A8
                                                                ADMINISTRATIVE REPORT


                                                      Date:  April 24, 1996
                                                      Dept. File No.  SA   


     TO:       Vancouver City Council

     FROM:     Director of Finance

     SUBJECT:  1997-99 Capital Plan Process - CityPlan,
               Staff Review Group, and Public Information Program



     RECOMMENDATION

          A.   THAT Council approve the establishment of a Capital Plan
               staff review group, including the proposed membership, as
               further described in this report, and that the staff review
               group be instructed to report back to Council in early July
               with a short-list of recommended projects to be included in
               the City's 1997-99 Capital Plan.

          B.   THAT Council approve the proposed Public Information Program
               as further described in this report, and the Director of
               Finance be instructed to report back to Council with further
               details and a suggested budget  for the Public Information
               Program.


     GENERAL MANAGER'S COMMENTS

          The General Manager of Corporate Services RECOMMENDS approval of
          A and B.


     COUNCIL POLICY

     The City's present policy is to plan for capital expenditures on a
     three-year cycle.  Funding for Capital expenditures comes from a mix
     of borrowed funds, cost-sharing from senior levels of government
     (e.g., conditional revenue sharing grants) and a contribution from the
     Operating Budget (pay-as-you-go financing).

     The borrowing of funds (except for borrowing for sewer and water
     purposes) requires approval of the voters through a capital
     plebiscite.  The plebiscite usually takes place at the same time as
     the civic elections.



     In past plans, Council has appointed a staff group to review capital
     project submissions and make recommendations to Council on the
     composition of the Plan.

     On June 6, 1995, City Council adopted CityPlan: Directions for
     Vancouver as a "broad vision to guide policy decisions, corporate work
     priorities, budgets, and capital plans."


     PURPOSE

     This report recommends the creation of a Staff Review Group to review
     capital project submissions and make recommendations to Council on the
     Plan content, describes how CityPlan directions will be addressed in
     the submission and review process, and proposes a public process to
     inform the public on the process and elicit their comments on Plan
     priorities. 


     BACKGROUND

     In terms of the City's 1997-99 Capital Plan, Council has already taken
     the following actions:

     -  Agreed on a Capital Plan development schedule.

     -  Agreed on a three-year term for the plan.

     -  Agreed that the Capital Plan borrowing plebiscite would be held at
        the same time as the 1996 civic elections.

     -  Agreed on three categories for project submissions to the plan.

        -  Category A - projects that maintain existing capital plant,
           address safety and security concerns, and mandated environmental
           improvements.

        -  Category B - projects that maintain existing service levels and
           remedy service deficiencies.

        -  Category C - projects that increase service levels, provide new
           services, beautification, and non-mandated environmental
           improvements.

     -  Agreed on a financial ceiling for the 1994-96 Capital Plan of $175
        million.

     -  Approved an allocation equal to 14% of the financial limit ($24.5
        million) to the Park Board with report back in June with details of
        their proposed Capital Plan.

     -  Approved a maximum allocation of $5 million to Supplementary
        Capital budget.

     -  Approved a maximum allocation of $5 million for affordable housing.

     -  Instructed departments to use CityPlan directions to guide capital
        plans.


     This present report deals with the relationship of the Capital Plan
     with CityPlan, the establishment of a staff review group,  and a
     public information program.  All three will set the stage for the next
     phase in the process of developing the final content of the 1997-99
     Capital Plan.


     DISCUSSION

     1.  Relationship of CityPlan to the Capital Plan

     City Council approved CityPlan in June 1995 and instructed departments
     to use CityPlan directions to guide policy decisions, corporate work
     priorities, budgets and capital plans. A major theme of the CityPlan
     direction on Financial Accountability is that the City should
     re-direct rather than increase spending to achieve CityPlan
     directions.

     The 1997-99 Capital Plan process is the first opportunity for the City
     to consider capital expenditures within the CityPlan framework. For
     many staff who are preparing or reviewing Capital Plan submissions
     this will also be their first encounter with CityPlan directions "in
     action". For all of us it will be a challenge to go through a fairly
     familiar process with a new road map.

     In each step of the Capital Plan process, from the formulation and
     submission of project ideas to establishing priorities to
     communicating with the public to the decision on what goes into the
     final plan, CityPlan directions will be considered.


     2.  Establishment of a Staff Review Group

     As a matter of policy and practice, City Council has relied on the
     recommendations of staff review groups to assist its decisions on the
     content of past Capital Plans.  In terms of the City's 1997-1999
     Capital Plan, we are proposing that a staff review group again be
     established for that purpose.


     The terms of reference for this group will be to review capital
     project submissions in the three categories previously approved by
     Council and make recommendations on a short-list of projects for
     inclusion in the Plan.  In the past, the staff review group has been
     comprised of representatives of the major departments directly
     involved with Capital Works, and with Finance in an advise and guide
     role.

     The proposed membership of the staff review group is set out below. 
     The department heads of the participating departments will be
     responsible for assigning a staff member to the review group.
     Financial Services staff will also provide financial analyses and
     historical research services to assist the review group.

     -    City Manager             - Deputy City Manager
     -    Engineering Services     - General Manager
     -    Corporate Services       - Director of Finance
     -    Public Safety            - Chief Constable
     -    Community Services       - Manager of Non-Market Housing
     -    Park Board               - General Manager
     -    CityPlan                 - Director of CityPlans


     It is expected that the staff review group will commence its meetings
     in mid-May and conclude its deliberations with a short-list of
     recommended capital projects by mid-June, for Council consideration
     and community review in early July.


     3.  Proposed Public Process

     As in the previous 1994-96 Capital Plan process, there will be a
     public information and consultation program.  In the CityPlan section
     on Financial Accountability, it states that there should more
     opportunities for citizens to participate in setting City budget
     priorities and selecting projects for Capital Plan consideration and
     more information provided on the nature and location of City spending.

     Staff will be exploring a variety of options for providing public
     information about the Plan and input to the Capital Planning process.
     These include the use of newspaper advertising, the Internet, and
     community television. The objective would be to provide the public
     with information about the financial limitations in the Plan, the
     kinds of projects that are proposed, and the difficult decisions that
     are required in developing a final plan.

     In this process, the public will have opportunities to ask questions,
     discuss proposed projects and provide comments to Council through a
     public opinion survey, public meetings, the Internet, and mail and
     fax-in questionnaires. Council will consider this input prior to
     finalizing the Plan in September. Once the Plan has been finalized the
     content will be communicated to the public through a pre-election
     information process involving print and electronic media.

     Further details on the public process and a budget will be presented
     to Council in early July when the Staff Review Group reports back on
     the submissions to the Plan and their recommended Plan.


     SOCIAL IMPLICATIONS

     The 1997-99 Capital Plan will be guided by the CityPlan directions
     which encompass a range of social considerations. While CityPlan says
     that spending should be re-directed rather than increased, there is
     also a clear message from people that they supported spending on
     services such as subsidized housing, parks, crime prevention and
     improved transit.  Staff will be commenting how the various project
     submissions relate to CityPlan.


     CONCLUSION

     This report comments on the relationship between CityPlan and the
     Capital Plan, recommends that a Capital Plan staff review group be
     created to review submissions and make recommendations to Council on
     the content of the City's 1997-99 Capital Plan.  The report also
     proposes a public information program.



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