ADMINISTRATIVE REPORT


                                                        Date: July 16, 1996


     TO:       Vancouver City Council

     FROM:     Director of Finance

     SUBJECT:  1996 Operating Budget - June Budget Review



     INFORMATION

          The General Manager of Corporate Services submits this report for
          INFORMATION.


     COUNCIL POLICY

     Council has instructed the Director of Finance to report on the status
     of the City s Operating Budget as of June 30 and September 30 of each
     budget year.


     BACKGROUND

     This is the first report on the status of the 1996 Operating Budget
     since the budget was adopted by Council on April 25, 1996.  It will be
     followed by a second status report which will be presented to Council
     in late September.

     The June Budget Review generally focuses on issues that have arisen
     outside of the departmental budgets since the Operating Budget was
     approved in April, together with recommendations to deal with these
     issues.  Departments are expected to operate within their approved
     budget allocations, and to make the necessary adjustments to
     accommodate unplanned expenditures.  In the event that these unplanned
     expenditures cannot be accommodated within the existing funding
     levels, they will referred to Council at September Budget Review.


     DISCUSSION

     Finance staff have reviewed the status of the Operating Budget as of
     June 30, 1996, and have identified no significant items that require
     immediate action at this time, with the exception of two items that we
     wish to bring to Council s attention.




     1.   Receipt-in-Lieu of Taxes

     The City receives grants from senior levels of government and crown
     corporations for their properties in Vancouver, in lieu of payment of
     property tax.  These agencies normally provide an interim payment to
     the City in the year they are due, with the final payment made when
     they are approved.

     The Port of Vancouver has remitted to the City their interim payment
     for 1996, which is approximately $2.0 million less than the 1995
     interim payment.  Further, the Port is also seeking retroactive
     adjustments to 1984, and the financial impact to the City could be in
     the range of $3.5 million.  The dispute is largely on the
     interpretation of the Act on whether certain properties are to be
     included in the grant program.

     There is also a dispute between staff and the CBC with respect to the
     grant in lieu of taxes being made by the CBC.  This disagreement
     relates to the valuation, for grants purposes, of the CBC building.

     Staff will meet with the parties involved in the coming weeks to
     review the situations and will report back in the September Budget
     Review report.


     2.   Contingency Reserve

     The 1996 Contingency Reserve had an initial allocation of $2.038
     million.  As of June 30, 1996, $1.505 million has been allocated by
     Council to fund specific programs, and the remaining balance has been
     fully reserved for other items pending final approval.  As there are
     no identifiable surplus funds available in the Operating Budget at
     this time, staff have not recommended additional funding for
     Contingency Reserve, noting that a number of the funding items will
     not be decided until later in the year.  The issue of funding the
     aforementioned items will be reviewed at the September Budget Review.



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