ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

General Manager of Corporate Services / Director of Finance In Consultation with the Corporate Management Team

SUBJECT:

2003 Operating Budget - Preliminary Estimates

 

RECOMMENDATIONS

OR

COMMENTS OF THE CITY MANAGER

The Preliminary Report on the 2003 Operating Budget is the first opportunity that Council has had to review the budget position and to begin the process of bringing the estimates into balance. As noted in this report, the 2003 operating estimates show a funding shortfall of $21.8 million, equivalent to a property tax increase of 5.5%.

Staff are not requesting Council to make specific funding decisions at this stage of the budget process. However, in order to move the process forward, Council should look to providing advice on its tolerance for a property tax increase. The increase reflected in Recommendation B(i) seeks Council approval for a tax increase target of 5.5%. This increase is based on providing adequate funding to maintain base program levels, to accommodate new/expanded programs approved by Council in 2002, and to pass through increases other agencies impose on our budget that do not have direct Council control. This request is consistent with our mandate to bring forward a balanced budget without changes in service levels.

If this tax increase is above the level that Council wishes, then Recommendation B(ii) is offered as an alternative. This option would limit the property tax increase to approximately 3.9%, reflecting an increase in taxes consistent with local inflation and an increase in the costs imposed on the budget by outside agencies such as the GVS&DD, E-Comm and the provincial government of approximately 1.0%. Approval of this recommendation will require the Corporate Management Team to identify adjustments to the revenue and expenditure estimates of approximately $7.0 million for report back with the interim estimates.

It should be noted that a 5.5% tax increase will not provide sufficient funding to deal with several new initiatives that will be brought forward by the Corporate Management Team over the next few months. Should Council choose to approve some of these initiatives, we would look to provide the necessary funding from the Contingency Reserve allocation, thereby deferring the budget and property tax impact until 2004. However, the requested increase in Police sworn and civilian staffing would have a significant enough impact on the budget that a decision is advisable as part of the budget decision-making process. Council will be discussing these initiatives with the departments over the next two weeks, before any final decisions are required.

Staff also note that the budget includes limited funding for initiatives that Council might wish to implement during 2003. The Contingency Reserve provision will provide some funding, however, if there are major new expenditure initiatives that Council wishes to have funded in 2003, it would be advisable to either identify them as part of the budgetdecision making process or provide additional funding in Contingency Reserve. For reference, for each $1.0 million increase in the Contingency Reserve allocation property taxes would have to be further increased by approximately 0.25% beyond increase indicated in this report.

Moving forward from this report, staff will work to accommodate Council's priorities and to meet Council's taxation targets. Council will be meeting with each of the departments and boards to discuss challenges and opportunities specific to their budgets. A public information process, including two public meetings will seek input on the challenges we face in balancing the budget. This process will culminate in the Interim Report to Council on April 8, 2003, at which time Council will be asked to make the decisions necessary to bring the budget into balance.

PURPOSE

The purpose of this report is to:

· bring forward the revenue and expenditure estimates of the 2003 Operating Budget;
· to provide a list of initiatives that Corporate Management Team has identified, all of which impact on the 2003 budget; and
· Seek Council input into what is an acceptable property tax increase.

BACKGROUND

In April 2002, when Council approved the 2002 Operating Budget, the Director of Finance warned of a potential property tax increase in 2003 that could exceed the rate of local inflation. A number of factors contributed to that warning, including:

· the salary and benefit costs flowing from collective agreements;
· "added basic" costs for new programs and services;
· increased capital expenditure program costs;
· costs imposed on the City from outside organizations, and
· the approval of additional staffing in the Police department.

Council was advised that, the issues identified in the report could lead to a tax increase exceeding 3.9% in 2003.

Staff began preparation of the 2003 Operating Budget estimates during the summer of 2002. Departmental budget requests were reviewed during the fall based on standing instructions from Council to provide only for approved levels of service and for increases necessary todeal with workload and health and safety issues. Many adjustments were made to the estimates based on these instructions.

On February 27, 2003, Council approved a public consultation process for the 2003 Operating Budget designed to assist Council in determining the priorities of the City's citizens with relation to services and property tax increases. This process will take place between March 11, 2003, and April 8, 2003, and will include:

· an information flyer to be distributed through a community newspaper and at civic facilities throughout the City as well as made available on the City's website;
· a public opinion poll; and
· two community meetings in which the public can learn about and discuss the issues facing the City in balancing the budget
· the opportunity for the public to be heard at the time the Interim Report is presented to Council.

The results of this process will be reported to Council on April 8 with the Interim Report on the 2003 Operating Budget.

DISCUSSION

Finance staff have completed the administrative review of the revenue and expenditure estimates. This review included discussions with departments and boards to ensure that departmental budgets meet target expenditure levels that provide sufficient funding to maintain programs, services and staffing at approved levels, and that requests for additional funding beyond these targets could be justified on the basis of Council approvals, health and safety concerns or short-term workload issues. In addition, the Corporate Management Team has reviewed a number of new initiatives being developed for Council consideration in 2003.

