2017 BUDGET AND FIVE-YEAR FINANCIAL PLAN Council Approved 2017 Budget and Five-Year Financial Plan At the December 13, 2016 Council Meeting, Vancouver City Council approved an amended 2017 Operating Budget which includes $3.5M additional contingency to address the fentanyl overdose crisis. This has resulted in a change to the original proposed property tax increase from 3.4% to 3.9%, raising the 2017 Operating Budget to $1,322 million. Updated 2017 Budget Summary Balanced Operating Budget: $1,322 million (amended for $3.5 million increase) 2016 2017 Net Net $ millions Restated Approved Change Change Budget Budget ($) (%) Revenues $ 1,261 $ 1,322 $ 61 4.8% Expenditures & Transfers $ 1,261 $ 1,322 $ 61 4.8% Net Operating Budget - - - - Consolidated Budget (1) on financial statement basis: 2016 Budget on 2017 Budget on Net Net Financial Financial $ millions Change Change Statement Basis Statement Basis ($) (%) (2) (2) Revenues $ 1,481 $ 1,652 $ 171 11.5% Expenditures & Transfers $ 1,400 $ 1,501 $ 102 7.3% Net Consolidated Budget $ 81 $ 150 $ 69 85.3% Note: (1) In order to present financial information on a consolidated basis, financial transactions between funds or entities have been removed. (2) Public Sector Accounting Board adjustments have been made, including amortization of tangible capital assets, net of debt payments/issues and reserve transfers Capital Budget: $485.5 million (no change) 2017 Increases - City Property Tax, Fees and Charges Property Tax 3.9% Utility Fees (combined) 6.1% Water 4.0% Sewer 11.3% Solid Waste 3.8% Median single-family home combined 4.7% municipal property tax and utility fees Indicative City Property Tax and Utility Fee Impact 2017 Increases - All other Fees Median Median Recreation user fees 2.5% Single-Family Business Most other user fees 2.0% $1,386,000 Property $618,000 Permit fees 2.0% ESTIMATED ESTIMATED 2017 TAX CHANGE 2017 TAX CHANGE BILL (CoV OVER 2016 BILL (CoV OVER 2016 Indicative City Property Tax Impact PORTION) PORTION) 2016 Assessed Value Estimated Impact of Property Taxes of Property Change $2,207 $83 $4,049 $152 2017 Tax Bill additional (3.9% increase) (without Land Assessment over 2016 (CoV Portion) 0.5% Averaging) Utility Fees Median strata unit assessed at $761 $28 + $4 Water $616 $24 $571 $22 $478,000 Median residential unit assessed Sewer $384 $39 $392 $40 $1,490 $56 + $7 at $936,000 Solid Waste $271 $10 $217 $8 Median single-family unit $2,207 $83 + $11 assessed at $1,386,000 Total Utility Fees $1,271 $73 $1,180 $70 Median commercial property Total City Taxes $4,049 $152 + $19 assessed at $618,000 $3,478 $156 $5,229 $222 and Fees 1 | P a g e 13 December 2016 2017 Budget and Five-Year Financial Plan Table of Contents Message from the City Manager ......................................................................... 1 2017 Budget and Five-Year Financial Plan Highlights ............................................... 2 Part I: The City of Vancouver’s Fiscal Plan ............................................................ 6 Budgeting for results ..................................................................................... 6 Funding the budget .................................................................................... 6 Key steps in the 2017 budget process ............................................................... 8 Service planning and budget process................................................................ 9 City of Vancouver overview ............................................................................ 10 Long-term priorities and strategic goals ........................................................... 10 Economic context ........................................................................................ 12 Local context .......................................................................................... 12 National/provincial context ......................................................................... 14 Global context ......................................................................................... 15 Federal budget and infrastructure partnership ..................................................... 17 Fiscally responsible ...................................................................................... 18 Financial sustainability guiding principles ......................................................... 18 Progress with Council priorities ........................................................................ 23 Housing, affordability and homelessness .......................................................... 23 Safety, inclusion and social services ............................................................... 32 Economic development ............................................................................... 41 Greenest City .......................................................................................... 42 Value for money ....................................................................................... 46 Public engagement ....................................................................................... 48 Public feedback highlights ........................................................................... 50 Summary of Insights West research ................................................................ 55 Public feedback results ............................................................................... 56 Competitive residential and business property taxes and fees ................................... 57 Property taxes ......................................................................................... 58 Utility fees .............................................................................................. 66 User fees ................................................................................................ 68 Operating Budget ........................................................................................ 70 Revenue highlights for 2017 ......................................................................... 70 Expense highlights for 2017 .......................................................................... 71 Operating revenues ................................................................................... 72 i 2017 Budget and Five-Year Financial Plan Operating expenditures .............................................................................. 74 Investments ............................................................................................ 76 Managing costs for existing services ................................................................ 79 Detailed Operating Budget table ................................................................... 83 Notes to Operating Budget table ................................................................... 93 Impact on property taxes and utility fees ......................................................... 97 Five-year financial plan .............................................................................. 99 Capital Budget .......................................................................................... 103 10-year Capital Strategic Outlook ................................................................ 103 Four-year Capital Plan .............................................................................. 103 New capital project budget and funding ........................................................ 105 Infrastructure renewal to sustain services ...................................................... 106 Capital Expenditure Budget and five-year financial plan ..................................... 107 Capital Expenditure Budget and five-year financial plan by service category ............ 108 Top 10 projects and programs..................................................................... 111 Highlights of the Capital Budget and five-year financial plan ............................... 112 Consolidated budget ................................................................................... 130 Fund background .................................................................................... 130 Other entities ........................................................................................ 132 Consolidation adjustments ......................................................................... 136 Operating budget basis of presentation ......................................................... 136 Changes in 2017 ..................................................................................... 138 Property Endowment Fund budget .................................................................. 140 Property Endowment Fund budget summary ................................................... 141 Part II: Department Service Plans .................................................................... 145 Vancouver Police Department ....................................................................... 146 Key services delivered .............................................................................. 146 Major accomplishments in 2016 ................................................................... 146 Plans for 2017 ........................................................................................ 150 Looking ahead, 2018–2021 ......................................................................... 152 Department service metrics ....................................................................... 152 Vancouver Public Library