SUPPORTS ITEM NO. 2
CS&B COMMITTEE AGENDA
MAY 29, 1997
ADMINISTRATIVE REPORT
Date: May 5, 1997
C.C. File No. 5653-1
TO: Standing Committee on City Services and Budgets
FROM: General Managers of Engineering and Corporate Services
SUBJECT: New Operating Agreement - Parking Corporation of Vancouver
RECOMMENDATION
A. THAT Council approve the Mission, Goals and Operating
Principles for the Parking Corporation of Vancouver (the
"VPC") as enumerated in this report and direct staff to
incorporate these guidelines in the new operating agreement.
B. THAT the Director of Legal Services be authorized to approve
the new operating agreement on behalf of the City if approved
by the VPC and the General Managers of Engineering and
Corporate Services.
CITY MANAGER'S COMMENTS
As noted in this report, the operation of City parking facilities
by the Parking Corporation of Vancouver is a valuable service. The
City's block of parking stalls provides a valuable tool to
influence the parking market, and to meet transportation
objectives. The Corporation operates these facilities effectively
and in a well-controlled fashion. However, the VPC is also a
significant financial factor for the City. The City's parking
assets represent a significant investment, and the revenue
generated from these facilities provides a tool for further
investment in parking and related facilities.
In presenting this report, your officials are indicating a
direction simultaneously towards more independent operation by the
Corporation and a closer partnership with the City. Where the City
presently maintains relatively tight control over a number of
off-street parking related issues, the new agreement will provide
the Corporation with more independent decision making. Where the
City now puts certain parking operations in the hands of other
operators, these will be assigned directly to the Corporation. A
greater assignment of responsibility and additional assets to
manage represent a significant shift by the City.
Such a shift requires that the City also adopt a more stringent
approach to evaluation of the efficiency and cost of VPC
operations. The overhead costs of salaries and office space and
general operations must be consistent with other operators. The
total revenue generation must be as high as other operators would
achieve under the same
mandate. The time and cost
to bring new temporary lots
on line must be minimized
to ensure maximum revenue
for these short term lots.
Community relations must be
maintained at high levels.
In addition to the operating flexibility that will be reflected in
the new operating agreement, your officials propose that VPC
present an annual report which focuses on their operating
efficiency relative to prior years and to the industry at large.
Provision will be made to identify and monitor key operating
variables. In addition, from time to time it will be appropriate to
"test the market" for private operation of City facilities through
a bidding process. Your officials recommend that such a bid be
planned for two to three years in the future, to be preceded by a
report to Council. VPC officials are concerned that a bid process
could result in a private operator buying the business in order
to eliminate the VPC. This issue will be dealt with in the report
back.
These comments are provided for Council's information, so that
Council may provide further direction to staff if the approach
outlined here is not considered appropriate.
In consideration of the foregoing, I RECOMMEND approval of A and B.
COUNCIL POLICY
There is no specific policy related to this matter. Past practice has
been for Council to make decisions on pricing and operation of
off-street parking facilities owned by the City and to delegate certain
operating decisions to City staff. The proposals in this report broaden
the mandate of the VPC in a number of operating areas which heretofore
resided with City staff and Council.
BACKGROUND
On July 11, 1995, Council approved a recommendation submitted by the
General Manager of Engineering Services, as follows:
"THAT Council authorize the General Manager of Engineering Services and
the Director of Legal Services to enter into an updated operating
agreement for the City's off-street parking facilities consolidating,
where possible, those facilities now operated by
the parking Corporation of Vancouver."
On the same day, Council approved additional recommendations submitted
by the Parking Corporation of Vancouver, and amended by the Deputy City
Engineer, around its operation of city-owned facilities, as follows:
- the Vancouver Parking Corporation budgets continue to be
coordinated with Engineering Services and Corporate Services for
eventual approval;
- Engineering Services continue to advise, assist and monitor VPC
operations, enforcement and administration;
- Corporate Services continue to advise, assist and monitor VPC
accounting, financial reporting, risk management and annual audit;
and,
- the VPC Board continue to have a Council representative.
Subsequent to the adoption of the aforementioned resolutions, City staff
began work on drafting a new operating agreement for off-street
facilities. This draft agreement was forwarded to the VPC for review and
approval in late March of 1996. Little progress was made through the
remainder of 1996 to reach resolution around the new agreement.
