CITY OF VANCOUVER REGULAR COUNCIL MEETING MINUTES STANDING COMMITTEE OF COUNCIL ON CITY SERVICES AND BUDGETS JUNE 26, 1997 A Regular Meeting of the Council of the City of Vancouver was held on Thursday, June 26, 1997 at approximately 6:30 p.m., in Committee No.1, Third Floor, City Hall, following the Standing Committee on City Services and Budgets meeting, to consider the recommendations of the Committee. PRESENT: Mayor Philip Owen Councillor Don Bellamy Councillor Alan Herbert Councillor Lynne Kennedy Councillor Daniel Lee Councillor Don Lee Councillor Gordon Price Councillor George Puil Councillor Sam Sullivan ABSENT: Councillor Nancy A. Chiavario (Leave of Absence) Councillor Jennifer Clarke (Leave of Absence) CLERK TO THE COUNCIL: Allisen Croft COMMITTEE OF THE WHOLE MOVED by Cllr. Puil, SECONDED by Cllr. Bellamy, THAT this Council resolve itself into Committee of the Whole, Mayor Owen in the chair. - CARRIED UNANIMOUSLY COMMITTEE REPORTS Report of Standing Committee on City Services and Budgets June 26, 1997 Council considered the recommendations of the Committee, as contained in the following clauses of the attached report: Cl. 1: Brockton Totem Poles Concession/Visitor Centre Cl. 2: Budget Approval and Financing Plan for the New Asphalt Plant, Aggregate Handling Facility, and Testing Laboratory Cl. 3: New Operating Agreement - Parking Corporation of Vancouver Clauses 1, 2 and 3 MOVED by Cllr. Puil, THAT the recommendations of the Committee, as contained in Clauses 1- 3 of the attached report, be approved. - CARRIED UNANIMOUSLY (Councillors Sullivan and Puil were opposed to Recommendations A and B of Clause 3; and Councillors Kennedy and Daniel Lee and the Mayor were opposed to Recommendation C of Clause 3) RISE FROM COMMITTEE OF THE WHOLE MOVED by Cllr. Bellamy, THAT the Committee of the Whole rise and report. - CARRIED UNANIMOUSLY ADOPT REPORT OF COMMITTEE OF THE WHOLE MOVED by Cllr. Puil, SECONDED by Cllr. Bellamy, THAT the report of the Committee of the Whole be adopted. - CARRIED UNANIMOUSLY The Council adjourned at 6:35 p.m * * * * * REPORT TO COUNCIL STANDING COMMITTEE OF COUNCIL ON CITY SERVICES AND BUDGETS JUNE 26, 1997 A Regular Meeting of the Standing Committee of Council on City Services and Budgets was held on Thursday, June 26, 1997 at approximately 2:10 p.m. in Committee Room No. 1, Third Floor, City Hall. PRESENT: Councillor George Puil, Chair Mayor Philip Owen Councillor Don Bellamy Councillor Alan Herbert Councillor Lynne Kennedy (Clause 3) Councillor Daniel Lee Councillor Don Lee Councillor Gordon Price Councillor Sam Sullivan ABSENT: Councillor Nancy A. Chiavario (Leave of Absence) Councillor Jennifer Clarke (Leave of Absence) CLERK TO THE COMMITTEE: Allisen Croft ADOPTION OF MINUTES The Minutes of the Standing Committee on May 15, 1997 were adopted. RECOMMENDATION 1. Brockton Totem Poles Concession/Visitor Centre File: 4155 The Committee had before it an Administrative Report dated May 14, 1997 (on file), in which the General Manager of Parks and Recreation recommended that funding for the proposed Visitor Centre at the Brockton Totem Poles Site in Stanley Park be approved. The Director of Finance has noted the Park Board also is requesting that Council provide project financing. It is being funded outside the Park Board Capital Plan because the project demonstrates a reasonable business plan with a payback period within acceptable range. The Board proposes to repay the loan from the incremental net revenues that the project will generate, without further City participation. Under current financing terms, the loan will be repaid within eight years at the City s current financing rate. The Chair emphasized that the Committee is being asked only to approve the request from the Park Board to borrow $500,000 from the Property Endowment Fund (which is separate from tax monies and has nothing to do with the City s regular budget) and will not address the decision of the Park Board on May 5, 1997 approving the concept for the Visitor Centre. Philip Josephs, Director of Administration and Revenue Services for the Park Board, provided background information and responded to questions. The following speakers were opposed to provision of the requested funding: George Frankel, Operator of the Prospect Point Cafe (brief on file) Eleanor Hadley, West End Resident Alan Hawkins, Financial Advisor to Mr. Frankel (brief on file) Renee Jensen, West End Resident Jim Neal, Friends of Stanley Park and Fraserview Residents Association Gerome Ziskrout, Legal Advisor to Mr. Frankel A summary of the key issues raised by Eleanor Hadley, Renee Jensen and Jim Neal, relating to environmental concerns, taxes and use of Stanley Park by local residents, follows: City Council should not consider such a proposal when no policy guidelines have been established. Furthermore, $500,000 should not be spent on a project that was previously rejected