Vancouver City Council |
CITY OF VANCOUVER
ADMINISTRATIVE REPORT
Date:
March 9, 2004
Author:
Annette Klein
Phone No.:
604-873-7789
RTS No.:
03731
CC File No.:
1605
Meeting Date:
March 25, 2004
TO:
Standing Committee on City Services and Budgets
FROM:
General Manager of Corporate Services/Director of Finance
SUBJECT:
2004 Operating Budget - Final Estimates
RECOMMENDATION
THAT Council adopt the final 2004 Operating Budget revenue and expenditure estimates with a property tax increase of 2.93% as outlined in this report by approving the budget resolution attached as Appendix 2.
CITY MANAGER'S COMMENTS
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.
- 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.
- 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 2004 Operating Budget.
BACKGROUND
On March 9, 2004, Council considered the Interim Report on the 2004 Operating Budget and approved a number of recommendations related to the development of the 2004 Operating Budget. Specifically, Council instructed the Director of Finance to bring to Council final estimates that will balance the budget with a 2.93% general purposes tax increase while providing for:
- the Park Board Global Budget of $48,853,840, including approximately $493,800 for added basic and one-time adjustments in the Park Board estimates but excluding new and non-recurring budget;
- The creation of 3 positions within City Clerks and Corporate Services and the renewal of the contract for the Vancouver Economic Development Commission without impacting the 2004 Operating Budget position; and
- A one-time increase of $1 million in the Contingency Reserve provision to ensure sufficient funding for new initiatives.DISCUSSION
1. Final Budget Position
Since March 9, 2004, 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:
- New and Non-Recurring Budget was reduced by $750,000 (one-time);
- Corporate Training budget was reduced by $200,000 (one-time);
- The Strategic Initiative Fund was reduced by $750,000 (one-time);
- A $500,000 increase in vacancy saving/turnover was distributed to departments (one time);
- $1 million of efficiencies was also allocated to departments (on-going);
- Funding was provided for two communications positions approved by Council with a draw from Contingency Reserve;
- Funding was provided for snow removal costs incurred in January 2004 with a draw from Contingency Reserve;
- Funding was provided for the Corporate Climate Change Action Plan approved by Council with a draw from Contingency Reserve; and
- The general purposes tax levy has been increased by 2.93%, adding $12.2 million to the budget.
These adjustments bring the 2004 Operating Budget into a balanced position as follows:
($000)
($000)
Revenues
Taxation Revenue
$476,197
General Revenue
128,752
Utility Fees
115,309
Transfers
7,710
$727,968
Expenditures
Departmental Expenditures
$513,609
Utility Expenditures
147,597
Capital Program
61,366
Transfers
5,396
$727,968
Net Budget Position
$0
Property Tax Increase Applied to Budget
2.93%
2. The Budget Resolution
With approval of the Recommendation in this report, the 2004 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 to put in place the necessary rating bylaws to provide for billing of the general purposes property tax levy:
- On March 25,2004, City Services and Budgets Committee will consider a the enactment of averaging by-law. The by-law would authorize continuation of three-year land averaging as the method for calculating property taxes for Class 1 (Residential) and Class 6 (Business and Other) for 2004.
- On April 22, 2004, City Services & Budgets Committee will consider a report from the Director of Finance outlining the impact of shifting a one percent of the property tax levy from non-residential to residential properties.- On May 4, 2004, the Director of Finance will bring forward a report summarizing the property tax levy and Council will be asked to approve bylaws establishing general purpose and regional district tax rates.
CONCLUSION
The approval of the attached resolution will finalize the process of balancing the 2004 Operating Budget.* * * * *
City of Vancouver
Appendix 1
2004 Operating Budget
2003
2004
$
%
budget
Budget
change
change
($000s)
($000s)
SECTION 1: Summary of Revenues
Taxation Revenues
Base Levy
414,785
428,623
13,838
3.3%
New Construction
0
4,872
4,872
Net Taxation Revenues
414,785
433,495
18,710
4.5%
Tax Adjustments
(2,020)
(2,086)
(66)
3.3%
Local Improvement Taxes
4,251
4,118
(133)
(3.1%)
Receipts in Lieu of Taxes
35,582
34,821
(761)
(2.1%)
Penalties and Interest
5,850
5,850
0
0.0%
Total Revenue from Taxation
458,447
476,197
17,750
3.9%
Other Revenues
Provincial Revenue Sharing Programs
6,138
6,337
199
3.2%
Investment Income
11,600
10,000
(1,600)
(13.8%)
License Fees
12,892
14,148
