Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

Corporate Management Team, in consultation with
the Capital Plan Staff Review Group

SUBJECT:

Priorities for the 2000-2002 Capital Plan

 

RECOMMENDATION

CITY MANAGER'S COMMENTS

City and available through community centres, libraries and other civic facilities; through a short video outlining the planning process and draft plan contents to be shown on Roger Cable; and, through information on the City website. In every case, opportunities for public input will be encouraged.

POLICY

The City of Vancouver has a policy to plan for capital expenditures on a multi-year cycle. In recent years, capital plans have been developed in three year terms in order to match the term of Council and allowing for a borrowing plebiscite to be held in conjunction with civic election.

Capital Plans are normally funded from a combination of sources including, borrowing approved by plebiscite, borrowing authority approved by Council for sewer and water purposes, the annual operating budget and from contributions from third parties.


The Vancouver Charter, Section 242 provides that Council may approve the borrowing of funds for water and sewer purposes without the assent of voters. Borrowing for other purposes requires voter approval through a borrowing plebiscite.

SUMMARY

In accordance with the instructions of Council, the Corporate Management Team and Capital Plan Staff Review Group have reviewed the submissions for the 2000-2002 Capital Plan and have developed a list of high priority capital programs and projects that fit within the $173 million financial limit. In addition, priorities around the financial limit have been developed for two potential circumstances: that Council wishes to increase the amount of funding available in the Capital Plan to the $184 million level proposed by the Director of Finance; or, that Council wishes to reallocate funding to other projects within the current limit.

A process for public information and consultation is also proposed, including a public meeting on September 14, 1999, prior to Council concluding its decision making on the Capital Plan on September 21, 1999.

PURPOSE

The purpose of this report is to present the staff recommendations regarding 2000-2002 Capital Plan project priorities to Council for their consideration, and to recommend that the draft plan be referred to the public for comment.

BACKGROUND

On September 29, 1998, Council approved the following recommendation with respect to the next capital planning period:

The process for developing the capital plan involves several components.

1. Capital Plan Staff Review Group

Following approval of the next capital plan process, the Corporate Management Team appointed an interdepartmental staff group to develop a draft Capital Plan. The Capital Plan Staff Review Group consists of:

2. Public Consultation Program

On January 5, 1999 Council approved a three-phase public consultation and information process for the 2000-2002 Capital Plan, at an estimated cost of $150,000. This process involves the use of a survey to gauge public opinion on the capital expenditure program, as well as a series of videos and publications to provide information and seek input about the Capital Plan leading up to final approval by Council and submission of the necessary borrowing questions to the electorate as part of the 1999 civic election. Additional information about the next phase of this program is presented later in this report.

3. Financial Limits for the Plan

On March 23, 1999, the Director of Finance advised Council that a funding limit of $184 million for the 2000 - 2002 Capital Plan could be accommodated within the financial planning guidelines for the City. However, based on a recommendation from the Corporate Management Team, Council held the increase in the capital expenditure program to inflationary levels and approved the following recommendation:

Funding for the Capital Plan is derived from a number of sources. The financial limits for the plan deal with funding provided from:

· debenture debt approved by the electorate for general purposes;
· debenture debt approved by Council for sewer and water purposes; and,
· funding from the Operating Budget (Capital from Revenue).

The funding for the 2000-2002 Capital Plan will be provided approximately 80% from borrowing authority and 20% from the Operating Budget (Capital from Revenue). A report detailing the financial plan that will back up the Capital Plan will be before Council once the final plan has been approved in September.

In addition to the traditional sources, funding for capital expenditures beyond those provided for in the financial limit is provided from other sources, including:

· contributions from other levels of government and government agencies;
· contributions from third parties which leverage City funds, such as those provided by community centre associations or the non-profit sector;
· contributions from property owners through cost-sharing arrangements such as local improvements;
· development cost levies (DCLs)or community amenity contributions (CACs) which are intended to address the costs associated with growth in the community.

