in this account should have been transferred directly to the Liquid Waste Management Plan. This surplus budget amount therefore can be used to offset some of the negative balance in the overhead loading variance account. A budget of $200,000 has been maintained in the account to cover various remaining research and planning activities in LWMP yet to be carried out.

Sewer Separation on Private Properties

Sewer Separation on Private Properties was a program in which staff experienced an extraordinary change in budget requirement. This program ended with an over-expenditure of $737,183 in the 1997-1999 capital plan. This was due to a combination of a greater number of separation work requests for properties in the Downtown and West End areas and higher connection costs required for these connection jobs. Reallocation of more budgets to this area was made in subsequent budget years to absorb this negative balance. It is expected that this program will be on target for the 2000-2002 capital plan.

Miscellaneous Projects

The budget in this account was mainly for the Still Creek Inflow/Infiltration program . This program was completed in 1999 at a much lower cost than originally expected. As a result, a surplus of $356,812 has been realized which can be used to cover other areas that have a budget deficit.

System Expansion

This budget is for sewers system expansion in the Pacific Place area. Under the cost sharing agreement between the B.C. Place Corporation and the City, the developer is required to cost share 73.5% of the new sewer infrastructure with the City paying for the balance of 26.5%. When Concord Pacific purchased the site from the Province in 1988, nine development phases were proposed for the Concord Pacific Lands. Originally it was anticipated that site servicing for the nine phases would be completed at the end of the 1993 period. However, design, approval and construction for these phases have progressed at a slower rate. At the end of 1999, of the nine phases of development, four phases were completed with the remaining site servicing for three more phases of development postponed to the 2000-2002 capital plan. It is therefore recommended that the unspent funds from the 1997-1999 capital plan be carried forward into the current plan. It is expected that this program will be carried out within budget in the 2000-2002 capital plan.

Appendix 2

Capital Account Close-outs

Section E- Waterworks

To close and balance the accounts for the 1997-1999 Waterworks Capital Plan work completed as of April 11, 2002, the following summary has been prepared. The accounts that are being closed represent projects for which, as a group, funding occurred over the period of the 1997-1999 Capital Plan. Included in this
funding are carry forward budgets from the pre-1997 Capital Budget close out.

The account summaries are based on the Cycle 14, December 31, 1998 Capital Expenditure Statement generated by the LGFS accounting system and the Capital Expenditure Statement for the 1997-1999 Capital Plan generated by SAP system as of April 11, 2002.

The account close-out details for each category of work are shown on the following page. Explanations are provided for projects where variances are greater than $50,000 and 15% of the budget.

The net overall unexpended balance resulting from the close-outs of the Waterworks pre-1997 and 1997-1999 Capital Plan is $645,252. The surplus funds will be transferred forward to the 2000-2002 Waterworks Capital Plan as summarized in Table 2.

Proposed allocation of funding to be carried forward to 2000-2002 Capital Plan
Waterworks Operations Building $489,877
MAP project $155,375
Total $645,252

Close-out Summary

During the 1997-1999 Waterworks Capital Plan, the City's accounting system changed from LGFS/OCC to SAP. Under SAP, Waterworks spending in 1999 is represented by order group C07E. Unfortunately, significant spending from the 2000-2002 Waterworks Capital Plan has been included in order group C07E.

In LGFS/OCC, Waterworks Capital operated under two account series, 17/36 and 18/37. In the SAP system, these two Fund/Agency groups were combined under order group C07E. Though the first two years of the 97-99 Capital Plan were conducted under LGFS/OCC, this close out will report the appropriate programs and their balances as part of their SAP order group, C07E. The following summary is based on SAP information available on April 11, 2002. The following does not include Discount on Debenture.

The following is a summary of the waterworks 1997-1999 accounts to be closed out:

Budget $ 64,976,360 Expenditure : $ 64,331,108 Balance : $645,252

Explanations are provided where variances are greater than $50,000 and 15% of the budget as follows:

Distribution Main Replacement

Budget: $25,208,700 Balance: ($3,833,052) Variance: -15.2%

Approximately$2,682,422 of the 2000-2002 Distribution Main Replacement Program was performed under the 1997-1999 Capital Plan.

The Distribution Main Replacement program facilitates the life-cycle replacement of pit cast-iron, lined cast-iron and steel distribution mains. The work in the Distribution Main Replacement program is similar to work in the Miscellaneous and Short Notice program, which has a $1,117,304 surplus. Staff turn over caused some confusion on projects that should have been performed under Miscellaneous and Short Notice. Consequently, all projects were charged to the Distribution Main Replacement program. The variance for the two programs combined (once the 2000-2002 expenditures are removed from the 1997-1999 program) is 0.1%.

Transmission Main Replacement Program

Budget: $4,900,000 Balance: ($1,456,370) Variance: -29.7%

This program funds the replacement of aging large diameter (400 mm diameter and larger) transmission watermains. One of the major projects in this program was the Heather Street Transmission Main Replacement. During the detailed design phase of the Heather Street project, congested underground utility corridors created two changes in project scope:
- An additional 100 m of transmission main was required to avoid a street that was congested with mature trees as well as utilities.
- The distribution main on Heather Street had to be replaced as part of the project.
The distribution main was near the end of its design life and its replacement was in agreement with the guidelines in the Waterworks Long Range Capital Plan. The change in scope created a $456,935 change in project expenditures.

Approximately $997,435 of the 2000-2002 Transmission Main Replacement Program was performed under the 1997-1999 Capital Plan, and represents a transmission main replacement project on West 37th Avenue, from Trafalgar to Larch.

It is recommended that Transmission Main Replacement Program balance be funded from a surplus in the Transmission Capacity Program.

