• The 2021-2022 Biennial Budget appropriates $1.3 billion for Operating and Capital Budgets, a 3.25 percent decrease from the 2019-2020 biennium.
• Operating budgets across all funds total $1 billion and provide resources for sustaining essential services to the community, with some focused reductions based on both economic impacts of the recession as well as operational impacts of the COVID-19 pandemic.
• Capital budgets across all funds total $0.3 billion, and include strategic investments in street, utility, park and facility infrastructure across the community,
• The 2021-2022 biennial budget includes 15.0 new full time equivalent (FTE) positions are added, bringing the total City FTE balance to 1,192.8 by 2022, representing approximately a 0.4% decrease over 2020.
• 20.0 FTE positions are held frozen, or unfunded, until funding sources can stabilize resulting from the COVID-19 impact brought about in 2020.
• The budget is balanced by on-going revenues and available cash resources. It assumes a 0.6% property tax revenue increase in both 2021 and 2022, rate adjustments for water, sewer, and surface water utilities, parks impact fees, and optimized fee rates in fee-for-service areas such as building, fire marshal review and inspection, parking and planning.
• New revenue source of Affordable Housing Local Sales Tax is included in the budget.

The 2021-2022 biennial budget includes programs and projects that advance the City's Strategic Plan on many fronts and contribute to Vancouver becoming a more safe, welcoming, vibrant and prosperous city.

In addition, revised financial policies and priority policy themes of equity, safety and climate action guided preparation of the budget.

The City of Vancouver 2021-2022 Biennial Budget has been prepared for approval. The Recommended Budget was published by the City Manager on October 1st, 2020, and was presented to Council in workshops held on October 5th, 12th, 19th, 26th and November 2nd. All of the changes to the Recommended Budget recommended by City Council through the course of the workshop discussions have been incorporated into the 2021-2022 Biennial Budget.

The 2021-2022 Biennial Budget appropriates $1.3 billion for both operating and capital expenses, representing a 3.2% decrease over the current 2019-2020 budget. It proposes using $57 million in existing cash reserves city-wide to fund both the capital program and one-time initiatives. A total of $1.0 billion is appropriated for all City operating funds and $0.3 billion for capital funds and related funding transfers. There are 15.0 full time equivalent (FTE) positions added, bringing the total to 1,192.8 FTEs by the end of 2022. A total of 20 existing positions are unfunded in the budget for the two-year period.

Operating Budget

 
Total 2021-2022 Operating budget in all City funds is $989 million. Of that amount, General, Street and Fire Budget appropriation for the two-year time period is $500 million. The 2021-2022 Budget continues to fully fund City reserves and depreciation accounts to the levels dictated in the Council-approved financial policies, while maintaining adequate operating capital throughout the biennium. The Budget also increases staffing in key areas, including economic development, diversity and inclusion, planning, capital project management, support services and increasing opportunities for succession planning. The General, Street and Fire Budget utilizes $18 million in existing cash reserves to fund one-time projects, including several strategic City initiatives, and a select number of capital projects. Approximately $39 million cash reserves in other operating and capital funds is utilized in the 2021-2022 Biennial Budget mostly to fund the City's capital program.

The 2021-2022 biennium anticipates continuation of paced recovery from the recession of 2020. The amount of economic uncertainty during the budget development process has been unprecedented, with the economy coming out of the deepest recession due to the pandemic and a high continued level of uncertainty related to changes in the spending patterns of society and the continued level of federal support of the economy. The revenue forecast is built on a conservative set of assumptions, including lower recreation revenue in 2021and subdued sales tax collections over the biennium.

The Budget moves forward several high priority initiatives advancing social justice, climate and safety priorities of City Council and the community. Some of the highlights of the initiatives in this area are outlined below:

• The Budget continues funding for coordination of the City’s efforts to respond to homelessness. A cross-departmental team will continue to work with the homeless population on City streets. 

