Vancouver budget advisers recommend narrower focus, possible asset divestment

Click to play video: 'Vancouver releases budget task force report'
Vancouver releases budget task force report
The task force appointed to take a closer look at the City of Vancouver's books has released its report. The findings call for the city to find cost savings and efficiencies, but as Alissa Thibault reports, not all councillors are on the same page – Jan 18, 2024

The panel charged with digging into the City of Vancouver’s financial challenges has released its report, with findings it describes as “profound” and 17 recommendations aimed at improving efficiency.

According to Mayor Ken Sim’s Budget Task Force, the growing municipality faces two “urgent challenges.” The first is a “staggering” $500-million annual infrastructure funding deficit, despite property tax increases, and the second is an ever-expanding portfolio of responsibilities that traditionally handled by the provincial or federal governments.

“This expansion, driven by crises in areas such as housing access and affordability, opioid use, mental health, climate change, child care, and cost-of-living, has led to increased costs for the City’s residents and businesses, creating an unsustainable financial burden,” the task force said in its report going before mayor and council next week.

Click to play video: 'Vancouver City Council urged to get back to basics'
Vancouver City Council urged to get back to basics

The task force’s recommendations include that the city no longer approve property tax increases that outpace inflation, that it narrow its scope of responsibilities, and that it build mandatory collaboration protocols with other levels of governments, including First Nations.

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The volunteer panel also encouraged mayor and council to modernize its funding model to avoid “disproportionate contributions to provincial revenue” by Vancouver taxpayers and track how its revenue distribution from more senior governments compares with that of other large cities.

Christine Boyle, a councillor who is not a member of Sim’s ABC Vancouver majority, said the panel’s recommendations aren’t “game-changing.” She characterized some suggestions as “concerning,” and others as “comical.”

Click to play video: 'Vancouver Park Board talks fee increases, possible Stanley Park access fee'
Vancouver Park Board talks fee increases, possible Stanley Park access fee

“What was missing from the report was any kind of actual definition of what core services are, and I think what the municipality’s core services are would shift depending on who you’re talking to,” Boyle told Global News.

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“The housing challenge is absolutely a responsibility of all levels of government, and there’s a lot more that the city could be doing in terms of land use to make it faster and easier and less expensive to build non-market and social housing.”

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Click to play video: 'Vancouver draft budget proposes 7.6 per cent hike'
Vancouver draft budget proposes 7.6 per cent hike

In December, mayor and council approved a 2024 operating budget of $2.2 billion that included a property tax increase of 7.5 per cent. Three per cent of the increase was allocated to meet the needs of the Vancouver Police Department, and 3.5 per cent was allocated to other city services.

The Budget Task Force convened in April as an external advisory body, with Sim noting that the 10.7-per cent property tax increase approved in 2023 was not sustainable nor “desirable.” However, spending within the VPD, the Vancouver Public Library, and the Board of Parks and Recreation — now slated to be dismantled — were outside of its scope of review.

The task force also took aim at municipal employment, stating that each day of reduced employee absenteeism could save about $4.5 million a year. It recommended ensuring more holistic supports are in place for staff, as well as updated health and safety programs, and development performance targets and a reward system for employees.

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Click to play video: 'Vancouver Mayor Ken Sim on park board abolition'
Vancouver Mayor Ken Sim on park board abolition

As another cash-saving measure, the advisory body floated the idea of collaborating with other municipalities on procurement of significant items and services, allowing private entities to own Vancouver’s “non-core assets” and either selling, redeveloping or modifying any underutilized assets.

According to the report, the current assessment value of the city’s Property Endowment Fund is about $5.7 billion, yet it contributed only $13 million in dividends to city operations last year as well as a cash yield of 0.2 per cent.

Brian Montague, an ABC Vancouver councillor, said those suggestions were “interesting.”

“I think one of the things that the report really said to me was that we’re not utilizing and leveraging those investments as well as we could be,” he said. “I think we can do much better than $13 million for sure.”

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Boyle, however, found them “concerning” and said she hopes the public has opportunity to weigh in.

“It’s also not a new idea, but time and again, we’ve seen public-private partnerships end up being more expensive for taxpayers, and the idea that we would just sell some city assets is such a short-term solution to what is clearly a bigger, longer term problem,” Boyle said.

Montague further supported, in principle, the idea of leaning into private investors and philanthropists as a source of funds.

He also suggested, in line with the report’s recommendation, it may be time to “stop being as nice as we have in the past” when it comes to taking on traditionally provincial or federal portfolios. But like Boyle, he agreed that the definition of what falls under the city’s core jurisdiction may differ depending on who is asked.

— with files from Alissa Thibault


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