The Budget Challenge

Balancing the Operating Budget with a tax increase in the range of local inflation and without changes to the services delivered by the City presents an annual challenge. There are a number of reasons for this. First, changes in the City's budget do not track with changes in the Consumer Price Index, the normal measure of inflation, which is based on a basket of consumer goods and services. Second, the City relies on small number of non-taxation revenue sources, many of which are not related to the activities they support and which do not lend themselves to increases that match increases in the expenditure budget. Where possible, revenues are increased annually to reflect service costs, however, for those not related to the services they support, achieving an increase in the revenue source that matches increases in expenditures is very difficult. This situation is made worse by the factthat many revenues are subject to influences beyond Council's control such as decisions of outside organizations, the economy or the weather.

The impact of this mis-match between expenditure and non-taxation revenue growth and the fact that property tax revenues provide almost two-thirds of the funding in the operating budget means that, when expenditures rise, the pressure is on property tax increases to maintain service levels. This situation is reflected in the 2003 Operating Budget:

The challenge in balancing the Operating Budget is that, as costs increase, it is very difficult to hold property tax increases to local inflation without affecting the delivery of programs and services. As a result, the current budget position reflects a tax increase above local inflation. Moving below this level will require real adjustments in the estimates, either on the revenue or expenditure side of the budget.

The Current Budget Position

The following table summarizes the current position of the estimates following the administrative reviews described above. This position is presented prior to consideration of a property tax increase.

Revenues

    
 

Taxation Revenue

$437,791

  
 

General Revenue

120,818

  
 

Utility Fees

110,069

  
 

Transfers

8,866

$677,544

       

Expenditures

    
 

Departmental Expenditures

$490,962

  
 

Utility Expenditures

141,510

  
 

Capital Program

61,590

  
 

Transfers

5,290

$699,352

       

Net Budget Position

  

($21,808)

Indicated Property Tax Increase

  

5.5%

Additional detail of these estimates is provided in Appendix 1, along with comparative information from the 2002 Operating Budget.

The following summarizes the major expenditure and revenue areas in the budget.

1. The Expenditure Estimates
As noted, the expenditure side of the budget comprises four components: Departmental Expenditures, Utility Expenditures; the Capital Program and Transfers to other Funds/Reserves. The preliminary estimates include expenditures of approximately $699.4 million in 2003, up 5.3% from the 2002 budget. If approved at this level, expenditures of $589.3 million would be supported by property taxes and general revenues and $110.1 million would be supported by utility user fees.

Departmental Expenditures
Departmental expenditures are those related to the programs and services provided by the City. The increases in program costs totals $23.0 million and are driven by the following factors.

i) Salary and Benefit Costs

ii) Inflation in Non-Salary Costs

Natural Gas budgets have declined by $0.70 million from 2002 due to favourable market conditions in this sector. However, with the price of natural gas rising during the last few months, this area of expenditure will be a risk in the 2003 budget. The City attempts to minimize the impact of variability in natural gas prices by purchasing up to 50% of its consumption on longer term contracts.

The budget has assumed a 7% increase in the cost of fuel for the City vehicle and equipment fleet. However, with the purchase of more fuel efficient vehicles and a focus on preventative maintenance, overall consumption has declined, keeping the overall funding requirement at the 2002 level. However, recent increases in oil prices and the introduction of an additional $0.035 per litre fuel tax imposed by the Province has introduced some risk into the current budget position. Estimates of the impact to increased fuel costs range from $0.54 million to $1.1 million. Of this increase $0.20 million is attributed to the Provincial tax increase.

Staff will continue to monitor the impact of these factors and report any necessary changes to the 2003 estimates with the Interim Report.

iii) New Programs and Services

Increased Staffing for Vancouver Police Department

Parks Board "Added Basic"

iv) Charges from Outside Agencies

The City's operating budget must also fund costs imposed by outside organizations over which Council has little or no direct control. The following organizations have increased their requisitions to the City in 2003:

· GVS&DD levies the City for its share of regional sewerage costs. In 2003, these costs have increased by 9.6%. These costs are recovered 52% from user fees and 48% from property taxes. The impact on the tax supported operating budget of this increase is $1.9 million (5.2%) over 2002.
· The requisition from E-Comm for radio and dispatch services has increased by $1.5 million (12%) over 2002. Offsetting this increase is a reduction in the Fire Department's dispatch costs of $0.65 million. The services originally intended to be provided by E-Comm are now all in place and, although these costs have increasedover 2002, they remain in line with the original projections developed in 1997.
· As reported to Council in June 2002, the Province began recovering the costs associated with prosecuting the City's by-law fines through the Provincial Courts. The additional cost to the City is $0.40 million
· Effective December 31, 2002, the Province eliminated the cost sharing it provided to the Vancouver Police Department for serving criminal documents. This download will increase the budget by $125,000.