by taxpayers, when they are so many other areas in Stanley Park that require attention. There is strong opposition to taxpayers' money being used for this purpose and the process should be open to public scrutiny and inspection. In essence, the money will be utilized to expand commercial interests in Stanley Park. The proposal is based on the needs of tourists and tour bus operators, rather than those of local residents. We should not encourage more tour buses when local residents already are exposed to pollution from diesel fuel fumes. There are enough washrooms in the Park now - why install more in the Totem Pole area just for the convenience of tour bus patrons, most of whom stop only for a few minutes? Many tour buses have their own toilets, so extra washrooms are not needed in the Totem Pole area. An expenditure of $500,000 for a hot dog stand and toilets is unnecessary. They are four good restaurants and eight concession stands in the Park now. It would appear that Stanley Park is rapidly being commercialized. A compendium of the points raised by George Frankel, Alan Hawkins and Gerome Ziskrout objecting to the proposed funding, on the grounds it would negatively impact on the Prospect Point Cafe operation, follows: A lease agreement was recently concluded between the Lessee of the Prospect Point Cafe and the Park Board, whereby the former committed to an investment in the neighbourhood of $1 million to upgrade the facility, as a condition of the lease. Now the Park Board is seeking to fund a 2,400 sq. ft. commercial pavilion at the Brockton Point Totem Pole area. As that location will be the first stop on tour bus routes, the landlord will be in direct competition with the recently-enlarged gift shop and take-out stand at the Prospect Point Cafe. In light of the debt incurred to comply with construction requirements of the new lease, there is doubt whether the Prospect Point Cafe operation can remain economically viable. The issue is essentially a question of commercial morality and fairness. No tenant would invest a large amount of money in an operation knowing that there will be direct competition from the landlord, at a venue accessed in advance of the leased site. In this instance, the tenant was not apprised of the proposed Visitor Centre until after his investment was made. City Council should not approve financing to a landlord - who pays neither rent nor utilities -- that takes steps which may destroy the investment and livelihood of a tenant with a record of over a decade of fair dealings with the Park Board. The Lessee of the Prospect Point Cafe did not object to the original proposal for a small push cart selling ice cream and popcorn. However, this small concession has since escalated to two mobile units. The Visitor Centre concession will start small only to become larger, resulting in the projected revenue being understated. The City should consider that: (i) revenue generated by the Visitor Centre will have almost a dollar-for-dollar negative effect on revenue generated by the Prospect Point facility, resulting in a decline in rental income to the Park Board at 8% for every dollar of revenue redirected to the new Centre; (ii) the impact on profitability of the two competing sites - creating the possibility of marginally profitable or even non-profitable facilities; (iii) the potential imbalance between nature and human services, as yet another development is commenced; and (iv) making a decision without obtaining full financial details of the Board's proposals. The Committee should defer the requested approval, pending receipt of a business plan and full construction costing for the project, so as to make an informed decision. The Board's proposal contains virtually no supporting financial details for the capital cost estimate, nor estimate of new operating returns from the facility. It was suggested that a 2,400 sq. ft. pavilion, including take-out and gift shop facility, interpretative centre and public washrooms, would more likely cost double the Board's estimate of $500,000, which could change the economics of the project significantly. Debra Sparrow, representing the Musqueam Indian Band, expressed support for the proposed Brockton Totem Poles Visitor Centre. It is time for all parties to get together to ensure that everyone derives benefits from the Park. The history, tradition and crafts of the First Nation People, including those of the Coast Salish Nation, need to be represented with integrity. The Native People will work with the Park Board in planning the new Centre and are willing to work with Mr. Frankel and other interested parties, as well. There are enough people coming through the Park to benefit both facilities, and different routes could be taken by visitors through the Park. Vince Miele, BC Paraplegic Association, requested that the proposed Centre have total wheelchair and disabled