Much has already been said about the City of Vancouver’s operating budget shortfall, resulting in reduced services and mass layoffs of city staff.
And now the municipal government is nearing the junction where it will also have to make some difficult decisions on the 2019-2022 capital budget that funds new and improved infrastructure.
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Grace Cheng, the deputy city treasurer and the director of long-term financial strategy and planning, told city council last week that the city is expecting a $255 million drop in funding for the current three-year capital plan.
The decline is largely from the expected drop in real estate development activity, with development cost levies (DCLs) and community amenity contributions (CACs) from developers falling by $157 million and $47 million, respectively.
Other drops are $26 million from direct city contributions and $25 million from partner contributions, especially TransLink.
“We acknowledge that COVID-19 has really imposed significant strain on the city’s finances,” said Cheng.
“We acknowledge that, you know what, we need to live within our means, and this the new fiscal reality.”
To decrease the strain on the capital budget and ensure priorities can proceed, city staff have identified $300 million worth of projects in the capital plan that can be postponed or downsized in scope.
The biggest hit is the budget on water and sewer main infrastructure upgrades with the original budget set at $606 million. City staff are recommending lowering the budget by $133 million.
The second largest target area for cuts is $57 million from arts and culture — a 39% decrease from the original budget of $146 million. This includes $47 million from heritage grants typically funded by CACs, and $10 million from programs designed to help revitalize Chinatown. As well, $10 million set aside for the next phase of Hastings Park and PNE renewal will be “paused.”
The $325 million budget for transportation projects could see $45 million shaved. A third of the reduction is maintenance, including road rehabilitation, sidewalks and curb ramps, street lighting, and traffic signals.
Due to its own fiscal situation, TransLink has suspended its annual Major Road Network maintenance funding transfers to all municipalities. Instead, the full scope for these works will be deferred.
City staff are also looking to axe $13 million from the combined $32 million budget for the Granville Bridge Connector (bridge deck walking and cycling path) and the Drake Street bike lane by deferring the project scopes.
Other affected projects include reductions of $7 million from Gastown’s street rehabilitation and redesign (originally $10 million), $4.5 million from the redesign of West Georgia Street between Chilco Street and Nicola Street (originally $7 million), and $1.3 million from the second phase of the new Robson Square street-level plaza (originally $2.6 million). The scopes or phases of these projects would be deferred, not cancelled.
Within the Park Board’s budget, $42 million of the $269 million budget is eyed for cuts, including $8.8 million from the combined $15 million budget for English Bay Beach, Sunset Beach Park, and Queen Elizabeth Park improvements.
Another $3 million could be cut from Seaside Greenway improvements to Stanley Park and Kitsilano Park (originally $4 million), $1.3 million from Hastings Park stream and wetland (originally $1.6 million), $10 million from the new public park immediately east of the Olympic Village (originally $10 million), $7 million from the new public park at the corner of Fir Street and West 6th Avenue (originally $8 million), and $10 million from new park land acquisition (originally $80 million).
None of these Park Board cuts are permanent but rather deferments to the project scope or phase.
Reductions of $25 million on the $148 million budget for new and improved community facilities will also largely target Park Board projects, specifically the new Marpole Civic Centre on Granville Street and West End Community Centre replacement.
The capital plan originally budgeted $5 million for the planning of the new city hall campus, but this could see a reduction of $2 million, with the phase of planning work postponed.
Two areas that are not recommended for any budget changes are new childcare facilities ($119 million) and new affordable housing ($164 million), as both are deemed to be of high importance and are therefore prioritized.
“Affordable housing is really critical for Vancouverites, so we believe that the originally contemplated scope of work in the capital plan should be maintained,” continued Cheng.
With all that said, city staff have determined there is still some wiggle room in the capital plan budget.
Of the $1.1 billion in direct city contributions, $88 million designated for “emerging priorities funding” from property taxes has not been allocated to projects, with city staff recommending $40 million towards a new Grandview fire station, $8 million to relocate the city’s data centre outside of the Lower Mainland seismic zone, $10 million to social program initiatives especially in the Downtown Eastside, and $12 million for walking, cycling, public transit, and zero-emission building improvements.
City staff will finalize their work in August and provide city council with their final recommendations for changes to the capital plan budget by the end of September.