Agenda Index City of Vancouver

POLICY REPORT
PHYSICAL SERVICES

TO: Vancouver City Council

FROM: Director of Non-Market Operations and Manager of Mountain View Cemetery

SUBJECT: Mountain View Cemetery Master Plan and Implementation

RECOMMENDATIONS

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

There are no applicable Council policies to govern most aspects of this report, however, the following policies apply to some aspects of the Cemetery:

SUMMARY

Following receipt of the Vision Plan for Mountain View Cemetery on June 18, 1998, Council authorized the preparation of a master plan to guide Cemetery development for the next hundred years. By responding to the changing needs of the public for memorialization options and services; by more efficient use of scarce land resources; and by reclaiming unused plots for resale, the Cemetery could re-open for business and become financially viable. Mountain View Cemetery could then begin fulfilling the public's demand for memorialization opportunities within the City's boundaries.

The Master Plan was prepared with considerable public and stakeholder input. The Citizens Advisory Group and the Staff Liaison Committee provided valuable advice and guidance. Broader public input was obtained through public open houses and representatives of the Funeral Industry were also used to test support for the memorialization concepts in an openmeeting.

The Master Plan strives to create a more coherent and unified Cemetery. A new circulation plan bridges the streets which bisect the Cemetery. The plan acknowledges neighbourhoods with historically significant character within the cemetery. To address safety concerns, Crime Prevention Through Environmental Design (CPTED) principles are applied. More efficient use of scarce land resources is proposed with the closure of unnecessary roads; the development of higher density projects; the use of perimeters and boulevards; and the consolidation of maintenance, administration and caretaker uses into a single site. Columbaria, crypts, mausolea, a scattering pond, memorial walls and an open air chapel can be built on land made available through the above strategies.

The capacity of the Cemetery can be doubled with this range of interments and memorialization and provide for the more than 70% of British Columbian families that choose cremation. There are some outstanding issues concerning the perimeters and boulevards that require resolution with Engineering Services before projects in those areas may be contemplated. As there are services located within these perimeter areas, a business case must be made before these projects should proceed. Fortunately, the viability of the Cemetery is not dependent upon these perimeter areas being fully developed.

The Master Plan is accompanied by four other reports: the Financial Report, Operations Report; Management Report; and Marketing Report and Implementation Schedule.

The Financial Report is positive. The Cemetery is an asset that can generate sufficient revenue over the next 20 years to increase the Perpetual Care Fund to the sustainable $20 -25Million level and achieve an operating surplus. The value of only reclaimable plots is a capital asset worth from $7.2 - 15Million, with the higher value realizable as the Cemetery landscape is made more desirable after landscape improvements. With the introduction of new services and options at a range of prices, the public will be better served.

Sustainability of the Cemetery is contingent on the City's willingness and ability to support the Cemetery for another 5 - 7 years with either continued subsidies or loans. Mountain View must become a beautiful and welcoming place if it is to succeed in the increasingly competitive funeral services industry. It needs to be current and competitive with options, services and pricing. It must become customer-centred and operate with efficiency and effectiveness. Relationships with stakeholders must be cultivated and financial resources must be built to meet perpetual care obligations over the long term. To meet these objectives, the Cemetery By-law will have to be amended to facilitate implementation of the Master Plan.

The Operations Report reviewed the major functional areas of cemetery operations and recommends the current level of staffing be maintained but restructured to improveefficiency and effectiveness. Also that marketing and project management skills be added to facilitate implementation of the Master Plan.

The Management Report examines three governance and management models and recommends that Council establish a Cemetery Advisory Board as soon as possible; a Cemetery Foundation to encourage charitable support of the cemetery for heritage restoration and other non-revenue producing improvements; and a long term strategy for a new City Corporation to manage and govern the Cemetery.

The Marketing Report and Implementation Schedule outlines the steps for preparing an effective marketing plan and provides a detailed two-year first phase of implementation.

Two full set of reports are available at the City Clerk's Department.