• The Budget recommends setting aside $1.5 million per year dedicated to funding future recommendations from the Community Task Force on Policing, created in June of 2020, to review and make recommendations on establishing a body-worn camera program and use of force in policing. 

• The Budget continues investment in expansion of the Affordable Housing in the City and recommends advancing a new funding source – Sales Tax for Affordable Housing, to build additional units for the most disadvantaged population of the City.

• The Budget includes support for the Fourth Plain Commons project using a combination of General Fund, CDBG funding sources and utilizing a Section 108 Loan to round out the funding of the project. The project will serve as an incubator for new businesses to revitalize the Fourth Plain Corridor. The loan will be repaid by the future CDBG funding.

• Public Safety uniformed staffing was largely protected from budget reductions to ensure continued community safety, including the 13 new positions that were added during the 2019-2020 biennium to staff the new Fire Station 11. Funding for the positions starts in April of 2022 to ensure staff are trained and available to staff the new Station that is anticipated to come online in late 2022 or early 2023.

• The Budget also includes a number of funded planning efforts, such as: developing a Civic Center master plan for the vacant land surrounding City Hall and the Hilton Hotel and Convention Center, the largest remaining contiguous vacant land in the downtown core; and completion of the Transportation System Plan update, the guiding policy for hundreds of millions of dollars in future investments in the City’s transportation system. The recommended Budget also includes funding for implementation of the Heights District Plan.

• Included is funding for planning and build-out of the four new Complete Streets projects in different parts of town: NE 112th Ave, NE 51st Circle to SE Mill Plain Blvd to tackle safety issues, congestion and lack of connectivity; SE 34th Street, SE 164th to SE 192nd Ave; Fort Vancouver Way, Mill Plain Blvd to Fourth Plain Blvd, as well as planning efforts to begin on Fourth Plain Pedestrian improvements and addressing existing safety issues at Devine and 18th Street.
  
  

The budget is built on assumption of certain revenue increases over the biennium. Those include the statutorily authorized 0.6% increase in property tax revenues, for each year of the biennium, rate adjustments for sewer, water, surface water and garbage utilities to reflect inflation and fund depreciation costs already included in the Vancouver Municipal Code.

The budget includes $4 million per year in the Affordable Housing Local Sales Tax to fund new units of housing for households earning below 60% of the area median income. The budget also includes new capital projects in Parks funded by an increase in park impact fees. The fees on new single and multi-family residential construction have not been raised since 1994. The budget incorporates re-dedication of a portion of REET 1 funding to projects facilitating economic development and new job creation in the City. Other revenue increases include optimized fee rates in fee-for-service areas, such as building, fire marshal review and inspection, parking and planning.

Attachment B to the Ordinance outlines all changes in staffing included in the 2021-2022 Biennial Budget. The budget adds 15 new positions and freezes 20 existing positions, most of them vacant, across City operating departments. Most are added to address staffing deficiencies in key strategic areas, like economic development, diversity and inclusion, planning and city capital program management. The Budget includes adding two positions in the City Manager’s office: an FTE for a Director of Diversity, Equity and Inclusion and supporting resources to champion and coordinate City internal and external efforts in promotion of social equity and justice causes, and a new Assistant City Manager FTE to augment strategic City management resources. These and all other changes in staffing are outlined in the Attachment B.

2021-2022 Capital Budget

The City has nearly $2 billion in capital assets (building, streets, land, utility lines, etc.). Stewardship of these capital assets is critical to efficient, effective, and sustainable service delivery. While the true cost to manage these assets through their lifetime is daunting, the City has been making meaningful, strategic investments in our assets without adding new debt. The same trend is evident in the 2021-2022 Biennial Budget.