1,256
9.7%
Property Rental Income
1,276
1,349
74
5.8%
Service and Inspection Fees
21,602
22,671
1,069
4.9%
Municipal By-Law Fines
9,454
9,654
200
2.1%
On Street Parking Revenue
19,490
20,800
1,310
6.7%
Civic Theatres Revenue
5,652
5,990
339
6.0%
Park Board Revenues
31,167
32,433
1,266
4.1%
Miscellaneous Revenues
5,445
5,370
(75)
(1.4%)
Total Other Revenues
124,715
128,752
4,037
3.2%
Utility Fees
Waterworks
57,104
61,535
4,432
7.8%
Solid Waste
22,405
22,166
(239)
(1.1%)
Sewers
30,560
31,607
1,047
3.4%
Total Utility Fees
110,069
115,309
5,240
4.8%
Total Revenues before Transfers
693,231
720,258
27,026
3.9%
2003
2004
$
%
budget
Budget
change
change
($000s)
($000s)
Transfer from Other Funds/Reserves
Sinking Fund Prior Year Surplus
1,956
550
(1,406)
(71.9%)
Property Endowment Fund
7,000
7,000
0
0.0%
Art Gallery Reserve
160
160
0
0.0%
Revenue Surplus
0
0
0
0.0%
Other
250
0
(250)
(100.0%)
Total Transfer from Other Funds
9,366
7,710
(1,656)
(17.7%)
Total Revenues before Tax Increase
702,597
727,968
25,371
3.6%
SECTION 2: Summary of Expenditures
General Government
Mayor and Councillors
1,590
1,734
144
9.1%
City Manager / EEO
1,008
1,016
8
0.8%
City Clerk
2,462
2,499
37
1.5%
Legal Services
3,459
3,547
88
2.5%
Corporate Services
27,406
27,973
567
2.1%
Human Resources
5,857
5,723
(134)
(2.3%)
Other General Government
7,631
6,040
(1,591)
(20.8%)
Community Services Administration
5,422
6,228
806
14.9%
City-Wide and Community Planning
5,300
5,367
67
1.3%
Total General Government
60,134
60,126
(8)
(0.0%)
Protection to Persons and Property
Police Services
133,230
138,413
5,183
3.9%
Fire and Rescue Services
67,732
67,900
169
0.2%
E-COMM Services
14,094
14,655
560
4.0%
Permits and Licences
18,918
18,644
(274)
(1.4%)
Animal Control
997
1,005
8
0.8%
Vancouver Emergency Program
658
694
36
5.4%
Total Protection to Persons and Property
235,630
241,311
5,682
2.4%
2003
2004
$
%
budget
Budget
change
change
($000s)
($000s)
Public Works
Administration and General
7,422
8,024
603
8.1%
On Street Parking Program
7,230
8,242
1,012
14.0%
Traffic Planning and Control
7,077
7,188
111
1.6%
Street Lighting and Communications
4,527
4,755
228
5.0%
Street Cleaning
6,520
6,952
432
6.6%
Streets, Bridges and Walkways
14,957
16,785
1,828
12.2%
Total Public Works
47,732
51,946
4,214
8.8%
Utilities - Waterworks
Operating Costs
7,419
7,976
556
7.5%
Water Purchase
24,425
28,985
4,560
18.7%
City Debt Charges
24,644
22,272
(2,372)
(9.6%)
Transfer to/(from) Reserve
615
2,303
1,688
274.4%
Total Utilities - Waterworks
57,104
61,535
4,432
7.8%
Utilities - Solid Waste
Operating Costs
21,513
20,792
(721)
(3.4%)
Transfer to/(from) Reserve
892
1,374
482
54.0%
Total Utilities - Solid Waste
22,405
22,166
(239)
(1.1%)
Utilities - Sewer
City Operating Costs
5,311
6,211
900
17.0%
City Debt Charges
20,604
20,912
308
1.5%
Regional Sewerage Levy
36,090
36,755
665
1.8%
Transfer to/(from) Reserve
23
18
(5)
(21.9%)
Total Utilities - Sewer
62,028
63,896
1,869
3.0%
2003
2004
$
%
budget
Budget
change
change
($000s)
($000s)
Recreation and Community Services
Parks and Recreation
78,685
81,287
2,602
3.3%
Britannia Service Centre
2,430
2,453
23
0.9%
Social Planning
1,417
1,730
314
22.1%
Housing Programs
1,289
1,399
109
8.5%
Office of Cultural Affairs
612
770
158
25.9%
Carnegie Centre
2,767
2,412
(355)
(12.8%)
Dowtown South Gathering Place
1,750
1,776
27
1.5%
Vancouver Public Library
30,661
30,733
71
0.2%
Civic Theatres
5,913
6,233
321
5.4%
Archives
882
1,264
382
43.4%
Cemetery
729
820
91
12.4%
Total Recreation and Community Services
127,134
130,876
3,742
2.9%
Civic Grant Program
10,855
11,004
149
1.4%
Contingency Reserve
14,696
18,346
3,650
24.8%
Total before Capital Program and Transfers
637,717
661,207
23,489
3.7%
Capital Program
General Debt Charges
42,739
39,448
(3,291)
(7.7%)
Capital From Revenue
12,600
16,300
3,700
29.4%
Local Improvements
4,251
4,118
(133)
(3.1%)
Debt Repayment Reserve
0
1,500
1,500
Total Capital Program
59,590
61,366
1,776
3.0%
Transfers to Reserves/Funds
Other Transfers
5,290
5,396
106
2.0%
Total Transfers to Reserves/Funds
5,290
5,396
106
2.0%
Total Expenditures
702,597
727,968
25,371
3.6%
Tax Increase Used to Balance Budget
2.93%
Appendix 2
RESOLUTIONMOVED 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 November 18, 2003, and March 9, 2004 and approved measures to bring the estimates into balance, including approval of a 2.93% 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 2004, 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 $727,967,900;
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 2004 from sources other than real property taxes, as amended by Council, amounts to $294,473,300;
AND WHEREAS the amount of the General Purposes Tax Levy so required is $433,494,600;
THEREFORE be it 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.