The availability of funding from these other sources provides additional opportunities to upgrade and develop new City facilities beyond the level that would be available within the Capital Plan funding limit. For example;

· DCL funding has been used to purchase property for park sites and to develop replacement housing in Downtown South and to develop park sites in Burrard Slopes and Oakridge-Langara areas. Commitment of these funds has exceeded $25 million since 1993;
· the Roundhouse Community Centre (opened in 1997) and Coal Harbour Community Centre (under construction) and numerous parks in False Creek and Coal Harbour have been provided at no cost to the City as a result of developer contributions;
· senior government contributions have allowed the City to expedite the updating of basic sewer infrastructure, to improve the traffic signal system and to construct traffic and transit safety improvements;
· City funds committed to social, cultural and recreational projects have leveraged significant funding to improve City facilities. Several community centres have benefitted from upgrades as a result of community association fundraising. The rehabilitation of the Vancouver Museum and upgrades to several cultural facilities are partly funded by third party fundraising.

While the City benefits where facilities are provided without a full investment by taxpayers, the associated operating costs do have to be accommodated within the Operating Budget.

During departmental presentations and the deliberations, the Staff Review Group discussed potential uses of alternative funding sources to provide for some of the requested projects.

The recommendations of the Staff Review Group are based on the expectation that some funding outside the Capital Plan limit will be utilized, including funding from TransLink for rehabilitation of the major road network, CAC funding for public realm improvements in the Downtown Eastside and community fundraising for community centres and neighbourhood houses. The draft plan also recommends utilizing existing capital funds to undertake projects requested within the Public Works section of the plan.

The Staff Review Group did not deal with the issue of how the new City-wide DCL might be integrated into future Capital Plans, however, it did recognize that there may be opportunities to provide new growth-driven facilities from this source before the end of the 2000-2002 Capital Plan.

4. The Waterworks Capital Plan

Waterworks is operated as a self-funding utility with user fees set to recover operating and debt service costs. As a result, the water capital program is dealt with outside the capital plan financial limit. On March 23, Council instructed:

A separate report on the Waterworks Plan will come forward in the near future.

5. Capital Planning Process

The Staff Review Group held meetings from November through June. Prior to the review of individual project submissions, the group identified the process for allocating funding in the plan and considered other issues which would assist in developing a list of priority projects. These meetings focussed on the following:

· Review of Municipal Service Reports which were tabled with Council on March 23, 1999 and which set out long-range capital expenditure priorities for departments and boards that were requesting funding from the plan. The reports outline Council policies and service issues, departmental strategic plans and priorities, and policy related to infrastructure replacement programs;

·the Facilities Strategic Plan, which provides an inventory of civic buildings and long-range priorities for capital maintenance expenditures. The plan was also intended to identify potential joint use facilities;
· CityPlan and Transportation Plan objectives, guidelines, and policies;
· Results of the MarkTrend Public Opinion Survey on the City's capital expenditure program.

The Staff Review Group was also guided by the priorities set for past capital plans. These included placing:

Past capital plan funding had been allocated approximately 75% to existing facilities and 25% to new or expanded facilities and this was seen as an appropriate guide for the 2000-2002 plan.

The Staff Review Group received detailed project submissions from departments and boards which totalled $233 million, excluding Waterworks. The detailed review of these project submissions took place over several meetings in March and April. Departmental and Board representatives used these meetings as an opportunity to support their submissions with relevant information.

Following the departmental presentations, the Staff Review Group developed a list of recommended projects that fit within the financial target of $173 million. The group also considered the project priorities around this financial limit as instructed by Council.

The draft plan was reviewed by the Corporate Management Team and endorsed for presentation to Council as representing a balanced set of priorities for capital expenditures in the next three years.

DISCUSSION

The draft Capital Plan addresses several requests from Council to the Staff Review Group:

· a list of programs/projects that are recommended for funding within the financial limit of $173 million;
· a recommendation for Park Board capital funding in the Capital Plan, developed within the overall context of capital expenditure needs of the City;
· identification of those projects which would be recommended for inclusion in the Capital Plan should additional funding of up to $11 million be approved;
· a recommendation for Supplementary Capital funding, based on an assessment of the demand for funding for emergent issues.

The Staff Review Group faced difficult choices in their deliberations. The cost of the requested projects exceeded the financial limit of the plan by $60 million and many worthwhile projects could not be accommodated within the draft plan. Those projects recommended by the Staff Review Group were identified as the highest priority for funding in the 2000-2002 Capital Plan.