Attachment C to the Budget Ordinance displays a list of all projects included in the City of Vancouver’s 2021-2022 Capital Budget. The $269 million capital program includes $180 million for projects in multiple functional areas; additional appropriation of $89 million is related to funding transfers. Below are some highlights:

• Utilities projects totaling $102 million, include:
  

   

  • Water fund projects totaling $49 million include $20 million for the Water Station 5 reservoir to replace infrastructure components and rehab the existing lining for the aging steel tank, $6.5 million to continue construction of twin reservoirs constructed in 1909 and in the 1930s at Water Station 1 with two new seismically sound 4 million gallon reservoirs.

   

  • Wastewater utility appropriation totaling $46 million includes a $6 million replacement of lagoon diffusers that have deteriorated with age, $3 million for a two-phase east interceptor rehab from Marine Park Water Reclamation Facility and upstream using trenchless technology, $3 million for the continuation of upgrading Programmable Logic Controls (PLC) hardware and operating platforms at both the Westside and Marine Park treatment plants, and a variety of other collection and treatment projects.

   

  • Surface water appropriation of $8 million to keep up with the NPDES regulations including water quality and inspection programs.

   

• General Capital Projects include:
  

   

  • New Fire Station 11 construction primarily funded by Fire District 5 expected to be completed in late 2022, early 2023.

   

  • Purchase of the new Police Headquarters on Chkalov for $11 million in 2022 per the lease agreement using cash reserves in the General fund.

   

  • Officers Row roof replacements at the Grant House and Howard House and additional sidewalk repairs for $0.5 million.

   

  • Continued designed work on Replacement of the Operations Center. Funding is split between the General Fund and Water fund. This investment will result in a vastly more efficient, effective, and resilient facility that will better meet our daily operating and emergency response needs.

   

  • General Capital asset management program of $15 million includes major maintenance projects like roof replacements at VPD East Precinct, Fire Station 4 and Slocum House, and exterior masonry, sealing, painting, and server system upgrades at various city facilities.

• The Budget allocates $37.5 million for transportation capital project funding, funded by a combination of the vehicle license tab revenues, grants, impact fee revenue and local cash resources. The program includes the following projects:
  

   

  • SE 1st Street – 177th Ave to 192nd Ave. for $10 million, and SE 1st St – 164th to 177th for $9 million to fund the second phase of the urban arterial upgrade of an existing 2-lane rural road to increase safety, mobility and livability, and meet future subarea needs;

   

  • 137th Ave Corridor – 49th to Fourth Plain Blvd for $3 million in street improvements;

   

  • Westside Bike Mobility for $2 million focusing on the first phase of the Columbia Street corridor to include traffic calming and bicycle and pedestrian improvements in coordination with pavement management;

   

  • Various other traffic management projects and street and sidewalk improvements, including $1 million in Main Street improvements.

• Parks Capital program totals $8 million. The program includes funding for park land acquisitions in districts 2 & 4 using the City’s Park Impact Fee resources, and major renovations and expansions at parks including North Image, Oakbrook, Peter S. Ogden, Rose Village and Jaggy Road. Shaffer park design is included at a cost of $1.3 million. This project is funded by the proposed increase in the City’s parks impact fee revenues, planned for 2021-2022.
  
  

The 2021-2022 Recommended Budget addresses the top priorities of the community while exercising a high level of fiscal constraint in its use of City resources. The budget is balanced by using ongoing revenues, and one-time expenses are funded by existing cash. The budget sets initiatives in place that will bear financial savings in future biennia and will temper the growth in city expenditures.

1. The proposed budget will allow the City to provide valuable services to city residents in a variety of high-priority areas and advance key projects to better serve the community.
2. The highest priority services and projects as identified by the Council and Community are funded in the budget in the context of a resource-constrained environment.
3. The budget allows the City to continue to reinvest in our essential utility systems, including sewer, water and stormwater, on a pay-as-you go basis, without the use of debt.
4. The budget preserves emergency and operating reserves across all funds at a level that allows continued financial stability and resilience through the biennium.
5. The proposed budget will ensure that the City remains in compliance with state statutes that require all City expenditures to have an appropriation approved by ordinance.