ADMINISTRATIVE REPORT

Date: 20 March, 1998

Author/Local: HCreighton/2156

CC File No. 3603

TO: Vancouver City Council

FROM: Director of Finance

SUBJECT: E-Comm - Banking and Investment Arrangements

RECOMMENDATION

A. THAT the City accept funds from E-Comm, in trust, to be disbursed from time to time, in accordance with E-Comm’s directions, and that the City invest any surplus funds in money market instruments, in accordance with City investment policies and the timing of cash requirements of E-Comm.

B.THAT the City provide accounting and other related services for E-Comm, based on full recovery of costs, to continue until the end of 1998 or such later date as the parties mutually agree.

C.THAT the Director of Legal Services and Director of Finance be empowered to negotiate and execute a contractual agreement on behalf of the City with E-Comm, governing the trust arrangement relating to the holding and investing of E-Comm funds, and related accounting services.

GENERAL MANAGER'S COMMENTS

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

COUNCIL POLICY

There is no City policy directly applicable to this situation. However, Section 145 of the Vancouver Charter provides the City with the broad power to engage in arrangements such as the proposed relationship with E-Comm, and Section 152(3) establishes how monies, which are accepted in trust by the City, may be invested, until required for the purposes of the trust.

PURPOSE

The purpose of this report is to seek Council approval to enter into an agreement with E-Commwhich would provide for the City to receive funds from E-Comm, in trust, to invest those funds, or a portion thereof, until needed by E-Comm, and to handle all accounting functions.

BACKGROUND

The E-Comm organization is still in it’s infancy, and many of it’s administrative functions are being performed by City staff or consultants. Recruitment has been initiated to hire managerial staff. However, the E-Comm Board have expressed the desire to contract out their administrative functions, and to focus on their core responsibilities.

E-Comm have now raised the majority of their projected capital funding requirements through a debenture issue by the Municipal Finance Authority of B.C. These funds must now be invested in the short term, until required to pay capital expenditures. The E-Comm Board have requested that the City manage the investment of these funds through its normal procedures and to provide related accounting services.

DISCUSSION

The request of the E-Comm Board can be managed by the City, largely within existing resources. There is the advantage of the City managing the investment of surplus funds, in that City staff can work through detailed cash flow requirements with E-Comm, and invest in accordance with the risk preferences of E-Comm. Providing accounting services, including the receipt and disbursement of funds, can also be accommodated within City systems.

There will be some costs to the City for these functions, and it is proposed that these costs be recovered from E-Comm.

This arrangement will probably last for 1998, and then be reviewed by the E-Comm Board to determine their on-going plans. As E-Comm operations commence next year, there will be more extensive administrative functions, including payrolls, and the Board will have to determine how best to handle these on-going tasks.

CONCLUSION

As the City is one of the major partners in E-Comm, and given that the City is able to accommodate their request, it is concluded that it is appropriate to provide the requested services, with the City recovering all costs.

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(c) 1998 City of Vancouver