ADMINISTRATIVE REPORT

 

Date:

October 7, 2003

 

Author:

David Sherwood

 

Phone No.:

604.873 7571

 

RTS No.:

03651

 

CC File No.:

3143

 

Meeting Date:

October 23, 2003

TO:

Standing Committee on City Services and Budgets

FROM:

General Manager of Corporate Services

SUBJECT:

Vancouver Economic Development Commission 2004 Business Plan and Budget

RECOMMENDATION

CITY MANAGER'S COMMENTS

Council has identified economic development as a priority for the City of Vancouver. During the past year the Vancouver Economic Development Commission has demonstrated strong and effective leadership in promoting Vancouver as a place to do business and carrying out the economic development activities as outlined in their 2003 Business Plan. It is important to continue with these activities as outlined in the 2004-2006 Business Plan.

The City Manager RECOMMENDS approval of funding to enable the Vancouver Economic Development Commission to carry out core economic development services on behalf of the City of Vancouver commencing January 2004.

GENERAL MANAGER'S COMMENTS

The VEDC has continued to build upon the progress made in 2002. While economic development is a long-term investment there have been some notable successes in 2003 as outlined in this report. The 2004 budget increase is modest and yet will allow the VEDC to continue to fulfil its mandate in providing long-term economic benefit to the City.

COUNCIL POLICY

Since 1996 Council has contracted with the Vancouver Economic Development Commission for the provision of economic development services, contingent upon approval of its Annual Business Plan.

PURPOSE

The purpose of this report is to seek approval for the Vancouver Economic Development Commission 2004 Business Plan and Budget (Appendix A), and to enter into a contract with the VEDC for the provision of economic development services.

BACKGROUND

The Vancouver Economic Development Commission is an arm's length, non-profit organization created by Council in 1997 as a focus for economic development in the City. The Commission seeks to unite the private and public sectors in the active and progressive management of Vancouver's economic growth.

VEDC is governed by a 15-member board with three ex-officio members and two designated city council liaisons. Collectively, the Commissioners bring an array of knowledge and contacts in such areas as transportation, international finance, technology, economics, communications and urban development. Commissioners are appointed by Council, and in general, serve two-year terms.

The five staff members of the VEDC provide economic development services to the City, which are funded through a fee for service contract. In 2001, a review of economic development business models resulted in Council re-affirming VEDC as the City of Vancouver's vehicle for economic development, and establishing which activities were determined as critical in order to move Council's objective of economic development forward. Renewal of the services provided by the Commission are subject to annual review by Council. Annually, Council also reviews the results of the Commission's activities including reporting of the Commission's accomplishments, and operating and financial results for the past year.

The complete 2003 Annual Report including audited financial statements will be reported to Council in April 2004.

DISCUSSION

2003 Year to Date Review

The VEDC 2003 Business Plan set out four principal goals, and specific objectives for each goal. The full status of these objectives is described in the 9-month status report provided to Council with this report. Briefly, some of the key accomplishments relating to each goal, are:

Goal #1 To foster a supportive and competitive business climate in Vancouver
The BusinessFirst interviews have identified a number of key issues that may affect economic development in the City. Several key issues under investigation are; permitting and zoning, overall business environment, crime, and the cost of doing business in Vancouver relative to the GVRD.

The VEDC has taken a lead role in supporting provincial and regional collaboration on economic development initiatives. VEDC is a member of the GVRD sustainable region initiative working group and is working with VanCity Capital and the Mayor's office to host a regional forum in Feb 2004 that will focus on regional collaboration and best practices. The VEDC will also be taking a leading role in the Leading Edge BC initiative sponsored by the Ministry of Competition, Science and Enterprise.

Goal #2 To retain and expand business currently operating in Vancouver
Implementation of the BusinessFirst! program designed to identify local issues that affect the competitiveness of Vancouver firms and facilitate business growth. In 2002 VEDC staff completed 115 interviews and 89 fax-back surveys. In 2003 a total of 215 interviews were completed in the first 9 months:
Quarter 1 45
Quarter 2 117
Quarter 3 53

These interviews are being used to inform the business community of the City's interest in their success and in determining areas where the VEDC and its business assistance team may provide assistance in identifying key barriers for success that the city may address.

Email newsletters are produced every 2 weeks and are distributed to 1000 members of the business community.

Goal #3 To attract new investment and knowledge-based business to Vancouver
There has been continued development and improvements to the VEDC website both in content and delivery. Throughout the first 9 months of 2003 over 11,000 pages are being viewed each month by interested parties.

The VEDC has responded to over 310 information requests and has been involved with 83 relocation inquires within the nine months. There have been four notable successes including the expansion of the Istonish call centre creating an additional 325 positions; the relocation of a multi media company Infinity Media Group to the downtown eastside; the relocation of e-Bay to the Vancouver region creating 600 new jobs; and the relocation of the head office of Electronic Arts from Burnaby to a downtown location. VEDC also welcomed the opening of a 75 person support and development facility in downtown Vancouver by PeopleSoft.

The VEDC continues to expand and develop its relationships with key industry sectors that provide opportunities for economic growth and with organizations supporting economic development in Vancouver. Working with InvestBC, VEDC's attendance at major conferences is helping to raise international awareness of the City's economic development climate. VEDC was a co-sponsor of the Bio Partnering North America 2003 conference, which will become an annual event for the City.