It has been Council practice to pass these expenditure increases through to taxpayers as a tax increase rather than forcing reductions in City services to remain within acceptable taxation targets. Together these additional charges total $3.62 million and represent a property tax increase of about 0.9%

Utility Expenditures
The City has established three utilities that are operated on a user pay basis. The water and solid waste utilities are fully funded from user fees so that increased expenditures are matched by increased user fee revenues with no impact on property taxes. The sewer utility is funded approximately 48% from user fees and 52% from property taxes.
Water utility costs are driven by increases in the cost of water purchased from the Regional District debt charges which increased by $1.06 million (4.5%) and $1.7 million (7.6%) respectively. In December, 2002, Council approved a 2.5% increase in water rates for 2003, bringing the flat rate water charge to $271 from $264. Metered rates were increased by the same percentage.

Improved revenues from recycling and efficiencies in the solid waste operation allowed Council to approve a reduction in Solid Waste fees for residential properties for 2003, from $147 to $146. This is the third consecutive year these charges have been reduced. Charges for non-residential users of the system remain at the regional disposal rate.

Council approved a 9.4% increase in sewer rates for 2003 increasing the residential user fee from $139 to $152. Much of this increase reflects increases in regional treatment costs. Sewer fees for metered users were increased by similar amount.

Overall, the increase in charges to residential properties receiving these three services from the City increased by 3.5% over 2002, from $550 to $569. As noted, water and solid waste operations have no impact on taxes while the increases to the sewer costs is partially impacting the general tax levy.

Capital Program
The City's capital program is planned over a three year period with financing provided by a combination of debt and pay-as-you-go funding. The costs of this financing plan are carried in the Operating Budget through payments of principal and interest on debt and through a transfer of the current property tax levy.

Council policy has been to fund the capital expenditure program such that it is not a driver in the Operating Budget. However, in approving the 2003 - 2005 Capital Plan, Council acknowledged that demands on the program from basic infrastructure and facility maintenance and upgrading required higher funding levels.

In 2003, these costs will increase for two reasons:

· the City is able to manage its debt portfolio to take advantage of market conditions rather than being required to borrow to meet expenditure requirements. This results in lower borrowing costs over the longer term. However, the $100 million issue completed in 2002 will result in higher debt costs of $2.3 million in 2003.
· the 2003-2005 Capital Plan includes an increase over the last plan in both borrowing and capital from revenue. The increase in funding from current taxes will impact the budget by an additional $7.9 million over the course of the plan, translating to an increase of $0.7 million in 2003.

Transfers to Reserves/Funds
There are a number of transfers included on the expenditure side of the operating budget:

· funding of $4.1 million for the Information Technology Long Term Financing Plan. This funding provides for maintenance, replacement and upgrading the City's core information technology infrastructure and equipment.
· funding of $400,000 for the 2005 election, and
· funding of $752,000 for the Liability Insurance Reserve.

2. The Revenue Estimates

The revenue side of the Operating Budget comprises four components: Taxation Revenue, General Revenues, Transfers from Reserves / Funds, and Utility Revenues (as they relate to the utility expenditures detailed above). The interim estimates include revenues of $677.5 million in 2003, up2.5% from 2002. This revenue position is prior to consideration of a property tax increase.

Taxation Revenue
Taxation revenues are those derived from property taxation sources including the general purpose tax levy, receipts-in-lieu of taxes (revenues from properties not subject to property taxation) as well as penalty and interest charges for outstanding and arrears taxes. The preliminary estimates establish these revenues at $437.8 million, up 1.3% from 2002.

· The general purposes tax levy has been set at $395.6 million prior to consideration of a tax increase. This includes $5.3 million in tax revenue from "non-market movement" on the assessment roll.
· The provision for tax adjustments has been set at 2.0 million, reflecting the number of assessment appeals now before the Assessment Review Panel and the City's exposure to subsequent adjustments to the property tax levy.
· Receipts-in-lieu of taxes totaling $34.2 million (an increase of $0.9 million), reflecting a detailed review of grantable property carried on the 2003 Assessment Roll.

General Revenues
A variety of general revenue sources support the expenditure budget. Overall, general revenues are anticipated to increase to $120.8 million or 3.7% over the 2002 budget level of $116.6 million. These revenues are summarized below:

· Provincial Revenue Sharing is comprised of two components:

· Investment Income is dependent on the cash balances the City has to invest and on market interest rates. An overall increase in the cash pool and anticipated increases in short term rates during 2003 have resulted in an anticipated increase in investment income of $1.0 million.
· On-Street Parking Revenue has been increased by $1.0 million to reflect 2002 earnings and program changes to be implemented in 2003.
· Service and Inspection Fees have been increased by $1.0 million reflecting increasing activity in this sector of the economy and the increased fees approved by Council.
· Park Board and Civic Theatres revenues have been set to reflect adjustment to fees andcharges approved by Council (Civic Theatres) and the Park Board.
· Miscellaneous Revenue has been decreased by $1.1 million mainly as a reflection of the continued reduction in revenues related to Port Policing. The Vancouver Police Department assumed responsibility for Ports policing in 1997 when the Federal Government dissolved the Ports Canada Police. In 1997, Ports Canada agreed to provide transitional funding over seven years, ending in 2004.

