ADMINISTRATIVE
REPORT
Date:
Author/Local: Ken Bayne / 7223
RTS
No. 03204
CC
File No. 1605
Council:
|
TO: |
Vancouver City
Council |
|
FROM: |
General Manager
of Corporate Services / Director of Finance |
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SUBJECT: |
2003 Operating Budget: Interim Report |
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|
|
RECOMMENDATION
A.
THAT
Council approve the Park Board Global Budget of $47,518,000, including approximately $455,000 for added basic and
one-time adjustments in the Park Board estimates, this amount to exclude any
reductions approved by Council to balance the 2003 Operating Budget.
B. THAT Council approve the 2003 Operating Budget - Interim Estimates as outlined in this report and recommended by the City and instruct the Director of Finance to bring the budget into balance with a 4.5% general purposes tax increase;
C.
THAT Council approve the creation of the
following positions utilizing existing departmental funding:
·
EEO Program 1.0fte EEO Officer I
·
Human Resources 1.0fte Ergonomist (Health & Safety)
subject to classification
by the General Manager of Human Resources.
D.
THAT Council approve the creation of the
following positions at a net cost of $172,900 in 2002 ($298,000 ongoing):
·
City Clerk 1.0fte Communications Coordinator
·
City Clerk 0.5fte FOI
Clerk
·
Corporate Services 1.5fte Security
Guard (
·
Corporate Services 2.0fte Building
Services Worker (Police),
subject to
classification by the General Manager of Human Resources. These positions are supported by the
Corporate Management Team and funding has been included in the current budget
position.
E.
THAT Council approve an increase of 6.0ftes in the
civilian support staff in the Police Department (detailed in this report) as
follow:
1.
Operations Division Event
Coordinator
2.
Investigation Division Clerk
Typist II
with at an annual
cost of $86,500 ($43,000 in 2002) and one time costs of $17,000;
AND, the
following positions:
3.
Investigation Division Technician
4.
Investigation Division Systems
Administrator
subject to
confirmation of recoveries from outside organizations;
AND the following
positions:
5.
Support Services Clerk
III (2 ftes)
with one time costs
of $17,000 and ongoing funding to be provided by a reallocation of temporary
staff budgets within the department. All
positions subject to classification by the General Manager of Human Resources.
F.
THAT Council approve the addition of $75,000 to
the Police Department budget in 2003 to fund additional night-time security at
G.
THAT Council approve an independent study of staffing
levels in the Information Management Section of the Police Department, and
instruct the City Manager and the Chief Constable to report back on study scope
and funding.
CONSIDERATION
H.
THAT Council approve an increase of $500,000 in
the Contingency Reserve provision in the 2003 Operating Budget to ensure
sufficient funding for new initiatives.
I.
THAT Council approve an increase in the
allocation to the Mayor’s Office of $150,000 to fund additional staff and other
resources.
The following items
are proposed by the City Manager following reviews of the requests from the
Police and Library Board considered by Council on March 27, 2003:
J.
THAT Council agree to fund the Downtown
Eastside enforcement team for three months following the departmental pilot
program (from June 30 to October 31, 2003) at a cost of $1.3 million and
instruct the Chief Constable to report back in October 2003 on the outcomes
achieved in that initiative and the need for ongoing staffing to continue it.
K.
THAT Council approve an increase in funding for the
COMMENTS
OF THE CITY MANAGER
The City Manager notes that
this has been a difficult year for developing the Operating Budget. Inflationary increases in the cost of the
City’s core programs, new program costs, requisitions from the GVS&DD and
E-Comm, the impact of changes in provincial programs and the capital program
are all running ahead of local inflation.
Moreover, the City’s non-taxation revenue has not shown sufficient
growth to offset these cost increases.
This has led to a budget position where Council is faced with approving
a tax increase above inflation or making adjustments to the services the City
provides.
The current budget position
reflects a property tax increase of 5.25%; however, this does not include
provision for additional funding requests from the Police and Library
Boards. There are also a number of
initiatives that have been identified by Council but which have not been the
subject of specific approvals. These
requests have been documented in the report.
Those with the highest priorities have been included in the current
budget position reflected in this report and are recommended by the Corporate
Management Team. Other requests
documented in the report will be submitted for consideration by Council during
the year and, if approved, would require funding from Contingency Reserve and a
deferral of the property tax impact to 2004.
