SUPPORTS ITEM NO. 2 
                                                CS&B AGENDA
                                                APRIL 10, 1997     

                             ADMINISTRATIVE REPORT


                                                Date: April 4, 1997
                                                C.C. File No. 6008 


   TO:       Standing Committee on City Services and Budgets

   FROM:     Director of Finance

   SUBJECT:  Tourism Vancouver - 1997 Business Plan, Budget, and
             Publication and Distribution Contract.


   RECOMMENDATION

        A.   THAT Council approve the Greater Vancouver Convention and
             Visitors Bureau s (Tourism Vancouver's) 1997 Business Plan in
             the amount of $7,950,000 being the portion funded by the 2%
             hotel tax; and,

        B.   THAT Council approve a contract with Greater Vancouver
             Convention and Visitors Bureau (Tourism Vancouver) for
             publication and distribution of tourism-related material for
             1997, in an amount not to exceed $400,000  before GST, as
             requested, subject to an agreement satisfactory to the
             Director of Legal Services.

   CONSIDERATION

        C.   THAT Council direct  Tourism Vancouver to fund at least  50%
             of the additional City costs  associated with APEC,  taken
             from the  Hotel Tax portion of Tourism Vancouver's 1997
             business plan.

   GENERAL MANAGER'S COMMENTS

        The General Manager of Corporate Services RECOMMENDS approval of A
        and  B, and submits C for CONSIDERATION.

   COUNCIL POLICY

   City Council must approve the business plan of the Tourism Vancouver,
   which details the allocation of the 2% Hotel Tax. 

   City Council has supported tourism promotion by way of grants to Tourism
   Vancouver up to 1990, and thereafter by way of a contract for the
   publication and distribution of promotional material.


   DISCUSSION

   In accordance with Council policy, Tourism Vancouver has submitted its
   1997 Business Plan and 1997 Publication and Distribution Services
   Contract proposal for Council's consideration and approval. The Business
   Plan and Contract proposal are attached as Appendix I to this report. 

   Council will note that the Business Plan contemplates the continued
   receipt and expenditure of the 2% Hotel Tax.  The plan also anticipates
   municipal contract revenues in addition to the 2% tax.  As in prior
   years, Tourism Vancouver will conduct its business activities for the
   year in accordance with the approved plan and budget.  Additionally, the
   Association will file its annual audited financial statements with the
   City for review by the Director of Finance in the normal manner.

   An analysis of Tourism Vancouver's 1997 Budget indicates the following
   changes from 1996.

                          1996            1997            PERCENT
                         ACTUAL          PLANNED          CHANGE 

   Total Budget        $9,450,327     11,810,000           25.0%

   2% Hotel Tax        $7,532,985     $7,950,000            5.5% 

   Other Revenues      $1,917,342     $3,860,000          101.3%

   Tourism Vancouver is projecting a surplus of $11,797 for the 1996
   business year, and is budgeting for a $150,000 payment into a stability
   reserve.  

   2% HOTEL TAX

   In order to recognize the lead time between the collection of the 2%
   Hotel Tax and its receipt by the City and Tourism Vancouver, the
   Association has based its business plan on the 2% tax revenues to be
   collected during the 12 month period of October 1, 1996 through to
   September 30, 1997.  This collection period treatment is consistent with
   business plans approved in the prior years.

   In the past two years, Council has approved Tourism Vancouver s request
   to increase their budget to take up any excess of actual 2% tax revenues
   over the original approved budget. Any Hotel Tax funds collected in
   excess of the revised budget would be placed in the Hotel Tax Reserve
   for application to the following year s business plan.




   The following table shows the actual 2% Hotel Tax revenues as collected
   from October, 1995 to September, 1996 and compares these against the
   1996 Business Plan as revised and approved by Council on November 7,
   1996. 

          1996 2% revenues as collected          $7,532,985
          1996 2% revenues as budgeted            6,809,629
          Net Nov 96 Budget increase                732,356

          1996 reserve for 1997                   $       0


   Tourism Vancouver projects 2% Hotel Tax revenues to be $7,950,000 for
   1997.  As in the prior years, if actual 2% Hotel Tax revenues collected
   are in excess of the approved budget for 1997, Tourism Vancouver will
   submit a revised budget for approval that takes up the excess. 

   PUBLICATION AND DISTRIBUTION CONTRACT

   In the past, the City has directly contributed to Tourism Vancouver's
   activities by way of grants until 1990, when a contract for publications
   was awarded in place of a grant.  Provision of services through the 1996
   contract was reviewed by the City's Purchasing Division during the year,
   and funds were released as Tourism Vancouver successfully met all of the
   terms and conditions of the contract.  A copy of the 1996 contract is on
   file in the City Clerk's office.  The cost to the City for the 1996
   contract was $600,000 before GST and the 1997 request is for $400,000,
   before GST.  Tourism Vancouver's 1997 Contract Renewal Submission and
   analysis is presented on Schedule A in Appendix I to this report.

   APEC

   Staff and Tourism Vancouver have continued discussions regarding APEC
   cost sharing.  Tourism s position is that these costs should not be
   borne by Tourism Vancouver, and that their participation be limited to
   the existing agreement to fund 50% of City  APEC costs to a maximum of
   $350,000, spread over the 1996 and 1997 business years.  Although
   Council has resolved to limit City APEC expenditures to $700,000, there
   may be circumstances that result in additional, unavoidable costs to the
   City. If Council believes that  there is an  obligation on the  part of
   Tourism Vancouver  to help  defray  these costs, given that some of the
   major beneficiaries of  these events  are the  Hotel and  Hospitality  
   industries, Council may wish to extend the cost  sharing agreement to
   include any City
   APEC costs to due to any unexpected  increases. This option has been put
   forward for Council  CONSIDERATION.



   CONCLUSION

   The 1997 Business Plan as submitted by Tourism Vancouver is consistent
   with Council Policy and with past operations.  Therefore, The Director
   of Finance recommends approval of the 1997 Tourism Vancouver Business
   Plan in the amount of $7,950,000, being the portion funded by the 2%
   Hotel Tax. 

   The contract for publication and distribution, as proposed, reflects the
   reductions approved by Council on February 20, 1997. The Director of
   Finance recommends approval of the contract proposal as submitted in the
   amount of $400,000, before GST. 

   Representatives of Tourism Vancouver will be in attendance to answer any
   questions on their business plan and contract proposal.


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