TABLE OF CONTENTS

REPORTS OF THE STANDING COMMITTEES

AND OTHER COMMITTEES

As Considered by

The Council of the City of Toronto

on July 29, 30 and 31, 1998

STRATEGIC POLICIES AND PRIORITIES COMMITTEE

REPORT No. 15

1Transition Projects

21998 Wheel-Trans Budget Update

3Funding of Additional Capital Projects for Transportation

4Toronto Transit Commission - Subway Asbestos Removal -Program Requirements

5Purchase of Service Agreements with AIDS Committee of Toronto and Youthlink Inner City for the Period July 1, 1998 to June 30, 1999

6North Toronto Memorial Arena's Request for a $15,000.00 Cash Advance

7Audit Committee - Roles and Responsibilities

8Mandate - Audit Services Division

9Audit Division Restructuring and Staff Redeployment

101997 Management Letter - Social Services Division -General Welfare Assistance Program

111997 Management Letter - Former Metropolitan Toronto Library Board

121997 Management Letter - Hostel Services Division

131997 Management Letter - The Hummingbird Centre for the Performing Arts

141997 Management Letter - Canada's Sports Hall of Fame

151997 Management Letter - Toronto Hydro

161997 Management Letter - The Parking Authority of Toronto

171997 Financial Statements of The Metropolitan Toronto Housing Company Limited

18Donation for Caribana

19Policy - Disaster Situations and Requests for Emergency Relief

20Selection of External Attest Auditors 1998 - 2002

211997 Management Letters of the former Municipalities- Metropolitan Toronto, City of Toronto, City of Scarborough,City of Etobicoke, City of York and Borough of East York

22Ontario Lottery Corporation - Advance Funding Program

23Status of Special Committees and Task Forces

24Other Items Considered by the Committee

City of Toronto

REPORT No. 15

OF THE STRATEGIC POLICIES AND PRIORITIES COMMITTEE

(from its meeting on July 24, 1998,

submitted by Mayor Mel Lastman , Chair)

As Considered by

The Council of the City of Toronto

on July 29, 30 and 31, 1998

1

Transition Projects

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the transmittal letter (July 14, 1998) from the Budget Committee, and the recommendation in the report (July 20, 1998) from the Chief Financial Officer and Treasurer:

Recommendations:

The Budget Committee on July 13, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that:

(1)$570,000.00 be approved for Transition Project F-7 - Toronto Fire Service (Training - manuals, equipment, seminars - standardization required);

(2)$150,000.00 be approved for a feasibility study for Transition Project F-2 - Toronto Fire Service - (Radio Communications System) and that the Fire Chief report to Council on July29, 1998 on a breakdown of how the $150,000.00 will be spent;

(3)$700,000.00 be approved for Transition Project F-1 - Toronto Fire Service (Station Location Study);

(4)$940,000.00 be approved for Transition Project F-4 - Toronto Fire Service - (Headquarters Consolidation);

(5)$121,000.00 be approved for Transition Project CLK-04 - Clerk's Department - (Training, Dismantle and Relocate, Centralize Mail/Courier, File Server Archiving);

(6)Transition Project TP-6 - Transportation (Legislative and Operating Harmonization and Consolidation) be approved, subject to the work being carried out in-house;

(7)$199,000.00 be approved for Transition Project TP-10 - Transportation (Purchase of License of ITX Source Code);

(8)$250,000.00 be approved for Transition Project TPA-1 - Parking Authority (Consolidation/Renovations to Head Office, 33 Queen Street East);

(9)$870,000.00 be approved for Transition Project H-1 - Health Department (Vaccine Preventable Disease Redesign);

(10)$392,000.00 be approved for Transition Project Chi 01 - Child Care (Relocation of two field offices to Civic Centres);

(11)$192,000.00 be approved for Transition Project Chi 02 - Child Care (Management of Downloaded Information (Executive Office) and the Commissioner of Community and Neighbourhood Services report back to the Budget Committee advising if the work is being done externally or internally;

(12)$47,000.00 be approved for Transition Project Chi 03 - Child Care (Financial Reporting Processes for Downloaded Programs);

(13)$100,000.00 be approved for Transition Project Chi 04 - Child Care (Equipping Program Consultants for Increased and Diversified Caseload);

(14)$1,781,000.00 be approved for Transition Project SS 01 - Social Assistance and Employment Support (Caseload Transfer from Provincial FBA Program to Municipal Ontario Works Program) and that the Commissioner of Community and Neighbourhood Services provide a confidential report as to how the City can manage the costs of this program more efficiently;

(15)$651,000.00 be approved for Transition Project IT-1 - Information Technology (Telecommunications: external consultant; labour cost plus leased lines)

(16)$5,000,000.00 be approved for Transition Project HR-1 - Chief Administrative Office - (Amalgamation and Service Rationalization) and that the Chief Administrative Officer provide a status report to the Budget Committee at the end of 1998;

(17)$1,315,000.00 be approved for Transition Project HR-3 Finance and Human Resources (various including: Excluded Employee Compensation Plan, Labour Relations Consultants, External Search Consultants and New Employee Benefits Plan Consultants and that the Corporate Services Committee be requested to review the use of consultants, in the Finance and Human Resource area, with a view to reducing the City's reliance on consultants;

(18)Transition Project PUD-l - Urban Planning (New Official Plan) be approved and the Commissioner of Urban Planning and Development Services report back to the Budget Committee in October if funding for this project cannot be absorbed within the departmental budget.

The Budget Committee reports having deferred the following:

(a)Transition Project F-5 - Toronto Fire Service - (Self-contained breathing apparatus) and requested:

(i)the Fire Chief to proceed with the work on a unified single breathing apparatus;

(ii)the Chief Financial Officer and Treasurer and Fire Chief to provide to the Budget Committee in September or October an overview on what type of breathing apparatus is being recommended, the phasing in of this apparatus; and the timing for standardized training after the purchase of the breathing apparatus;

(b)Transition Project F-3 - Toronto Fire Service (Computer Assisted Dispatch System (CAD/RMS) until September 1998;

(c)Transition Project TP-1 Transportation (Evaluation, selection and implementation of unified business application systems, road allowance control, work management, capital accounting and other) until September 1998.

(d)Transition Projects HOU 01 and 03 - Housing (Financial and Property Management, Cityhome, and Registry Information Tracking) pending receipt of the report from the Ontario Housing Corporation;

(e)Transition Project FM-3 - Facilities Management (Business Systems Integration) to the next meeting of the Budget Committee and that the City Solicitor provide a report on the licensing issue;

(f)Transition Project FM-4 - Facilities Management (Contingency moves to be identified) and that the Commissioner of Corporate Services bring forward to the next Budget Committee meeting the details of the Request for Proposal for this transition project; and

(g)the report (July 12, 1998) from the Commissioner of Corporate Services regarding the use of consultants in the City Hall relocations to the next meeting of the Budget Committee.

The Budget Committee also reports having referred Transition Project HOU 02 - Housing (Systems Standardization) to the Executive Director of Information Technology for a report back to the Budget Committee.

Background:

The Budget Committee on July 13, 1998, had before it the following:

(a)financial summary of the transition projects from the Chief Administrative Officer, deferred from the Budget Committee meeting held on July 7, 1998, indicating those transition projects which are of a high priority and those which can be deferred until September 1998;

(b)report (July 7, 1998) from the Fire Chief regarding the radio communications system;

(c)report (July 13, 1998) from the Fire Chief regarding an overview of transitional funding requests;

(d)report (July 10, 1998) from the Medical Officer of Health providing additional information regarding the vaccine preventable disease program;

(e)report (July 12, 1998) from the Commissioner of Corporate Services regarding the use of consultants in the City Hall relocations; and

(f)communication (July 13, 1998) from the Project Manager, Computer-Aided Dispatch and Records Management System regarding funds for the CAD/RMS Project for Fire Services.

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(Report dated July 7, 1998 addressed to the

Budget Committee from the Fire Chief)

Purpose:

The Fire Service radio communications systems are presently made up of a variety of 800 MHZ technologies, as well as VHF and UHF systems. These systems were purchased as independent systems, and the design and coverage areas were developed within the old municipal boundaries. There is an urgent requirement to implement an integrated solution to the 800 MHZ radio communications systems, thereby providing an increased level of service to the public as well as reducing the risk to fire fighters and providing standardized operations throughout the Toronto Fire Service.

Funding Sources, Financial Implications and Impact Statement:

The proposed solution is a smartzone trunking network, comprised of four simulcast trunking zones that preliminary predictions indicate deliver portable street level coverage and medium in building portable radio coverage that is augmented by additional receiver sites and mobile repeaters throughout the city.

The four radio communications system zones are:

(i)West Zone(Etobicoke)

(ii)North Zone(North York)

(iii)East Zone(Scarborough and East York)

(iv)South Zone(Toronto and York)

The proposed solution will be a three year transitional investment totalling $26,000,000.00.

Recommendations:

It is recommended that:

(1)transitional funding in the amount of $26,000,000.00 be approved for the implementation of a fully integrated 800 MHz radio communications system for the Toronto Fire Service.

(2)the appropriate Toronto Fire Service staff be authorized to implement the integrated 800 MHz radio communications system.

Council Reference/Background/History:

This project was originally submitted January 8, in the Fire Services Capital Budget, and then re-submitted February 18 when the Transition Projects were removed from the Capital Program.

Comments and/or Discussion and/or Justification:

The integrated radio communications system must establish consistent coverage and a standard technology platform for the Fire Service throughout the City of Toronto. The Toronto Fire Services has an existing investment of $7.7 Million in operational 800 MHz radio communications equipment. York and Toronto were in the process of upgrading from VHF and UHF to 800 MHz prior to amalgamation, but the projects were postponed.

The Fire Service must implement an integrated 800 MHZ radio communications system. This integrated system will establish the communications backbone for the Fire Service and facilitate seamless operations for coordinated closest vehicle response to emergency incidents across the City of Toronto. The Fire Service has the most stringent requirements of the three public safety agencies, and the most severe working environment. The design and implementation of this system would upgrade each individual system to a homogeneous technology platform, providing consistent radio coverage, and ensuring standard operations and firefighter safety.

Toronto Fire Services, under the guidelines of the Peer Review, assessed opportunities for integration between the Emergency Services for radio communications systems. This design was consistent with the existing systems presently operated by Toronto Police Services and Toronto Fire Services. A joint design group identified areas to eliminate duplication and reuse existing equipment where possible. The Fire Services have not yet finalized a system design and subsequent levels of integration, but have agreed at a minimum, to share radio communications infrastructure with Toronto Police Services.

Estimated costs of $21,000,000.00 for infrastructure, equipment, and support services is included in transition capital costs for the Fire Service. The Fire Service has the most stringent requirements for radio communications in terms of coverage, working environment and grade of service (access to channels), therefore a further $5,000,000.00 is required to address the Fire Services' unique requirements for in building radio coverage using radio receiver sites and mobile repeaters, and fire station alerting.

The project has been identified in a number of phases, the end result being a four zone networked integrated radio communications system. A cost breakdown of the individual phases of the project is included.

Conclusions:

The Fire Service does not have in house expertise to perform either the engineering and systems design for a new system, or the independent engineering review of that design.

An engineering consultant must be contracted to review the Fire Service's needs and develop an overall integration plan.