The Draft Plan

The recommended draft plan has been consolidated under five main categories, summarized in Table 1 below. Details of the departmental submissions and the recommendations of the Staff Review Group are included in the attached document Submissions to the 2000-2002 Capital Plan (limited distribution) and a more detailed summary is attached to this report as Appendix 1.

Table 1
Summary of the Recommended Draft Capital Plan

Proposed Allocation

Capital Plan Category

$ 116,900,000

Public Works (Streets, Sewers, Electrical, Traffic Signals, Yards)

$ 29,500,000

Parks and Recreation

$ 9,850,000

Community Services (Affordable Housing, Social &Cultural Facilities, Downtown Eastside Initiiatives, Public Art)

$ 11,750,000

Other Civic Facilities (Facility Development, Major Building Maintenance)

$ 5,000,000

Supplementary Capital

   

$ 173,000,000

Total Capital Plan

a) Public Works (excluding waterworks): $116.9 million

Proposed Allocation

Projects

$ 9,450,000

Street reconstruction, including repairs to major bridges

$ 9,900,000

Pedestrian & bicycle improvements, including greenways and the bicycle network

$ 7,330,000

Transit and safety improvements

$ 13,000,000

Local area street improvements and traffic plans, including local improvements

$ 5,100,000

Traffic signal modification and replacement

$ 5,147,000

Street lighting and communications improvements

$ 51,045,000

Sewer replacement and pollution abatement initiatives

$ 15,928,000

Relocation and replacement of aging facilities at Cambie yard

The Public Works section of the Capital Plan deals with the funding requirements to maintain and upgrade the City's streets, sewers, traffic signal, street lighting and communications infrastructure. The plan also includes funding for the consolidation and replacement of works yard facilities. Several factors influenced the decisions on this section of the plan:

· Council policy related to the ongoing replacement of the City's basic public works infrastructure as well as those related to transportation priorities for pedestrians, bicycles and transit improvements;
· the need to relocate the Cambie Works yard to the BN Flats, east of Main Street.
· the availability of funding from TransLink to assist with major road network rehabilitation;
· the availability of unexpended funds from previous capital plans;

There are five major categories of expenditure in the Streets section of the Plan which address:

· the need to rehabilitate or reconstruct the arterial and local street network and the City's major bridges. City funding in this area is augmented by funding from TransLink and the reallocation of existing funding to complete the seismic upgrading of the Burrard Bridge;
· pedestrian & bicycle improvements, including sidewalk and pedestrian projects and continued development of the bicycle network and neighbourhood greenways;
· local area street improvements and the development of neighbourhood traffic plans, including funding for the local improvement program;
· improvements to enhance transit service and initiatives to improve traffic safety;
· modification and expansion of the traffic signal system.

Overall the plan includes $44.8 million in City funding for Streets work which will be supplemented by approximately $5.2 million in funding from TransLink to improve the major road network and by utilization $2.4 million of existing funding to complete seismic upgrading of the Burrard Street Bridge. This level of funding is about $3.0 million below that provided in current plan, primarily because of the funding commitment recommended to the Cambie Yards project. As noted later in this report, this area of the plan would be among the highest priorities should additional funding be available in this plan.

The Street Lighting and Communications section of the plan provides funding to replace and provide limited upgrading of the City's street lighting and communications network. The latter expenditure provides for voice and data transmission among civic facilities as well as control of vital systems. The Staff Review Group considered a parallel proposal from the telecommunications working group to significantly upgrade the communications system to be not well enough developed to include in this plan and have recommended it be reported to Council separately with funding from Supplementary Capital if necessary.

The Sewers section of the draft plan is targetted at maintaining the 1% replacement policy for sewers infrastructure, although it is acknowledged the recommended allocation falls below that level, again because of the priority that the General Manager of Engineering Services has given to the replacement Cambie Yards within this Capital Plan. Other expenditures are planned for sewer system management and pollution abatement, including continuation of the sewer separation on private property program that is directed at eliminating sewer outflows into surrounding water. As noted later in this report, this area would be among the highest priorities for additional funding in the Capital Plan.