Public safety is a significant
driver in the 2003 Operating Budget.
Additional funding for 30 sworn and 15 civilian staff approved by
Council in 2002 along with other salary related costs have increased the Police
estimates by $3.5 million, equivalent to a tax increase of 0.9%. In addition, the department has requests
before Council for additional funding to extend a new enforcement team targeted
in the Downtown Eastside until year-end and for 27 additional civilian
positions.
The Library Board has also
requested an increase in funding to allow the Library system to remain open
during its annual closure in August.
In response to Council’s
instruction for staff to report back on the adjustments necessary to achieve a
tax increase of 3.9%, the Corporate Management Team has proposed a number of
adjustments to the operating budget.
These include adjustments to revenue and expenditure estimates that can
be made with only minor impact on the services provided by the City. The second phase of adjustment is designed to
give Council options in achieving a 3.9% tax increase. These adjustments involve reductions in
service levels throughout the organization and the loss of some staff
positions. In addition, changes to the
capital program are also put forward.
The City has canvassed the
views of the public in relation to the current budget position in a formal
opinion poll. The results of that
process indicate that the public values City services, believes they have seen
the quality of services maintained or improved over the years and believes they
get good value for the property taxes they pay.
Sixty-two percent of the respondents to the survey indicate a
willingness to accept a tax increase of 6.0% in order to avoid service
reductions, increasing to 79% at a 4.0% increase.
The following comments and
decision table are intended to guide Council through the decisions that flow
from this report.
The first set of
decisions related to the budget involve a series of recommendations to increase
revenues, defer a portion of the funding for the capital program and make
several service level changes that are important to the business of the City:
·
The
increase in parking revenues can be achieved through normal adjustments to the
parking program. Should Council agree to
this increase, a detailed report will come forward from the City Engineer;
·
The
Group 1 revenue adjustments can be implemented without significant impact on
the public and, in some cases, ensure fees are set at cost recovery levels;
·
The City
Manager believes that a deferral of capital-from-revenue funding can be done
without significantly impacting the 2003-2005 Capital Plan. If it becomes too
difficult to provide these funds in future years, the pressure will be on staff
to find joint projects or to seek additional senior government or community
partner funding in order to complete the planned program and project
expenditures. A deferral of up to $2.0
million in 2003 can be managed over the next three years, reducing the
projected property tax increase in 2003 by a full 0.5%.
·
Specific
comments related to the Police civilian staffing are contained in this report.
These
adjustments will reduce the projected tax increase to 4.5% and are RECOMMENDED
by the City Manager.
The next set of
decisions involves additional costs in the Operating Budget and is put for
Council’s CONSIDERATION. Should Council
approve some or all of these initiatives, the 4.5% property tax levy would be
negatively impacted unless other funding sources were identified. It is noted that the proposed increase in
Contingency Reserve will enhance Council’s ability to deal with new initiatives
or other issues that emerge during the year.
Finally, if
Council wishes to reduce the tax increase below the level arising from the
decisions, there are a number of budget reduction proposals, totalling $6.6
million that can be considered. The
further reductions proposed by the Corporate Management Team involve changes to civic programs and
services and involve up to 64 identified positions and potentially more should
reductions be requested from the Library and Park Board. If Council wishes to consider these additional proposals, it is
recommended that that decision be deferred to City Services and Budgets
Committee on April 10 to provide the opportunity for input from City staff,
unions and the public.