PURPOSE

This report seeks Council approval, in principle, of the Master Plan for Mountain View Cemetery to guide development and care of the Cemetery while preserving and enhancing our heritage. Council approval of a funding strategy is also required in order to make the capital investments and site improvements that will offer the choice in service and memorialization that the community will expect at a revitalized Mountain View Cemetery.

BACKGROUND

Owned and operated by the City of Vancouver since 1887, Mountain View Cemetery has 106 acres of land with approximately 92,000 grave sites and approximately 145,000 interred remains. Located west of Fraser Street between 31st and 43rd Avenues, the Cemetery is bisected by several City streets including the 37th Avenue Greenway. Within the Cemetery is the Heritage "B" listed Vancouver Crematorium which is owned by the Loewen Group.

The operation of the cemetery is governed by the Cemetery and Funeral Services Act, Ministry of the Attorney General, Department of Consumer Services. The Minister appoints a Registrar to administer and enforce the Act. The Registrar regulates the operation of funeral services, interment facilities, cemeteries and crematoria in the province through the issuance of licenses and certificates. The Act also requires municipalities to adopt By-laws, approved by the Registrar, that govern administration and operation of the cemetery; rights and privileges of the operator; rates and charges; and the size, type and materials used for memorials. The Act also regulates the establishment and management of Perpetual Care Funds.

In 1912, a Perpetual Care Fund for Mountain View Cemetery was created and families could chose to buy perpetual care or maintain the grave space themselves. By 1958, the purchaseof perpetual care was made mandatory. Today there is less than $3Million in this provincially-mandated Fund, which is not enough capital to generate sufficient revenue to
cover operating costs.

Since 1986, plots have not been sold except to the Province for the burial of indigents. As of November, 1999 no more plots were available for these burials. The closure of sales for the last 14 years has capped the Perpetual Care Fund and shifted some of the cost of operation onto the tax-roll. The Cemetery cost the taxpayers $750,000 in 1999. Since 1985, the City has subsidized the Cemetery a total of $7.5Million.

On May 16, 1996 Council decided to retain control and operation of Mountain View Cemetery and subsequently approved retaining the consulting team lead by Philips Wuori Long to undertake a study to re-position Mountain View Cemetery as a financially viable operation that would meet the present and future needs of the citizens of Vancouver for memorialization and interment.

DISCUSSION

A Cemetery is a sacred sanctuary where individuals, families and organizations honour the memory of their ancestors. It is also a place where the history of the City is preserved and where passive recreational activities take place in a unique open space. The challenge of balancing these uses in an environment of competition is a major issue addressed by the master planning process. Other considerations are the multi-cultural tradition of the Cemetery, the relationship with the surrounding neighbourhoods and the tax-roll support of the facility by the citizens of Vancouver.

The planning process was carried out by a multi-disciplinary team, working closely with a citizen advisory group, cemetery staff and city departments to build consensus. The result is five reports which together provide a guide to development of the cemetery into the future:

I. Master Plan - recommends research, design and development guidelines for the physical revitalization;
II. Financial Report - provides market, demographic and pricing analysis and business plan
III. Operations Report - reviews and restructures major functional areas;
IV. Management Report - proposes a management and governance structure, an advisory board and a foundation;
V. Marketing Report and Implementation Schedule - outlines broad marketing steps and implementation schedule that flows from the Master Plan

I. Master Plan

The Master Plan takes a comprehensive approach to the redevelopment of the Cemetery by:

· integrating historical legacies and customs;
· providing a landscape analysis and recommendations;
· revising circulation patterns;
· preserving important views;
· consolidating buildings and infrastructure; and


Major aspects of the Master Plan are described below:

II The Financial Report

The Financial Report integrates the physical plan with an informed market, demographic and pricing analysis. The cemetery and death care industry has undergone major changes over the last 5 years. An understanding of the trends of aging, migration and regional demographics is necessary for projecting market share and determining the appropriate mix of services. The Financial Report is the business plan to help Mountain View make the transition from a cost burden to the City to a facility that covers cost and eventually generates a modest surplus.