Transfers from Reserves
The transfer from other funds and reserves includes:
· $1.5 million, reflecting the annual surplus on the City's sinking fund. This transfer is 60% reflects lower income in the fund in 2002 due to lower interest rates and lower cash balances.
· the annual dividend from the Property Endowment Fund is held at $7.0 million.
· $160,000 transfer from the Art Gallery Reserve to partially offset the Art Gallery operating grant
· $250,000 from the Hasting Park Reserve for the City's obligation to the PNE for maintenance of Hastings Park..
· "Other transfers" have declined by $1.0 million because the 2002 budget included a transfer to cover election expenditures. The operating budget provides annual installments to this reserve to fund the triennial election, as noted in the Transfer to Reserve section above.

3. Indicated Property Tax Increase

As noted, the budget shortfall reflected above is $21.8 million and would require a 5.5% tax increase to eliminate. This is comprised of increases of approximately:

4. Park Board Global Budget

The preliminary estimates make full provision for the Park Board Global Budget of $47,518,000, including added basic funding of $299,650. The global budget has been calculated by the City and Board staff according to the principles agreed upon in thearrangement with Council. In short, these principles require the Park Board to increase its fees and charges based on the increase in City costs in order to receive adjustments on the expenditure side (employment costs, inflation and added basic) of the its budget on the same basis as other departments. The base budget has been adjusted to reflect changes in salary and benefit costs arising from collective agreements and non-salary costs have been increased by the same 1.75% provided to all departments.
Added basic is the ongoing operating cost that arises from the Park Board capital program. Under the global budget arrangement, Council has agreed to add these costs to the Park Board budget. The 2003 allocation includes $299,650 of additional funding for maintenance and support of buildings and parks infrastructure, as well as the operating costs of the expanded programs and new parks.

5. Regularization of Positions Utilizing Existing Funds

As part of the administrative review of the operating budget, staff identified two positions that currently are funded on a temporary basis but would be more effective if they were made permanent. Funding for these position is provided for within the existing base and therefore would not be an incremental cost to the operating budget. Staff have determine that the need for these positions are required to meet existing service needs in the organization. The two positions requested to be made permanent are an EEO Officer I for the EEO Office and an Ergonomist in Human Resources. Appendix 2 includes a description of the positions and the rational for making them permanent. Recommendations to give effect to this conversion will be included in the Interim Report.

6. New Initiatives for 2003

The budget position described earlier in the report does not include provision for any new initiatives that may come forward during the year. However, as part of the budget planning process, departments were asked to identify new initiatives that may require funding in 2003. Appendix 3 includes the list of initiatives from the Corporate Management Team which total $7.3 million. Council will have the opportunity to discuss these initiatives with individual departments over the next two weeks.

The initiatives have been placed into three categories. Categories A and B initiatives should be considered by Council when balancing the budget at the interim stage on April 8, 2003. Items in category C will be reported to Council after the budget process is complete with funding associated with any approvals being allocated from Contingency Reserve, thereby reducing the funding available for the balance of the year.

Initiative Type A:
Recommended by Corporate Management Team for Approval

There are five initiatives listed in Appendix 3 that the Corporate Management Team recommends to be funded as part of the 2003 Operating Budget. The request of five positions are required to meet base service levels and would assist staff to achieve the City's operational objectives. The total funding request for 2003 is $172,900 equivalent to a 0.05% tax increase. The initiatives identified are:

· City Clerks Office - Communication Coordinator ($60,200 annually)
· City Clerks Office - 0.5fte Freedom of Information Officer ($33,100 annually)
· Corporate Services - 1.5fte Building Supervisor to increase security at the Museum/Planetarium complex at Vanier Park ($99,00 annually)
· Vancouver Police Department - 2.0fte Building Services workers (part of Corporate Services) to provide increased janitorial service at the Police Station at 312 Main Street ($104,000 annually)

Recommendations for Council's consideration of these initiatives will be included in the Interim Report.

Initiative Type B:
Put Forward for Council Consideration

Corporate Management Team identified three requests for new funding, totaling $4.4 million, for Council consideration as part of the 2003 Operating Budget. To assist Council in the decision making process, the Police and Library Boards will bring forward Information Reports to Council detailing these requests on March 27, 2003. The annual cost of these initiatives if approved in full would be equivalent to a property tax increase of 1.1%. The final Council decision on these initiatives will be made on April 8, 2003.

i) Vancouver Police Department Initiatives

The Vancouver Police Department has two initiatives that should be addressed as part of the budget decision-making process.

Sworn Positions for the Downtown East Side (DTES)
In 2001, the VPD provided a report to Council that set out the impact of workload changesexperienced from 1993 to 2000. The report indicated that the VPD needed an increase of 115 officers in its authorized strength to return the patrol response capability to 1993 levels. Fifty positions were added in 2001 (including permanent status for 20 temporary officer positions deployed in the DTES) and 30 positions were added in 2002, although no funding for these positions was required until 2003.

The VPD has identified the issues of the DTES to be a priority and have requested 44 additional positions to provide a greater visible police presence in the area. This staff would be allocated to sustained projects aimed at the illegal business support infrastructure and to deterrence of drug trafficking and disorder.

