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. * * * * *