|
|
|
Budget Position |
Property Tax Impact |
|
|
|
|
|
|
Current Budget Position |
Base program growth Added Basic Recommended New Initiatives |
$(20,848,000) |
5.25% |
|
|
|||
|
Adjustments Recommended by City Manager |
Increase Parking Revenues |
800,000 |
(0.2)% |
|
Group 1 Revenues Increase |
478,000 |
(0.1)% |
|
|
Defer Capital-from-Revenue |
2,000,000 |
(0.5)% |
|
|
Additional Police Civilian Staff |
(185,000) |
0.03% |
|
|
|
|
$3,093,000 |
(0.75)% |
|
Adjusted Shortfall andTax
Increase |
$(17,755,000) |
4.5% |
|
|
|
|||
|
New Initiatives Submitted
for Council Consideration |
Increase Mayor’s Office Budget |
(150,000) |
0.03% |
|
Increase Contingency Reserve to accommodate new initiatives |
(500,000) |
0.10% |
|
|
Police Enforcement Team |
(1,300,000) |
0.33% |
|
|
Library System Hours |
(152,000) |
0.04% |
|
|
|
|
(1,852,000) |
0.5% |
|
Adjusted Shortfall andTax
Increase |
$(19,607,000) |
5.0% |
|
|
|
|||
|
Potential Budget Adjustments
to Further Reduce Property Tax Increase |
Group 1 Expenditure Reductions |
540,000 |
(0.1)% |
|
Group 2 Expenditure Reductions |
4,400,000 |
(1.1)% |
|
|
Group 3 Expenditure Reductions |
1,400,000 |
(0.4)% |
|
|
|
|
$6,340,000 |
(1.6)% |
|
|
|
$(13,267,000) |
3.4% |
COUNCIL POLICY
The Vancouver Charter requires
the Director of Finance to present the estimates of revenues and expenditures
to Council not later than April 30 each year and for Council to adopt a
resolution approving the budget and a rating bylaw establishing general purpose
tax rates as soon thereafter as possible. There are generally three reports to
Council in the budget building process.
C The Preliminary Budget Report provides Council with the
first indication of the budget request from Departments and Boards and seeks
Council guidance on the policies that will govern the administrative review of
the estimates. This report was considered by Council on March 11, 2003.
C the Interim Report summarizes the results of the detailed
administrative review of the budget and seeks Council approval to finalize the
estimates, bringing the budget into balance.
C The Final Report on the Operating Budget presents the
finalized revenue and expenditure estimates including any final adjustments
approved by Council at the interim report stage. The Final Report is
accompanied by a resolution in which Council adopts the estimates for the year.
It has been Council policy
that general purpose tax increases associated with development of the Operating
Budget be held within the range of local inflation. However, in approving the annual budget,
Council has also adopted a practice of passing tax increases related to requisitions
from outside agencies, including the Greater Vancouver Sewerage and Drainage
District and E-Comm, through to taxpayers rather than forcing offsetting
reductions in City programs and services to meet Council's taxation objectives.
It is Council policy that
changes in service levels, either expansions or reductions are approved by
Council. This includes the creation and deletion of regular positions and the
allocation of funding from general revenues or taxation.
PURPOSE
The purpose of this
report is to:
·
bring the updated estimates in the 2003 Operating
Budget to Council;
·
outline adjustments to the current budget position
recommended by the City Manager and Director of Finance;
·
put forward for Council consideration two service
level increases requested by the Police and Library Boards;
·
offer a number of further budget adjustments
identified by the Corporate Management Team to bring the 2003 Operating Budget
into balance with a property tax increase as low as 3.9%.
The decisions
arising from this report are intended to bring the 2003 Operating Budget into
balance.
BACKGROUND
On March 11, 2003, the Director of Finance reported
the preliminary estimates of the 2003 Operating Budget to Council. The estimates reflected the following budget
position:
|
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% |
|
In addition to the budget position indicated above,
the Corporate Management Team identified a number of new initiatives for
consideration during the 2003 Operating Budget decision making process. These initiatives were categorized by the CMT
as follows:
|
Type |
Action |
2003 Cost |
Annualized Cost |
|
|
A |
Recommended by the Corporate Management Team to be
approved as part of the Budget |
$ 172,900 |
$298,200 |
|
|
B |
For Consideration by Council during the budget
process1 |
3,845,800 |
$1,939,600 |
|
|
C |
For Consideration by Council following approval of
the budget |
2,929,800 |
4,640,200 |
|
|
|
Total
Initiatives |
$6,948,500 |
$6,878,000 |
|
1. Ongoing
costs do not contemplate ongoing costs related to the Police Enforcement Team
initiative.
Details of these initiatives are included in Appendix
3.
On March 13, Council approved the following
recommendations related to the 2003 Operating Budget:
A. THAT Council receives the preliminary
estimates for the 2003 operating budget . . .
for information.
