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ADMINISTRATIVE REPORT

Date: April 29 1999
Author / Local: J. Beresford / 7789
RTS #00687
CS&B Date: May 6, 1999
CC File No. 1602

TO: Standing Committee on City Services and Budgets

FROM: Director of Finance

SUBJECT: 1999 Basic Capital Budget

RECOMMENDATION

A. THAT the 1997 - 1999 Capital Plan reduction of $525,000 approved by Council on April 29, 1999, be achieved through deferral of Building Management/Maintenance ($255,000) and Civic Theatres ($270,000) funding for consideration in the 2000 - 2002 Capital Plan.

B. THAT the allocation of 1999 Capital from Revenue funding of $10,214,200 to the 1999 Capital Budget be as follows:

Parks & Recreation Facilities 2,400,000
Protection Services 680,000
Social and Cultural Facilities 3,459,200
Other 2,353,000
Supplementary Capital 1,322,000
Total $10,214,200

C. THAT the 1999 Park Board Basic Capital Budget totalling $6,713,000 as summarized in this report and in the attached Park Board report (Appendix 2) be approved, with the source of funding to be from plebiscite borrowing authority ($4,313,000) and Capital from Revenue ($2,400,000) as approved as part of the 1997-1999 Capital Plan.

D. THAT the allocations to the Protection Services, Social & Cultural Facilities and Other components of the 1999 Basic Capital Budget as summarized in this report and detailed in Appendix 3 be approved.
GENERAL MANAGER'S COMMENTS:

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

COUNCIL POLICY

It is Council policy to identify capital funding priorities in three year Capital Plans. These Plans and the associated Capital Financing Plan are developed such that the plan and necessary borrowing authority can be put to the voters at the time of triennial civic elections.

The Capital Plan forms the framework within which annual capital budgets are prepared. The two components of the annual capital budget are:

· Basic Capital, which includes project/program - specific items that were included in the Capital Plan, and
· Supplementary Capital, which includes items which had not been anticipated in the Capital Plan but which have become a priority during the course of the Plan.

PURPOSE

The purpose of this report is to summarize the 1999 Capital Budget and to seek Council approval for the allocation of Capital from Revenue funding and for debenture authority necessary to complete the funding of the 1999 Capital Program.

BACKGROUND

The 1997 - 1999 Capital Plan has guided the development of annual capital budgets in 1997, 1998 and 1999. Funding for the plan is derived from borrowing authority approved by plebiscite ($83,383,000) and by Council for sewer and water projects ($123,517,000). In addition, the plan includes provision for $32.2 million in capital expenditures to be funded from the Operating Budget (Capital from Revenue) over the three years of the plan.

On April 8, 1997, Council approved a reduction in the Capital from Revenue portion of the 1997-1999 Capital Plan totaling $1,531,600 to provide transition funding for new revenues in the 1997 Operating Budget. This reduction was allocated to the provision for Downtown South Park Acquisition.

On April 9, 1998, Council approved a reduction of $700,000 in the Capital from Revenue portion of the 1997-1999 Capital Plan to be achieved in equal installments in 1998 and 1999. On May 28 1998, Council approved the source of this reduction to be from elimination of the provision for Downtown South Park Acquisition ($968,400). The balance of the funds ($268,400) was transferred to the 1998 Supplementary Capital budget.

On October 20, 1998, Council approved $1.5 million in funding for two transportation studies related to the Skytrain project with the source to be the 1999 provision for Capital from Revenue. Funding levels were reduced in the Social and Cultural Facilities ($1,310,800) and Supplementary Capital ($378,000) categories.

On April 29, 1999, Council approved a reduction of $525,000 in the 1999 provision for Capital from Revenue to assist with balancing the 1999 Operating Budget.

DISCUSSION

1. Funding for the 1999 Basic Capital Budget.

The following table summarizes the total funding for the 1997 - 1999 Capital Plan, as adjusted by Council actions detailed in the Background Section of this report and as proposed in Recommendation A. The table also shows the prior years allocations, the portion to be allocated to the 1999 Capital Budget and the balance of funding to be available in 2000.

Capital

Prior

1999

Unallocated

($`000)

Funding

Allocations

Budget

Balance

Capital from Revenue: (1)

$29,932

$19,718

$10,214

$0

Debenture Authority:

Plebiscites (prior years)

2,121

0

0

2,121

Plebiscite (1997 - 1999):

83,383

$56,914

$26,469

0

Sewer

49,417

$32,825

$16,592

0

Water

74,100

$46,950

$14,750

$12,400

Total Debentures

209,021

$136,689

$57,811

$14,521

Total Funding ($'000)

$238,953

$156,407

$668,025

$14,521

(1) Capital from revenue funding reflected in the table, includes the following reductions from the original plan:

- a 1997 reduction of $1,531,600 related to transition funding in the 1997 Operating Budget;
- a reduction of $700,000 approved as part of the 1998 Operating Budget;
- a reduction of $1510,800 transferred to transportation planning issues;
- $525,000 approved as part of the 1999 Operating Budget.

On April 29, 1999, Council approved a reduction in funding for Capital from Revenue of $525,000 and instructed the Director of Finance to report back on which projects would be deferred for consideration in the 2000-2002 Capital Plan. Recommendation A proposes this funding to come from deferral of:
- the upgrade of washrooms at the Orpheum Theatre ($270,000). There is insufficient funding available to complete this project and work will not be scheduled until mid 2000.
- building maintenance ($255,000) projects which are being reviewed as part of the facilities strategic plan being developed for the 2000 - 2002 Capital Plan.

A summary of the projects/programs in the 1997-1999 Capital Budget and the funding allocated in the Plan, and in the 1999 Capital Budget, is included in Appendix 1. Appendix 2 provides additional detail about the projects/programs funded in the Protection, Social and Cultural Facilities and Other categories of the 1999 Capital Budget.

