Vancouver City Council

ADMINISTRATIVE REPORT

Date: April 9, 2003
Author/Local: Annette Klein/7789
RTS No. 03205

CC File No. 1605
Council Date: April 22, 2003

TO:	Vancouver City Council
FROM:	General Manager of Corporate Services / Director of Finance
SUBJECT:	2003 Operating Budget - Final Estimates

RECOMMENDATIONS

THAT Council adopt the final 2003 Operating Budget revenue and expenditure estimates with a property tax increase of 4.67% as outlined in this report by approving the budget resolution attached as Appendix 2.

CITY MANAGER'S COMMENTS

When Council considered the interim estimates of the 2003 Operating Budget, staff was instructed to make adjustments with a view to achieving a balanced budget with a tax increase of 4.67%. With the adjustments noted in this report, that target has been achieved. Therefore, the City Manager RECOMMENDS approval of the foregoing.

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 in the budget building process:

· the Preliminary Estimates Report provides Council with the first indication of the budget requests 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.

· the Interim Estimates Report summarizes the results of the detailed administrative review of the budget and seeks Council approval to finalize the estimate, bringing the budget into balance. Council considered the interim estimates on April 8, 2003.

· 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.

PURPOSE

The purpose of this report is to seek approval of the final revenue and expenditure estimates for the 2003 Operating Budget.

BACKGROUND

On April 8, 2003, Council approved a number of recommendations related to the development of the 2003 Operating Budget. Specifically, Council instructed the Director of Finance to bring to Council final estimates that will balance the budget with a 4.67% general purposes tax increase while providing for:

· 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;
· The creation of 7 positions within EEO, Human Resources, City Clerks and Corporate Services;
· The creation of 6 civilian support positions in the Police Department as well as funding for night-time security at 312 Main Street;
· an increase of $500,000 in the Contingency Reserve provision to ensure sufficient funding for new initiatives;
· an increase in the allocation to the Mayor's Office of $150,000 to fund additional staff and other resources; and
· an increase in funding for the Vancouver Public Library budget of $152,000 to allow for the opening of the library system during the last week of August.

DISCUSSION

1. Final Budget Position

Since April 8, staff have worked to bring the budget into balance within the property tax guidelines approved by Council. Appendix 1 reflects the final estimates including the following changes from the interim budget estimates:

· Funding was provided for 6 civilian positions and night-time security at 312 Main Street for the Vancouver Police Department at a cost of $153,400;
· $2.0 million of Capital-from-Revenue was deferred;
· Revenues were increased by $1.28 million ($0.8 million in Parking Fees and $0.48 million in a number of Community Services, Corporate Services, and Engineering fees); and
· The general purposes tax levy has been increased by 4.67%, adding $18.3 million to the budget.

These adjustments bring the 2003 Operating Budget into a balanced position as follows:

		($000)	($000)
Revenues
	Taxation Revenue	$457,448
	General Revenue	122,586
	Utility Fees	110,068
	Transfers	8,866	$698,968
Expenditures
	Departmental Expenditures	$492,557
	Utility Expenditures	141,531
	Capital Program	59,590
	Transfers	5,290	$698,968
Net Budget Position			$0
Property Tax Increase Applied to Budget			4.67%

2. The Budget Resolution

With approval of the Recommendation in this report, the 2003 Operating Budget will be brought into balance and the budget cycle completed. Council approval of this final position requires adoption of the budget resolution attached as Appendix 2.

3. Final Steps

Two additional actions will be required of Council over the next two weeks to put in place the necessary rating bylaws to provide for billing of the general purposes property tax levy:

· On April 24, 2003, City Services & Budgets Committee will consider a report from the Director of Finance outlining the impact of shifting a further one percent of the property tax levy from non-residential to residential properties. This is the annual decision Council makes on the distribution of the property tax levy and follows from Council actions in 1994, 1995, 1977 and 2000. The Director of Finance will present this change in the distribution of the property tax burden for Council's CONSIDERATION.

· On May 13, 2003, the Director of Finance will bring forward a report summarizing the property tax levy and presenting a series of resolutions that give effect to the land averaging program approved by Council earlier this year, as well as Rating Bylaws for the City's general purpose tax levy and the requisition from the Greater Vancouver Regional District. This report will reflect the final impact of decisions made regarding taxation policy measures.

CONCLUSION

The approval of the attached resolution will finalize the process of balancing the 2003 Operating Budget.

- - - - -

APPENDIX 1

City of Vancouver
2003 Operating Budget

		2002 budget ($000s)	2003 final ($000s)	$ change	$ change
SECTION 1: Summary of Revenues
Taxation Revenues:
	Base Levy	387,058	408,697	21,639	5.6%
	New Construction	3,248	5,588	2,340	72.0%
Net Taxation Revenues		390,306	414,285	23,979	6.1%
		58.7%
	Tax Adjustments	(1,750)	(2,020)	(270)	15.4%
	Local Improvement Taxes	4,304	4,251	(53)	-1.2%
	Receipts in Lieu of Taxes	33,352	35,082	1,730	5.2%
	Penalties and Interest	5,850	5,850	0	0.0%
Total Revenue from Taxation		432,062	457,448	25,386	5.9%
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	12,892	602	4.9%
	Property Rental Income	1,295	1,276	(19)	-1.5%
	Service and Inspection Fees	19,404	21,062	1,658	8.5%
	Municipal By-Law Fines	9,652	9,454	(198)	-2.1%
	On Street Parking Revenue	16,990	19,490	2,500	14.7%
	Civic Theatres Revenue	5,585	5,592	7	0.1%
	Park Board Revenues	29,303	31,250	1,947	6.6%
	Miscellaneous Revenues	6,301	4,832	(1,469)	-23.3%
Total Other Revenues		116,557	122,586	6,029	5.2%
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	110,068	6,334	6.1%
Total Revenues before Transfers		652,353	690,102	37,749	5.8%