B. That Council direct staff to develop a preliminary draft budget
based on a property tax increase consistent with local inflation plus an
allowance to offset the increased costs imposed on the budget by outside
agencies AND instruct the Director of Finance, in consultation with the
Corporate Management Team, to identify adjustments to the revenue and
expenditure estimates sufficient to hold the increase in property taxes to that
level, currently 3.9%.
A.
THAT
the Director of Finance, in consultation with the Corporate Management Team,
report the interim estimates for Council consideration on April 8, 2003.
On March 27, Council considered the following reports
related to Type B initiatives listed above:
1. 2003 Police Sworn Staffing Request for the Downtown
Eastside
2. 2003 Police Civilian Support Staffing Request
3. Vancouver Public Library: Additional Funding to Open One Week in August
Departmental presentations and delegations from the
public were heard by Council but decisions were deferred until the Interim
Estimates are before Council on April 8, 2003.
On February 27, 2003, Council approved the components
of a public consultation process related to the 2003 Operating Budget. City
Choices 2003, an information flyer outlining the choices available to
Council in balancing the budget was published in community newspapers on March
19 and placed on the City website. A
questionnaire provided the public the opportunity to make their views known to
Council. In addition, a public opinion
poll was conducted to determine the perceptions of a broader range Vancouver
citizens. Finally, two public meetings –
the Mayor’s Forum - were hosted by the Mayor to give the public the opportunity
to hear first hand about the budget issues and to provide input.
DISCUSSION
Since Council considered the
preliminary estimates, Finance staff have continued to review the revenue and
expenditure estimates looking for opportunities to improve the budget
position. A number of changes are included
in the budget position outlined below.
In addition, the impact of recent increases in energy costs - both
natural gas and vehicle fuels - have been identified and reflected in the
budget estimates. In addition, a number
of further adjustments to the estimates are put forward for consideration in
meeting the 3.9% property tax target established by Council on March 13, 2003.
The
following sections summarize the current position of the budget as adjusted
since the preliminary report; present for Council’s consideration adjustments
to revenues and service levels that will assist Council in achieving its
taxation targets review; and report on a number of new initiatives identified
by the Corporate Management Team and by Council.
1. RECOMMENDED ADJUSTMENTS
TO THE PRELIMINARY ESTIMATES
The following adjustments have
been made to the budget by the Director of Finance as part of the ongoing
review of the estimates, are reflected in the budget position outlined in this
report and are recommended as part of the budget approval process.
|
|
Proposal |
Department |
Budget Impact |
|
Adjustments to the Revenue Estimates |
On-Street Parking Revenues Based on actual experience during the
first three months of 2003, Street Parking Revenues can be increased. |
Corporate
Revenues |
$700,000 |
|
|
Convention Centre Zoning and
Development Fees Anticipated revenues related to the
development of the VECC expansion. |
Corporate
Revenues |
$300,000 |
|
|
Receipts in Lieu of Taxes Payments in lieu of property taxes
from City property on lease to third parties |
Corporate
Revenues |
$300,000 |
|
Adjustments to the Expenditure Estimates |
Strategic Initiative Fund Reduction in funding for corporate
strategic initiatives |
General
Government |
$300,000 |
|
|
Increased Energy Costs To fund increases in vehicle and building
energy costs as a result of: ·
Increased energy costs ·
Provincial fuel tax increase |
Various
departments |
($470,000) ($170,000) |
|
Net Improvement in Budget Position |
|
$960,000 |
|
The
Corporate Management Team also recommends that the following initiatives be
approved as part of the 2003 Budget in order to address important business
issues. Details of these recommendations
are reflected in Appendix 3 and are included in the Interim Estimates presented
in Appendix 1.