Contact Names:

Vera Maute Vince St Jean

392-1700396-5362

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Appendix I

Estimated Totals:

West Zone$ 1,400,000.00

North Zone$ 1,700,000.00

East Zone$ 1,500,000.00

South Zone$ 4,200,000.00

Dispatch Centre$ 4,100,000.00

User Gear$ 2,300,000.00

In Building Coverage$ 4,000,000.00

Fire Station Alerting$ 1,000,000.00

Smartzone Networking$ 2,000,000.00

Services$ 3,800,000.00

$26,000,000.00

Three Year Transitional Investment:

1998:

$2,600,000 million will be required in 1998. Included in this amount is the costs for the proposal and engineering review. 10 percent of the project funding will be paid at the signing of the negotiated contract.

1999:

$20,800,000 million will be required in 1999. This will be paid as project milestones are completed

2000:

A final payment of $2,600,000 million, the remaining 10 percent of the project funding will be paid in the Year 2000 at final acceptance of the system.

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(Report dated July 13, 1998 addressed to the

Budget Committee from theFire Chief)

Purpose:

This report responds to the request of the Budget Committee for additional information regarding

the requests for transition funding from the Fire Services.

Funding Sources, Financial Implications and Impact Statement:

Transitional funding has been requested for the following projects:

Computer-Aided Dispatch and

Records Management System (CAD/RMS) $15,400,000.00

Radio Communications system (Radio): $26,000,000.00

Standardized Self-Contained Breathing Apparatus (SCBA)$1,600,000.00

Standardized Training (Training):$570,000.00

Fire Station Location StudyApproved and Underway

Headquarters ConsolidationApproved

Recommendations:

It is recommended that:

(1)total funds as noted below, phased over three years, be approved for the Fire Services for the following four projects:

CAD/RMS:$15,400,000.00 upset limit with $500,000.00 requested for 1998.

Radio:$26,000,000.00 subject to final review by radio consultant,

with $2,600,000.00 requested for 1998.

SCBA:$1,600,000.00 ($2,000,000.00 less $400,000.00 trade-in allowance) all for 1998.

Training:$570,000.00 -all for 1998; and

(2)staff be authorized to release a Request for Proposal document for the CAD/RMS system and proceed with the acquisition of the SCBA and Training projects in concert with the Purchasing Department's normal procurement procedures.

Council Reference/Background/History:

Budget Committee at its meeting of July 7, 1998 requested that the Fire Chief provide a further report to be presented to Budget Committee at its next meeting scheduled for July 13, 1998 providing additional information on the four requests for transition funding. Requested information included: (a) radio equipment capacity, growth capability, and the reasonable lifespan of the telecommunications switch, and (b) the degree of data integration, linkages to other emergency services and the database platform for the Computer-Aided Dispatch system.

Comments and/or Discussion and/or Justification:

Note: The Fire Station Location Study and the Headquarters Consolidation projects have already been approved by council.

Radio System:

The Fire Service radio communications systems are presently made up of a variety of 800 MHZ technologies, as well as incompatible VHF and UHF systems. These systems were purchased as independent systems, and the design and coverage areas were developed within the old municipal boundaries. There is an urgent requirement to implement an integrated solution to the 800 MHZ radio communications systems, thereby providing an increased level of service to the public as well as reducing the risk to fire fighters and providing standardized operations throughout the Toronto Fire Service. The proposed solution will be a three-year transitional investment totalling $26,000,000.00.

The Toronto Fire Services has an existing investment of $7.7 Million in operational 800 MHz radio communications equipment. York and Toronto were in the process of upgrading from VHF and UHF to 800 MHz radio systems in 1997, but the projects were postponed pending amalgamation.

The Fire Service must implement an integrated 800 MHZ radio communications system. This integrated system will establish the communications backbone for the Fire Service and facilitate seamless operations for coordinated closest vehicle response to emergency incidents across the City of Toronto. The design and implementation of this system would upgrade each individual system to a common networked technology platform, providing consistent radio coverage, and ensuring standard operations and firefighter safety.

Toronto Fire Services, under the guidelines of the Peer Review, assessed opportunities for integration between the Emergency Services for radio communications systems. This design was consistent with the existing systems presently operated by Toronto Police Services and Toronto Fire Services. A joint design group identified areas to eliminate duplication and reuse existing equipment where possible. The Fire Services have not yet finalized a system design and subsequent levels of integration, but have agreed at a minimum, to share radio communications infrastructure with Toronto Police Services.

Total costs of $26,000,000.00 for infrastructure equipment and support services also addresses the Fire Service's unique requirements for "in-building" radio coverage, working environment and grade of service (access to channels). The Fire Services has the most stringent requirements for radio coverage and fire station alerting.

The radio system being proposed here will met the Fire Service's needs for a 5 -10 year period and will be built with the flexibility for expansion.

Computer-aided Dispatch System:

The fire Services wishes to acquire and implement a centralized Computer-Aided Dispatch system that will incorporate features and functionality of software (computer programs) that are unique to fire departments. This uniqueness includes the capability for the system to capture and display site-specific information at the time of the call, e.g. location of hazardous chemicals, floor plans, location of utility shut-off valves and building fire protection systems, owner and tenant information, structure information, an analysis of the potential threat to neighbouring structures, etc. In addition, the fire software will analyse the quantity, type and current location of the vehicles required for dispatch and automatically notify them electronically.

Whether or not the Fire Services is presently amalgamated, or will eventually become amalgamated with other emergency agencies will have no bearing on the decision to recommend a system that is specific to the stated and unique needs of the Fire Services. The proposed system does include electronic links from the Police 9-1-1 system and to/from the ambulance dispatch system which will allow both of these agencies to share dispatch-related information dynamically between them whether or not they share the same physical facility.

The proposed CAD/RMS system will use existing map data -to the extent that it exists today -from the Public Works departments of the former seven municipalities and the Land Information Services department of former Metro. New files will only be built if they do not currently exist in a usable format. The operating system will probably be Windows NT, however suppliers will be allowed to propose other software operating systems if they feel they are more advantageous to the City.

Of the six Communications Centres taking calls from the public for emergency assistance, three of these sites are presently computerized while the other three are not. Of the three that are computerized, none of them are Year 2000 compliant. We will be able to address the issue of Year2000 non-compliance as part of this project.

Self-contained Breathing Apparatus:

Due to the fact that the six former fire departments acquired equipment that was not compatible amongst themselves, we must now standardize for a variety of reasons, the most important reason being firefighter safety. The current stock still has a reasonable life span and it is this residual value that makes these units attractive to the used equipment' marketplace.

Noted below is further information relating to the acquisition options available and the methodology to be used by staff of the Fire Services to choose a supplier of SCBA, the criteria and rationale for its selection, the opportunities for salvaging existing equipment and information on the life span of the current stock.

Currently, there are three different types of self-contained breathing apparatus in use by firefighters in the Toronto Fire Services: (1) Mine Safety Appliances - 4500 Custom II, (2) Scott (4.5 & 2.2), and (3) International Safety Instruments. These three different apparatus types are not compatible with each other with the result that firefighter safety could be compromised.

The technology that is required would have to incorporate amongst others, the following criteria: built-in safety factors, (e.g. voice communications, pass alarms, etc.), be sufficiently light in weight, durable, relatively maintenance free, cost effective both in initial capital cost and ongoing operating costs, manufacturer's service support, cost of replacement parts, length and conditions of warranty, etc.

The evaluation process would include an equipment testing period that would extend for 90 -120 days and would occur in various stations across the city. Selected staff from all affected and applicable divisions (including the Health and Safety Committee) would form an Evaluation Committee and be charged with the responsibility of recommending to the Fire Chief a supplier for new SCBA equipment and a purchaser for our used equipment. It is possible that one supplier might be contracted for both of these needs. The Evaluation Team would conduct the applicable equipment tests (e.g. water submersion test, fogging test, etc.) and be responsible for ensuring that each supplier's product meets the required safety regulations presently in effect.

Many opportunities exist for salvaging existing equipment as discussions have been held with interested parties. From verbal valuations given to date, we expect to realize approximately $500.00 per unit for each of the 843 units presently in use for a total of about $400,000.00.

Training System:

One method of training and one set of training material must be used in order to most effectively facilitate and expedite a safe and consistent amalgamation of the six emergency response departments. Previously the former Departments utilized different training packages. Management, media relations and conflict resolution sessions should be provided to all senior management, approximately 100 staff.

One-time transitional funding is requested. The estimated costs are $570,000.00. The purchase of this one time investment would impact the training materials line item, if drawn from the Fire Services Operating Budget.

The Fire Services are now ready to proceed to order the required training materials to commence the various programs required to ensure the operational effectiveness of staff. This will allow a consistent level of training for the new Service.

Bulk purchasing will allow for reduced costs. The following training materials will be ordered for distribution to staff:

IFSTA Essentials of Fire Fighting Training Manual -4th Edition$127,440.00 (US funds)

IFSTA Essentials of Fire Fighting Study Guide$86,000.00 (US funds)

Sub-Total US Funds:$213,440.00 (US funds)

Sub-Total Cdn. Funds:$320,000.00

ADD:

Ontario Fire Fighter Standards:

3,200 Learner Guides$ 71,280.00

3,200 Learner Notes$ 31,280.00

1,000 Trainer Facilitator Guides$ 21,768.00

Sub-Total Cdn. Funds $124,000.00

Implementation Assistance:$76,000.00

TOTAL COSTS( with applicable taxes)$570,000.00

Conclusions:

The Fire Services is prepared to take action on these four projects immediately upon receiving approval from council to proceed. The CAD/RMS and SCBA projects will be initiated with a Request for Proposals document. The Radio system firstly requires the retention of a radio consultant to document the specifications for a suitable system, while the Training system is ready for acquisition.

The Fire Services requires these four projects to proceed to truly amalgamate the former six fire departments and to ensure the safety of both our staff and the public.

Contact Names:

Alan Speed, 397-4300.

Norm Gibbons, 397-4315.

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(Report dated July 10, 1998 addressed to the

Budget Committee from the Medical Officer of Health)

Purpose:

This document is to provide additional information to reports previously submitted to the Budget Committee regarding the Vaccine Preventable Disease Program (VPD) re-design.

Source of Funds:

1998 transition capital budget.

Recommendation:

It is recommended that the Budget Committee approve the requested budget of $870,000.00.

Background:

Currently, the VPD Program is offered in six offices across the new city. The rationalization of this program includes centralizing staff and the vaccine-related databases. Due to this rationalization, a $400,000.00 savings will be realized annually. This results in reducing staffing by 7 FTEs.

Justification:

(1)Why Centralize:

Continuing to use six separate systems and processes will mean students in Toronto will be suspended from school when their record exists in another database. This is poor customer service and potentially will result in legal action against the city. It places an unnecessary burden on students, parents, school staff, as well as our VPD staff.

With the budget reduction of $400,000.00, we are not be able to operate the program as was done in the past. The new program has been designed to utilize fewer staff. The transition funding request enables this to occur.

(2)Mobile Technology:

Mobile technology will be used to connect on-line to immunization databases. E-mail is not the intended primary use, however, mobile staff will be able to keep up-to-date with critical issues using this technology. Office space, desks and phones will ultimately reduce as a result of this rationalization.

(a)Grade 7 Hepatitis B Immunization Program:

Students in the city transfer schools at a rate of 40 percent. Immunization information must be accessible on-site to ensure the greatest number of students are immunized. Otherwise, the immunization of certain students may be deferred until a later date or students may be immunized too soon and the vaccine will not be effective. In both these cases students will be at a higher risk for acquiring the disease. Manual procedures can be put in place to call the office and some offices perform this task using cell phones at the school location. However, this requires two staff, one at the clinic and one at the office location to determine the eligibility of the student to receive the vaccine. Due to the volume of students to be immunized and the reduction in VPD staff, this practice cannot continue. In addition, on-site data entry keeps records as up-to-date as possible and productivity at clinics is maximized.