Sustaining the cemetery, even during low cash flow periods, is contingent on sufficient Perpetual Care Funds. The recommended financial plan could see the Perpetual Care Fund grow to $20 - 25 million in 20 years so that interest accruing on the principal amount will be sufficient to sustain Mountain View Cemetery in perpetuity.

An incremental project development approach is recommended that would bring a variety of revenue generating services to the market; yet present a low level of risk. Projects will be selected to offer the public choices in product, services and pricing and be strategically located to demonstrate changes in the cemetery. The incremental approach will give management the opportunity to assess the financial impact of the new and renewed services.

The 20-year cash flow projections (on file) indicate that with modest market share captures, the introduction of new products and a modest increase in unit pricing, the annual operating deficit could be reversed into an annual operating surplus. Mountain View is in a very strong position to generate revenue based upon two key advantages:

1. there are still burial plots available at no additional cost to the City; and
2. the investment in cemetery structures has the potential to yield extraordinary returns which can range from 200 to 800 percent.

The 20-year cash flow model forecasts stabilized annual revenue of approximately $3.1Million by Year 5 and increasing to $4Million in Year 20. Annual expenses are limited to approximately $3Million in Year 5 and $3Million in Year 20. The operating surplus is projected to increase to in excess of $500,000 by Year 20.

The Cemetery is a $750,000 per year burden on the taxroll today. The status quo in 20 years would cost the City $15Million. The net benefits of the Master Plan program, illustrated in Appendix C which includes contributions to the Perpetual Care Fund, indicates a net benefit of up to $36 million.

III Operations Report

The Operations Report provides a detailed review of 9 major functional areas of cemetery operations, such as interment, turf management, etc.. The review reveals that the current staff complement is too large for the current level of activity, but staff layoff is not contemplated since the reopening will create new work.

The redistribution of staff resources into a series of functional teams, combined with skills upgrading for some staff, should result in higher levels of service and greater levels of efficiency and effectiveness. Important for financial viability is the reallocation of resources from non-revenue producing (general maintenance) work to revenue generating work (e.g. interment, monument setting).

The reorganization is based upon the following:

1. the level of activity will increase substantially as the plan is implemented and more products are sold and more projects undertaken;
2. the skill sets must expand to meet future initiatives;
3. the existing staff are committed to higher levels of productivity and skill upgrading;
4. the current subsidy is too large.

The new organization has the Cemetery Manager overseeing all staff teams and championing the Master Plan and the vision for the cemetery. The Landscape Team will maintain the cemetery grounds: turf, horticulture and arboriculture. The Interment Team will look after the interment of both ash and full casket remains. The Special Project Team will work on new and major initiatives and planned maintenance projects. The Customer Service Team will consist of office workers who respond to customer requests and complaints, manage an electronic database and are involved with marketing and sales.

Staff will be assessed to determine their skill levels. Retraining will be provided for those who are willing and have the aptitude. For those who are not prepared to make the necessary changes, transfer to alternate employment will be sought in cooperation with CUPE 1004 and other City departments.

It is recommended that the current level of human resources be maintained but restructured and that Marketing and Project Management expertise be added to facilitate implementation of the plan.

IV Management Report

The Management Report examines three management and governance models:

1. a new City corporation
2. a board or commission
3. a division of a City department.

Applying the principles of flexibility, innovation, partnerships and empathy which the consultants deem are crucial to meeting the needs of the Cemetery, the consultant recommends that the Cemetery remain in the City operations over the near and medium term; and become a new City Corporation as a long-term goal once costs are offset by revenues. The Corporation would function under the auspices of the City but would have financial and operating autonomy.

In the interim, a strategy and budget should be adopted that enables staff to embark on new projects, initiate organization and operation changes and reopen Mountain View for business.

The consultant also recommends establishing the Mountain View Cemetery Advisory Board of community representatives to advise Council; to advise the department in long range planning and financial decisions; and to act as liaison between the proposed Foundation and Council. The Mountain View Cemetery Advisory Board should be formed as soon as possible.

