Falling development revenues force $254-million City of Vancouver budget cut

Sep 25 2020, 6:19 pm

Prior to the onset of COVID-19, the City of Vancouver was planning to spend $2.889 billion on its 2019-2022 capital plan supporting the construction of new facilities and infrastructure.

The majority of the budget, $1.63 billion, depended on payments from developers, spurred by their real estate development projects.

This includes $953 million from cash community amenity contributions (CACs) and development cost levies (DCLs), $110 million from connection fees and services funding, and $570 million from in-kind value developer contributions.

But with the pandemic’s economic impact, the expected CACs and DCLs will fall by about 25% — a drop of $236 million to $717 million. This single decrease accounts for most of the changes to the available budget for the capital plan.

Over the past decade, a significantly higher proportion of Vancouver’s new community and recreational amenities — including new public parks and open spaces, childcare, transportation infrastructure, arts and culture spaces, and social housing — depend on funding from developer contributions through CACs.

There is a further loss of $15 million, with TransLink’s contribution falling from $68 million to $53 million, including about $10 million from the maintenance of the Major Road Network.

The proportion of the municipal government’s self-funded budget is almost unchanged, falling from $1.095 billion to $1.075 billion, including the $11-million drop in taxpayer-funded capital from $224 million to $213 million.

As a result, the overall capital plan budget has dropped by about 10% to $2.635 billion.

“Pay-as-you-go” capital funding from both taxes and utility fees combined, totalling $403 million, will finance a “recalibrated” capital plan, with planning work and construction for projects either delayed or seeing their scopes deferred.

No budgetary changes have been made to the $158-million budget for childcare, and only marginal cuts have been made to affordable housing (-$15.3 million to $584.5 million), community facilities (-$12.9 million to $229.9 million), civic facilities and equipment (-$5.3 million to $106.3 million), and transportation and street use (-$10.5 million to $315.5 million).

The largest cuts were to parks and open spaces (-$43.5 million to $225.5 million), arts and culture (-$58.1 million to $131.2 million), water utilities (-$113.7 million to $503.5 million), and emerging priorities (-$65 million to $23 million).

Some of the major transportation projects that will proceed include the Granville Bridge Connector walking and cycling pathway, with its deferred scope budget falling from $25 million to $14.5 million.

Interim design of the Granville Bridge Connector, September 2020. (City of Vancouver)

Due to deferred scope, the redesign of Gastown’s streets and West Georgia Street have seen their budgets fall respectively to $10 million from $2.8 million and $7 million from $2.5 million.

The $12.1-million budget for bus stop upgrades is unchanged, but the budget for new sidewalks will fall from $7.4 million to $3.9 million. The municipal government previously set aside $5 million for the planning of its new and expanded City Hall campus, but this has dropped to $2.75 million with deferred scope changes.

Emerging priorities that are unaffected include $40 million for the new Grandview Fire Hall, $8 million to relocate the city’s data centre outside the Lower Mainland’s earthquake zone, and $12 million for climate change response, such as $8 million for “advancing mode share targets and electric vehicles,” $4 million for zero emission buildings, and $5 million for equity projects.

City council approved the capital plan changes in a meeting last week.

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