(b)Immunization Clinics for the Homeless:

This vulnerable population is at high risk for acquiring vaccine preventable diseases. Offering immunization to these individuals reduces their risk. However, the clinics must be accessible to these individuals and thus are offered in shelters and drop-in centres. For health and safety reasons, immunization staff need to know what immunization has been given by the health department in the past. Access to the database at these sites enables staff to ensure they are not over immunizing and putting the client at risk. These sites are not fixed and may change from year to year.

(c)Additional Mandatory Program:

A new Ministry of Health mandated program, Inspection of Physician Vaccine Storage and Handling Practices, has been absorbed by this rationalization. No new staff will be required to implement this program based on receiving our requested transition budget. However, a new software system is needed to support the program. These users will also make use of the mobile technology while making over 3,000 visits annually to health care provider offices.

Attached are two tables which detail the requested budget and an inventory of current and planned equipment.

Conclusions:

This capital investment in the information system to support the VPD Program is essential to achieve the $400,000.00 designated savings.

Contact Name:

Jann Houston, Toronto Office, Tel: 392-0884, Fax: 392-0631.

Fraser Ratchford, Toronto Office, Tel: 392-7411, Fax: 392-0047.

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Table 1: Budget

Table 2: Inventory of Equipment

**Information from the former City of Toronto indicated that their annual maintenance costs were $260,000. Maintenance costs for 10 additional notebooks will not be significant. All new equipment is under warranty for two years.

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(Report dated July 12, 1998 addressed to the

Budget Committee from the Commissioner of Corporate Services)

Purpose:

To provide the Budget Committee with information about the use of consultants in the City Hall relocations.

Funding Sources, Financial Implications and Impact Statement:

Funding in the amount of $1.7 million for this Stage One planning and critical 1998 moves has been requested from the Transition Reserve Fund - this request is currently under consideration by the Budget Committee. A further funding amount of $1 million from the Transition Reserve Fund to complete this work and initiate the Yards property consolidation study is also under consideration by the Budget Committee. An allocation of $710,000.00 for consulting fees is included within both of these funding requests and is outlined in the discussion section.

Recommendations:

It is recommended that this report be received for information.

Council Reference/Background/History:

The Budget Committee, at it's July 7, 1998 meeting, "¼requested the Commissioner of Corporate Services to report to the Budget Committee on July 13, 1998, advising how many consultants have been hired to date to achieve the moves to City Hall, at what cost and why this work cannot be completed in-house."

Discussion:

The Departments are now re-organizing and are requiring adjustments to space allocations. The Facilities & Real Estate Division must respond to manage relocations and overall space planning to ensure the new organization can be as effective as possible.

Consultants have not been utilized in the management or planning of any Council and/or staff relocations that have occurred in 1998. Consultants will not be utilized in any relocation management and/or planning to occur in the remainder of 1998. This work has been and will continue to be completed by City staff as the significantly condensed time-frames for the relocations to date and projected in 1998 require detailed knowledge of existing buildings and a "just-in-time" approach to planning.

The consulting firm of Kelly, McTernan & Lavoie was retained by the Facilities & Real Estate Division in April to assist in the strategic planning necessary to establish the workplan for the office and civic space consolidation project. This work was funded by a $10,000.00 Department Purchase Order. Findings of a summary report submitted to the City are included in a staff report submitted to the July 20, 1998 Corporate Services Committee and conclude the scope of current work by this firm. City staff were extensively involved in the planning process but required facilitation of planning sessions and external advice on current market trends.

As noted above there is a further request for $2.7 million to complete the planning for office and civic space consolidation, initiation of the Parks/Works Yards study and the necessary 1998 relocations. The Budget Committee has requested a breakdown of consulting fees contained within these two requests. The breakdown of consulting fees in the total amount of $710,000.00 is as follows:

(i)$100,000.00 will be expensed to hire students and purchase additional hardware/software to complete the necessary Computer Assisted Drawings of the civic and office space buildings. There are insufficient staff resources to complete the drawings quickly and the students are less costly. This activity will allow City staff to expedite relocation planning and will reduce actual relocation expenses in 1999 and 2000 by up to 30 percent.

(ii)$310,000.00 will be utilized to retain a prime consultant to provide expert advice and complete the necessary work to detail recommendations, associated budget savings and an implementation plan for office and civic space consolidation. To this end a Request for Proposals for a prime consultant or consortium will be issued in July 1998.

(iii)$300,000.00 will be utilized to initiate the planning required for the Yards consolidation. Staff have already completed an initial inventory of Yard properties in preparation for this project.

The use of consultants on these projects will be to provide the expert analysis and recommendations covering all aspects of portfolio management from reasonable space standards to building condition surveys to real estate market analysis. In addition, consultants will also be utilized to ensure that best practices in the use of space and the overall reduction of space are achieved for the new City of Toronto. City staff will be extensively involved in this project in providing space needs analysis and base building information. The current and anticipated workload through 1998 to complete critical relocations does not allow City staff to complete the planning phases of these projects by the December deadline.

Conclusions:

The City has not retained any consultants to complete relocations in 1998. City staff will perform all functions related to the planning and management of the anticipated moves into City Hall in 1998. Consultants have been retained to date to assist with the overall approach to the office and civic space consolidation project and involvement from a prime consultant is required to complete Stage One of this project in 1998. Consultants will also be required to assist with the planning required to consolidate the City Yards properties.

The use of consultants on these space consolidation projects is required to meet the project deadlines and provide external best practice and current market advice.

Contact Name:

Mark Davies, Tel: 397-0805 / Fax: 397-0825, Project Team Lead, Facilities & Real Estate Division.

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(Communication dated July 13, 1998 addressed to Councillor Tom Jakobek

from the Project Manager, Computer-Aided Dispatch and Records Management System)

We request Council approval to spend upwards of $500,000.00 in 1998 on the Computer-Aided Dispatch and Records Management System (CAD/RMS) project. These funds would provide for the establishment of a Wide Area Network which is the basis for a CAD/RMS system.

Requested goods and services include:

(i)Computers and printers in all 80 fire stations, divisions and offices.

(ii)Modems and communications equipment in all sites with computer equipment.

(iii)Installation of telecommunications lines via Bell Canada; i.e., I.S.D.N. to connect the network.

(iv)Computer operating systems and basic software tools for employee productivity.

(v)Design and Implementation of basic networking systems; i.e., e-mail, etc.

(vi)Staff Training.

The above-noted goods and services would be acquired in consultation with staff of the corporate Services Commission.

The Strategic Policies and Priorities Committee also submits the following report (July20,1998) from the Chief Financial Officer and Treasurer:

Purpose:

To provide funding authority for transition projects recommended by Budget Committee on July 13, 1998 as summarized in Appendix A-1.

Funding Sources, Financial Implications and Impact Statement:

Funding for the 1998 transition project costs totalling $13.1 million is to come from:

(a)dedicated reserve fund sources totalling $7.4 million; and

(b)the transition reserve fund totalling $5.7 million.

Total three-year transition project costs are estimated to be $17.7 million with annualized savings of $7.0 million.

Recommendations:

That 1998 funding totalling $13.1 million for transition projects identified in Appendix A-1 be approved and funded by $7.4 million from the dedicated sources and by $5.7 million from the transition reserve fund.

Council Reference/Background/History:

At its meeting of July 8, 1998, Council approved high priority transition projects totalling $23.3 million as summarized on Appendix A-2. At its meeting of July 13, 1998, the Budget Committee approved $17.7 million in transition project costs as summarized in Appendix A-1 and deferred consideration of transition projects totalling $64.1 million as per Appendix A-3. The FIS & HRIS System project totalling $26.3 million will be reviewed by a joint meeting of the Budget Committee and Corporate Services Committee.

Discussion:

Financial Summary:

The following is a financial summary of the transitional projects listed in Appendix A-1 and is consistent with the transmittal from Clerks to the Strategic Priorities Committee detailing the recommendations of the Budget Committee meeting of July 13, 1998:

($000's)

* Projected annualized savings to realized by the year 2000.

The FIS/HRIS transition project listed in Appendix A-1 is to be reviewed by a joint meeting of Budget Committee and Corporate Services Committee.

1998 Transition Reserve Fund:

Presently, the transition reserve fund has a balance of $31 million available. This is sufficient to provide funding for the transition projects approved by Council (Appendix A-2) and the transition projects to be considered by Council including the FIS/HRIS Project (Appendix A-1), which in total require $29.9 million from the 1998 transition reserve fund.

$000's

Total 1998 Transition

Cost Reserve Fund

Approved by Council July 8, 199823,29215,912

Recommended by Budget Committee

July 13, 199817,7025,673

FIS/HRIS Project to be reviewed26,300 8,300

Total67,29429,885

Transition projects totalling $64.1 million which have been deferred for review in September 1998 (Appendix A-3) may require debenture financing of $10.4 million for the 1998 cost which would have an impact of $0.3 million for the 1998 debt charges and $1.5 million for the 1999 debt charges.

Conclusions:

Further review of the transition projects deferred for consideration in the fall of 1998 will be required to determine future year funding requirements and funding sources. Several higher priority transition projects have already been approved by Council and others are recommended by Budget Committee. These projects must proceed in order to realize the savings identified in the 1998 budget.

Contact Name:

Shekhar Prasad, Director, Budget Services, 392-8095.

Insert Table/Map No. 1

Appendix A-1 - transition projects

Insert Table/Map No. 2

Appendix A-1 - transition projects

Insert Table/Map No. 3

Appendix A-1 - transition projects

Insert Table/Map No. 4

Appendix A-1 - transition projects

(A copy of the financial summary, attached to the transmittal letter of the Budget Committee respecting the transition projects from the Chief Administrative Officer, deferred from the Budget Committee meeting held on July 7, 1998, indicating those transition projects which are of a high priority and those which can be deferred until September 1998, has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July24, 1998, and a copy thereof is also on file in the office of the City Clerk.)

(City Council on July 29, 30 and 31, 1998, had before it, during consideration of the foregoing Clause, the following report (July 28, 1998) from the Commissioner of Works and Emergency Services:

Purpose:

The purpose of this report is to respond to the Budget Committee's request of July 13, 1998 to provide a breakdown of how the funding for the feasibility study would be spent.

Funding Sources, Financial Implications and Impact Statement:

On July 13, 1998, the Budget Committee allocated $150,000.00 to secure the services of a radio communications consultant to review the technology proposed for the integrated radio communications system and the conceptual design. This study is required to support implementation of a new Radio Communication System and Computer Aided Dispatch System for the Fire Department. There is concern that the corporate implications of requests for communication system upgrades for fire and police be reviewed to ensure that the potential for shared systems, cost savings and future requirements are fully addressed.

Recommendation:

That this report be received for information.

Comments:

The study may cost less than $150,000.00 based on the developed terms of reference and the following four major tasks:

(1)The consultant will undertake a high level review and present an interim report of findings on which items should proceed, with emphasis placed on Toronto Police projects No. 037 (Occurrence Re-engineering) and 057 (Radio System Re-Engineering).

(2)The consultant will undertake a review of the conceptual design of the integrated Police and Fire radio communications system and Police Project No. 054 (M.D.T. replacement) and produce a report.

(3)The consultant will undertake a review of opportunities in the broader public sector, within the City of Toronto respecting participation in the Provincial Government mobile communication initiative and report based on the information provided.

(4)The consultant will provide recommendations on:

(a)how the current communications technologies presently in use can be re-utilized and combined into the new system;

(b)the life expectancy of the current technology; and

(c)the best means to ensure that there is appropriate potential in the new system for growth and change without loss of the new and current investment.