In addition, the Consultant recommends the formation of a Foundation to fund raise andprovide a structure to manage the stakeholders, partners and clients who are expected to recommit to Mountain View upon implementation of the Master Plan. This body would primarily gather community support for the Cemetery and provide information and other services to cemetery visitors. Staff believe this needs further analysis and recommend reporting back to Council after the initial implementation work is under way.

As the adoption of the recommendation to form a City Corporation does not impact the Implementation Schedule, staff can be instructed to report back on the implications and advisability of forming a corporation to govern the Cemetery.

However, given the citizen interest, it is recommended that Council establish the Mountain View Cemetery Advisory Board and staff will report back on the Terms of Reference and recommendations for appointment before the end of the year.

V Marketing Report and Implementation Schedule

This report is the final part of the plan and outlines the steps Mountain View Cemetery should take in preparing a marketing plan that addresses issues specific to marketing a range of services. It also presents the implementation schedule that flows from the Master Plan, financial projections and the marketing report.

In addition to an understanding of the market and the opportunities, the marketing plan should provide:

To implement a marketing plan, Mountain View must acquire a number of skills before a detailed annual plan can be finalized. These include diagnostic skills, company levels, marketing implementation skills, and implementation-evaluation skills. The purchase of marketing expertise to head the marketing initiative has been recommended.

SOCIAL IMPLICATIONS

The reopening of Mountain View Cemetery with new memorial services will begin to meet the needs of the people of Vancouver today. Trends toward greater secular spirituality, cultural diversity and death care `products' have changed the way death is managed. We must heed these trends to serve our citizens adequately.

Because the Cemetery is surrounded by the City and has no reserved land, the Master Plan provides for some in-ground burial locations and some above-ground mausoleum locations. These spaces should give families wanting burial some choice. With more than 70 % of people choosing cremation, Mountain View Cemetery must offer affordable alternatives to burial. Shut out for 14 years, Vancouverites will again be able to choose Mountain View Cemetery as a final destination.

PERSONNEL IMPLICATIONS

Except for the addition of marketing and project management skills, the reports recommend that existing staff have an opportunity to participate in the revitalization of Mountain View. Employees will have the opportunity to learn new skills and to learn their role in the renewal process. Staff will be assessed and those with limited aptitude for retraining may be assisted with relocation to other City departments where their current skills are in demand.

The plan is to reallocate the staffing complement to become more efficient and effective. Benchmarks will be established to monitor and amend work practices. There will be changes in what staff do and how they work as efficiencies are adopted. Staff will be organized into functional teams and over time, work will shift from non-revenue to revenue producing employment. With management and staff working together, the cemetery can become the best choice for interment and/or memorialization in the Lower Mainland. If the desired levels of effectiveness and efficiency are not met within 2 years, there is a recommendation that an RFP process be implemented that would secure certain services from the private sector or through other City departments.

The specialized Marketing and Project Management skills are recommended to be added as they require an advanced level of training and experience. These skills are available on a part-time or contractual basis and should be purchased as needed.

FINANCIAL IMPLICATIONS

The Master Plan transforms Mountain View Cemetery from a pasture-like setting with few services and no products to a respectful and contemplative place. To become a preferred interment location, requires an investment in services, landscape, equipment, employees and facilities. What has been sacrificed due to lack of funds since 1986, must be restored and further enhanced with investments in both revenue and non-revenue producing projects.

The Master Plan assumes that the Cemetery's operations will remain an integral part of the City's operating budget. The current budget 'subsidy' to the Cemetery of $750,000 per year will decline, beginning in year 2 of the plan. Basic Cemetery operations will break even by year 8, and contribute ever increasing 'surpluses' thereafter. In the final five years of the plan, the 'surplus' from operations is expected to exceed $500,000 per year.

The plan makes assumptions about the timing of revenues and capital expenditures. However both revenues and expenses may be accelerated or delayed to take advantage of business opportunities. The plan recommends the City approve the establishment of a Cemetery Capital Reserve Fund to accumulate resources from Cemetery revenues to be used for major capital expenditures. Initial expenditures from the fund may be financed by up to $1Million borrowed from the City. The plan provides for $150,000 in financing charges to pay interest on any loans from the City.

