1998 Supplementary Capital Budget

ADMINISTRATIVE REPORT
Dated: May 1, 1998
Author/Local: J. Beresford 7789
CC File No. 1602
TO: City Services and Budgets Committee
FROM: Director of Finance
SUBJECT: 1998 Supplementary Capital Budget
RECOMMENDATIONS
A. THAT the Civic projects identified as RECOMMENDED in Appendix 1 and totaling $2,363,700, be approved; source of funds to be:
·the 1998 Supplementary Capital Budget ($1,968,400); and,
·a $395,300 increase in the loan from the Property Endowment Fund related to the purchase of the West Annex.
B. THAT, in addition to those projects included above, the following projects included in Appendix 1 and categorized as "Other Funding Recommended" be approved:
A 6 relocate Solid Waste Management $55,000
from the Solid Waste Capital Reserve
A-7 relocate Risk Management $82,000
from the Liability Insurance Reserve
A-21 relocate & equip Training Centre $250,000
from the Capital Reserve
B-1 upgrade BC AFIS $590,000
from the Systems Long Term Financing Plan
GENERAL MANAGER COMMENT
The General Manager of Corporate Services RECOMMENDS approvalof A and B.
COUNCIL POLICY
The 1997 - 1999 Capital Plan includes provision for $5,000,000 in Supplementary Capital expenditures to be funded from the Operating Budget (Capital from Revenue) over the three years of the plan.
PURPOSE
The purpose of this report is to review the requests for funding from the 1998 Supplementary Capital Budget and to forward the recommended projects to Council for approval.
BACKGROUND
The City’s Capital Plan normally provide two types of funding:
·Basic Capital provides for those projects and on-going programs that can be planned in advance,
·Supplementary Capital deals with expenditures of a capital nature that arise during the three-year duration of a Capital Plan. Supplementary Capital has also been utilized as a source of funding for several on-going capital maintenance programs, including the roof replacement and asbestos control programs.
The 1997 - 1999 Capital Plan includes $5,000,000 in funding from the Operating Budget for allocation to the Supplementary Capital needs. The 1998 portion of that funding, totaling $1,700,000, is to be allocated as part of the 1998 Supplementary Capital Budget. In addition, Recommendation A of the 1998 Basic Capital Report proposes that additional funding of $268,400 be added to this allocation.
DISCUSSION
Appendix 1 summarizes the submissions to the 1998 Supplementary Capital Budget that total $7,759,800. Details of these requests are included in Appendix 3 entitled "Submissions to the 1998 Supplementary Capital Budget" (limited distribution).
Appendix 1 also summarizes the recommendations of the staff group that reviewed these requests. That group was comprised of the City Manager, General Manager of CorporateServices, General Manager of Engineering Services, General Manager of Community Services, Director of Finance, Manager of Facilities Development, Manager of Building Management and Comptroller of Budgets and Research.
Allocation of the limited funding available in this year’s budget required difficult choices to be made among the projects submitted. The recommendations give priority to:
·projects requiring immediate funding because of timing issues (e.g. relocation of City offices from City Square to the West Annex);
·projects dictated by service improvement initiatives (e.g.. realignment of office space in the East Wing);
·projects having health or safety implications (e.g.. Library Square projects); and
·projects involving previous Council policy or decisions (e.g.. Art Gallery Security System and Fire Hall communications equipment).
The highest priority items identified by the staff review group total $3,340,700, exceeding the available funding levels by $1,372,300. However, several of these projects have access to funding sources outside Supplementary Capital and the Director of Finance therefore recommends the following additional funding sources:
·To consolidate offsite City offices to the West Annex; $395,300 from the Property Endowment Fund, extending the loan repayment related to purchase of the building; $82,000 from the Liability Insurance Reserve to relocate Risk Management; and $55,000 from the Solid Waste Capital Reserve to relocate Solid Waste Management.
·To equip a training centre to be used by the staff training and development program (Human Resources) and the SAP Project; $250,000 from the Capital Reserve.
·To upgrade the Police Department’s Automated Fingerprint Identification System; $590,000 from the Systems Long-Range Financing Plan.
With these funding sources, all of the highest priority projects can proceed this year.
Appendix 2 includes comments on several of the specific projects submitted to the Supplementary Capital Budget, including those where alternative funding sources are recommended.
Appendix 4 provides a five year history of the Supplementary Capital Budget approvals.
Note:Attachments to this Report that do not have electronic copy are available on file in the City Clerk's Office.
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Appendix 2
Comments on the Submissions to the
1998 Supplementary Capital Budget
Details of the submissions to the 1998 Supplementary Capital Budget are included in Appendix 3 (limited distribution). The following comments highlight the issues related to the recommended funding levels of several projects submitted to the 1998 Supplementary capital Budget.
Civic Use Buildings
A-1Roof Replacement Program$105,000
A-2Asbestos Program50,000
In the mid-1980’s Council began a roof replacement program funded from Supplementary Capital. The recommended funding will continue that program by dealing with the highest priority replacements identified by Building Management. These include the Police Garage building and Fire Hall #1.
Funding for Asbestos remediation work has been provided for several years from Supplementary Capital. Available funding allows the 1998 allocation to be reduced without jeopardizing the highest priority work.
A-4Relocate Social Planning$280,000
A-5Relocate Real Estate & Property Management590,000
A-6Relocate Solid Waste Management55,000
A-7Relocate Risk Management82,000

In April 1997, Council approved the relocation of City departments in City Square (21,500 SF) to the former VanCity Building upon expiration of their present leases with a report back on the fit-up costs. These costs have been submitted to the Supplementary Capital budget.