access throughout for local visitors and tourists, and that public washrooms include male and female stalls for the disabled, as well as a unisex stall so that disabled persons with attendants of the opposite sex can use the facility. He asked that disabled access be built in during the initial stages, rather than as an afterthought; that plans for the new Centre be presented to the Special Advisory Committee on Disability Issues; and, where feasible, that employment opportunities be open to persons with disabilities. The Committee was sensitive to the concerns registered by Mr. Frankel and his Financial and Legal Advisors and concerned that the Park Board might be construed as competing with its tenant in this instance. It was the consensus that the Park Board be encouraged to consult with Mr. Frankel in developing a marketing strategy for the new concession and reach compromise on the product mix and merchandise assortment to be sold, in accordance with the Resolution (D) it adopted on May 5, 1997. The following motion by the Mayor was put and carried. The Committee, therefore, RECOMMENDED A. THAT funding for the proposed Visitor Centre at the Brockton Totem Poles Site in Stanley Park, as proposed in Appendix A to the Administrative Report, dated May 14, 1997, be approved with financing to be provided by a loan from the Capital Financing Fund, on terms satisfactory to the Director of Finance, to be repaid from the Park Board Global Budget. B. THAT the Park Board be requested to develop a marketing plan in consultation with the Lessee of the Prospect Point Cafe on the type of merchandise to be sold in the Visitor Centre. - CARRIED UNANIMOUSLY 2. Budget Approval and Financing Plan for the New Asphalt Plant, Aggregate Handling Facility, and Materials Testing Laboratory File 5801 Council had for consideration an Administrative Report dated June 3, 1997 (on file) in which the General Manager of Engineering Services requested approval for the acquisition of a portion of 900 East Kent Avenue in exchange for the estimated proceeds on the sale of existing Engineering Services Assets, and development thereon of an asphalt/aggregate facility at a cost of $13,306,000. In addition, funding was recommended for the Consultant to proceed with final design; general engineering and inspection services at a cost of $834,000; a Materials Testing Laboratory at a cost of $1,190,000; and a Project Manager. The report also requested Council approve a financing plan and proposed the sale of Engineering land assets necessary to acquire the land at 900 East Kent Avenue. David Rudberg, General Manager of Engineering Services, with the aid of an overhead slide presentation, reviewed the report and responded to questions. The following speakers opposed the recommendations of the Report: John Schnablegger, B.C. Roadbuilders & Heavy Construction Association, (brief on file) advised he represented the interests of both the Industry (170 companies) and the City in suggesting that the attenuated risks had not been taken into consideration. Not only would the return on the investment of public funds be minimal, the proposal also is fraught with risks that could easily transform a $500,000 annual savings into a $1 million annual loss. The cost of aggregate, which has doubled in the past five years, is the most obvious risk and construction cost over-runs, environmental liability and overall technological change represent further risks. Ken Hiltchen, LaFarge Canada Inc., (brief on file) registered concern that the City is working against the private sector in not putting the supply of their aggregate requirements out to tender and suggested this would work hardship on a number of local suppliers, as well as the City s taxpayers. Mr. Rudberg cited a number of errors in the assumptions put forward by Mr. Schnablegger and stated that the City s Financial Department had examined the proposal in depth and was satisfied with the analysis. The following motion by Councillor Price was put and carried. The Committee, therefore, RECOMMENDED A. THAT Council approve an expenditure of up to $250,000 from the Property Endowment Fund (PEF) for costs associated with the purchase of the 900 East Kent Avenue Site (900 Kent). Once the final costs are known, they will be added to the purchase price and pro-rated to the PEF and Engineering Services. B. THAT Council approve the purchase by Engineering Services of approximately six acres of the western parcel, Block P, of 900 Kent at a cost of $4.1 million, with funding to be provided by the sales of Sterling Shipyard and Commissioner Street Yard ($2.1 million) and of Stainsbury Yard ($2.0 million) to the PEF. C. THAT Council, based on the Preliminary Design and Class 'B' Estimate, approve a project budget of $13,306,000 for the construction and commissioning of an Aggregate Handling and Asphalt Plant operation, at 900 Kent. D. THAT Council, based