Civilian Staffing
In 2002, the Police Department provided a support staffing request for 46 civilian positions. Council approved 15 positions, eight of which had funding offsets in the existing Police department budget. In 2002, priority was given to:

· positions that would result in additional officer time "on the street", including civilianization of functions now performed by sworn staff,
· positions that provide direct support to operational areas of the department and will improve operational effectiveness, and
· positions that address internal security issues identified by the department.

The VPD has updated their civilian request for 2003 and has requested funding for:

· an additional 27 civilian positions,
· the restoration of funding utilized in the business case for the VPD records management system (PRIME BC),
· increased funding for a Commissionaire at 312 Main Street,
· strategic issues management consulting funds, and
· contract funds for enhanced security clearances for replacement civilian hires for the Police Department

ii) Library

In order to comply with funding reductions as part of the 1997 budget management program, the Library Board made the decision to close the system for one week each year. This was one of several options that the Board could have utilized to achieve these savings. The Library Board will be coming forward requesting funding to allow it to stay open for this week. As the Library Board needs to plan for the reopening Council approval on August 8,2003 is necessary to ensure the necessary staff resources are in place.

Initiative Type C:
Provided for Council's Information with Reports Back During 2003

The Corporate Management Team has identified $2.7 million of additional initiatives that will be reported to Council after the budget process is complete. These initiatives range from programs that Council has specifically requested a report back on or have been identified by staff as being a priority for the department. Funding required in 2003 for initiatives that are adopted by Council would be provided from Contingency Reserve with permanent additions being fully funded in 2004.

The Impact of the Budget On Property Taxes

The impact of a 5.5% tax increase on the City's residential properties is approximately $0.15 per $1,000 of assessed value. The following chart summarizes the tax and user fee impacts on the median residential property

For non-residential properties in Class 06, a 5.5% tax increase would represent an increase of approximately $0.85 per $1,000 of assessed value over the base.

Inflation Benchmark

It has been Council policy that general purpose tax increases associated with developmentof the Operating Budget be held within the range of local inflation. The following summarizes recent measures of the consumer price index in Vancouver:

Council has adopted a practice of passing tax increases related to requisitions from outside agencies, including the Greater Vancouver Sewerage and Drainage District, E-Comm, and the Province through to taxpayers rather than forcing offsetting reductions in City programs and services to meet Council's taxation objectives. As outlined in this report, the impact of these outside agencies on the 2003 Operating Budget is equivalent to tax increase of approximately 1.0%

Should Council wish to continue with the practice of setting tax rate increases based on past practice, the total property tax increase would translate to approximately 3.9%. To provide for this level of tax increase, Corporate Management Team would need to identify adjustments to the revenue or expenditure estimates of approximately $7.0 million prior to consideration of any of the new initiatives going forward as part of the 2003 Operating Budget.

Council Direction

This report presents the preliminary estimates to Council. At this stage of the budget process, Council is not asked to make specific funding decisions related to these estimates. With discussions with departments and board scheduled over the next two weeks and with a public consultation process due to begin shortly, it is more appropriate to delay these decisions until the Interim Report is presented on April 8, 2003.

It is important however, that Council provide some guidance to staff and the public related to its tolerance for a property tax increase. That is the purpose of recommendation B. Based on Council's instruction, Director of Finance, in consultation with the Corporate Management, will prepare options for adjusting the budget for Council's consideration at the Interim Report stage.

CONCLUSION
The preliminary estimates of the 2003 Operating Budget indicate that a property tax increase of 5.5% would be necessary to provide for the costs of base City programs and the added basic costs associated with new programs approved by Council in 2002. In addition, thereare number of requests for significant new funding the most significant from the Police Department. The public consultation process will determine what trade-offs is the public willing to make with regards to tax increases, new services, and service adjustments.

- - - - -

City of Vancouver

  

Appendix 1

2003 Operating Budget Projections

   

2002

2003

$

%

   

budget

projection

change

change

 

($000s)

($000s)

    

SECTION 1: Summary of Revenues

        
           

Taxation Revenues:

        
 

Base Levy

387,058

390,200

3,142

0.8%

 

New Construction

3,248

5,300

2,052

63.2%

Net Taxation Revenues

390,306

395,500

5,194

1.3%

           
 

Tax Adjustments

(1,750)

(2,020)

(270)

15.4%

 

Local Improvement Taxes

4,304

4,251

(54)

(1.2%)

 

Receipts in Lieu of Taxes

33,352

34,211

859

2.6%

 

Penalties and Interest

5,850

5,850

0

0.0%

Total Revenue from Taxation

432,062

437,791

5,728

1.3%

         

Other Revenues:

      

 

Provincial - Revenue Sharing Programs

6,137

6,138

1

0.0%

 

Investment Income

9,600

10,600

1,000

10.4%

 

License Fees

12,290

12,862

572

4.7%

 

Property Rental Income

1,295

1,276

(20)

(1.5%)

 

Service and Inspection Fees

19,404

20,427

1,023

5.3%

 

Municipal By-Law Fines

9,652

9,454

(198)

(2.1%)

 

On Street Parking Revenue

16,990

17,990

1,000

5.9%

 