Following submission of the draft agreement, a governance review study
was commissioned by VPC, and its findings and recommendations were
reviewed by City staff.
On February 4, 1997, a motion was put forward to Council as follows:
"THAT Council confirm that the Parking Corporation of Vancouver shall
operate, maintain and fix rates for any 'City-owned' off-street parking
facility."
This motion, in effect, would have changed some of the provisions around
a new operating agreement which were approved by Council in July, 1995.
Those provisions, as originally approved, are outlined below.
- existing agreements are consolidated into one document which will
standardize and clarify operating conditions;
- the term of the revised agreement is 20 years expiring in 2015 with
automatic renewal if not cancelled;
- the revised agreement will contain provisions for cancellation of
both the entire agreement and individual lots;
- all net profits from all sources are paid by VPC to the City;
- budgeting and reporting are consolidated under the General Manager
of Engineering Services in consultation with the General Manager of
Corporate Services;
- establishment of contract parking provisions and hours of operation
are the responsibility of the General Manager of Engineering
Services;
- establishment of parking rates are the responsibility of the
General Manager of Engineering Services and are reported to Council
as necessary;
- the parking operator is responsible for all maintenance and
financial accounting;
- the parking operator is responsible for budget requested capital
improvements up to $10,000;
- the City is responsible for payment of property taxes or payment in
lieu of taxes; and,
- flexibility is provided in the agreement for the addition or
deletion of sites.
Council deferred action on the motion and referred it to the City
Services and Budgets Committee on February 20, 1997, requesting staff to
report back and clarify the issues.
On February 20th, the City Services and Budgets Committee dealt with the
administrative report referred from the earlier Council meeting and
heard a delegation representing the Parking Corporation of Vancouver.
The VPC presented information to support its proposal that they be given
the opportunity to manage all city-owned off-street parking facilities,
with the exception of Park Board and Civic Theatres. VPC also requested
the responsibility for establishing contract parking provisions, hours
of operations, and parking rates in consultation with Engineering
Services, with appropriate reporting to Council, and responsibility for
implementing approved capital improvements up to $100,000. VPC argued
that its proposal would allow them to respond to the market and take
advantage of revenue opportunities as those occurred.
After hearing from staff on this issue, Council adopted the following
resolution.
"THAT Council defer consideration of the Administrative report dated
February 14, 1997 on City Off-Street Parking Facilities, pending a
report back within one month by the City Manager on the proposal by the
Parking Corporation of Vancouver for a new operating agreement."
DISCUSSION
Since the February 20th Committee meeting, staff have met with
representatives of the Parking Corporation of Vancouver on four separate
occasions (February 25th, March 7th, April 4th and April 28th) in order
to reach agreement on the principal terms and conditions around a new
operating agreement between the City and VPC. These meetings have been
productive and progress has been slow and measured. We now believe that
all of the major hurdles have been resolved, although it will likely
take a month or so longer to work out the details of a new operating
agreement, and have it signed and in place.
In terms of this present report, the following summary outlines the
areas of consensus resulting from the joint City/VPC consultative
process. This report recommends approval of these items as a basis to
conclude the new operating agreement.
1. Mission and Goals
It was agreed that VPC serves a useful purpose as the City's
off-street parking manager under the following mandate.
a. Mission
The Vancouver Parking Corporation exists to manage and operate
safe, customer friendly and cost effective off-street parking on
behalf of the City of Vancouver.
b. Goals
- to advise the City on transportation policies and operating
strategies for the off-street parking facilities, which are
complementary to the needs and economic health of the business
community.
- to manage the City's off-street parking in a manner consistent
with the City's transportation policies.
- to operate the City's off-street parking facilities in a
professional manner.
- to provide a highly cost effective operation that maximizes the
City's return on its parking investment within the constraints
imposed by the City.
- to be accountable to the City through a regular schedule of
operating and financial reporting, reflecting mutually developed
performance criteria.
2. Policy, Authority and Responsibility
a. Council policy would include, but not be limited to:
- the strategic location, funding and development of municipal
off-street parking facilities;
- on-street parking placement, practices and procedures;
- promotion of short-term over long-term contract parking;
- regulatory by-laws related to parking;
- approval of the VPC budget;
- the use of off-street parking as an instrument of transportation
demand management; and,
- discretionary powers (authority) granted to VPC.