on a Class 'D' Estimate, approve a budget of $1,190,000 for a Materials Testing Laboratory, to be constructed at 900 Kent. E. THAT Council authorize the General Manager of Engineering Services to instruct Westmar Consultants Inc., (the Consultant), to proceed with Phases II and III of the Consultant Services Contract - Final Design, General Engineering, Inspection and Record Services, valued at $834,000. F. THAT Council approve funding of $152,000 for a temporary Civil Engineer II to manage the design, construction and commissioning of the project. G. THAT Council approve financing for the Asphalt/Aggregate Plant, including Consultant Services, Material Testing Lab and Project Manager, as follows: Capital Financing Fund Loan $ 11,282,000 Truck Plant Account 4,000,000 Streets Capital Budget 150,000 Waterworks (Fire Protection) Budget 50,000 H. THAT Council authorize the General Manager of Engineering Services to call for proposals for a public/private partnership for a waste concrete and asphalt crushing/recycling pilot project. - CARRIED UNANIMOUSLY 3. New Operating Agreement - Parking Corporation of Vancouver File 1203 The Committee had before it an Administrative Report dated May 5, 1997 (on file) in which the General Managers of Engineering and Corporate Services requested approval for the Mission, Goals and Operating Principles for the Parking Corporation of Vancouver (VPC) and authorization to the Director of Legal Services to approve the new operating agreement on behalf of the City, after it is deemed satisfactory to the parties. The City Manager provided comments on the report for the information of the Committee and recommended approval of its recommendations. David Rudberg, General Manager of Engineering Services, reviewed the Report and responded to questions. Proposals in the report broaden the mandate of the VPC in a number of operating areas, which to date have resided with City staff and Council. In the past, there has been a fair amount of City control over VPC operations, which they feel has hampered their ability to manage and make timely decisions. It is recommended that the authority granted to VPC include the ability to control, operate, maintain, enforce, facilitate on-site way finding and carry out business in accordance with City policies and joint venture partner agreements. While greater autonomy is proposed, there will also be more accountability as demonstrated in the proposed Mission Statement and Goals for the VPC. It is proposed to assign all existing and future commercial, off-street City parking facilities to VPC, with the exception of Park Board off-street facilities and free community parking facilities such as the Kerrisdale, Fraser Street and East Hastings lots. Management of commercial off-street parking associated with joint ventures, such as Library Square, between the City and its business partners would be subject to negotiations and a possible public tender process. A summary of speakers' presentations follows: Rae Ackerman, Director of Civic Theatres, (Report to Council on file) requested that the Queen Elizabeth Theatre Parking Garage be excluded from the operating agreement on the grounds that the VPC would not be able to maintain the level of customer service currently offered by parking attendants. His position did not relate to VPC versus Metro Parking , the current operator, but was adopted from a theatre management viewpoint based on cost and quality control, customer service and staffing. Core garage staff, many of whom are long-time employees, have developed and fostered a special relationship with regular theatre patrons over the years. Attendants have been able to tailor service to various clientele, including Patrons, Donors and handicapped persons, and were accorded an 85% approval rating in recent public surveys. Dan Sawchuk, Imperial Parking Limited, (brief on file) stated that the proposed transfer of 12 city-owned parking lots to VPC could negatively affect revenues accruing to the City. Operation of those lots by Impark has resulted in approximately $400,000 annual revenue for the City, of which Impark is paid approximately 15% or $75,000 per annum. Impark is investor-friendly and its gross revenues have continued to grow at the rate of a 25% increase over the last five years. Mr. Sawchuk refuted several widely-held misconceptions concerning Impark and city parking, and concluded by stating that the City would incur significant additional costs by transferring management of its privately managed parking properties in-house and citing as examples the estimated $100,000 cost of replacing Impark credit-card/cash machines and supervision and collection costs. Gerald Tottman, Metro Parking Ltd. (brief on file) concurred that removal of the city-owned properties from private operators will not result in any net revenue gain or increased customer service. He cited the cost