|
|
Proposal |
Department |
Budget Impact |
|
New Program Funding |
1.0 fte
Communications Coordinator To provide adequate staffing for
corporate communications requirements |
City
Clerk |
$35,100 |
|
|
0.5fte Freedom of Information Clerk To ensure adequate response times for information
requests |
City
Clerk |
$19,300 |
|
|
1.5fte Security To provide for improved security at Vanier Park
Complex |
Corporate
Services |
$57,700 |
|
|
2.0 Building Service Worker (Police) To provide for janitorial requirements in Police
buildings at 2120 Cambie and 312 Main Street |
Corporate
Services |
$60,800 |
|
Total New Program
Funding |
$172,900 in 2003 $298,000 ongoing |
||
The Current
Budget Position
The adjustments noted above have resulted in a modest
improvement to the budget position from that reported at the preliminary
stage. This adjusted position is
reflected in the following table:
|
Revenues $(000) |
|
|
|
|
|
Taxation Revenue |
$438,091 |
|
|
|
General Revenue |
121,818 |
|
|
|
Utility Fees |
110,069 |
|
|
|
Transfers |
8,866 |
$678,844 |
|
Expenditures $(000) |
|
|
|
|
|
Departmental
Expenditures |
$491,302 |
|
|
|
Utility Expenditures |
141,510 |
|
|
|
Capital Program |
61,590 |
|
|
|
Transfers |
5,290 |
$699,692 |
|
Net Budget Position |
|
($20,848) |
|
|
Indicated Property
Tax Increase |
|
5.25% |
|
The budget shortfall reflected
above is $20.8 million and would require a 5.25% tax increase to
eliminate. Additional detail of these
estimates is provided in Appendix 1, along with comparative information from
the 2002 Operating Budget.
Park Board Global
Budget
The interim
estimates make provision for the Park Board Global Budget of $47,518,000.
This allocation includes “added basic” funding of approximately $300,000
and one-time funding of $155,000 related to lost revenue at Bloedel
Conservatory during the rebuild of the Queen Elizabeth Park Reservoir. The global budget has been calculated by the
City and Board staff according to the principles agreed upon in the arrangement
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 its budget on the same basis
as other 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 $300,000 of additional funding for maintenance and support of buildings and parks
infrastructure.
Should Council
approve additional budget reductions to achieve its taxation targets in 2003,
adjustments may be required to the Park Board Global Budget.
2. ACHIEVING
THE COUNCIL-MANDATED PROPERTY TAX INCREASE
To move from the budget position indicated above - a
5.25% increase - to 3.9% will require further adjustments to the budget
totalling approximately $6.0 million.
The report summarizes a number of proposals intended
to provide Council with options for bringing the Operating Budget into balance
within the 3.9% property tax increase guideline. In putting these proposals forward, the
Director of Finance notes that it is increasingly difficult to make changes in
the budget without impacting on service, both internally or to the public.
Adjustment
Recommended by the Director of Finance
Increased Street Parking Revenue $800,000
Should Council agree to this proposal, the City
Engineer will bring forward a report recommending adjustments to existing
on-street parking rates in some areas of the City, the expansion of the program
to new areas, and changes to the parking enforcement program that will generate
an additional $800,000 in 2003 and up to $1.2 million on an on-going basis.
If Council supports this initiative, the revenue
anticipated in 2003 would be improve the budget position and reduce the
property tax increase to approximately 5.0%.
Further
Budget Adjustments Submitted by Corporate Management Team
The Corporate Management Team has identified a number
of additional budget adjustments. These reductions, which are detailed in
Appendix 4, result from a process in which targets calculated for each
department on a pro-rata basis were used as a guide to identify where revenues
could be increased or expenditures adjusted in order to reduce the tax increase
to as low as 3.9%. On an annual basis,
these adjustments total approximately $7.0 million. Actual savings in 2003 will depend on how
quickly decisions are made and implemented.
If approved in total, more than 64 full time equivalent positions could
be affected.
In order to provide some measure of the of the impact
of these proposals on service levels, a ranking was developed by each General
Manager where “1” indicates lower impacts and “3” was assigned to areas where
reductions would be least supported.
There has been no attempt to provide a ranking across departmental
submissions within each category.
Park
Board and Library Board staff have worked with the Corporate Management Team in
this process; however, neither Board has approved specific reductions. As a result, the proposal is that Council
approve general reductions in the Board budgets, leaving them to determine the
specific adjustments that would be implemented.
Group 1
Adjustment $940,200
These include $478,000 in adjustments in a number of
revenue sources and approximately $462,200 in expenditure reductions. Approximately 50% of these reductions would
be allocated to Park Board. The
Corporate Management Team believes these changes can be made without
significant impact to service levels.
Should Council approve these reductions, the impact
would be a 0.25% reduction in the indicated property tax increase.