During the life of the plan, the Cemetery's Perpetual Care Fund, will grow by almost $18Million to $20.7Mmillion. The interest earned on this fund in excess of inflation, (i.e. 4% interest per year) will cover the majority of our basic operating expenses at the Cemetery by year 2020. This helps eliminate the serious financial liability associated with the City's obligation to operate the Cemetery in perpetuity.

The Cemetery should be brought quickly to a high standard to compete with private and public cemeteries in the lower mainland. This is a competitive business where the private sector has a large active sales forces. To succeed, Mountain View Cemetery must first have something to sell besides plots. With a tasteful and discreet advertising campaign, accompanied by a sales strategy, the Cemetery will be launched towards financial independence and long term sustainability.

In order to give management the flexibility needed to produce the services and alternative products which are contemplated in the Master Plan and that will make the cemetery attractive in the marketplace, it is proposed that Council authorize the establishment of a Cemetery Capital Reserve. A portion of the revenue from the sale of products and services at the Cemetery will be transferred to the reserve and will be available to undertake the work proposed in the Master Plan to develop new products. This scenario is contemplated in the Financial Plan and it will not impact the plan to eliminate the Operating Budget subsidy to the cemetery. Council is also asked to authorize a line of credit of up to $1Million to balance the cashflow for these improvements. It is recommended that the Director of Finance be authorized to determine the source of this internal financing (likely to be either the Capital Financing Fund or the Property Endowment Fund) along with the terms of any advances provided on the understanding that market interest rates and reasonable repayment terms will apply.

There are few risks evident in the financial projections. The Financial Report's Cash Flow Projections based on conservative assumptions about the City's market share of interments indicate that the annual operating deficit could be reversed into an annual operating surplus. Revenue over the first 3 years could be in the range of $5 - 6Million to assist with offseting these expenditures.

The status quo in 20 years would have a negative taxpayer impact of $15Million. The benefits of the Master Plan program (Appendix C) including contributions to the Perpetual Care Fund are $21Million. Therefore, the net financial difference to the City between implementing the plan versus status quo, is $36Million over 20 years. Given this low-risk/high-benefit scenario, the City cannot afford to do nothing.

The addition of a Cemetery Foundation to attract contributions for non-revenue generating needs of the Cemetery such as restoration of significant heritage elements would further reduce risk. The feasibility of establishing such a foundation will be further investigated by staff with a report back and recommendation.

LEGISLATIVE REQUIREMENTS

As previously stated, the Provincial Cemetery and Funeral Service Act provides consumer protection and province-wide uniformity through the regulation of products, services, feescharges and management of perpetual care funds. Mountain View Cemetery also operates under City By-law 4162 which has not been substantially changed since the early 1960's other than amendments related to the "closure" beginning in 1986. In order to implement the Master Plan; to access the reclaimable space; and to allow alternative forms of memorialization, amendments to the existing By-law will be required.

The accompanying report, Amendments to Cemetery By-law 4162 is attached. These by-law amendments acknowledge that the Cemetery must continuously adapt to changing needs and public preferences. Revised fees and charges are included with this request for amendment and must also be reviewed and approved by the Registrar.

Simultaneously, an amendment to the Cemetery's Operating Certificate will be prepared for the Registrar's review and approval.

PRICING

New fees and charges need to be approved for the proposed reclaimed interment spaces; for the new forms of memorialization; and for bringing existing fees and charges in line with current market pricing levels. To preserve scarce supply of burial plots for residents, differential prices are proposed for residents vs. non-residents. This is a common practice for municipal cemeteries and has the approval of the Registrar. The accompanying report Amendments to By-law 4162 includes new and revised fees and charges for Council's consideration.

