CS&B COMMITTEE AGENDA
                                                JUNE 26, 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


        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.


        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

        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.


   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.


   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;

   -    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

   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

   -    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

   "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." 


   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

        -  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

        -  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

        -  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;

        -  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

   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.


   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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