The purchase of the VanCity Building (City Hall West Annex) has been financed by the PEF with a loan repayable over 5 years from building rent savings payableat City Square and to the PEF. It is proposed that the term of the loan be extended by approximately one half year to assist with fit-out of space in the building. Funding for the move of the Solid Waste Management can be provided from the Solid Waste Capital Reserve.
In addition, it is appropriate to relocate Risk Management from 456 West Broadway to a location adjacent to Legal Services in the West Annex with funding from the Liability Insurance Reserve which pays most of the operating costs for the branch.
A-8Reorganize City Hall East Wing$975,000
Community Services has been undergoing considerable reorganization and re-engineering. In order to take advantages of efficiencies at all levels of the operation, it is necessary to reorganize the East Wing to consolidate activities. In addition, expansion of the Development Business Review process anticipated in the fall of 1998 will require allocation of additional space. The proposal includes development of an open office concept that will utilize modular furniture.
A-12Revenue Services - Accommodate New Staff$ 68,000
Renovations are required to accommodate approximately 11 new positions within Revenue Services in the areas of Bylaw Fines and Taxation & Utilities. These positions were approved by Council in January 1998 for increased enforcement and to support the solid waste and sewer utilities. The total required for this renovation is $100,000 of which $32,000 is from existing funding.
Other Building Maintenance & Upgrades
A-13City Hall Maintenance Facility & Equipment$189,000
A-14Building Maintenance Service Vehicles120,000
Building Management has proposed the development of a comprehensive shop facility at 456 West Broadway to service the maintenance needs of City buildings. However, prior to developing such a facility, the longer term plans for the City Hall Precinct need to be established and the alternatives for developing maintenance facilities explored with Park Board and Engineering Services.
A-16City Hall Main Transformer Replacement$120,000
A-17City Hall & Public Safety Building Chiller Replacement465,000
A-28Orpheum Theatre Chilled Water Condenser30,000
D-1BC Space Centre Chiller Replacement50,000
Funding for the highest priority major building maintenance, including upgrading of elevators, electrical and HVAC systems was provided in the 1997 - 1999 Capital Budget. The first and last two of these projects can be funded from that source in 1998.
Design work is all that can be completed on the City Hall & Public Safety Building Chiller Replacement Program in 1998 and $20,000 in funding is available in Basic Capital to complete that work. The balance of the funding necessary to complete the replacement will be considered as part of the 1999 Capital Budget.
A-19Library Square - Repair Plaza Pavers$23,000
A-20Library Square - Fire Alarm Upgrade30,000
Two priority projects for Library Square are recommended for 1998 Supplementary Capital funding. Repair of the plaza pavers is required to correct failure of original installation and to eliminate a potential "trip" hazard. Cross-zoning of the controls of the Deluge Sprinkler System will reduce the likelihood of accidental tripping and substantial water damage.
A-21Relocate and Equip Training Centre$270,000
The City has made a long term commitment to a new corporate information system in the SAP Implementation Project. Roll out of this tool to City staff will require a considerable initial and ongoing training initiative, including the development of an in-house training facility. To be temporarily located in the sub-ground area of City Hall recently vacated by Information Technology, the new training centre will provide for on-line training of City staff. In addition, there may be opportunities to rent the facility to other local organizations currently implementing SAP.
Funding of $20,000 for temporary building modifications is available in the Supplementary Capital allocation. The additional funding of $250,000 required to provide furniture, equipment and training tools can be provided from the Capital Reserve.
A-29Old Continental - Elevator Upgrade$95,000
The Old Continental is an asset of the Property Endowment Fund which can fund the modernization of the elevators. However, prior to undertaking this upgrading, it would be appropriate for staff to report to Council on the long term use of the building for non-market housing purposes.
Other
B-1Police - BC AFIS Upgrade$590,000
Police - Scenes of Crime Program420,000
The BC Automated Fingerprint Identification System provides the Police Department with access to national fingerprint records. The current system is now several years old and must be replaced prior to the end of 1999 to ensure year 2000 compatibility. Council has provided a funding stream - the Systems Long Term Financing Plan - to provide for systems upgrading and this is the recommended source for this project.
The related Scenes of Crime Program proposed by the Police Department is not recommended at this time. Although this project may provide benefits related to crime scene investigation, the department has not demonstrated those benefits nor identified an appropriate source of funding. If this project is to proceed, it should be reported separately to Council with the appropriate justification.
B-2Upgrade of Pigeon Park$160,000
B-4VFRS - Networked Computers, Printers & Furniture$47,700
To complete the 1997 program to install networked computers and printers in every Firehall. The project includes the renovations required to accommodate the networked computers and provide ergonomic furniture. In 1997, $86,000 was approved from Supplementary Capital.
Museum and Art Gallery
D-2Art Gallery - Robson St. Steps$ 40,000
D-4Art Gallery - Security System Completion135,000
The Robson St. Alcove of the Vancouver Art Gallery masonry surfaces are subject to extreme vandalism. Installation of suitable gate & railing systems are proposed to reduce access to the top of the plinths on both sides of the stairs.
Funding for the replacement of the Vancouver Art Gallery Security System was begun in 1996. In 1996 and 1997, a total of $150,000 was provided with a review by City security staff to be completed before the final installment was provided. The project can now be completed at an additional cost of $135,000 if the remaining equipment is purchased and installed in 1998. Completion of the project will result in Operating Budget savings of $30,000 annually.
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