Strategic alliances with Tourism Vancouver and the International Finance Centre have aided efforts to grow the tourism and finance, insurance and real estate sectors. Working with the Ministry of Competition, Science and Enterprise the VEDC will be taking an active role in the provincial technology marketing initiative Leading Edge British Columbia to begin in the fall of 2003. This provides the VEDC with a strategic partner in growing the technology sector.

Goal #4 To benchmark progress in Vancouver and best practices globally
Economic indicators are provided on the website and through the quarterly report. Over time it will be possible to produce some trend data on these measures, which will further enhance it's usefulness. VEDC is currently expanding the indicators to include certain measures of sustainability to be consistent with one of its underlying principles.

VEDC continues to monitor the activities of other jurisdictions including the GVRD to maintain current comparative information and build relationships.

Secretariat duties to support the Commission and Council
The VEDC has established three ex-officio positions to provide board linkage with the provincial and federal governments and Tourism Vancouver.

The VEDC has coordinated board activities including revamping its committee structures. Communication with City staff and Council has been achieved through regular briefings, meetings, email and verbal contact.

Financial Performance

VEDC Core Activities Income Statement
Year to Date to September 30, 2003
And Projected Year End 2003

 

Total Year
Budget

Actual
Year to date

Projected
Year End

Projected
Year End Variance

Revenues

          

Service contract (City)

570,000

427,500

570,000

  

0

Other revenues

0

21,410

28,261

1

28,261

TOTAL REVENUES

570,000

448,910

598,261

  

28,261

           

Expenses

          

Salaries and Benefits

405,000

300,579

408,579

2

(3,579)

Rent

50,000

35,699

47,775

  

2,225

Office,promotion,conference and other

115,000

84,430

121,964

3

(6,964)

Total Expenses

570,000

420,708

578,318

  

(8,318)

           

Net Income (loss)

0

28,202

19,943

  

19,943

Notes

Commentary:
The projected 2003 surplus has been largely achieved through obtaining other funding sources. In previous years some of these other funds would have been used to repay the loan to the City, which was paid off in full at the end of 2002.

As in previous years volunteer hours and in-kind support provided by Commissioners and the business and academic communities have been valuable contributions to the success of the VEDC in 2003.

Having reviewed the third quarter financials and projected year-end position with the VEDC, staff is satisfied that the VEDC continues to demonstrate good financial management and that the 2003 financial budget provides a reasonable basis for the 2004 budget request.

2004 Business Plan

The 2004 Business Plan is provided with this report. Staff provide the following summary;

The VEDC's vision, mission, values and mandate remain unchanged from 2003. The business plan for 2004 is a three-year business plan in that the goals being established are looking ahead to 2006. However the request for funding is consistent with previous years and is for only one year.

The 4 goals established in the 2003 business plan continue to be relevant and are reflected in the 2004 goals numbered 2 to 5. The goals for 2004 are as follows;

An additional goal has been established in 2004, "to facilitate development of a long-term economic strategy for the City". This will require the support of a number of key City staff and council. The strategy will need to address human resources, infrastructure, financial considerations, land use zoning, leadership and research and innovation. Follow up implementation of the outcomes from this goal will be reflected in the 2005/2006-business plan.

VEDC staff and its board of commissioners have developed the 2004 business plan. Staff have also provided their comment.

Summary

The VEDC has worked closely with City staff from across the organization throughout the year on issues including permitting, business licences, downtown eastside initiatives and planning. The five-member VEDC team has demonstrated a commitment to building effective relationships and working hard towards fulfilling their mandate, goals and objectives.

It is difficult to measure the extent of the positive impact the VEDC has had on the economic development of the City. However there are good indicators, such as the 5 successes noted against goal 3, that suggest the work completed is showing a return on investment. Having established it self as a key stakeholder the VEDC is providing a powerful voice representing the economic interests of the City. This will be of particular value as Provincial and Regional initiatives make important progress. In 2004, involvement in the Leading Edge British Columbia initiative will likely see the City receiving benefits from provincial funding into economic development of the technology sector.

The 2004 business plan will continue to build upon the work completed in 2003 with the addition of a significant challenge in developing a long-term economic strategy for the City.

FINANCIAL IMPLICATIONS

The financial resources required to carry out the core activities in this business plan are $587,000. This would be an increase of $17,000 or 3% from the VEDC's 2003 core operating contract of $570,000. The increase is primarily due to inflation plus an increase in the cost of rent affected by insurance rates and property tax increases, which are passed on by the landlord.

Staff recommends that Council approve this level of funding, as it will continue to ensure proactive economic development on behalf of Vancouver; source of funds to be the 2004 Operating Budget

CONCLUSION

The VEDC has submitted its 2004 Business Plan and Budget and has requested that Council renew the annual operating contract and provide the funding necessary to fund core activities. Staff recommends the renewal of the contract and approval of funding in the amount of $587,000 for 2004.

- - - - -

APPENDIX A

See attached binder (LIMITED DISTRIBUTION TO COUNCIL - On File in City Clerk's Office) entitled:

Vancouver Economic Development Commission
2003 Submission to Council

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cs20031023.htm

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