Group 2
Adjustments $4,427,200
Group 2 adjustments begin to impact more significantly
on service levels. Included are a number
of smaller service level changes in a number of departments ($406,000);
elimination of one truck in Fire & Rescue Services, including elimination
of 20 positions ($1.7 million); deferral/elimination of the 30 sworn officers
approved for the Police Department in 2002 ($2.3 million); and further
reductions in the Park Board global budget ($278,400).
Should Council approve these reductions, the impact
would be a 1.1% reduction in the indicated property tax increase.
Group 3 Adjustments $1,509,400
Group 3 adjustments are considered the least desirable
reductions of those identified by the Corporate Management Team. They include a number of funding reductions
in administrative areas, including the City Clerks Office, Equal Employment
Office and Council support areas; reductions in information technology security,
maintenance and training; deferral of the emergency preparedness program;
reductions in street maintenance and cleaning; and, reduced funding for the
Library.
Approval of these reductions in full would result in a
0.4% reduction in the indicated property tax increase.
Should Council wish to consider these reductions in
the 2003 estimates, it is recommended that the decisions be deferred until City
Services & Budgets Committee on April 10.
At that time, members of the Corporate Management Team would be
available to answer questions and delegations from the public could be heard.
Deferral/Reduction
in the 2003-2005 Capital Plan
Another option to reduce the property tax increase in
2003 would be a deferral or permanent reduction in Capital-from-Revenue funding
in the Operating Budget. Using the
flexibility available in funding this portion of the Capital Plan to ease
annual budget pressures is a mechanism that has been used by Councils in the
past. In 2000, Council deferred $1.5
million in capital-from-revenue and “recovered” it by increasing the
allocations in the last two years of the Capital Plan, albeit with an
additional increase in taxation. In
2002, Council took the further step of eliminating $1.0 million in
capital-from-revenue funding for a capital project that could not be completed
during the planning period.
The
2003 - 2005 Capital Plan anticipates funding from the Operating Budget of $45.9
million over a three year term, including $14.6 million in 2003. Timing of that allocation is flexible and it
is possible to defer a portion of the 2003 funding until later in the Capital
Plan without impacting on the overall Capital Plan. The Public Works and Park Board programs
would be “front-ended” with debenture funding and the balance of the 2003 capital
program could proceed as planned.
However, in order to complete the entire capital program by 2005, the
deferred funding would have to be replaced by an increased provision for
Capital-from-Revenue in the last two years of the plan. This additional allocation in 2004 and 2005
would result in a larger property tax impact during these years. If additional funding were not provided,
other funding sources including cost sharing opportunities or joint projects
would have to be identified or specific programs or projects in the Capital
Plan would have to be eliminated.
The
Director of Finance cautions that the 2003 – 2005 Capital Plan is already
expected to become a driver in the budget over the next few years, especially
if the $20 million of additional borrowing approved by the voters is utilized. Deferring the capital-from-revenue in 2003
will increase those impacts.
If
Council were inclined to use a deferral to assist with the budget position, the
Director of Finance suggests keeping the deferral as small as possible to
minimize the tax impact in 2004. It
should also be recognized that the larger the deferral, the more likely it is
that a permanent reduction in the capital program will be required in the
future.
For
reference, a deferral of $1.0 million, equivalent to a property tax increase of
0.25% could be recovered by an additional 0.125% tax increase in 2004 and 2005.
3. DEALING
WITH NEW INITIATIVES
As noted in the Background section of this report,
there are a number of new initiatives that have been put forward by the Corporate
Management Team for consideration as part of the 2003 Operating Budget. In addition, staff is aware of a number of
initiatives initiated by Council that will have to be considered in finalizing
the 2003 Operating Budget.
The initiatives put forward by the Corporate
Management Team are grouped into three categories which are discussed
separately below.
Type A: Recommended By the Corporate Management
Team as Part of the Budget
As noted above, the Corporate Management Team believes
these initiatives are important in meeting the business needs of the City and
are recommending their approval as part of the budget. Funding for these initiatives is provided in
the budget position reported above and Recommendation D authorizes the
associated staff positions.
Recommendation C requests Council approval for two
regular full time positions that are currently filled on a temporary
basis. Funding for these positions is
available by converting temporary help funding to salary funding within the
existing estimates.