CONCLUSION

Mountain View Cemetery is a special place, a sacred place. It provides beautiful vistas and has long been a place of quiet contemplation and remembrance for the people of Vancouver. For over one hundred years, many of our citizens have been buried in the Cemetery. It continues to serve the needs of a growing Vancouver and has the potential of being treasured as a public open space and place of remembrance. As urban development continues to encroach upon the natural landscape, cemeteries are becoming places where people go to enjoy nature as well as to appreciate and learn about the lives of those who came before us. The Master Plan is the guide to ensure that Mountain View Cemetery will again serve the public and be a valued community resource into the future.

Due to the inadequacy of the Perpetual Care Fund, the tax-roll has been burdened with annual costs totalling $7.5Million since 1985. This can be addressed with the sales of products and services which will generate sufficient revenue to build the PCF to the $20 -25Million level that would sustain care in perpetuity after 20 years. The net benefit of the Master Plan to the City in 20 years is $36 million.

The public has been involved in the preparation of the Master Plan through the Citizens Advisory Group, workshops, and public open houses. The industry has been consulted and informed. The memorialization concepts, preservation of heritage elements, landscape enhancements, circulation improvement have met with a great deal of enthusiasm. The public is on side and eager to see change begin at Mountain View Cemetery. It is recommended that Council approve, in principle, the Master Plan, and the $1Million Cemetery Capital Reserve Fund to finance Cemetery projects, be established.

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APPENDIX A on file in City Clerk's Office

- - - - -

APPENDIX B: INITIAL PROJECTS to achieve the 20-year cash flow results of the Financial Report

I. INITIAL PROJECTS - OVERALL CEMETERY

1. Develop Cemetery Guidebook, Walking Tours and Areas of Interest. Source of funding - Cemetery Capital Reserve Fund. Time frame - withing 2 years.

2. Install and re-install upright monuments. Source of funding - owner initiated and funded. Time frame - begin immediately.

3. Plant memorial trees throughout the cemetery in unused grave locations and at designed locations. Source of funding - owner. Time frame - begin immediately.

4. Locate memorial benches throughout the Cemetery at appropriate locations based on the Master Plan. Cemetery to determine a kit of parts and memorial bench design options. Source of funding - owner and Cemetery Capital Reserve Fund. Time frame - begin immediately.

II INITIAL PROJECTS by NEIGHBOURHOODS

1. Veterans' - Fields in collaboration with Veterans' organizations, phased approach to

2. Horne West in concert with Engineering Services, maintain street trees and boulevards. Source of funding- Boulevard Tree funding and existing maintenance budget. Time frame - begin immediately.

3. Old Horne re-introduce tree planting in selected areas and explore new ground cover products. Source of funding - Cemetery Capital Reserve Fund. Time frame - begin immediately.

4. Abray in collaboration with Veterans' organizations, phased approach to upgrade these areas and to provide a selection of new memorialization choices for the families of Veterans. Source of funding - collaborators and existing maintenance budget. Time frame - begin immediately.

5. Old Cemetery restore curbing in collaboration with Cemetery Foundation, phased approach to upgrade. Source of funding- collaborator's budget. Time frame - begin within 5 years.

6. Greenway resolve legal and infrastructure issues between Engineering Services Group and Mountain View Cemetery. Time frame -completed within 5 years.

7. New Jones begin consolidation of administration and service buildingswhile concurrently planning for out-door mausoleum complex. Source of funding - Cemetery Capital Reserve Fund. Time frame - completed within 10 years.

8. Jones West
in collaboration with various Veterans' organizations, a phased approach to upgrade these areas and to provide a selection of new memorialization choices for the families of Veterans. Source of funding - collaborators and existing maintenance budget. Time frame - begin immediately.

9. Masonic amend road system. Source of funding - Cemetery Capital Reserve Fund. Time frame - begin within 5 years.

10. John Oliver amend gateway and road system. Source of funding - Cemetery Capital Reserve Fund. Time frame - begin within 2 years.

11. Fraser Corner begin development of gateway with columbaria at 41st Avenue and Fraser Street. Source of funding - Cemetery Capital Reserve Fund. Time frame - begin within 5 years.

12. 1919 develop dispersed double depth grave spaces, memorial books, trees, benches. Source of funding - Cemetery Capital Reserve Fund. Time frame - begin immediately.

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