Conclusion:

The estimated cost of the consulting services is about $100,000.00, including applicable taxes. We would request that the funding approval level remain at $150,000.00 with the outstanding balance of available funding identified when the consultant's final report is tabled at Committee.

Contact Names:

Dan Perlstein, Toronto Police Service, Tel: (416) 808-6905, and

Vera Maute, Toronto Fire Services, Tel: (416) 392-1700.)

2

1998 Wheel-Trans Budget Update

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 14, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 13, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that the Toronto Transit Commission maintain its unaccommodated rate at 2 to 3 percent and report back to the Budget Committee meeting scheduled for November 10, 1998 on a source of funding to cover the increased costs resulting from a higher demand for Wheel-Trans service.

Background:

The Budget Committee on July 13, 1998, had before it a transmittal letter (July 13, 1998) from the Urban Environment and Development Committee regarding the 1998 Wheel-Trans Budget Update.

Councillor Howard Moscoe, Chair, Toronto Transit Commission, appeared before the Budget Committee in connection with the foregoing matter.

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(Transmittal letter dated July 13, 1998, addressed to the Budget Committee

from the Urban Environment and Development Committee)

Recommendation:

The Urban Environment and Development Committee on July 13, 1998, recommended to the Budget Committee, the adoption of the recommendations of the Toronto Transit Commission embodied in the attached communication (June 19, 1998) from the General Secretary, Toronto Transit Commission, regarding the 1998 Wheel-Trans Budget.

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(Communication dated June 19, 1998, from the

General Secretary, Toronto Transit Commission)

At its meeting on Wednesday, June 17, 1998, the Commission considered the attached report entitled, "1998 Wheel-Trans Budget Update."

The Commission approved the Recommendation contained in the above report, as listed below:

"It is recommended that the Commission approve:

(1)increasing the 1998 Wheel-Trans Operating Budget of $38.2 million by up to $625,000.00, and the workforce complement from 380 to 383, as set out below:

(a)increasing the Sedan Taxi service by up to $400,000.00 to accommodate unbudgeted costs associated with increased trip demand;

(b)increasing the Wheel-Trans maintenance costs by $75,000.00 as a result of decreasing Orion bus reliability and thereby delaying the planned reduction of the Wheel-Trans Maintenance workforce;

(c)allocating the legal costs associated with the current Canadian Charter of Rights and Freedoms Challenge of the Wheel-Trans application process and eligibility criteria, in the amount of $150,000.00 to the 1998 Wheel-Trans Operating Budget;

(2)increasing the current purchase order upset limits of the Sedan Taxi Contracts by up to $400,000.00 in order to provide for these additional trips; and

(3)forward this report to the City of Toronto requesting City Council approval, through the City Budget Committee, of a draw from the Corporate Contingency Account in the amount of $625,000.00, bringing the 1998 Budget to $38.8."

The foregoing is forwarded to City of Toronto Council for the necessary approval, as detailed in the report.

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(Report No. 5 from the meeting of June 17, 1998,

of the Toronto Transit Commission)

Recommendations:

It is recommended that the Commission approve:

(1)increasing the 1998 Wheel-Trans Operating Budget of $38.2 million by up to $625,000.00, and the workforce complement from 380 to 383, as set out below:

(a)increasing the Sedan Taxi service by up to $400,000.00 to accommodate unbudgeted costs associated with increased trip demand;

(b)increasing the Wheel-Trans maintenance costs by $75,000.00 as a result of decreasing Orion bus reliability and thereby delaying the planned reduction of the Wheel-Trans Maintenance workforce;

(c)allocating the legal costs associated with the current Canadian Charter of Rights and Freedoms Challenge of the Wheel-Trans application process and eligibility criteria, in the amount of $150,000.00 to the 1998 Wheel-Trans Operating Budget;

(2)increasing the current purchase order upset limits of the Sedan Taxi Contracts by up to $400,000.00 in order to provide for these additional trips; and

(3)forward this report to the City of Toronto requesting City Council approval, through the City Budget Committee, of a draw from the Corporate Contingency Account in the amount of $625,000.00, bringing the 1998 Budget to $38.2 million.

Funding:

The 1998 Wheel-Trans Operating Budget did not provide sufficient funds to accommodate the increased demand, accelerated decline of Orion fleet reliability, and costs associated with the Challenge under the Canadian Charter of Rights and Freedoms. Therefore, the additional funding of up to $625,000.00 is an unbudgeted expense.

Background:

Demand:

The 1998 Wheel-Trans Operating Budget provided for a trip demand of 1,415,000. The TTC Accessible Transit Services Plan 1998-2002, which utilized Metro Planning Department demographic studies as well as actual Wheel-Trans experience during 1997, and the Transit Accessibility Needs Study prepared for the Metro Council Advisory Committee to the TTC Task Force on Accessible Transit, predicted Wheel-Trans demand would increase by about 3 percent per annum. However, the 1998 Wheel-Trans trip demand was increased by approximately 6 percent in order to reflect full year impact of the significant registrant growth throughout 1997 combined with an additional 2 percent projected registrant growth in 1998 and a trip utilization rate increase of 1 percent.

Experience in the first half of 1998 indicates the increase in trip demand by year-end will be in the order of 2 percent to 3 percent above the 1998 budget estimates. This translates into an additional 40,000 trips requested. In order to achieve the goal of a 2 percent unaccommodated rate for the remainder of 1998, the Wheel-Trans Operating Budget would have to be increased by up to $400,000.00. The additional trips would be provided by sedan taxi contractors because the available accessible taxi fleet will be used to capacity and the unreliability of the aging Orion fleet means they cannot accommodate the added demand.

Legal Costs:

Legal costs associated with the Canadian Charter of Rights and Freedoms Challenge regarding the Wheel-Trans eligibility criteria and application process are anticipated to be $150,000.00 for 1998. This Challenge was forwarded to the Commission in March, 1998 and therefore was not provided for in the 1998 Wheel-Trans Operating Budget.

Orion Maintenance Costs:

The declining reliability of our Orion bus fleet results in both customer inconvenience when trips are interrupted and additional cost to achieve Wheel-Trans budgeted service levels. In order to maintain the Orion service levels for the remainder of 1998, the planned maintenance workforce reduction will not be possible. Funding in the amount of $75,000.00 is required to provide for additional maintenance resources for the balance of 1998.

Discussion:

The 1998 Wheel-Trans Operating Budget of $38.2 million is comprised of $36.2 million for service and $2.0 million to begin replacement of the aging Orion fleet scheduled to take place over the next five years. This Orion replacement plan was approved by the Commission in August, 1997 when the report of the TTC Task Force on Accessible Transit and Five Year Accessible Transit Services Plan were presented.

In 1998, staff have taken action in order to maximize service within the funding available. Wheel-Trans has improved scheduling efficiency and productivity is up. New Zone Service has been introduced and consideration is currently being given to expanding this Zone service in early 1999 rather than later as originally planned. With the introduction of a new Cancellation Policy in 1997, the cancellation rate initially decreased to 9 percent, however, the rate has increased to 12 percent during 1998. This increase has had a negative impact on our ability to provide additional trips within the funds available. A report will be submitted later this year recommending changes to this policy in order to bring the rate of cancellations to an acceptable level.

The increased 1998 Wheel-Trans demand is due to a combination of an expanding registrant base (currently 15 percent or 1,800 higher than the 1998 year-end target level of 11,600) and increased trip utilization by these registrants. The milder winter weather, improved quality of service, and positive response to the new Downtown Zone Service have all contributed to this increased utilization of the service and an overall increase in our trip demand. As a result of this increased demand, the unaccommodated rate has risen from 2 percent to 4 percent.

Alternatives were considered to address this additional demand. One involves maintaining service with current funding ($36.2 million) which will result in an increased unaccommodated rate of 6.5-7.5 percent for the last six months of this year (overall 5.5 percent for 1998). This is not an acceptable option as it means the quality of service will continue to deteriorate to an unacceptable level.

An alternative to use part of the $2 million dedicated in the 1998 budget for Orion bus replacement is not an option. This is not recommended as it will delay the replacement of the Orion fleet, a key component of the approved Five Year Accessible Transit Services Plan, required to reduce operating and maintenance costs and to improve service. Proposals for replacing the Orion Bus fleet will be tendered in July with the approval to award a contract anticipated in August, 1998.

The recommended option is to maintain the 2 percent unaccommodated rate for the remainder of 1998 (currently 4 percent), by maximizing the level of service available from Orions and accessible taxis, and increasing funding by up to $400,000.00 to accommodate additional taxi trips to year- end. This additional funding would be drawn on as needed by adjusting contracted taxi purchase orders.

In order to respond to the reliability problems with the Orions and maintain current levels of service, an increase of $75,000.00 is required for maintenance staff in 1998. It was anticipated in the 1998 budget that a reduction in maintenance costs could be accomplished, however, the reliability problems experienced to-date suggest cost reductions in this area are not realistic and could contribute to being unable to provide service at the levels required. Our peak hour vehicle allocation is now down to 115 vehicles while in 1997 it was still possible to schedule 117 vehicles for peak service.

With regard to the legal costs for the challenge under the Charter of Rights and Freedoms, this item was not foreseen in the 1998 Operating Budget and, given the situation outlined above, this cost cannot be accommodated in the remainder of 1998. As such, a separate allocation should be established as part of the Wheel-Trans funding.

Justification:

It is appropriate for the Commission to authorize up to an additional $625,000.00 for the Wheel-Trans budget to address higher than budgeted demand, the inability to reduce our maintenance costs and the funds necessary for the legal costs associated with the Charter challenge.

3

Funding of Additional Capital Projects for Transportation

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 14, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 13, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that the uncommitted revenue from the sale of property assets be used to fund the additional $9.103 million for the 1998 Capital Program for Transportation approved by City Council on April 29 and 30, 1998.

The Budget Committee reports having:

(a)referred the joint report (June 22, 1998) from the Chief Administrative Officer and the Commissioner of Corporate Services to the Corporate Services Committee for information; and

(b)received the memorandum (July 6, 1998) from Councillor Jack Layton, Don River.

Background:

The Budget Committee on July 13, 1998, had before it the following:

(a)joint report (June 22, 1998) from the Chief Administrative Officer and the Commissioner of Corporate Services providing information about the proceeds from the sale of City-owned property;

(b)transmittal letter (May 8, 1998) from the City Clerk advising that City Council approved additional funds for transportation projects and requesting the Budget Committee to report on the source of the additional $9.103 million possibly from the projected sale of major assets;

(c)report (May 25, 1998) from the Chief Financial Officer and Treasurer identifying the source of funding for the additional $9.103 million approved by Council; and

(d)memorandum (July 6, 1998) from Councillor Jack Layton regarding the proceeds from the sale of properties.

--------

(Joint report dated June 22, 1998, addressed to the Budget Committee

from the Chief Administrative Officer and the Commissioner of Corporate Services)

Purpose:

To respond to requests from the Budget Committee for information about the proceeds from sale of City owned property.

Source of Funds:

Not applicable.

Recommendation:

It is recommended that this report be referred to the Corporate Services Committee for information.

Council Reference/Background/History:

At its meeting of May 26, 1998, the Budget Committee had before it a report from the Commissioner of Corporate Services, "Expediting the Sale of Property and Reduction of Leased Space", dated May 11, 1998. Among other things the Committee requested:

(1)the Commissioner of Corporate Services to report to the next Budget Committee on:

(i)the saleability of the subject properties and the process to be implemented with regard to the disposition of City-owned land;

(ii)those properties where the proceeds from the sale of the properties are required to go back to a specific reserve or to be allocated for a specific purpose as a result of previous Council policies;

(2)the Chief Administrative Officer to report to the next meeting of the Budget Committee:

(i)on those properties which the Budget Committee can count on being sold this year and the expected closing dates; and

(ii)as to whether there are any reserves or liens on these properties.