Civic Theatres Revenue

5,585

5,583

(2)

0.0%

 

Park Board Revenues

29,303

31,250

1,947

6.6%

 

Miscellaneous Revenues

6,301

5,238

(1,063)

(16.9%)

Total Other Revenues

116,557

120,817

4,260

3.7%

         

Utility Fees

      

 

Waterworks

53,965

57,103

3,138

5.8%

 

Solid Waste

21,760

22,405

645

3.0%

 

Sewers

28,009

30,560

2,551

9.1%

Total Utility Fees

103,734

110,069

6,335

6.1%

         

Total Revenues before Transfers

652,353

668,677

16,323

2.5%

         

Transfer from Other Funds/Reserves:

      

 

Sinking Fund Prior Year Surplus

3,638

1,456

(2,182)

(60.0%)

 

Property Endowment Fund

7,000

7,000

0

0.0%

 

Art Gallery Reserve

160

160

0

0.0%

 

Revenue Surplus

0

0

0

 

Other

1,300

250

(1,050)

(80.8%)

Total Transfer from Other Funds

12,098

8,866

(3,232)

(26.7%)

         

Total Revenues before Tax Increase

664,451

677,543

13,091

2.0%

         

         

SECTION 2: Summary of Expenditures

      

   

2002

2003

$

%

   

budget

projection

change

change

   

($000s)

($000s)

    

General Government:

      

 

Mayor & Councillors

1,391

1,422

30

2.2%

 

City Manager / EEO

921

973

52

5.6%

 

City Clerk

2,230

2,399

169

7.6%

 

Legal Services

3,357

3,459

102

3.0%

 

Corporate Services

26,431

27,313

882

3.3%

 

Human Resourses

5,720

5,857

137

2.4%

 

Other General Government

4,265

8,488

4,223

na

 

Community Services Administration

5,262

5,147

(115)

(2.2%)

 

City Wide & Community Planning

5,003

5,573

570

11.4%

Total General Government

54,580

60,630

6,050

11.1%

           

Protection to Persons & Property:

      

 

Police Services

128,060

132,955

4,895

3.8%

 

Fire & Rescue Services

67,315

67,629

314

0.5%

 

E-COMM Services

12,126

13,624

1,499

12.4%

 

Permits and Licences

18560

18918

358

1.9%

 

Animal Control

909

997

88

9.7%

 

Vancouver Emergency Program

949

1,104

155

16.4%

Total Protection to Persons & Property

227,919

235,227

7,308

3.2%

           

Public Works

      

 

Administration & General

7,484

7448

-36

(0.5%)

 

On Street Parking Program

6,728

7,229

501

7.4%

 

Traffic Planning and Control

6,860

7,077

217

3.2%

 

Street Lighting & Communications

4,450

4,578

128

2.9%

 

Street Cleaning

6,273

6,640

367

5.9%

 

Streets, Bridges & Walkways

14,883

15,312

429

2.9%

Total Public Works

46,678

48,284

1,606

3.4%

           

Utilities - Waterworks

      

 

Operating Costs

7,172

7,413

241

3.4%

 

Water Purchase

23,860

24,425

565

2.4%

 

City Debt Charges

22,981

24,644

1,663

7.2%

 

Transfer to/(from) Reserve

(48)

621

669

na

   

53,965

57,103

3,138

5.8%

Utilities - Solid Waste

      

 

Operating Costs

21,646

21,509

(137)

(0.6%)

 

Transfer to/(from) Reserve

114

896

782

na

   

21,760

22,405

645

3.0%

Utilities - Sewer

      

 

City Operating Costs

4,933

5,308

375

7.6%

 

City Debt Charges

19,827

20,604

777

3.9%

 

Regional Sewerage Levy

33,017

36,090

3,073

9.3%

 

Transfer to/(from) Reserve

0

0

0

   

57,777

62,002

4,225

7.3%

   

2002

2003

$

%

   

budget

projection

change

change

   

($000s)

($000s)

    
           

Recreation & Community Services:

        
 

Parks & Recreation

76,881

78,768

1,887

2.5%

 

Britannia Service Centre

2,515

2,428

(87)

(3.5%)

 

Social Planning

1,393

1,417

24

1.7%

 

Housing Programs

1,282

1,283

2

0.1%

 

Office of Cultural Affairs

601

612

11

1.8%

 

Carnegie Centre

2,363

2,762

399

16.9%

 

Dowtown South Gathering Place

1,744

1,752

8

0.5%

 

Vancouver Public Library

29,670

30,491

821

2.8%

 

Civic Theatres

5,704

5,809

105

1.8%

 

Archives

895

882

(13)

(1.5%)

 

Cemetery

704

762

59

8.3%

Total Recreation & Community Services

123,750

126,965

3,215

2.6%

           

Civic Grant Program

10,745

10,855

110

1.0%

           

Contingency Reserve

4,246

9,000

4,754

na

           

Total Before Debt Charges & Transfers

601,420

632,471

31,051

5.2%

           
         

Capital Program

      

 

General Debt Charges

40,673

42,739

2,066

5.1%

 

Capital From Revenue

13,900

14,600

700

5.0%

Total Capital Program

58,877

61,590

2,713

4.6%

           

Total Transfers to Reserves/Funds

4,153

5,290

1,137

27.4%

           

Total Expenditures

664,451

699,351

34,900

5.3%

           
           

Tax Increase Used to Balance Budget

  

5.5%

    

Appendix 2

Regularization of Positions Utilizing Existing Funds

The following is a description of the positions that are being requested that Council make permanent utilizing existing funding.