The relocation of Cambie works yard has been identified as a high priority by the General Manager of Engineering Services for the 2000-2002 Capital Plan. Council has instructed that the yard be relocated pending redevelopment of the southeast shore of False Creek. The Staff Review Group discussed the possibility of phasing this work, however the conclusion was that completion of the relocation to the BN Flats by the end of the next plan will offset the need to undertake expensive interim improvements to the buildings on the current site which would be lost in a phasing option. The cost of this project has impacted the recommended allocations to other areas of the proposed capital program. In addition to the funding recommended here, the City Engineer will be reporting separately to Council on the land costs associated with this project.

b) Parks & Recreation $29.5 million

Proposed Allocation

Projects

$ 29,500,000

Park Facilities, including Community Centres, Rinks, Pools and Concessions

Land Acquisition

Street Trees Program

Park Development, including neighbourhood parks, playgrounds and playfields

Major Parks, including Stanley Park, Queen Elizabeth Park and Hastings Park

The Parks & Recreation component of the Capital Plan addresses the funding requirements in three areas: Facilities Development, including the community centre and community recreation facility system; Park Development, including the maintenance and development of major and neighbourhood parks; and Land Acquisition, including funding to increase the park inventory in park deficient neighbourhoods. The Parks & Recreation component also includes funding to continue the restoration of Hastings Park.

The recommended level of funding for Park Board is $3.5 million above the current capital plan, which at $26 million included a special allocation of $2.0 million for community centre upgrading. The increase is recommended partly in recognition of the significant facilities maintenance issues identified in the Facilities Strategic Plan due to aging infrastructure and more demanding regulatory requirements. The balance of the recommended increase is to provide funding to continue restoration of Hastings Park. The budget for Hastings Park restoration for 2000-2002 is $10.5 million, of which $5.0 million is funded from the Capital Plan and the balance from outside sources.

As noted later in this report, Parks & Recreation would be a high priority should additional funding be available in the Capital Plan.

Allocation of the recommended funding to individual projects is the responsibility of the Park Board. At the present time, the Board is collecting public input on the allocation of the funding in the draft plan. The final allocation will be reported to Council prior to final approval of the Capital Plan.

c) Community Services: $9.85 million

Proposed Allocation

Projects

$ 2,500,000

Affordable Housing projects

$ 4,100,000

Social, child care, and cultural facilities, including $2.1 million for special projects

$ 2,500,000

Initiatives associated with the revitalization of the Downtown Eastside

$750,000

Public Art Program

The proposed funding levels for Community Services projects takes a number of issues into consideration:

· City funding in areas such as Affordable Housing and the development of social and cultural facilities provides considerable "leveraged" funds from other levels of government and from the community;
· Some community services projects are eligible for funding from Development Cost Levy and Community Amenity Contribution programs, including the provision of public open space and replacement housing projects;
· Council has identified the rehabilitation of the Downtown Eastside as a priority, including the provision of improvements to the public realm.

Funding for the Affordable Housing Fund will ensure that the City is able to follow through with the initiatives anticipated in the Provincial-Municipal Housing Partnership recently approved by Council as well as continue the program of City-initiated non market housing initiatives.

Funding for the Social and Cultural Facilities component of the plan provides for maintenance and upgrading of City-owned and non City-owned social, cultural and daycare facilities. In addition, the plan includes funding for the proposed replacement of the Little Mountain Neighbourhood House that was deferred from the current Capital Plan. This replacement involves a potential joint use facility involving other City services that will be reported to Council at a later date.

Funding to support Council's initiatives on the Downtown Eastside is also recommended in the draft plan. In addition to the funding indicated above which could be utilized on a number of projects to improve community space and facilities, the Staff Review Group notes that additional open space in the area can be pursued utilizing existing Community Amenity Contributions.

d) Other Civic Facilities $11.75 million

Proposed Allocation

Projects

$ 3,500,000

Public safety facilities, firehall upgrading and replacement

$ 8,250,000

Major maintenance of civic buildings

This section of the draft Capital Plan deals primarily with the balance of the civic infrastructure, most notably the 280 buildings from which the City delivers its core services. In the past, basic building envelope and systems maintenance has competed with other projects for funding in Supplementary Capital, often leading to deferral of desirable maintenance programs.