Type B: For
Consideration by Council during the Budget Process
Type B initiatives arise from two departments – Police
and Library. As they involve
considerable changes in service levels and a significant amount of new funding
($3.8 million in 2003) that cannot easily be accommodated in the budget, it is
recommended that Council consider these requests as part of finalizing the 2003
Operating Budget.
i)
Police Sworn
Staffing Request $2,300,000
The Chief Constable has requested funding of $2.3
million to extend an enforcement strategy for the Downtown Eastside for the
balance of 2003. No increase in
authorized staffing is being requested at this time, however, the department
will report back in the fall on the success of the program and on the need for
an increase in sworn staffing to continue it in 2004.
The City Manager has the following comments
about this request:
On April 7th,
the department will assemble a team of sworn staff to enhance enforcement
activities on the Downtown Eastside for three months. These officers will be drawn from other
duties in the department. Extending the
team beyond June 30 presents difficulties for the department because of
workload and manning issues over the summer period. If Council is supportive of this initiative,
it should be recognized that a three month trial does not provide sufficient
time to assess the effectiveness of the underlying strategy in dealing with
drug related crime in the Downtown Eastside or on police activities elsewhere
in the City. If Council wishes to see
the results of an effective pilot, funding for an additional three months would
provide for the necessary time. It is
estimated the additional funding necessary would be $1.3 million (Consideration
J). Prior to the end of the trial, the
Chief Constable and City Manager will report back to Council on the results of
this initiative. City staff resources
will be assigned to work with the department to review the program and to
prepare this report.
Should Council approve this modified request, the
impact will be a one time 0.33% tax increase in 2003. Ongoing costs in 2004 would be the subject of
a report back in the fall of 2003.
ii) Police Civilian Staffing Request $1,393,800
The Chief Constable has updated and resubmitted a
request from 2002 for additional civilian support staffing for the
department. Funding for the equivalent
of 34 positions is requested at an estimated cost of $1,393,800 in 2003, rising
to $1,787,600 in 2004.
The City Manager has the following comments on these
requests:
In reviewing the
request for additional civilian staff, the City Manager has taken a number of
issues into consideration:
·
civilian positions that free sworn officers from
administrative duties and put them back on the street have a significant benefit
·
positions that provide direct support to the
operational areas of the department will improve operational efficiency
·
Positions/funding that addresses internal security
issues should be given a high priority.
The recommendation
of the City Manager also take into consideration that there are cost recovery options for some
positions and that the department has been utilizing existing funding sources
to provide some of the services identified.
Four of the regular full time positions recommended can take advantage
of those funding sources. Further, there
are opportunities for the department to participate in “shared services” with
the City that could free civilian positions to meet the needs identified
elsewhere in the department.
The positions
recommended by the City Manager in Recommendations E, F and G do not address
all of the needs identified by the department in their civilian staffing
report. However, the City Manager does
support the comprehensive review of staffing levels in the department’s Information
Management Section that was proposed by the Chief Constable. Many of the additional civilian positions
requested by the Chief Constable would be placed in this area and with the
process and system changes implemented over the last few years, it is
appropriate to have an independent review of the staffing and other
issues.
Should Council approve this request as put forward by
the City Manager, the short term impact on the Operating Budget will be
approximately $110,000, equivalent to a tax increase of .03% in 2003.
iii) Library Board Funding for August Week Closure $152,000
The Library Board has requested the Council add
$152,000 in funding to the Library budget to enable the library system to
remain open 52 weeks per year.
City Manager submits this request for Council’s
consideration, noting that Council could request the Library Board to
reallocate funds within its existing budget in order to reinstate year-round
opening of the library system.
Should Council approve this request, the impact will
be a 0.04% increase in property taxes in 2003.
Type C: For Consideration by Council after
Approval of the Budget
Items in Category C include initiatives being brought
forward by departments at the request of Council or initiatives that
departments have identified as being a priority in their business plans. Several of these initiatives are not fully
developed and will not be ready for consideration by Council until after the
budget process is complete. In total,
these initiatives involve funding requests of approximately $2.7 million in
2003 and $4.3 million on an on-going basis.
The City Manager has not reviewed these requests in
detail and notes that not all may be priorities for Council. As a result, no specific provision has been
made in the 2003 Operating Budget for these initiatives beyond funding normally
provided in Contingency Reserve.
