ADMINISTRATIVE REPORT

Date: April 29, 2000
Author/Local: Ken Bayne / 7223
RTS No. 1464

CC File No. 1605

CS&B: May 4, 2000

TO:	City Services and Budgets Committee
FROM:	Director of Finance
SUBJECT:	2000 Operating Budget - Final Estimates

RECOMMENDATION

THAT Council approve the final 2000 Operating Budget revenue and expenditure estimates as outlined in this report and summarized in Appendix 1 by approving the budget resolution attached as Appendix 2.

GENERAL MANAGER'S COMMENT

The General Manager of Corporate Services RECOMMENDS approval of the foregoing recommendation.

COUNCIL POLICY

The Vancouver Charter requires the Director of Finance to present the estimates of revenues and expenditures to Council not later than April 30 each year and for Council to adopt a resolution approving the budget and a rating bylaw establishing general purpose tax rates as soon thereafter as possible. There are generally three reports in the budget building process:

… the Preliminary Budget Report provides Council with the first indication of the budget requests from Departments and Boards and seeks Council guidance on the policies that will govern the administrative review of the estimates. This report was considered by Council on February 15, 2000.
… the Interim Budget Report summarizes the results of the detailed administrative review of the budget and seeks Council approval to finalize the estimates, bringing the budget into balance. Council considered the interim estimates on April 4, April6 and April 20, 2000.
… the Final Report on the Operating Budget presents the revenue and expenditureestimates including any final adjustments approved by Council at the interim report stage. The Final Report is accompanied by a resolution in which Council adopts the estimates for the year.

PURPOSE

The purpose of this report is to review the 1999 Operating Budget as balanced by Council on April 20, 2000.

BACKGROUND

On February 15, 2000, Council considered the preliminary estimates of the 2000 Operating Budget. In addition to referring the budget for a detailed administrative review, Council approving the following recommendation:

C. THAT Council instruct the Director of Finance, in consultation with the Corporate Management Team, to report back as quickly as possible with budget management proposals that will allow the interim estimates to be developed with an increase in property taxes between 2 and 4%.

On April 20, 2000, Council approved the following recommendations which had the effect of bringing the 2000 Operating Budget into balance with a 2.75% general purposes property tax increase.

D. THAT Council approve the following budget reductions:

(i) THAT the Strategic Initiatives Fund be reduced by $300,000;
(ii) THAT the General Reduction to Overtime Funding be $500,000;
(iii) THAT the New and Non-recurring Funding be reduced by $300,000;
(iv) THAT the Community Services - Tree Program be reduced by $50,000;
(v) THAT the Community Services/Fire-Miscellaneous Fees be reduced by $50,000;
(vi) THAT the Grants Budget be reduced by $50,000;
(vii) THAT the Park Board - Revenue Enhancement/Cost Reduction be $100,000;
(viii) THAT Police - Sworn Staffing be reduced by $300,000;
(iv) THAT the Community Services communications position be eliminated for a reduction of $55,000.

C. THAT Council approve a 2000 Operating Budget with a general purposes tax increase of approximately 2.75%.

DISCUSSION

Since April 20, staff have worked to resolve the outstanding issues and bring the budget into balance using a 2.75% tax increase as the guideline. Appendix 1 reflects the final estimates including the following changes from the interim budget estimates:

… the budget adjustments approved on April 20 have been reflected.
… the tax levy has been adjusted to reflect the partial implementation of the new sewer user fees. With introduction of user fees for the sanitary sewer services and direct charges of BOD/TSS costs to permitted industry, $12.3 million has been removed from the tax levy resulting in a tax reduction of approximately 5% for residential properties and approximately 2.0% for non-residential properties.
… New and Non Recurring funding of $1.7 million and general turnover of $1.5 million has been allocated to departments.
… the estimated revenues and expenditures related to the water utility and solid waste utility have been reflected in the estimates.

Taken together with the approved increase in the general purposes tax levy of 2.75%, these adjustments have brought the 2000 Operating Budget into balance as follows:

Revenue		($000)	($000)
	Taxation Revenue	$ 402,608
	General Revenue	106,768
	Utility Fees	91,715
	Transfers	11,562	$ 612,653
Expenditures
	Departmental Expenditures	$ 415,824
	Utility Expenditures	136,312
	General Debt Charges	44,785
	Transfers	15,732	$ 612,653
	Net Budget Position		$ 0

Council approval of the resolution attached as Appendix 2 will complete the 2000 budget cycle. Two additional actions will be required of Council over the next two weeks to put in place the necessary rating bylaws to provide for billing of the general purposes property tax levy:

… in an accompanying report, the Director of Finance presents the impacts of shifting a further 1% of the property tax levy from non-residential to residential properties. This shift follows from actions of Council over the last 6 years and is recommended by the Citizen’s Advisory Group on Property Taxation. The Director of Finance presents this change in taxation burden for Council’s consideration.
… on May 16, 2000, the Director of Finance will bring forward a report summarizing property taxes and presenting a series of resolutions that give effect to the land averaging program approved by Council earlier this year, as well as Rating Bylaws for the City’s general purpose tax levy and the requisition from the Greater Vancouver Regional District. This report will reflect the final impact of decisions made regarding taxation policy measures.

* * * * *

Link to Appendix 1

Appendix 2

RESOLUTION

MOVED BY COUNCILLOR:

SECONDED BY COUNCILLOR:

THAT WHEREAS, the Vancouver Charter, Section 219 requires that the Director of Finance submit to Council each year the detailed estimates of revenue and expenditure of the City for the year;

AND WHEREAS the Vancouver Charter, Section 372 requires that Council adopt the estimates of revenues and expenditure for the City as soon thereafter as possible;

AND WHEREAS in decisions made on February 15, 2000, Council established guidelines within which the 2000 Operating Budget should be reviewed by the Director of Finance and reported back to Council;

AND WHEREAS Council has reviewed the development of the estimates in reports submitted by the Director of Finance on February 15, 2000 and April 4, 2000, and approved measures to bring the estimates into balance, including approval of a 2.75% general purposes property tax increase;

AND WHEREAS the total estimated expenditures of the City to pay all debts and obligations of the City falling due in the year 2000, exclusive of the amounts required for school, Greater Vancouver Regional District, Greater Vancouver Transportation Authority, British Columbia Assessment Authority and Municipal Finance Authority purposes and not otherwise provide for, as amended by Council, amount to $612,653,300;

AND WHEREAS the total estimated expenditures as aforesaid is the sum of the appropriation requests of all departments and boards properly supported by detailed analysis of those expenditures and listings of the salaried staff;

AND WHEREAS the total estimated revenue of the City for 2000 from sources other than real property taxes, as amended by Council, amounts to $243,687,600;

AND WHEREAS the amount of the General Purposes Tax Levy so required is $368,965,700;

THEREFORE be is resolved that the said estimates, both as to totals and individual items pertaining thereto, of the Director of Finance as so amended by Council be and the same are hereby adopted by Council.

(c) 1998 City of Vancouver