This report provides information on the above requests.

Comments:

(1)Saleability of the surplus properties and the process for considering disposition:

The City's surplus properties contain a wide range of property types in varying conditions. The list, which has been updated for this report, in Appendix A includes:

53 houses in the Spadina Corridor;

19 small remnant parcels in the Spadina Corridor of interest only to abutting property owners from whom the parcels were severed;

19 houses in the Scarborough Corridor;

49 parcels of vacant land; and

2 industrial, 1 industrial office space, 1 playground, 3 commercial, and 2 office properties.

The saleability of a property depends on the market demand for the type of property, its location, and its potential, and will be reduced by conditions such as contamination, existing leases or oversupply of the property type. Real estate staff of the various former municipalities develop appropriate strategies for the sale of each property, taking into consideration recent sales in the area for the property type.

Properties that have already been declared surplus are being reviewed by Councillors and staff and some properties, such as the former Mimico Incinerator site, may be reconsidered for other uses.

The processes for considering whether a property should be declared surplus by City Council are set out in the report to the Corporate Services Committee from the Commissioner of Corporate Services dated May 11, 1998 "Acquisition and Disposal of Real Property" . The process includes review by the new senior staff Property Management Committee. The May 11, 1998 reports "Surplus Property within the "Spadina Corridor" and "Scarborough Transportation Corridor"and "Sale of "Property Houses" (houses in the former City of Toronto originally acquired for parks purposes but operated by Cityhome) establish special processes for the sale of these groups of residential properties, including those that are currently tenanted.

(2)Properties where the proceeds from the sale are required to go back to a specific reserve or allocated for a specific purpose as a result of previous Council decisions and policies:

The list in Appendix A includes lists of properties sold this year, sales in progress and surplus properties that may be sold this year, along with any specific allocation for a specific purpose or reserve fund of a former municipality. Sales completed to date this year and sales in progress are primarily a result of sales approved by former municipalities and allocations are to the reserve funds of the former municipalities.

The allocations for the properties sold this year and for sales in progress were for the following types of special reserves:

(a)parks purposes;

(b)social housing;

(c)environmental remediation for former Harbour Commission properties; and

(d)the general land reserve accounts of the former municipalities.

It should be noted that City Council, at its meeting of April 29 and 30, 1998, adopted Clause 12 of Report 6 of the Strategic Policies and Priorities Committee, which contained the report of the Chief Financial Officer and Treasurer. The report established new reserve funds into which the funds of the previous municipalities have been collapsed. These include the Discretionary Land Acquisition Reserve Fund, Other Discretionary Reserve Funds (including social housing and environmental remediation) and a Non Discretionary Parkland Acquisition Reserve Fund.

For the purpose of this report, the allocations to reserve accounts are grouped in the chart below. The charts reflect the situation as of June 15, 1998, so that City Council approvals for the sale of a property at the June 3 and 4 meeting are included in the list of sales in process. With respect to the Spadina Corridor houses, the charts do not show the share of revenues allocated to the Province, which is one third of the total revenue.

Allocation to Reserves: Properties Sold in 1998 to Date and Properties with Sales in Process

Therefore, the total revenues from completed sales and sales in progress that are forecast to be received in 1998 by the City are $23,457,189.00. The net unallocated proceeds available for other purposes at this time are $8,118,265.00.

In addition, there will be revenue from the sale of additional properties already declared surplus. The former City Councils and City Council have approved the future allocations of revenues for some properties yet to be sold. As appraisals have not been done on these properties, no revenue amounts can be listed at this time.

Approved Allocation of Revenue from Future Sales

PropertyWardAllocation

Everett Cr1Parks Dedication Fund

116 Combe8Parkland Development

180 Duncan Mill11Land Acquisition

Centennial Rd16Land Development

6520 Lawrence16Land Development

80 Turnberry21Expropriation of 11R Hounslow Heath

30 St. Lawrence 25Social Housing

877 Woodbine26Social Housing - landbanking

(3)Properties that the Budget Committee can count on being sold this year:

Appendix A sets out the list of properties already sold this year or sold with closing dates established for this year. Closing dates will be established for additional properties on the list, and there will be additional sales and closings if additional properties are declared surplus, including:

(1)revenue from the sale of the property houses, as set out in the report, "Sale of Property Houses", which recommends that a number of houses be declared surplus and sold; and

(2)revenue from the sale of additional properties that will be declared surplus this year, provided there is sufficient time for the sale and closing. It is anticipated that a report will be submitted to the Corporate Services Committee for its July meeting to recommend a list of properties to be declared surplus by City Council at its meeting in July.

It should be noted that the October 1 meeting is the latest date for Council approval of most types of sales so that the closing can occur in 1998. As unforseen issues can arise, the completion of a sale cannot be guaranteed to occur by a specific date.

Conclusions:

Detailed information about sales completed in 1998, sales in process, and surplus property that will potentially be sold is included in the Appendix of this report, and information is provided on these lists about allocation of funds where this has been previously approved. The planned hiring of the Project Director, Real Estate Disposal, will augment existing staff resources to expedite disposal of property.

Contact Name:

Cathie Macdonald, Interim Lead, Facilities & Real Estate, phone 392-0449, fax 392-0029 (bc98100.wpd).

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Appendices

Property Lists

Appendix A - Report of Properties Sold in 1998 as of June 15

Appendix B - Report of 1998 Sales in Progress

Appendix C - Report of Properties Declared Surplus by Former Municipalities and the new City of Toronto: Work in Progress

Please note Spadina Corridor, Spadina Corridor Rear Lot Remnants and Scarborough Corridor Properties:

2/3 of revenue generated to the City, 1/3 of revenue generated to the Province - until $30 million is reached. After $30 million, the split is 50/50. Agreement was reached with the Province to charge against the ORC portion the costs of the sale (ie. Appraisals, surveys, etc.)

Attached is an abbreviations list for Property Types and Property Status to be used with the Appendices.

Insert Table/Map No. 1

Appendices A - C

Insert Table/Map No. 2

Appendices A - C

Insert Table/Map No. 3

Appendices A - C

Insert Table/Map No. 4

Appendices A - C

Insert Table/Map No. 5

Appendices A - C

Insert Table/Map No. 6

Appendices A - C

Insert Table/Map No. 7

Appendices A - C

Insert Table/Map No. 8

Appendices A - C

Insert Table/Map No. 9

Appendices A - C

Insert Table/Map No. 10

Appendices A - C

Insert Table/Map No. 11

Appendices A - C

Insert Table/Map No. 12

Appendices A - C

Insert Table/Map No. 13

Appendices A - C

Insert Table/Map No. 14

Appendices A - C

(Transmittal letter dated May 8, 1998, addressed to the

Budget Committee from theCity Clerk)

City Council, at its Special Meeting held on April 29 and 30, 1998, in adopting the 1998 Operating and Capital Budgets, directed, inter alia, that the 1998 Capital Program, pertaining to the Transportation Program, be amended, in principle, by adding funds for:

(1)Bridge Construction$ 1,530,000.00

(2)F.G. Gardiner Expressway$ 2,000,000.00

(5)Bridge Reconstruction$ 1,350,000.00

(6)Road Resurfacing$ 3,323,000.00

(7)Traffic Control$ 400,000.00

(9)Safety and Operational Improvements$ 500,000.00

Total$ 9,130,000.00;

and further that the Budget Committee be requested to report to City Council on June 3, 1998, on the source of the additional $9,103,000.00 for the 1998 Capital Program for Transportation, possibly from the projected sale of major assets.

--------

(Report dated May 25, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To identify the source of funding of the additional $9.103 million approved by Council in the Transportation capital budget.

Funding Sources, Financial Implications and Impact Statement:

The projects are to be funded as indicated below.

Recommendations:

It is recommended that the uncommitted revenue from the sale of property assets be used to fund the additional $9.103 million approved by Council.

Background:

In Clause 2 of the agenda before Budget Committee today, is a report addressing the programs under way to expedite the disposal of land and reduction of leases. Out of the total anticipated proceeds, the Commissioner of Corporate Services has identified, in a memorandum to the CAO, the specific uncommitted revenues that could be made available to fund the additional Transportation capital projects of $9.103 million approved by Council. (Copy of the memorandum is attached).

Comments:

Council, in approving the 1998 capital budget for Transportation, amended the proposed Transportation budget by $9.103 million for the following projects, in order of priority:

$ million

(1)Bridge Construction $ 1.530

(2)F.G. Gardiner Expressway$ 2.000

(3)Bridge Construction$ 1.350

(4)Road Resurfacing$ 3.323

(5)Traffic Control$ 0.400

(6)Safety and Operational Improvement$ 0.500

Total$ 9.103

The specific work to be undertaken, as identified by the Transportation department, is as follows:

(1)Bridge construction on York Mills road from the Don river to east of Don Mills Road and the W.R. Allen Underpass at Elm Ridge drive, both at an estimated gross cost of $1.53 million (project : City No. 055);

(2)F.G.Gardiner Expressway bent repair and rehabilitation of the supporting columns from Jarvis Street to Cherry Street at an estimated cost of $2.0 million (project: City No. 180);

(3)Bridge construction on Lawrence Avenue West from the Humber River to east of Scarlett Road at an estimated cost of $1.35 million (project: City No. 055);

(4)Road resurfacing at 4 locations (project: City No. 396);

(5)Traffic Control which includes $100 thousand for the installation of audible signals and $300 thousand for the replacement and/or upgrade of old traffic plant. (projects: City No. 037 and No. 031); and

(6)Safety and Operational improvement includes miscellaneous works to improve the pedestrian and vehicular safety on arterial roads (project: City No. 380).

The historical spending pattern, on a gross basis, over the last five years, from 1993 to 1997, is an average of $85.1 million. On a comparable basis, the 1998 approved estimate for city wide projects is $77.3 million on a gross basis which is $7.8 million lower than the five year historical spending average. Excluding projects funded under the Federal Provincial Municipal (FPM) program and more recently, in 1997, the Canada Ontario Infrastructure Works (COIW) program this average is reduced to $69.7 million on a gross basis. The 1998 approved city wide estimate is $7.6 million higher than this average.

The 1998 estimate of $77.3 million includes an amount $33.0 million solely on the Humber bridges project approved by the former Metro Council in 1997. This leaves only $44.3 million for all other city wide projects. Given the previous spending average of $85.1 million gross annually, as indicated above, combined with the commitment of $33.0 million for Humber bridges, it is anticipated that the department will not experience any significant under expenditure in the program.

Conclusions:

This report identifies the funding of the additional $9.103 million approved in the Transportation capital program and provides background information on the historical spending patterns of the program to assess overall reasonableness of the additional amounts approved.

Contact Name:

Shekhar Prasad, 392-8095, Fax 392-3649, Internet: shekhar_prasad@metrodesk.metrotor.on.ca.

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(Memorandum dated May 24, 1998, addressed to the Chief Administrative Officer

from the Commissioner of Corporate Services)

See attached lists.

