SUPPORTS ITEM NO. 4 CS&B COMMITTEE AGENDA JULY 25, 1996 ADMINISTRATIVE REPORT Date: July 2, 1996 TO: Standing Committee on City Services and Budgets FROM: General Manager of Corporate Services SUBJECT: Renewal of Musqueam Service Agreement RECOMMENDATION A. THAT Council approve the renewal and extension of the recently expired Musqueam Service Agreement for a subsequent one year term (January 1, 1996 to December 31, 1996) on the same terms and conditions, pending completion of negotiations between City staff and the Musqueam Band on the content of a longer-term service agreement, and authorize the Director of Legal Services to sign the extended agreement on behalf of the City. B. THAT staff be instructed to report back to Council later this year on the terms and conditions negotiated and embodied in a longer-term service agreement between the City and the Musqueam Band for consideration and approval. COUNCIL POLICY City Council is the approval authority for the service agreements entered into between the City and the Musqueam Band. PURPOSE This report recommends a one year extension of the recently expired service agreement between the City and the Musqueam Band pending completion of the current negotiations on a longer-term service agreement. BACKGROUND Federal and provincial legislation now permits Indian Bands to levy taxes on occupiers of their lands to the exclusion of municipal taxation. The Musqueam Band, whose lands are located within the official boundaries of the City of Vancouver, has opted to levy taxes under this legislation, commencing in 1991. That action necessitated the replacement of the City's service agreements respecting the two residential subdivisions located on Musqueam Indian Reserve #2, which provided for all normal city services in return for payment of all taxes levied and billed by the City. The Directors of Legal Services and Finance have been involved with service agreement discussions with representatives of the Musqueam Band and the leasehold residents on the Reserve since the fall of 1990, leading up to the present service agreement which expired on December 31, 1995. In approving the recently expired service agreement, Council resolved: - that the draft Agreement dated June 16, 1994, be approved, subject to the amendments as set out in the letter dated July 27, 1994, from Mr. Lawrence Fast, General Counsel, Musqueam Indian Band, to the Director of Finance; and, - that the City provide notice of its intent to phase out cost-sharing of administrative costs associated with the separate tax system, in future agreements. The service agreement was amended as instructed and signed by the City on August 10, 1994. A copy of that agreement without the site schedules is appended to this report for information. DISCUSSION Given the nature of negotiating a longer-term service agreement, both parties, the City and the Musqueam Band, wish to ensure that all salient matters be appropriately reflected in the discussions. Staff were hopeful that the negotiations could be concluded with a new service agreement in place before now, but that objective will not be met. We will soon have a working draft of a replacement service agreement, which will reflect both party's interests. These interests will then be fine-tuned over the next several months at the staff level and then be submitted in the form of a final draft to both Councils (City and the Band) for consideration and approval. In the meantime, it is necessary to provide for the payment of city services delivered to the Reserve (both leasehold and Village properties) in 1996. Payment under the former service agreements was due and payable on or before the last working day in July of the current tax year and, in my opinion, it would be appropriate to carry forward the same arrangement this year. I have discussed the matter with city staff (Engineering and Law) and with Band Counsel, recognizing that the year is all but half over, and we agree that the recently expired service agreement could be renewed for a further one year term, on the same terms and conditions, pending completion of negotiations on a longer-term service agreement. I also note for Council that the Celtic shipyard properties, which are located outside of the boundaries of Musqueam Indian Reserve #2, will not be included in any service agreement unless and until there is an ultimate negative outcome in the appeal concerning the decision of the assessment Court of Revision to remove these properties from the City's assessment roll. The new service agreement would likely be for a term of ten years (with similar term renewal options), would embody the basic principles of the recently expired agreement, would cover-off the cost-sharing of administrative costs referenced in the Council resolution mentioned above, and would provide mechanisms to handle new development and growth/capacity issues relating to the present infrastructure (streets, sewer and water mains, street lighting, etc.) servicing the Reserve properties, among a number of other common interests. CONCLUSION Staff on both sides of the negotiation process believe it would be appropriate to renew the recently expired service agreement between the City and the Musqueam Band for a further one year term, pending completion of the negotiations on a new service agreement. The recommendations of this report reflect that position and are submitted to Council for consideration and approval. * * * * *