Council
Initiatives
There are a number of initiatives being proposed at
the political level for 2003. These
include the Olympic Youth Legacy Program identified by the Mayor; increased
funding for Community Services Grants and funding for an Election Process
Review. Two other initiatives – Child
& Youth Advocacy Program and increased Library funding - have also been
brought forward by departments and are included in the departmental initiatives
presented above.
During the next few months, Council will receive
reports on these initiatives from the appropriate departments, and if approved,
will fund the 2003 costs from Contingency Reserve. Given the requests outstanding, the Director
of Finance, recommends that the Contingency Reserve provision in the 2003
Operating Budget be increased by $500,000 to ensure sufficient funding is
available. The cost of this increased
provision would be equivalent of a 0.1% property tax increase and, if added to
the current budget position would increase the projected property tax increase
to 5.35%.
5. THE IMPACT OF THE BUDGET ON PROPERTY IN THE CITY
The following table summarizes
the impact of tax increase on an average residential property, together with
the changes in other user charges is summarized below:
|
|
3.9% Tax
Increase |
5.25% Tax
Increase |
||
|
Levy |
City Charges |
Change
from 2002 |
City
Charges |
Change from 2002 |
|
Average Residential Property |
$375,000 |
|
|
|
|
General Taxes |
$1,120 |
$42 |
$1,135 |
$57 |
|
Sewer Fee |
152 |
13 |
152 |
13 |
|
Solid Waste Fee |
148 |
0 |
148 |
0 |
|
Water Rates |
271 |
7 |
271 |
7 |
|
Total City
Charges |
$1,691 |
$62 |
$1,706 |
$77 |
|
Business Properties1 |
for each
$1,000,000 of value |
|
||
|
General Levy |
$16,053 |
$563 |
$16,260 |
$770 |
1)
Non-residential properties are
charged for utility services based on consumption of services rather than as a
flat fee. Water and Sewer charges for
these properties increased by the same percentages as those for residential properties.
In addition to
these City charges, the levies from other taxing authorities may increase. At the time of writing, the City has not been
notified of other levies.
6. COMPLETING THE BUDGET CYCLE
With
the decisions made as part of this report, the Operating Budget can be brought
into balance. The budget process would
be completed as follows:
C should
Council choose to hear delegations related to the budget decisions, these would
be heard at City Services and Budgets Committee on April 10.
C On April 22,
Council will consider the final estimates reflecting the decisions made based
on this report and the requests for additional funding. Council will be asked to adopt a balanced
budget resolution confirming the estimates for 2003.
C On April 24,
2003, the Director of Finance will bring forward a report summarizing the
options of the distribution of the property tax levy. Following the decisions on this report, the
2002 General Purposes Rating Bylaw will be brought forward for approval on May
13.
C On May 15,
City Services and Budget Committee will consider the Basic and Supplementary
Capital Budgets.
CONCLUSION
The interim
estimates of the 2003 Operating Budget indicate that a property tax increase of
5.25% would be necessary to provide for the costs of base City programs and the
added basic costs associated with new programs approved by Council. This budget position includes the impact of
several budget adjustments identified by the Corporate Management Team that
will have little impact on service. A
second set of budget adjustments are put forward should Council wish to reduce
the tax increase below this level. These
include proposals to increase revenues and reduce expenditure levels by
reducing program resources.
There are three
requests for new funding that should be dealt with as part of the budget
decision making process. The Police
Department has brought forward a request for additional funding to extend its
enhanced enforcement activities to the end of the year. A report back in the fall would report on the
need for an ongoing increase in sworn staff.
In addition, the department has requested funding for 27 civilian
support staff. The cost of these two
initiatives in 2003 is approximately $3.6 million. In addition, the Library Board has requested
funding to allow the library system to remain open during the last week of
August. The cost of this request is
$152,000.
The Corporate
Managers and Council have identified a number of additional initiatives that
will come forward during the year for consideration. Funding for those initiatives approved by
Council will be funded from Contingency Reserve.
The final stage in
completing the 2003 Operating Budget involves bringing a final budget forward
for approval. Following the decisions of
Council related to the budget, the Director of Finance will make final
adjustments to the budget and report back to Council on April 22, 2003.
* * * * *