of providing administrative services as one of the key factors affecting returns to the owner. Metro's costs for administrative services average $25 per stall per year - running to less than $10 per stall per year in the existing contract with Woodwards Parkade and $18.64 per stall per year at the Queen Elizabeth parking garage. Mr. Tottman urged the City to give careful consideration to the proposed transfer. The following speakers supported recommendations of the Administrative Report: Neil Bradbury, Representative, CUPE 1004 Ken Cameron, Manager of Strategic Planning, GVRD Bruce Campbell, Parking Corporation of Vancouver Alex Carruth, Downtown Vancouver Association Marguerite Ford, Downtown Vancouver Association Stuart MacKay, Management Consultant, KPMG David Walker, Downtown Vancouver Association A precis of these speakers pivotal comments follows in point format: VPC has been an asset to the City for many years. Its formation arose out of the requirement for additional parking in downtown Vancouver in the late 40s and 50s. It is a public/private sector partnership between the business community and the City, which promises a high standard of management that will maximize not only the amount of revenues accruing to the City but also operating efficiencies. The City is well represented on the VPC Board and will be able to exercise greater financial control and influence policies. VPC will facilitate the City working with developers and in planning related policies, and would be of assistance should the City decide to build on or develop any of its parking properties. VPC will facilitate greater input from the Tourism/Visitors sector into the parking business in the City. Through the VPC, the City will be able to set rates and effect changes in enforcement policies, making them more equitable and user-friendly. The VPC will not compete for private control or manage private parking facilities, confining itself to City-owned property or property in which the City has an interest - and only then with the consent of the City. At the same time, it will discourage domination of the market by any one company. VPC will offer more advantages through economy of scale and provide its employees with security and fair wages. VPC has the potential to assist and facilitate programs in the City s best interests and the benefits flowing back to the City will benefit the whole community. The Committee was generally supportive of recommendations in the Administrative Report. It was suggested that parking is more than just a commodity or provision for shopping and commuters. Effective parking management must be used as a tool to achieve broader goals including traffic control, environmental protection, setting standards and limitations, and projecting future requirements. To achieve maximum efficiency, a strong relationship must exist among Council, City staff, VPC, the private sector and the community as a whole. Some Committee members felt that, as VPC has a long history with the City and offers great potential for the future, it would make more sense to assign all city-owned lots to the one operator. In the case of the Queen Elizabeth Theatre Parking Garage, it is easy to understand the history and loyalty that exists between Civic Theatres and Metro Parking staff. However, there is no doubt the same level of service can be maintained by VPC. Other members questioned whether including the Queen Elizabeth Parking Garage in the proposed agreement would affect its efficiency, and referred to the human element and relationships established over the years with regular theatre clientele. It was suggested that the degree of service by attendants and daily, hands-on control exercised by Civic Theatres management with the present operator, in instances such as care and attention to handicapped persons and cooperation with GM and BC Place on certain nights during large events, would be difficult to duplicate, and that there would not be the same rapport. With a view to maintaining the present standard of service and encouraging healthy competition, it was recommended that the Queen Elizabeth Theatre parking garage be excluded from the agreement. The following motion by Councillor Kennedy was put and carried. Therefore, the Committee RECOMMENDED A. THAT Council approve the Mission, Goals and Operating Principles for the Parking Corporation of Vancouver (the "VPC") as enumerated in the Administrative Report dated May 5, 1997 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. - CARRIED (Councillors Sullivan and Puil opposed) The following motion by Councillor Price was put and carried. Therefore, the Committee RECOMMENDED C. THAT the Civic Theatres Parking Garage at the Queen Elizabeth be excluded from the operating agreement with the VPC. - CARRIED (Councillors Kennedy and Daniel Lee and the Mayor opposed) The Committee adjourned at 6:30 p.m. * * * * *