Equal Employment Office (EEO Officer I):

the EEO Office investigates complaints of harassment and acts as a resource to departments on issues related to human rights and diversity including training. EEO has recognized that providing training in-house rather than utilizing outside consultants is not only less cost prohibitive but also allows for better opportunities to implement initiatives related to the City's EEO policy. EEO has been funding a trainer position (EEO Officer I) on a temporary basis through a vacancy of a half time Clerk Typist II, and other miscellaneous sources. Staff recommend that Council create a EEO Officer I position by deleting the Clerk Typist II and finding the remaining funds within the existing EEO budget at an annual cost of$79,300 for salary and benefit costs.

Employee Health and Safety (Ergonomist):

Ergonomics is one of the most significant issues related to workers compensation benefit costs since 70% of time-loss claims are related to ergonomic issues. With the implementation of the WCB compliance plan, the City has been developed an in-house Ergonomics Program and has hired an ergonomist (HRC III - level 8) on a temporary basis. The use of outside consultants to provide this service is cost prohibitive and it is not anticipated that the demand for this type of support will diminish. Therefore, staff recommend that Council create a HRCIII position at an annual cost of approximately $71,000 utilizing existing funds within the WCB Compliance Budget.

Appendix 3 - Corporate Management Team Initiatives

     

Funding Required

    

Dept

Description

FTE

2003

2004

2005

Description

Type A: Recommended by Corporate Management Team for Approval as part of 2003 Operating Budget

 

Clerks

Create one Communication Coordinator

1

$35,100

$61,300

$62,500

Communication demands for the organization has placed significant strain on the Clerk's communication department. A Communication Coordinator I position would improve service levels and reduce the need to use external consultants.

Clerks

Add 0.5 fte to meet response time limit for FOI requests

0.5

$19,300

$33,700

$34,300

Given the volume and complexity of Freedom Of Information requests the City has been experiencing, a part-time position has been requested to allow the City to meet the statutory obligation of providing timely response to FOI requests

Corp Serv

Additional Security at Vanier Park

1.5

$57,750

$99,000

$99,000

Vanier Park has assets of approximately $51 million that need to be protected. Security provided by volunteers is insufficient and therefore additional security is required.

VPD

Increased Janitorial Service

2.0

$60,800

$104,200

$104,200

Since VPD operates on a 24x7 basis, the buildings are heavily used and require a detail heavy detail crew. The base budget does not include the heavy duty cleaning and janitorial scrub detail which is required to achieve safe and healthy facilities for users.

Total Type A Initiatives

5

$ 172,950

$ 298,200

$ 300,000

 
             

Type B: Provided for Consideration as Part 2003 Operating Budget - Information Reports provided on March 27, 2003

     

Funding Required

    

Dept

Description

FTE

2003

2004

2005

Description

             

VPD

Increase civilian staffing levels; Prime Funding, Commissioners

27.0

$1,393,800

$1,787,620

$1,787,620

The original civilian workload report requested 46 civilian positions in 2002 and 15 were approved. VPD has completed a further review of its civilian requirements and have since identify 27 positions to meet mostly existing service needs.

VPD

DTES staffing

44

2,850,000

4,272,500

4,272,500

Members of Vancouver Agreement agree that dismantling the open drug market in the DTES is the 'next step' in addressing the drug abuse problem. Vancouver Coastal Authority has prepared a plan for treatment & harm reduction and is currently pursuing funding. They are asking for VPD's corresponding policing and enforcement plan that will work in concert with their plan

Library

Funding to re-open closed week

0

$152,000

$152,000

$152,000

As part of a budget management program in 1997, the Library system has closed for one week per year on an annual basis. The Library Board has proposed to reopen this week so that it may offer library services on a year round basis.

Total Type B Initiatives

71

$4,395,800

$6,212,120

$6,212,120

 

Type C: Provided for Information - Reported Later in the Year for Council Approval (funded from Contingency Reserve)

     

Funding Required

    

Dept

Description

FTE

2003

2004

2005

Description

             

Clerks

Create two positions in Information Management

2.0

$61,800

$108,120

$110,282

Records Centre usage is up 40% and as a result City Clerk's will be reporting back on the need for additional staffing to ensure requests can be dealt with appropriately and long-term plans can be met.

Britan.

Regularize a Childcare Manager

1.0

$36,600

$67,200

$68,500

Given the Grandview-Woodland community area's extra childcare needs, Britannia will be reporting back on making permanent a childcare manager which currently is funded on a temporary basis.

CSG

Gastown Management Plan Implementation.