Transmission Capacity Program

Budget: $3,950,000 Balance: $2,167,060 Variance: 54.9%

This program funds new and upgraded replacement large diameter (400 mm diameter and larger) transmission watermains that are required due to growing water demand. One of the major projects during the 97-99 Capital plan was the upgrading of the existing 37th Avenue transmission main. The upgraded main was constructed on 33rd Avenue. The 33rd Avenue route provided 2 major cost saving opportunities:
- Few utility crossings.
- It could be constructed in conjunction with the replacement of an existing 33rd Avenue transmission main.
The combined cost saving for the 2 transmission main projects was approximately $1,000,000.

$1,150,000 of the balance was budgeted for a project on Kent Avenue North. This project was cancelled during the design stage when detailed hydraulic modeling determined that recent GVRD system improvements could adequately serve the area.

The remaining funds will be required during the 2000-2002 Capital Plan for partial funding of the West Side Redundancy Main.

Fire Upgrading for Development

Budget: $1,000,000 Balance: $977,285 Variance: 97.7%

For new developments, the City's practice is to seek cost-sharing for any Waterworks upgrading work the development requires. The Fire Upgrading for Development program is intended to fund the City's share of the cost.

This program is driven by development and it is difficult to predict the amount of activity the program will fund. Development activity was lower than the historic average during the 97-99 Capital Plan, resulting in a budget surplus of $977,285.

Dedicated Fire Protection System

Budget: $15,725,000 Balance: $1,872,866 Variance: 11.9%

The Dedicated Fire Protection System (DFPS) program was reviewed through a Value Engineering (VE) Study during the 97-99 Capital Plan. One of the results of the VE Study was deferral of a Kitsilano Point pump station for the foreseeable future and a change in program funding, as was reported to Council.

Emergency Supplies

Budget: $200,000 Balance: $95,043 Variance: 47.5%

This program funds projects that create alternate water supplies for drinking and fire fighting to be used in the event of emergency. A portable emergency pump was purchased slightly used, at less than half of it's anticipated cost.

Miscellaneous and Short Notice

Budget: $1,305,222 Balance: $1,117,304 Variance: 85.6%

As explained above, this balance is due to some confusion amongst new staff between this program and the Distribution Main Replacement program.

The Miscellaneous and Short Notice program performs the same type of work as the Distribution Main Replacement program. In the past, individual projects were budgeted in the Distribution Main Replacement program and the Miscellaneous and Short Notice program was required for unforeseen or emergency projects. Today, the Distribution Main Replacement program is more responsive, enabling Waterworks to coordinate closely with other street construction activities, such as sewer replacement and street repaving. Consequently, the Miscellaneous and Short Notice program is redundant and has been removed from the Waterworks Capital Plan for 2000-2002.

Minor Improvements to the System

Budget: $600,000 Balance: ($533,327) Variance: -88.9%

Approximately $594,350 of the 2000-2002 Minor Improvements to the System Program was performed under the 1997-1999 Capital Plan.

This program provides funding for minor works not associated with particular capital programs. Examples include valve chambers, short watermain extensions, and water quality monitoring stations.

Telemetry System

Budget: $500,000 Balance: $401,021 Variance: 80.2%

Staff turn over and vacancies have caused delays in this program. Remaining funding will be carried forward and used to fund this program in the 2000-2002 Capital Plan.

Waterworks Operations Building

Budget: $697,000 Balance: $489,877 Variance: 70.3%

The Waterworks Operations Building is an ongoing project, and the balance should be transferred to the current Capital Plan.

Since the Waterworks Operations Building was first budgeted, there have been significant changes as to how Waterworks approaches some elements of its operation. These changes have impacted the requirements for the Waterworks Operations Building and have delayed construction of the facility.

Appendix 2

Capital Account Close-outs

Section F - YARDS

To close and balance the accounts for the 1997-1999 Yards Capital Plan forwork completed as of April 11, 2002, the following summary has been prepared. The accounts that are being closed represent projects for which, as a group, funding occurred over the period of the 1997-1999 Capital Plan.

The account summaries are based on the Cycle 14, December 31, 1998 Capital Expenditure Statement generated by the LGFS accounting system and the Capital Expenditure Statement for the 1997-1999 Capital Plan generated by SAP system as of April 11, 2002.

The account close-out details for each category of work are shown on the following page. Explanations are provided for projects where variances are greater than $50,000 and 15% of the budget.

The net overall unexpended balance for Yards 1997-1999 Capital Plan is $1,148 and this surplus balance will be transferred forward as unallocated Yards 2000-2002 Capital Plan funding .

Proposed allocation of funding to be carried forward to 2000-2002 Plan:
Engineering Charges $1,148

Manitoba Yards Improvements

Budget: $50,000 Balance: $(87,805.94) Variance: -175.61%

The budget of $50,000 was for the installation of a security camera system for Manitoba Works Yard. At the time of the installation, a couple of thefts of equipment occurred in the Yard and the camera system as initially envisioned was determined to be inadequate in preventing similar incidents. As a consequence, the system was expanded to more thoroughly cover the buildings on the site (particularly around the Equipment Building) at an increased cost. Increasing the camera coverage at the entrance enabled the Yards Branch to eliminate one daytime security guard position at an annual savings of $50,000 in the operating budget. In addition, when the camera system was installed, the hardware connections for the fibre optic system to all the buildings were also installed and these costs should have been charged to the Yards - Other Improvements as part of the Electrical and Fibre Optic upgrades. As a result, the Yards Other Improvements was under charged by approximately $50,000 and, along with the increase cost system expansion, the Manitoba Yards Improvements for the Security Camera System over expended.

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