ADMINISTRATIVE REPORT

Date: May 10, 2002
Author/Local: Jeff Addis/7353

RTS No. 02724

CC File No. 1602/8203

CS&B: May 16, 2002

TO:	Standing Committee on City Services & Budgets
FROM:	General Manager of Engineering Services
SUBJECT:	False Creek Flats Development Sewerage Infrastructure Funding

RECOMMENDATION

THAT Council approve funding of the sewer infrastructure projects in the False Creek Flats and identified in this report, at a cost of $3.1 million with funding to be provided from developer contributions ($706,000), existing sewer capital budget ($494,000); the Property Endowment Fund ($616,000); and False Creek Flats development cost levies ($1,284,000), AND THAT the Director of Finance be authorized to provide financing of $1,156,000 in advance of the receipt of DCL funds with repayment from future DCL revenues.

GENERAL MANAGER COMMENTS

The General Manager of Engineering Services RECOMMENDS approval of the recommendation in this report.

COUNCIL POLICY

The allocation of DCL funds is specified in the area specific DCL by-laws approved by Council. The False Creek Flats DCL By-Law anticipated about $14.3 million will be available for infrastructure projects, including sewer construction.

PURPOSE

The purpose of this report is to recommend funding for sewer infrastructure construction work in the False Creek Flats area to meet area development agreements at a cost of $3.1 million.

DISCUSSION

Sewer infrastructure construction is required to service new development in the re-zoned areas of False Creek Flats. This work, which includes installing new storm trunk sewers and new sanitary sewers on Industrial Avenue and Station Street and a force main along Terminal Avenue (the Terminal Central-Thornton Park Force main), is required to be carried out this year as part of development agreements.

The estimated cost for the construction is $ 3.1 million. Funding will be provided as follows:

Existing Funding
	CN Rail	$280,000
	Higher Learning Consortium	426,000
	Sewers Capital	494,000
Funding Requested in this Report
	Property Endowment Fund	616,000
	Development Cost Levies (existing)	128,000
	Development Cost Levies (future)	1,156,000
Total		$3,100,000

CN Rail will be contributing $0.28 million towards the project and about $0.426 million will be contributed by the "Higher Learning" Consortium that has assumed the re-zoning obligations of the Great Northern Way Technology Park (formally the Finning Lands). The contribution from the Consortium is secured through an agreement that requires them to fund 18.3% of the Terminal Central-Thornton Park Force main. Sewers Capital will contribute about $0.5 million from already approved infrastructure replacement budgets for this area.

The Property Endowment Fund (PEF) owns approximately seven acres including roads at the south-east corner of Main and Terminal. The False Creek Flats Structure Plan shows the consolidation of existing roads and the creation of new roads in locations that will better serve the Flats. The construction of the new sewer is necessary in order to close the existing roads and to serve the future development parcels. There will also be other utility relocations required in order to close the roads. Even after new road dedications and the contribution to other utility re-locations there will be a net benefit to the PEF land holdings. The Director of Real Estate is therefore recommending the PEF contribute $616,000 to the subject sewer. In addition, Engineering agrees to the closing of Northern, Central, Southern and Western roads, within the PEF-owned seven acre parcel, once there is an approved subdivision plan and all other utilities have been relocated.

It is proposed that the balance of the cost ($1.284 million) be funded from DCL revenues as this project is driven primarily by the growth that will occur in the False Creek DCL area. However, when construction begins later this spring, it is anticipated that only $0.128 million in DCL revenues will have been received. As this project must proceed this year to meet development agreements in place in the area, it is proposed that the balance be financed from internal sources, pending receipt of the DCL funds.

The Director of Finance recommends that if such internal financing is to be provided, it be as a loan from the Capital Financing Fund at terms reflecting current market conditions and that repayment, with interest, be provided from future DCL revenues allocated to infrastructure upgrades. This is preferable to financing the work through additional borrowing authority. The risk associated with this financing is that development of the area and the receipt of DCLs is deferred for an extended period in which case the cost of servicing this loan will exceed the allocation available for DCLs. Should this become a problem, staff will report back with proposed solutions.

* * * * *

(c) 1998 City of Vancouver