Revenue from properties sold in 1998 and closed and not previously allocated$1.56 million

Revenue from Spadina houses sold (assuming City retains half the revenue)$1.60 million

Revenue anticipated from sales in progress where not previously allocated$5.50 million

Revenue from identified sales approved by the Corporate Services Committee$5.90 million

or being resolved to report to next meeting and not allocated

(114 Coombe, 23 Fraser, 171 Strathearn, 20 Sudbury,

2/s Avonmore Square, 530 Woburn)

TOTAL$10.56 million

In addition 2 land leases are in the process of being sold$18 to 21 million

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(Memorandum dated July 6, 1998, addressed to the

Budget Committee from Councillor Layton)

Recommendations:

It is recommended that:

(1)that City staff be directed to delay the sale surplus properties identified below for a period of 75 days;

(2)that the Council Strategy Committee for People Without Homes report to the next Budget Committee meeting on the following:

(a)the properties identified for potential affordable housing purposes and the rational used in the identification process

(b)a business plan for the utilization of these properties including:

(i)type of project being contemplated for each site;

(ii)funding mechanisms to be used in development;

(iii)potential end users;

(iv)timelines for expeditious development; and

(v)opportunity costs to the City for the targeted use of each property.

Background:

The report provides information on progress on the sale of City-owned properties that have been declared surplus. Most of the surplus designations were established under protocols of the former municipalities and Metro government. As such, properties currently being marketed have not been reviewed for their potential use in meeting key corporate objectives pursuant to directives established by new City Council. Specifically, Council has directed that the Council Strategy Committee for People without Homes be given an opportunity for input into the process of property disposition.

The Council Strategy Committee for People without homes and several other City Committees are reviewing innovative approaches used in other municipalities to meet the housing needs of lower income people. These include the following:

(a)low income ownership programs in New York City and Windsor, Ontario;

(b)multi-unit residential development by groups like Habitat for Humanity; and

(c)municipal programs encouraging the private development of Single Room Occupancy Hotels in Vancouver and San Diego, California

The key common denominator in all of these approaches has been the targeted use of City land resources. While in certain cases (especially in projects for the homeless) the municipalities under review have not received full market value for their property, in many instances cities have been able to achieve full value while still leveraging the development of new, permanently-affordable housing.

In the future, the review of properties by the Council Strategy Committee will ensure that lands are evaluated for their potential to meet housing needs prior to their final disposition by the City. However, a number of properties currently in the City's surplus portfolio have not been subject to this review and may be among the most suitable for affordable housing.

The Advisory Committee on Homeless and Socially Isolated Persons is establishing a panel made up of City staff and experts in the community to evaluate the City-owned properties for their potential use for innovative affordable housing. form a preliminary review of the current portfolio of surplus properties, it appears that at least 15 sites have potential for meeting affordable housing objectives while still generating revenue sales.

Potential Sites for Affordable Housing (preliminary list)

4

Toronto Transit Commission - Subway Asbestos Removal -

Program Requirements

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 14, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 13, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the recommendation embodied in the transmittal letter (June17, 1998) from the Urban Environment and Development Committee.

Background:

The Budget Committee on July 13, 1998, had before it a transmittal letter (June 17, 1998) from the Urban Environment and Development Committee.

--------

(Transmittal letter dated June 17, 1998, addressed to the Budget Committee

Urban Environment and Development Committee)

Recommendation:

The Urban Environment and Development Committee on June 15 and 16, 1998 recommended to the Budget Committee, the Strategic Policies and Priorities Committee, and Council the adoption of Recommendation No. (5) embodied in the communication (May 21, 1998) from the General Secretary, Toronto Transit Commission, viz:

"(5)forward this report to the City of Toronto Council requesting the necessary Project Approval adjustments set out in Appendices A, B andC, noting that no additional funds are required overall."

Background:

The Urban Environment and Development Committee had before it a communication (May 21, 1998) from the General Secretary, Toronto Transit Commission advising that the Toronto Transit Commission (Commission) on May 20, 1998, approved the following recommendations contained in report No. (33), entitled "Subway Asbestos Removal - Program Requirements":

"It is recommended that the Commission:

(1)authorize staff to proceed with the Subway Asbestos Removal Program in accordance with the revised schedule and modified methodology as reported to the Commission on September 23, 1997, noting that overall savings will be achieved in the Capital Program;

(2)grant additional project approval in the amount of $364,000.00 for a scaffold workcar under program 4.23 Purchase Rail Non-Revenue Vehicles, for a total estimated final cost of $3,781,000.00 (see Appendix A) and thereby further approve:

(a)authorization of award of a contract to AVRA Industries, Tender No.N31S8079, in the amount of $409,664.50, for the design and manufacture of a scaffold workcar for the immediate use in the Asbestos Removal Project on the North Yonge Line;

(b)funds in the amount of $92,335.50 for in-house labour and material costs related to the purchase of the scaffold workcar;

(3)grant additional project approval in the amount of $140,000.00 for the overhaul of four workcars under program 4.22 Rail Non-Revenue Vehicle Overhaul, for a total estimated final cost of $7,143,000.00 (see Appendix B); which will provide the necessary funds for in-house labour and material costs to complete the work and provide workcars for immediate use in the Asbestos Removal Project on the North Yonge Line;

(4)approve these funds being held in TTC accounts pending City Council approval of the Project Approval adjustments, as set out in Appendices A, Band C; and

(5)forward this report to the City of Toronto Council requesting the necessary Project Approval adjustments set out in Appendices A, B and C, noting that no additional funds are required overall."

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(Communication dated May 21, 1998,

from the General Secretary, Toronto Transit Commission.)

At its meeting on Wednesday, May 20, 1998, the Commission considered the attached report, entitled "Subway Asbestos Removal - Program Requirements."

The Commission approved the Recommendation contained in the above report, as listed below:

"It is recommended that the Commission:

(1)authorize staff to proceed with the Subway Asbestos Removal Program in accordance with the revised schedule and modified methodology as reported to the Commission on September 23, 1997, noting that overall savings will be achieved in the Capital Program;

(2)grant additional project approval in the amount of $364,000.00 for a scaffold workcar under program 4.23 Purchase Rail Non-Revenue Vehicles, for a total estimated final cost of $3,781,000.00 (see Appendix A) and thereby further approve:

(a)authorization of award of a contract to AVRA Industries, Tender No.N31S8079, in the amount of $409,664.50, for the design and manufacture of a scaffold workcar for the immediate use in the Asbestos Removal Project on the North Yonge Line;

(b)funds in the amount of $92,335.50 for in-house labour and material costs related to the purchase of the scaffold workcar;

(3)grant additional project approval in the amount of $140,000.00 for the overhaul of four workcars under program 4.22 Rail Non-Revenue Vehicle Overhaul, for a total estimated final cost of $7,143,000.00 (see Appendix B); which will provide the necessary funds for in-house labour and material costs to complete the work and provide workcars for immediate use in the Asbestos Removal Project on the North Yonge Line;

(4)approve these funds being held in TTC accounts pending City Council approval of the Project Approval adjustments, as set out in Appendices A, Band C; and

(5)forward this report to the City of Toronto Council requesting the necessary Project Approval adjustments set out in Appendices A, B and C, noting that no additional funds are required overall."

The foregoing is forwarded to City of Toronto Council for the necessary approval, as detailed in the report.

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(Toronto Transit Commission Report No. 33, entitled Subway Asbestos Removal -

Program Requirements from its meeting of May 20, 1998)

Recommendations:

It is recommended that the Commission:

(1)authorize staff to proceed with the Subway Asbestos Removal Program in accordance with the revised schedule and modified methodology as reported to the Commission on September23, 1997, noting that overall savings will be achieved in the Capital Program;

(2)grant additional project approval in the amount of $364,000.00 for a scaffold workcar under program 4.23 Purchase Rail Non-Revenue Vehicles, for a total estimated final cost of $3,781,000.00 (see Appendix A) and thereby further approve:

(a)authorization of award of a contract to AVRA Industries, Tender No. N31S8079, in the amount of $409,664.50, for the design and manufacture of a scaffold workcar for the immediate use in the Asbestos Removal Project on the North Yonge Line;

(b)funds in the amount of $92,335.50 for in-house labour and material costs related to the purchase of the scaffold workcar;

(3)grant additional project approval in the amount of $140,000.00 for the overhaul of 4 workcars under program 4.22 Rail Non-Revenue Vehicle Overhaul, for a total estimated final cost of $7,143,000.00 (see Appendix B); which will provide the necessary funds for in-house labour and material costs to complete the work and provide workcars for immediate use in the Asbestos Removal Project on the North Yonge Line;

(4)approve these funds being held in TTC accounts pending City Council approval of the Project Approval adjustments, as set out in Appendices A, B and C; and

(5)forward this report to the City of Toronto Council requesting the necessary Project Approval adjustments set out in Appendices A, B and C, noting that no additional funds are required overall.

Funding:

The change in methodology will result in costs under Program 4.23 Purchase Rail Non-Revenue Vehicles and Program 4.22 Rail Non-Revenue Vehicle Overhaul which were not specifically included in those sections of the 1998-2002 Capital Program. However, sufficient funding is included under Program 6.1 Environmental Programs, Subway Asbestos Removal (pages613-618) in the 1998-2002 Capital Program as approved by City Council on April 29, 1998.

Background:

The Commission has had an asbestos removal program in the subway system since the early 1980's. The work methods were developed by a task force consisting of representatives from the Ministry of Labour, Pinchin Environmental, Ontario Research Foundation, and the Commission. The methodology restricts actual asbestos removal to less than 1-1/2 hours each night after revenue service resulting in low output. After 17 years of asbestos removal in the subway system, an additional 20 years would still be required, using existing procedures.

At its May 27, 1997 meeting, the Commission approved the closure of the subway between Lawrence and Eglinton Stations on Saturday, July 12, and Sunday, July 13, 1997, to allow for an asbestos removal pilot project in the subway tunnel at this location.

The purpose of the pilot was to provide an opportunity to analyze asbestos removal productivity, methodology, costs, and safety issues for a continuous removal operation over a 52-hour period on the weekend while the subway system was shut down. The objective was removal of asbestos insulation from 800 feet of circular subway tunnel over the weekend.

At its meeting of September 23, 1997, Commission staff reported on the results of the asbestos removal pilot project. In summary, the pilot project verified that safe removal of sprayed asbestos insulation material from the circular tunnels, from York Mills to Lytton Boulevard Emergency Exit, is achievable in 20 weekends at a cost avoidance of over $10,000,000.00 subject to the following changes in methodology from the pilot project.

(a)the Commission's staff, who are experienced in asbestos removal and restrictions associated with working at track level, will take a lead role in managing the asbestos removal work; and

(b)the asbestos removal methodology will be based on a well-organized and planned assembly line operation (including the scaffolding system changes and 2 sets of workcars).

Discussion:

The purpose of the well-organized and planned assembly line operation is to eliminate bottlenecks and ensure a continuous work flow in the asbestos removal operation. Each activity in the asbestos removal pilot project was broken down and assigned a position in the assembly line that maximized efficiency. The productivity of each activity was then used to establish workforce needs and identify inefficiencies that must be engineered out.

Scaffolding Systems:

The main bottleneck in the proposed assembly line operation is the scaffold system used by workers to remove asbestos insulation from the upper portion of the subway circular tunnel. The standard scaffold system used in the pilot project required 3 hours to be constructed at track level, 2 hours to be dismantled, could safely support only 12 workers, provided a small congested work area, and was extremely difficult and time consuming to move along track level. The objective of 800 tunnel feet of asbestos removal cannot be met utilizing this scaffold system in a cost efficient manner.

To maximize the time available for asbestos removal during the subway shutdown, the construction of a scaffold workcar that could be towed to the worksite with no assembly required on-site was analyzed. The benefits include a setup and dismantling time of less than 1/2 hour, ease of movement through the tunnel to support the assembly line design, and the provision of a moving platform to support air compressors, lighting, tools, and equipment required for the assembly line operation.