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	698,968	34,517	2.5%
SECTION 2: Summary of Expenditures
General Government:
	Mayor & Councillors	1,391	1,590	199	14.3%
	City Manager / EEO	921	973	52	5.6%
	City Clerk	2,230	2,462	232	10.4%
	Legal Services	3,357	3,459	102	3.0%
	Corporate Services	26,431	27,508	1,077	4.1%
	Human Resourses	5,720	5,857	137	2.4%
	Other General Government	4,265	9,190	4,925	115.5%
	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	61,759	7,179	13.2%
Protection to Persons & Property:
	Police Services	128,060	133,214	5,154	4.0%
	Fire & Rescue Services	67,315	67,629	314	0.5%
	E-COMM Services	12,126	13,624	1,498	12.4%
	Permits and Licences	18,560	18,918	358	1.9%
	Animal Control	909	997	88	9.7%
	Vancouver Emergency Program	949	1,104	155	16.3%
Total Protection to Persons & Property		227,919	235,486	7,567	3.3%

Public Works
	Administration & General	7,484	7,444	(40)	-0.5%
	On Street Parking Program	6,728	7,230	502	7.5%
	Traffic Planning and Control	6,860	7,093	233	3.4%
	Street Lighting & Communications	4,450	4,527	77	1.7%
	Street Cleaning	6,273	6,521	248	4.0%
	Streets, Bridges & Walkways	14,883	14,956	73	0.5%
Total Public Works		46,678	47,771	1,093	2.3%
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	-1391.8%
		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	686.0%
		21,760	22,405	645	3.0%
Utilities - Sewer
	City Operating Costs	4,933	5,306	373	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	23	23
		57,777	62,023	4,246	7.3%
Recreation & Community Services:
	Parks & Recreation	76,881	78,768	1,887	2.5%
	Britannia Service Centre	2,515	2,429	(86)	-3.4%
	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	400	16.9%
	Dowtown South Gathering Place	1,744	1,752	8	0.5%
	Vancouver Public Library	29,670	30,643	973	3.3%
	Civic Theatres	5,704	5,809	105	1.8%
	Archives	895	882	(13)	-1.5%
	Cemetery	704	729	26	3.6%
Total Recreation & Community Services		123,750	127,086	3,336	2.7%
Civic Grant Program		10,745	10,855	110	1.0%
Contingency Reserve		4,246	9,600	5,354	126.1%
Total Before Debt Charges & Transfers		601,420	634,088	32,668	5.4%
Capital Program
	General Debt Charges	40,673	42,739	2,066	5.1%
	Capital From Revenue	13,900	12,600	(1,300)	-9.4%
	Local Improvements	4,304	4,251	(53)	-1.2%
Total Capital Program		58,877	59,590	713	1.2%
Transfers to Reserves/Funds
	Other Transfers	4,153	5,290	1,137	27.4%
Total Transfers to Reserves/Funds		4,153	5,290	1,137	27.4%
Total Expenditures		664,451	698,968	34,517	5.2%
Tax Increase Used to Balance Budget			4.67%

Appendix 2
RESOLUTION

MOVED BY Councillor:

SECONDED BY Councillor:

THAT WHEREAS, the Vancouver Charter, Section 219 requires that the Director of Finance submit to Council each year the detailed estimates of revenues and expenditures of the City for the year;

AND WHEREAS the Vancouver Charter, Section 372 requires that Council adopt the estimates of revenues and expenditures for the City as soon thereafter as possible;

AND WHEREAS Council has reviewed the development of the estimates in reports submitted by the Director of Finance on March 11, 2003, and April 8, 2003 and approved measures to bring the estimates into balance, including approval of a 4.67% general purposes property tax increase;

AND WHEREAS the total estimated expenditures of the City to pay all debts and obligations of the City falling due in the year 2003, exclusive of the amounts required for school, Greater Vancouver Regional District, Greater Vancouver Transportation Authority, British Columbia Assessment Authority and Municipal Finance Authority purposes and not otherwise provide for, as amended by Council, amount to $698,967,500;

AND WHEREAS the total estimated expenditures as aforesaid is the sum of the appropriation requests of all departments and boards properly supported by detailed analysis of those expenditures and listings of the salaried staff;

AND WHEREAS the total estimated revenue of the City for 2003 from sources other than real property taxes, as amended by Council, amounts to $284,682,500;

AND WHEREAS the amount of the General Purposes Tax Levy so required is $414,285,000;

THEREFORE be is resolved that the said estimates, both as to totals and individual items pertaining thereto, of the Director of Finance as so amended by Council be and the same are hereby adopted by Council.

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