1.0

$53,000

$79,470

$79,470

Additional staff resources will be required to deal with increased development activity due to Council approved a number of initiatives to facilitate revitalization of Gastown/Chinatown

CSG

Additional RFT Social Planner pos - Civic Youth Strategy

1.0

$165,000

$164,800

$169,700

Council approved a pilot project for Civic Youth Strategy that has been very successful. Staff will report back on the long-term support needed for this program.

CSG

Cultural planner -Festivals & Celebrations

1.0

$54,000

$74,000

$74,000

Council approved provision for 2 new funding/development programs through the Office of Cultural Affairs: Celebration Grants, and Opportunity Grants. Council also approved a policy framework including a more "proactive" role in fostering events, festivals and community celebrations. Council directed staff to report back on an advisory committee and Cultural Planner II FTE staff position.

CSG

Carnegie & Gathering Place -additional auxiliary staff

-

$94,000

$147,186

$149,718

Carnegie staff provide programs in Oppenheimer Park and the surrounding area which has very active drug and social problems. In order to deal with increased activity and public disorder, there is a need for additional staff. In addition, extra Carnegie auxiliary staff are needed to handle welfare week demands. Lastly extending operating hours by 2 hours until 10 pm and opening sundays will better serve the Gathering Place patrons including local street youth in the area

     

Funding Required

    

Dept

Description

FTE

2003

2004

2005

Description

             

Engin

Street Furniture Project - litter cans

-

$200,000

$330,000

$330,000

Council provided preliminary approval, subject to report back, to add 800 litter cans on City streets to complement the City's Street Furniture Contract.

Engin.

Knight St. corridor route analysis

-

$140,000

$0

$0

Knight/Clark corridor is an important goods movement corridor in the City and Region. Work to date has identified a number of issues (noise, air quality, speeding, safety & livability). Work in 2003 would identify short & long term solutions for this corridor

Engin.

Increase parking demands

9.0

$464,000

$563,500

$563,500

In order to meet existing service levels of parking enforcement, staff are proposing to nine positions to deal with increased population and parking pressures. Offsetting these expenditures would be revenues of $1.97 million.

Engin.

Anti-graffiti program continuation

4.0

$452,500

$739,100

$739,100

Council approved in April 2002 new funding to deal with graffiti. Staff will report back on the success of the program and its on-going funding needs.

Engin.

Downtown transportation plan implementation

5.0

$218,000

$372,000

$372,000

Downtown Transportation Plan was completed in 2002, and Council asked for a report back on implementation in January 2003. It can be anticipated that this implementation may require additional staff, monitoring or other expenses.

Engin.

Rich-Airport-Vanc Rapid Transit

10.0

$95,000

$1,000,000

$1,000,000

Funding would be needed for phases 2, 3, and 4 of the Richmond-Airport-Vancouver Rapid Transit proposal. Council has approved phase 1 of the project for a study of available information. Phase 2 & 3 would occur in 2003 and involve a detailed study and recommendation. Phase 4 would entail establishment of a site office similar to the Millennium Skytrain program with 10 fte's

HR

Compensation & Benefits -Assistant Position

1.0

$30,300

$52,000

$52,000

Additional resources are needed for the Compensation and Benefits Department due to the significant challenges facing the organization related to: increase in retirees, an aging workforce with higher health care costs, benefit cost increases due to government downloading, disability management, market rate pressures, etc.

HR

Staff & Org. Development RFT - HRC III

1.0

$0

$72,000

$72,000

Implementation of the change management initiatives associated with employee attraction, retention, recognition, and succession planning would require additional staffing starting in 2004

     

Funding Required

    

Dept

Description

FTE

2003

2004

2005

Description

             

Library

Champlain Branch additional staffing

1

$29,200

$75,000

$75,000

The Champlain Branch has seen a 62% increase in number of reference questions and is currently 4th busiest branch. Existing staff is unable to keep up with the increased volume of work and requires additional resources to meet appropriate service levels.

VFD

2 additional Fire Prevention Inspectors

2.0

$93,900

$156,000

$156,000

The buildings inventory over the last ten years has increased dramatically without any increase to the number Fire Inspectors who inspect buildings for life safety concerns. Additional staffing is required to meet guidelines established by the Office of the Fire Commissioner

VFD

2 additional IT Staff

2

$73,500

$126,000

$126,000

Two information technology positions are required to deal with new technology issues related to the computer aided dispatch system now being utilized by VFD. A second position is related to records management support that can no longer be provided by the Vancouver Police Department.

VFD

2 additional Public Education Officers

2.0

$93,900

$155,000

$155,000

Two additional Public Education Officer positions would be utilized to implement additional safety and educational initiatives such as juvenile fire-setter program, programs focused on seniors, and programs focused on groups with English as a second language

VFD

Replace records mgmt system

0

$575,100

$358,800

$354,800

The Fire Department will be reporting back on a proposal to have E-Comm provide a new Records Management system to replace the its current system which has become obsolete

Total Type C Initiatives

43

$2,750,600

$4,310,176

$ 4,317,070

 
 

TOTAL INITIATIVES

119

$ 7,319,350

$10,820,496

$ 10,829,190

 

* * * * *

ag20030311.htm

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