ARVA Industries was invited to submit a tender on the basis of sole source, which was approved previously by senior management.

ARVA Industries has successfully designed and built workcars for the Commission in the past. They presently have the shop capacity to produce a scaffold workcar in the required time frame. Commission staff worked with ARVA Industries on conceptual drawings of a scaffold workcar that would meet the asbestos removal assembly line requirements and could be easily constructed within the scheduled time frame.

The bulk asbestos removal program is scheduled to begin in Fall 1998. Design and construction of a scaffold workcar would have to be completed by the end of Summer 1998 to provide adequate time for commissioning and training. A design/build contract with a firm experienced in the construction of workcars is required to maintain the schedule.

The tender, in the amount of $409,664.50, submitted by ARVA Industries meets the Commission's requirements and is recommended for acceptance.

The trucks for the scaffold car will be provided by the Commission. The total estimated cost of materials and in-house labour to commission the scaffold car is $92,335.50.

When not in use for the asbestos removal program and after completion of the program, the scaffold workcar can be used for painting subway station ceilings, tunnel lighting repairs, and tunnel structure maintenance.

Workcar Modifications:

Two workcars will be modified to carry equipment and tools to the track level worksite and for storage and removal of the bagged waste asbestos insulation from the worksite. The asbestos workers at track level will be working 11 hour shifts. A third workcar will be modified to provide lunchroom facilities and a testing laboratory at the track level worksite. A fourth workcar will be modified to provide decontamination facilities for the asbestos workers prior to entering and leaving the asbestos removal worksite. The workcar modifications will be completed by in-house Commission forces for a total cost of approximately $140,000.00.

Justification:

To achieve the objective of 800 feet of bulk asbestos removal per weekend resulting in significant time and cost reductions, an assembly line methodology approach has to be followed. The scaffold workcars are the key pieces of equipment in obtaining this objective. The award of contract to ARVA Industries and the in-house rehabilitation of existing workcars will allow the bulk removal program to begin in Fall 1998.

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Appendix A

Program 4.23 - Purchase Rail Non-Revenue Vehicles

City Project No. 490

Summary of Project Approval

Note:Revised program requirements for 1998 are within the existing City Approvals for No. 490 and this new requirement of $364 thousand for the improved production line methodology will be accommodated by savings in Project 611 -Subway Asbestos Removal Program. The revised Project Approval for this project will total $3,781.00.

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Appendix B

Program 4.22 - Rail Non-Revenue Vehicle Overhaul

City Project No. 480

Summary of Project Approval

Note:Additional City Project Approvals are required in 1998 for the revised program requirements for No. 480, however, this new requirement of $140 thousand for the improved production line methodology will be accommodated by savings in Project 611 - Subway Asbestos Removal Program. The revised Project Approval for this project will total $4,007.00.

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Appendix C

Program 6.1 - Environmental Programs

Subway Asbestos Removal Program

City Project No. 611

Summary of Project Approval

Note:Additional City Project Approvals are required in 1998 of $504 thousand for the revised program requirements for No. 480 and No. 490, however, this new requirement for the improved production line methodology will be accommodated by savings in Project 611 - Subway Asbestos Removal Program of $642 thousand. The revised Project Approval for this project will total $15,812.00.

5

Purchase of Service Agreements with AIDS Committee of

Toronto and Youthlink Inner City for the Period

July 1, 1998 to June 30, 1999

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends:

(1)that a purchase of service agreement for the provision of HIV/AIDS prevention services by the AIDS Committee of Toronto be entered into for the period of July 1, 1998 to June 30, 1999, at a cost not to exceed $256,808.00, inclusive of GST;

(2)that a purchase of service agreement for the provision of HIV/AIDS prevention services by YOUTHLINK Inner City be entered into for the period of July 1, 1998 to June 30, 1999, at a cost not to exceed $149,608.00, inclusive of GST;

(3)that 50 percent of the required funding in the amount of $203,208.00 be drawn from the 1999 fiscal year; and

(4)that the appropriate City of Toronto officials be authorized to take the necessary action to give effect thereto.

The Strategic Policies and Priorities Committee submits the following transmittal letter (July14, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 13, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the recommendations embodied in the transmittal letter (June 24, 1998) from the Board of Health.

Background:

The Budget Committee on July 13, 1998, had before it a transmittal letter (June 24, 1998) from the Board of Health regarding the Purchase of Service Agreements with Aids Committee of Toronto and Youthlink Inner City.

--------

(Transmittal letter dated June 24, 1998, addressed to the Budget Committee

from the Board of Health)

Recommendation:

The Board of Health at its meeting on June 23, 1998 recommended the adoption of the report (June12, 1998) from the Medical Officer of Health, and forwards this matter to the Budget Committee for consideration of 50 percent of the required funding in the amount of $203,208.00 being drawn from the 1999 fiscal year.

Background:

The Board of Health had before it a report (June 12, 1998) from the Medical Officer of Health respecting the Purchase of Service Agreements with Aids Committee of Toronto and Youthlink Inner City for the Period July 1, 1998 to June 30, 1999.

The Board recommended the adoption of the report and requested that it be forwarded to the Budget Committee for consideration of funding in the 1999 fiscal year, and subsequently to City Council for adoption.

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(Report dated June 12, 1998, addressed to the Board of Health

from the Medical Officer of Health)

Purpose:

This report requests approval from the Board of Health for purchase of service contracts for the AIDS Committee of Toronto and YOUTHLINK Inner City.

Funding Sources, Financial Implications and Impact Statement:

The AIDS purchase of service budget was approved in the 1998 Operating Budget by City Council at its special meeting of April 28, 29 and 30, 1998. Of the approved $406,416.00 in the 1998 budget, 50 percent was spent out in January to fulfill commitments pertaining to the July 1997 - June 1998 purchase of service cycle; 50 percent is available for payments related to the funding approval sought in this report, for the period July 1998 - December 1998. Funds in the amount of $128,404.00 for the AIDS Committee of Toronto and $74,804.00 for YOUTHLINK Inner City are available in Public Health 1998 Operating Budget, Account No. 734-760-651. The remaining $203,208.00 will be included in the Public Health 1999 Operating Budget. ($128,404.00 for the AIDS Committee of Toronto and $74,804.00 for YOUTHLINK Inner City). This split-year funding is a pre-amalgamation carry-over. Historically, the AIDS purchase of service period has been July to June; thus, each year the former Toronto City Council allocated funds of $406,416.00, with 50 percent of the funds being drawn from the next fiscal year.

Recommendations:

(1)that a purchase of service agreement for the provision of HIV/AIDS prevention services by the AIDS Committee of Toronto be entered into for the period of July 1, 1998 to June30, 1999, at a cost not to exceed $256,808.00, inclusive of GST;

(2)that a purchase of service agreement for the provision of HIV/AIDS prevention services by YOUTHLINK Inner City be entered into for the period of July 1, 1998 to June 30, 1999, at a cost not to exceed $149,608.00, inclusive of GST; and

(3)that the appropriate City of Toronto officials be authorized to take the necessary action to give effect thereto.

Council Reference/Background/History:

AIDS purchase of service agreements are designed to provide HIV/AIDS prevention services to communities that are difficult to reach. They play a key role in assisting Public Health in accessing these communities for the effective delivery of public health services. In accordance with this principle, renewing the purchase of service agreements with the AIDS Committee of Toronto and YOUTHLINK Inner City will continue to assist Public Health in meeting the current needs for HIV/AIDS prevention services in the former City of Toronto. AIDS purchase of service agreements, in conjunction with AIDS prevention grants, are a policy-supported, integrated component of Public Health's HIV/AIDS program.

In the current year, AIDS purchase of service funding directly funded 52,000 of the AIDS Committee of Toronto's direct service contacts and 5,000 of YOUTHLINK Inner City's client contacts. These two agencies provide significant HIV/AIDS preventive services to reach high risk populations such as men who have sex with men, street-involved youth and individuals living with HIV/AIDS. HIV/AIDS continues to have a major impact upon gay men and men who have sex with men; the median age of HIV onset is shifting to the youth population, such that prevention among high risk youth is now critical.

Comments and/or Discussion and/or Justification:

With the support of the purchase of service agreement, the AIDS Committee of Toronto does targeted HIV prevention work with self-identified gay men, gay men who do not connect with gay groups, and men who do not self-identify as gay but have sex with men. HIV/AIDS is still highest among men who have sex with men. The AIDS Committee of Toronto works collaboratively with a number of HIV/AIDS agencies, community agencies and groups to develop and deliver a variety of community-based education activities.

The purchase of service agreement also provides support for the AIDS Committee of Toronto referral services program that links people infected with and affected by HIV/AIDS with the information and services they need. The AIDS Committee of Toronto maintains a community referrals database that tracks services related to HIV/AIDS for service users and service providers, and makes this information available by person, telephone or via the AIDS Committee of Toronto's web site, and through issue-focussed referral lists that are produced and regularly updated to meet a variety of needs. A world class library provides a comprehensive reference service to members of the public, including people infected and affected, teachers, medical/nursing/social work students and other smaller City-funded AIDS projects.

The AIDS Committee of Toronto is a credible organization within the community and is well positioned to reach men who have sex with men and to serve as a centre for information collection and dissemination. It has appropriate infrastructure and expertise in developing and delivering effectively targeted education programs. The vast majority of clients live in the new City. The AIDS Committee of Toronto is currently planning to licence partnerships and programs in additional areas of the new City. The programs supported through the AIDS Committee of Toronto's purchase of service agreement involve a substantial number of volunteers who deliver the majority of the activities.

With the support of the purchase of service agreement, YOUTHLINK Inner City undertakes targeted HIV prevention work with street-involved youth. As the HIV epidemic evolves, more infections are occurring in young people. Among young people, street youth are especially at risk for becoming infected with HIV due to a variety of risk behaviours. Addiction Research Foundation surveys show high rates of drug use among Toronto street-involved youth, including sharing of needles. As a group, street-involved youth tend to have frequent and multiple sexual partners, often engaging in prostitution. Street youth have high rates of sexually transmitted diseases.

YOUTHLINK was incorporated in 1912 (as Big Sisters Association). Inner City, a division of YOUTHLINK, was established in 1980 after the murder of Emmanuel Jacques, in response to a request from the then Metro government and the Province to provide "an outreach service to street youth in the downtown core of Toronto." During the past 18 years of service provision, Inner City has grown into a well-respected and extensively utilized program, reaching approximately 13,000 at risk youth. YOUTHLINK Inner City will continue to provide HIV/AIDS prevention education and on-going counselling/support to street youth populations in the former City of Toronto through a variety of outreach and on-site strategies. Emphasis is downtown, with some service in other high-risk areas of Toronto.

Appendix A details the services and terms of agreement for the purchase of service agreements for the AIDS Committee of Toronto and YOUTHLINK Inner City. The services, terms of agreement and budget for the AIDS Committee of Toronto were developed in consultation with Joan Anderson, Director of Education and Advocacy; those for YOUTHLINK Inner City were developed in consultation with Karen Positano, Supervisor, YOUTHLINK Inner City.

Conclusions:

This report details new community-based AIDS purchase of service agreements to begin in July 1998, as part of Public Health HIV/AIDS prevention program.

Contact Name:

Liz Janzen, Regional Director, Toronto Office, Toronto Public Health,

Tel: 392-7458, Fax: 392-1483

email: ljanzen@city.toronto.on.ca.