As noted in the table, $57,811,000 of the funding for the 1999 Basic Capital Budget comes from debenture authority, including $26,469,000 from plebiscite authority and $31,342,000 in sewer and water authority approved by Council.

2. Funding for the 1999 Supplementary Capital Budget

With the adjustments approved by Council, the 1997 - 1999 Capital Plan includes $4,890,400 for the Supplementary Capital Budget. In 1997, $1,600,000 of this funding was allocated to Supplementary Capital, and $1,968,400 was allocated in 1998. The remaining $1,322,000 for the Supplementary Capital Budget is provided in 1999.

The allocation of these funds to specific projects will be reported to City Services and Budgets Committee on May 20, 1999.

COMMENTS ON THE BASIC CAPITAL BUDGET REQUESTS

1. Engineering Basic Capital Budget

The 1999 Engineering Basic Capital Budget has been submitted as an accompanying report, and includes the recommendations necessary to provide funding for identified projects . The Engineer has requested funding totalling $48,098,000 which fits within the 1997 - 1999 Capital Plan allocation. All of this funding comes from borrowing authority approved by plebiscite ($16,756,000) and by Council for sewer and water ($31,342,000).

The 1999 allocation will leave $12.4 million in waterworks borrowing authority unallocated and available to fund projects identified in the 2000-2002 Capital Plan.

2. Park Board Capital Budget

The 1999 Park Board Capital Budget is $6,713,000, including the final installment of additional community centre funding approved by the voters in 1996. Funding for this capital budget is provided from plebiscite authority ($4,313,000) and from the Operating Budget ($2,400,000). Approval of Recommendation C will provide the necessary funding for projects brought forward by the Park Board. Details of the Park Board Capital Budget were approved by the Park Board on February 22, 1999.

Operating costs associated with the 1999 Park Board Capital Budget will begin to impact the Operating Budget in 2000.

3. Protection Services

The Capital Budget includes funding of $6,080,000 for Fire and Police capital programs.

The plan includes funds for the replacement of Firehall #18 (38^th and Cartier Street) and Firehall #3 (12^th and Quebec). Funding for design work for these two replacements was allocated in previous capital budgets. The 1999 Capital Budget allocates $5.4 million in borrowing authority funding for construction of the new halls which will begin in during the year.

The plan also includes $1.8 million for improvements to Polices facilities and information systems. Funding for replacement of the Mounted Squad stables in Stanley Park ($500,000) was provided in the 1997 Capital Budget and information systems funding of $620,000 was allocated in 1997 and 1998. The 1999 allocation has two components:

· $180,000 for additional information systems work,
· $500,000 to upgrade computer terminals to allow connection to the new E-Comm CAD system. This funding had been provided in the Capital Plan to assist with replacement of the departmental Records Management System, however, as this new system will be provided by E-Comm, it is possible to reallocate this funding to upgrading of computer hardware to provide necessary connection to E-Comm.

4. Social and Cultural Facilities

The 1997 - 1999 Capital Plan includes funding of $7,814,200 for projects related to social and cultural facilities owned by the City and by others. These include: upgrading or relocation of social service, daycare and cultural facilities; rehabilitation of the Vancouver Museum; and continuation of the Public Art program. All of these projects are funded from Capital from Revenue.

The 1999 Capital Budget includes funding of $3,459,200 allocated to the following projects/programs:

· Upgrading city-owned social & cultural facilities $789,200
· Crabtree Corner Childcare 500,000
· Capital Grants to privately owned social & cultural facilities 200,000
· Public Art Program 310,000
· Vancouver Museum Revitalization 1,660,000

Approval of expenditures under these allocations will be the subject of future reports to Council.

4. Other

The Other Category of the Capital Plan includes allocations for maintenance of the City Hall Precinct (City Hall, East Wing and West Annex buildings) and a contribution to the Affordable Housing Fund. All of these projects are funded from Capital from Revenue.

The 1999 recommended allocation of $2,353,000 includes:

· Affordable Housing 2,128,000
· Major Building Maintenance 225,000

The 1999 allocation to the Affordable Housing Fund provides funding for projects anticipated to be part of the Housing Partnership with the Province and to repay advances provided from the Property Endowment Fund. These projects include the replacement of Central Residence, the acquisition and the renovation of SRO hotels/rooming houses in downtown.

Funding for major building maintenance and upgrading in the City Hall precinct has been reduced in 1999 with anticipated projects being considered as part of the comprehensive facilities strategic plan being developed for the 2000-2002 Capital Plan. The available funding will provide for a emergency maintenance work and compliance with WCB standards in City Hall and for small renovation work necessary as a result of service improvements or minor reorganizations.

CONCLUSION

The 1999 Capital Budget represents the final annual budget arising from the 1997-1999 Capital Plan and provides for the allocation of funding included in that Plan to individual projects and programs.

ATTACHMENTS THAT DO NOT HAVE ELECTRONIC COPY ARE AVAILABLE ON FILE IN THE CITY CLERK'S OFFICE

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	Capital	Prior	1999	Unallocated
($`000)	Funding	Allocations	Budget	Balance

Capital from Revenue: (1)	$29,932	$19,718	$10,214	$0

Debenture Authority:
Plebiscites (prior years)	2,121	0	0	2,121
Plebiscite (1997 - 1999):	83,383	$56,914	$26,469	0
Sewer	49,417	$32,825	$16,592	0
Water	74,100	$46,950	$14,750	$12,400
Total Debentures	209,021	$136,689	$57,811	$14,521

Total Funding ($'000)	$238,953	$156,407	$668,025	$14,521