ADMINISTRATIVE REPORT

                                                  Date:  September 16, 1996


   TO:       Vancouver City Council

   FROM:     Director of Finance

   SUBJECT:  1997-99 Capital Plan



   RECOMMENDATION

        THAT the Capital Plan, as set out in Appendix A, and as modified
        this day, be approved in principle, and that the Director of
        Finance report back on the breakdown of funding between Revenue
        funds and Borrowed funds, and on the proposed wording for the
        questions in the plebiscite.

   GENERAL MANAGER'S COMMENTS

        The General Manager of Corporate Services RECOMMENDS approval of
        the foregoing.

   COUNCIL POLICY

   On July 23, 1996, Council approved the following resolution:

        THAT the recommended plan for $165 million, as set out in the
        Policy Report dated July 15, 1996, be received and circulated to
        the public, leading up to a public meeting on September 23rd to
        receive public comment, and for final adoption on September 24th. 

   PURPOSE

   This report seeks Council's final consideration and approval of the
   content of the proposed 1997-99 Capital Plan.

   BACKGROUND

   On July 23, 1996, Council approved, in principle, the proposed Capital
   Plan at a cost of $165 million.  This amount reflects:

        -    Council's approval of the regional radio program, which will
             involve a financial commitment, outside of the Capital Plan,
             of approximately $23 million; and
        -    The re-allocation of $10 million of 1997-99 Capital from
             Revenue funds to the Information Technology infrastructure
             replacement program.

   Council also approved a public consultation program on the contents of
   the Capital Plan.  The main elements of that consultation included:

        -    Public Information Flyer - distributed to residences on the
             Labour Day weekend, providing information on the contents of
             the proposed plan, and requesting responses to be sent back to
             the City;

        -    Citizen's Survey - telephone opinion poll conducted by
             MarkTrend, based on scientific polling techniques to a
             randomly chosen sample of citizens;

        -    Information posted on the City's Internet Home Page, also
             requesting responses;

        -    Mailing to local community groups, providing detailed
             information on the proposed Plan, and requesting responses;

        -    A short video produced and shown by Rogers Community
             Television.

   On September 23, 1996, Council is scheduled to hold a public meeting on
   the Plan.  At that time, Council will receive representations from the
   public, as well as to receive information on the responses to the flyer
   which was distributed to residences on the Labour Day weekend.

   On September 24, Council will receive a presentation from MarkTrend
   Research on the results of the Citizen's survey which was conducted in
   August.

   DISCUSSION

   The proposed Capital Plan, as summarized in Appendix A, represents the
   culmination of a planning process by Council and staff.  This Plan is as
   recommended by the Staff Review Group.

   In finalizing this Plan, Council may wish to make certain adjustments,
   arising out of the public consultation process.  Any contemplated
   changes should be dealt with at this time, and the recommendations of
   the report modified to reflect those changes.

   When Council was considering the report of the Staff Review Group in
   July, there was a request to review the discussion around the setting of
   the financial ceiling for the Capital Plan.  The following summarizes
   the earlier presentation.

   In considering the affordability of the Capital Plan, two major
   constraints were identified:

        -    impact on future tax increases
        -    overall debt burden of the City

   With respect to taxes, the Plan is "sized" such that future debt charges
   and capital from revenue contributions can be "fitted" within future
   Operating Budgets without generating tax increases beyond normal
   inflation.  These projections are based on normal growth in the budget
   and do not allow for extraordinary growth in revenues not major shocks
   such as loss of Provincial grants.

   With respect to the City's overall debt burden (excluding water debt),
   the projections which were reported to Council on March are reproduced
   in Appendix B.  As was previously reported to Council, the traditional
   guidelines about debt as a percentage of the Operating Budget are
   projected to be exceeded in 1999.  While these guidelines are not
   absolute, there is cause to be reasonably cautious about the growth in
   debt.  It was also noted in March that the basis for calculating these
   guidelines will change in the future, with the introduction of the sewer
   and solid waste utilities.

   Subsequent Actions

   Once Council approves the Plan, as presented in this report, along with
   other changes which maybe decided this day, there are a number of other
   steps leading up to the November plebiscite.

   a)   Funding Sources

   The funding for the Plan comes from three sources:

        -    Borrowing authority not requiring voter approval - sewer and
             water
        -    Borrowing authority requiring voter approval
        -    Capital from Revenue - 1997-99 budgets

   The Capital from Revenue will be allocated to certain program areas, and
   the remaining amounts (excluding sewer and water) will require voter
   approval.  This allocation will be reported to Council on September 26.

   b)   Plebiscite Questions

   The issues around the plebiscite questions will also be addressed by
   Council on September 26.  Typically, there are two or three separate
   questions on the plebiscite, such as public works, public safety, and
   parks and recreation, and Council direction will be
   sought.  Specific wording of the questioning will be then addressed by
   staff, with a final review by Council (or a delegated sub-committee of
   Council).

   c)   Public Information Program

   Leading up to the plebiscite, an information program will be initiated
   to inform the electorate about the contents of the Plan.  The Citizen's
   Survey identified that the electorate will want information about:

        -    how and where the money will be spent
        -    how taxes will be affected
        -    goals of the plan
        -    how and by whom the priorities were set

   An information program is being developed which will include a brochure
   to be delivered to all residences, a media campaign, and a continuation
   of the information program by Rogers Community Television.


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