An integral part of the process for developing the 2000-2002 Capital Plan was creation of a Facilities Strategic Plan which had three main purposes:

· an inventory of all City buildings and facilities, including an evaluation of their condition and a funding request to deal with the highest maintenance priorities;
· a review of requests for replacement of civic facilities;
· a review of the potential for joint-use facility projects to take advantage of synergies in providing services.

The first and last of these tasks was reported to Council earlier this year with departmental Municipal Service Reports. In addition, the group submitted a specific funding request based on a programmed approach to dealing with major building maintenance issues. Throughout the deliberations of the Staff Review Group, the facilities group also provided input into maintenance and replacement requests for civic buildings which is reflected in the draft plan.

There are a number of programs or projects recommended in this section of the Capital Plan:

· The Facilities Strategic Plan indicates that up to four firehalls should be replaced in the next three capital plans. The proposed 2000-2002 Capital Plan recommends funding for replacement of Firehall #13 (790 East 24th Avenue) which is now 80 years old and no longer meets the operational needs of the Fire Department. It is likely that up to two additional replacements will be required in the next capital plan.
· relocation of the Police Dog Squad from Cambie Yards to coincide with the proposed relocation of the works yard. The department is reviewing a number of potential locations for the new facility and will report back on any necessary property costs.
· funding for mandated upgrading and other building maintenance issues to ensure civic facilities continue to be functional for the delivery of civic services.
· funding for upgrading washrooms at the Orpheum Theatre.
· funding to begin programmatic planning and design for a proposed joint use facility between the Park Board and Library Board. If the planning work indicates a feasible project can be developed, funding for this facility will be requested in the next Capital Plan.

e) Supplementary Capital $5.0 million

Supplementary Capital is intended to deal with emergent issues which arise during 2000-2002 Capital Plan. There are a variety of program and project proposals for which departments requested funding that were either of a smaller scale than could be considered in the plan, where the immediacy for undertaking the work was not established, or where the issues were not well defined. These items were not included in the plan and the potential for submitting them to future Supplementary Capital Budgets was identified. The draft plan recommends funding to deal with these projects on an annual basis be set at $5.0 million.

PRIORITIES AROUND THE FINANCIAL LIMIT

In addition to developing a recommended draft Capital Plan that fits within the financial limit approved by Council, the Staff Review Group has identified priorities around this limit. These priorities were intended to provide for the following situations:

· increasing the funding in the plan by up to $11 million to bring the total funding the $184 million level proposed by the Director of Finance; or
· reallocation funding within the current limit to accommodate different projects.

1. Priorities for Additional Funding

Should additional funding be available for the Capital Plan, the Staff Review Group recommends projects that focus on basic infrastructure needs as being the highest priority with lower priorities being given to projects that involve new or expanded program funding that otherwise meets Council priorities. The specific recommendations are summarized below:

A

Sewers

$ 1.5 million

restore funding for the full 1% replacement policy.

A

Streets

$ 1.0 million

restore funding to arterial street reconstruction.

A

Parks &Recreation

$ 2.0 million

provide for increased rehabilitation of recreation facilities, including playing fields and community centres.

A

Housing Centre

$ 0.5 million

enhance the City's ability to pursue affordable housing initiatives.

B

Library

$ 2.5 million

funding to confirm the integration of two library branches. The SRG supports this project however, timing is unlikely to fit within this Capital Plan.

C

Social and Cultural Facilities

$3.0 million

provide funding for additional major facilities projects in the social & cultural community.

 

Total

$10.5 million

  

Together, these proposals total $10.5 million and, if all approved would bring the Capital Plan to $183.5 million.

2. Lower Priorities for Reallocation Within the Current Limits

Should Council wish to reallocate funding within the draft plan, the Staff Review Group has identified a number of areas of lower priority that would be recommended for funding reductions:

Supplementary Capital

$1.0 million

would reduce funding for emergent needs during the capital plan period.

Parks & Recreation

$3.5 million

could limit the rehabilitation and upgrading of parks facilities or community centres or slow the redevelopment of Hastings Park.

Sewers

$2.0 million

would reduce funding levels below the 1% replacement level.

Housing Centre

$0.5 million

could limit the City's ability to pursue affordable housing initiatives.