It was acknowledged that parking policy is the product of Council
decisions as advised by City staff, the community-at-large, BIA
groups, and the VPC Board.
b. It was agreed that authority granted to the VPC would include the
ability to control, operate, maintain, enforce, facilitate on-site
way finding and carry out business in accordance with governing
City policies and joint venture partner arrangements. This
authority would include, but not be limited to:
- the conduct of off-street parking rate reviews, leading to the
determination of off-street parking rates and enforcement fees
to be used on City facilities;
- the determination of operating hours policies, procedures and
practices for each municipal facility;
- the preparation of capital and operating budgets for City
approval;
- the ability to expend up to a maximum of $20,000 on unbudgeted
items to be justified at a later date; and,
- the ability to control budgeted capital projects up to a maximum
of $100,000 in consultation with City staff.
c. It was agreed that responsibility included the accountability owed
by the VPC to the City for the proper use of its authority to
conduct business in compliance with City policies. This
responsibility would include, but not be limited to:
- adherence to the provisions of the Master Operating Agreement;
- performance reporting based on standards agreed to by both
parties; and,
- due diligence in representing the best interest of the City, as
monitored by the General Managers of Engineering and Corporate
Services within their appropriate functional areas.
3. Assignment of City Car Parks
a. It was agreed that municipal off-street parking would be grouped
into three policy classifications, with management assigned as
follows:
- existing and future commercial off-street facilities acquired or
improved through the use of Parking Sites Reserve funds would be
assigned to VPC management. Over and above current VPC holdings,
this would include Woodwards, the West End Community Centre and Civic Theatres;
- existing and future commercial off-street properties
administered through Property Endowment funds and used for
permanent or temporary off-street parking would be assigned to
the VPC, with revenues returned to the Property Endowment Fund;
- community parking facilities that remain free to the public will
be administered directly by the City. Examples in this category
include the Kerrisdale, Fraser Street and East Hastings lots;
and,
- the management of commercial off-street parking associated with
joint ventures (e.g. Library Square) between the City and its
business partners would be subject to negotiations by the City,
and a possible public tender process.
b. It was agreed that Park Board off-street facilities were not under
consideration.
4. Extra Municipal Parking Management
a. It was agreed that the VPC would be authorized to pursue the
management of publicly funded commercial off-street parking
facilities owned by a public agency and justified to the City on a
case-by-case basis.
b. It was agreed that each facility would be managed in a manner
generally consistent with the provisions contained in the Master
Operating Agreement.
5. Standard Request for Proposals
a. It was agreed that the City would to the extent possible adopt a
standard request for proposals and parking management agreement to
be used when public tendering for the management of off-street
parking facilities is required by the provisions of joint
development agreements in which the City is a principal.
b. It was agreed that the August 26, 1996 document prepared by the VPC
at the request of the City would be considered in preparation of
the final City document.
6. Proposed Master Operating Agreement
a. It was agreed that the proposed Master Operating Agreement would
reflect the policy and operating items mentioned in this summary.
b. It was agreed that a separate joint team approach would be used to
draft the proposed Master Operating Agreement, with items requiring
further consideration and the final draft referred back to the
current City/VPC committee for agreement.
7. Validation of VPC Estimates
a. It was agreed that the KPMG assessment of the financial benefits of
grouping municipal off-street parking management under the VPC be
tabled, and that appropriate operating metrics be established under
the new agreement.
8. Strategic Planning
a. It was agreed that consensus on VPC mission and goals as the City's
off-street parking operating agency is important to the tone and
content of the proposed Master Operating Agreement.
b. It was agreed that a policy document, including the City's and
VPC's mission and goals in respect to municipal off-street parking,
would be developed within the current City/VPC committee.
9. Miscellaneous
a. The City agreed to report on the City/VPC relationship around the
settlement of the outstanding Tax Refund Notes if any issues
continued to exist.
b. The City agreed to forward a recommendation to Council that the
VPC's parking enforcement fee be increased to a flat rate of
$10.00, to be applied primarily to unattended facilities.
CONCLUSION
On February 20, 1997, Council instructed staff to report back on
proposals submitted by the Parking Corporation of Vancouver towards a
new, comprehensive operating agreement. Since that date, staff have met
with representatives of VPC to work out the details. Progress has been
made and a new operating agreement containing broader operating
responsibility for the VPC will be concluded in
approximately a month or so. In the meantime, this present report
outlines the areas of consensus reached to date for consideration and
approval of Council.
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