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.



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