Total

$7.0 million

  

A MORE STRATEGIC APPROACH TO FACILITIES PLANNING

The process of developing the 2000 - 2002 draft Capital Plan utilized a more coordinated approach to dealing with facilities issues than had been used in prior capital plans. One of the primary purposes of the Facilities Strategic Plan was to begin to identify possibilities for joint-use facilities that took advantages of synergies among departments or between departments and outside organizations that would enhance service delivery and minimize cost.

The Staff Review Group worked with departments and the Facilities Strategic Planning Group to identify joint-use opportunities in the 2000-2002 Capital Plan. Several potential projects were identified, however, while at least one of these projects was strongly supported by the group, none was well enough developed to be included in the draft plan. The experience of the Staff Review Group is that opportunities to develop these types of facilities must be planned in a strategic fashion utilizing a co-operative approach to planning services that work together and a longer term planning horizon to ensure that the necessary resources (land, funding, etc.) are available when projects reach development stage. This has been difficult enough to bring together for services provided by City departments without contemplating a significant move to shared facilities with the not-for-profit or private sectors.

If the City is to pursue these types of facilities in the future, a commitment to seek out these opportunities and a planning horizon longer than three years must be brought to the process. The Corporate Management Team has taken two steps consistent with achieving this result. First, CMT has begun a process of identifying key strategic direction, bringing a more consistent and strategic approach to planning for service delivery. Second, the Facilities Strategic Planning Group is to be refocused to ensure that joint-use opportunities will be an inter-departmental priority and that appropriate sites on which such developments can take place are identified and made available on a timely basis. CMT will be reporting this initiative to Council in a future report.

FUNDING FROM OUTSIDE THE FINANCIAL LIMIT: DCLs AND CACs

As noted above, the Staff Review Group has not dealt with the use of funding from outside the traditional sources for capital expenditures. While DCL and CAC funding is currently available for work in specific neighbourhoods, extension of those charges on a City-wide basis will not occur until the next capital plan is in place. As a result, it was difficult to anticipate how much funding would be available and what the priorities for its use would be identified by Council through the Financing Growth Study.

However, the potential for additional DCL funds to be available during the course of the next capital plan led the Staff Review Group to favour programs and projects that dealt with the City's existing infrastructure rather than embarking on new projects that are driven by demands related to growth. Only one proposal utilizing CAC funding - improvements to Downtown Eastside open space - is included in the draft plan. Once the Financing Growth Study is completed and Council has directed how new DCL and CAC funding should be utilized, it will be possible to develop a more specific process for factoring these funds into the capital planning process.

NEXT STEPS

This report fulfills Council's instructions to report back on a recommended capital plan and the priorities around the $173 million financial limit. Throughout its deliberations, the Staff Review Group attempted to take into consideration the priorities of Council and the public, however, it is acknowledged that the draft plan is really staff's view. In addition to providing the opportunity for Council to consider the components of the draft plan, it is appropriate that the public should also be given the opportunity to provide its input.

Park Board is currently in the midst of its consultation with the public on the Capital Plan and will be reporting its results to Council prior to the plan being finalized by Council. In addition, the Staff Review Group has developed a process to publicize the contents of the draft Capital Plan and to encourage public feedback, culminating in a public meeting on September 14, 1999. These components of the public process include:

· a newspaper based flyer summarizing the draft Capital Plan priorities to be delivered in a July issue of community newspapers and distributed through community centres, branch libraries and other civic facilities. This will be modelled after the What do you think? document produced for the 1997-1999 Capital Plan;
· the same information in the flyer will be available on the 2000-2002 Capital Plan webpage which can be accessed from the City homepage;
· a follow-up to the video outlining the Capital Planning process that will outline the major components of the draft plan. The video will be aired on Rogers Cable during Council breaks and on the greater.vancouver program;

Feedback from the public will be encouraged by means of the Capital Plan Questionnaire (Your Opinion), which will be available in the flyer and on-line on the Capital Plan webpage.
The public meeting will provide Council to opportunity to hear reaction to the draft Capital Plan from departments and boards, if appropriate as well as from the public.

Following the public meeting, Council will make final decisions on the contents of the plan on September 21, 1999. This approval will be followed by a report recommending a financial plan outlining the sources of funding to support the Capital Plan. The components of the plan requiring borrowing authority will be submitted to the electorate in a series of plebiscite questions during the civic election on November 20, 1999.

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