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Appendix A

A.AIDS Committee of Toronto:

Services:

The parties agree that, for the period July 1, 1998 to June 30, 1999, the AIDS Committee of Toronto will:

(1)facilitate access to HIV/AIDS-related information, client assessment, referral services and a range of other programs offered by AIDS Committee of Toronto and external agencies for people infected and affected by HIV/AIDS through Referral Services, in person and by telephone; and by the development of specific referral lists for the public and service providers (e.g., anonymous testing sites);

(2)provide community-based education on HIV prevention and health promotion to self-identified gay men, gay men who do not connect with gay groups, and men who do not self-identify as gay but have sex with men, through the following strategies:

(a)develop and deliver specific messages and diverse campaigns that promote the adoption and maintenance of behaviour change including campaigns focussed on youth, and safer sex maintenance for HIV positive and HIV negative men, including community workshops/discussion groups;

(b)develop partnership strategies with community groups serving men who have sex with men from other language and cultural groups including participation in the Toronto Gay Men's Education Network;

(c)undertake peer education and outreach to venues such as bars, bathhouses, parks, youth-oriented social sites and community events such as Lesbian and Gay Pride Day activities; such education and outreach to be prioritized to fill gaps not being reached by other HIV prevention projects; explore feasibility of using washroom advertising in venues frequented by gay men/youth;

(3)provide a professionally managed library with a comprehensive reference collection on HIV/AIDS available to clients, the general public, students, health care workers, volunteers and staff of community and government services within the City of Toronto, through the following strategies:

(a)acquire, organize and provide access to a wide range of current periodicals, books, videotapes, etc. on HIV/AIDS and related issues, through the use of appropriate collection development and acquisition policies, bibliographic processing according to accepted standards, and the production of appropriate and relevant access tools (e.g., catalogues, guides, bibliographies);

(b)enhance access to the collection through computer-based strategies including online access to information and current statistics, and electronic resource sharing;

(c)provide reference and first contact service to AIDS Committee of Toronto clients, in person and by telephone, through personal assistance in forming and answering queries, and through the production of convenient and easy-to-read information packages on important subjects, including drug and complementary therapies, opportunistic infections, etc.;

(d)provide reference service to other AIDS service organizations and community groups.

Terms of Agreement:

(1)The parties agree that AIDS Committee of Toronto will be funded by the Corporation of the City of Toronto for the period July 1, 1998 to June 30, 1999.

(2)AIDS Committee of Toronto agrees to allow its financial accounts relating to the operation of the program to be audited.

(3)AIDS Committee of Toronto agrees to provide for progress and financial reports on Public Health specified forms, satisfactory to the Medical Officer of Health.

(4)The parties agree that funds will be payable to AIDS Committee of Toronto as follows:

$128,404.00Upon execution of the Agreement by both parties (July, 1998)

$ 64,202.00Upon receipt of report #2 and invoice (January, 1999)

$ 64,202.00Upon receipt of report #4 and invoice (July, 1999)

$256,808.00

B.YOUTHLINK Inner City:

Services:

The parties agree that, for the period July 1, 1998 to June 30, 1999, YOUTHLINK Inner City will:

(1)(a)provide daily morning and evening outreach to youth on the street, in order to communicate HIV/AIDS prevention education, distribute free condoms and latex dams, exchange needles/syringes, and offer counselling and assistance to help street-involved youth to overcome barriers and effect behaviour change based on harm reduction strategies (approximately 4000 youth per year);

(b)conduct weekly HIV/AIDS film/discussion groups and daily informal HIV/AIDS discussions at the YOUTHLINK Inner City office where approximately 5000 youth per year receive help in stabilizing their lives which builds self-esteem and consequently promotes healthy changes in their lives by interrupting dependency on the street lifestyle;

(c)conduct and promote specific HIV/AIDS education targeted at immigrant youth who frequent the walk-in office who are not seen on the street by the outreach workers. (These youth frequent the hostel system and 40 percent of in-office clients);

(2)conduct HIV/AIDS prevention and education workshops 6-8 times per month for at-risk youth in group homes, community centres, etc.;

(3)develop and implement health promotion strategies which ensure the cultural appropriateness and relevancy of various HIV/AIDS prevention activities (e.g., materials relevant to the street culture, and posters and novelties which reflect a broad range of ethno-cultural/racial backgrounds); and

(4)develop leadership initiatives around issues pertinent to street-involved youth by targeting other pilot neighbourhoods that are under-serviced for youth; undertake a pilot project in the Queen Street West area during summer 1998 to assess services needed by homeless youth in the west end of Toronto.

Terms of Agreement:

(1)the parties agree that YOUTHLINK Inner City will be funded by the Corporation of the City of Toronto for the period July 1, 1998 to June 30, 1999;

(2)YOUTHLINK Inner City agrees to allow its financial accounts relating to the operation of the program to be audited;

(3)YOUTHLINK Inner City agrees to provide four progress and financial reports on Public Health specified forms, satisfactory to the Medical Officer of Health; and

(4)the parties agree that funds will be payable to YOUTHLINK Inner City as follows:

$ 74,804.00Upon execution of the Agreement by both parties (July, 1998)

$ 37,402.00Upon receipt of report #2 and invoice. (January, 1999)

$ 37,402.00Upon receipt of report #4 and invoice. (July, 1999)

$149,608.00.

6

North Toronto Memorial Arena's Request for a

$15,000.00 Cash Advance

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 14, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 13, 1998, recommended to the Strategic Policies and Priorities Committee, and Council:

(1)the adoption of the report (July 10, 1998) from the Chief Financial Officer and Treasurer; and

(2)that the Chief Financial Officer and Treasurer be delegated the authority to provide cash advances for any similar requests received from other arenas.

Background:

The Budget Committee on July 13, 1998, had before it a report (July 10, 1998) from the Chief Financial Officer and Treasurer regarding the North Toronto Memorial Arena's request for a $15,000.00 cash advance.

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(Report dated July 10, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To obtain approval for the Chief Financial Officer and Treasurer to provide a cash advance of $15,000.00 to North Toronto Memorial Arena.

Funding Sources, Financial Implications and Impact Statement:

None.

Recommendation:

It is recommended that approval be given for the Chief Financial Officer and Treasurer to advance the North Toronto Memorial Arena $15,000.00, subject to repayment of these funds to the City prior to December 31, 1998.

Background:

A request has been received from the Manager of the North Toronto Memorial Arena for a cash advance of $15,000.00. Revenue received by the arena during the period from May to August is limited and results in a shortage of funds. These funds would be repaid to the City prior to December31, 1998.

Comments:

From discussions with Finance staff from the former City of Toronto, similar requests from this arena have been received and granted on a regular basis in the past. Repayment of the advances have always been made on a timely basis.

The current request from the North Toronto Memorial Arena is consistent with previous requests and therefore approval to advance the $15,000.00 is requested.

Conclusion:

The Chief Financial Officer and Treasurer be authorized to advance $15,000.00 to North Toronto Memorial Arena, subject to repayment being made prior to December 31, 1998.

Contact Name & Telephone Number:

A. C. Shultz, Director of Accounting Services, Finance Department, 416 397 5240 .

7

Audit Committee - Roles and Responsibilities

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 9, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 3, 1998) from the City Auditor setting out the roles and responsibilities of the Audit Committee be received by the Strategic Policies and Priorities Committee and Council for information.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 3, 1998) from the City Auditor setting out the roles and responsibilities of the Audit Committee.

The Audit Committee received the report from the City Auditor and directed that it be forwarded to the Strategic Policies and Priorities Committee and Council for information.

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(Report dated June 3, 1998, addressed to the

Audit Committee from the

City Auditor)

Recommendation:

It is recommended that this report be received for information.

Background:

In view of the fact that Audit Committee did not exist in many of the former amalgamating municipalities and its concept is new to many Councillors, there is a need for a permanent document outlining the roles and responsibilities of such a committee. The document "Audit Committee - Roles and Responsibilities" meets those objectives.

Comments:

Most public companies are required by Corporation law to have an Audit Committee. Regulated financial institutions are generally governed by special legislation which often prescribe extensive responsibilities for the Audit Committee including communication with the regulator.

In the Municipal Sector, although there may be no statutory requirement, Councils in many municipalities across North America have appointed audit committees. Many of the benefits derived from audit committee in the private sector are equally applicable in the municipal environment.

The attached document "Roles and Responsibilities of the Audit Committee" will assist Members of Council in carrying out their responsibilities, and will ensure that the Council, Senior Management and the City Auditor, work together towards common goals.

Contact Name and Telephone Number:

Jeff Griffiths, 392-8461.

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City of Toronto

Audit Committee - Roles and Responsibilities

Purpose:

This document provides specific guidance relating to appropriate responsibilities, structure and relationships for the Audit Committee at the City of Toronto.

Introduction:

Every citizen wants high-quality services from public sector organizations. Because there is often an expectation gap between the services citizens expect and those delivered by public sector entities, there is increasing pressure for public officials to demonstrate a higher level of accountability over the use of public funds. One means of demonstrating greater accountability and ensuring higher services is through the effective use of internal controls, and more specifically, through the establishment of an Audit Committee.

Stricter standards of accountability cannot be achieved without an effective internal control structure. One way that public officials can enhance accountability and demonstrate proper stewardship over public funds is to establish and support an adequate control environment within their organizations. A critical element of the control environment is an effective Audit Committee that provides oversight on matters of financial reporting, auditing, and internal control.

An effective Audit Committee can provide several important aspects of control including: ensuring the independence of the internal auditing function and ensuring appropriate action is taken on audit findings. The Audit Committee serves in a unique capacity as an important communication link between external and internal auditors and operating management, and as a means of reducing the risk of management override of key elements of the City's internal control structure.

In general, Audit Committees exercise responsibility in three important areas:

(1)Financial reporting;

(2)Corporate governance; and

(3)Corporate control.

Financial Reporting:

The responsibility of Audit Committees in the area of financial reporting is to provide assurance that financial disclosures made by management reasonably portray the municipality's:

(1)financial condition;

(2)results of operations; and

(3)plans and long-term commitments.

The specific steps involved in carrying out this responsibility include:

(a)recommending the external auditors;

(b)overseeing the external audit coverage, including:

(i)Auditor engagement letters;

(ii)estimated fees;

(iii)timing of auditor visits;

(iv)coordination with the City Auditor;

(v)monitoring of audit results;

(vi)review of external auditor performance; and

(vii)review of non-audit services if any.

(c)reviewing accounting policies and policy decisions;

(d)examining the financial statements, including:

(i)variance reports;

(ii)annual financial statements, auditors' opinions, and management letters; and

(iii)other reports.

Corporate Governance:

The responsibility of Audit Committees in the area of corporate governance is to provide assurance that the Municipality is in compliance with pertinent laws and regulations, is conducting its affairs ethically, and is maintaining effective controls against conflict of interest and fraud.

The specific steps involved in carrying out this responsibility include:

(1)reviewing corporate policies relating to compliance with laws and regulations, ethics, conflict of interest, and the investigation of misconduct and fraud;

(2)reviewing significant cases of employee conflict of interest, misconduct, or fraud; and

(3)requiring the City Auditor to report in writing annually the scope of the reviews of corporate governance and any significant findings.

Corporate Control:

The responsibility of Audit Committees for corporate control includes an understanding of the company's key financial reporting risk areas and system of internal control. The Committee should monitor the control process through the City Auditor.

According to the Institute of Internal Auditors (IIA) Standards for the Professional Practice of Internal Auditing, "The scope of the internal audit should encompass the examination and evaluation of the adequacy and effectiveness of the organization's system of internal control and the quality of performance in carrying out assigned responsibilities."

The Standards would require the City Auditor to:

(1)review the reliability and integrity of financial and operating information and the means used to identify, measure, classify, and report such information;

(2)review the systems established to ensure compliance with those policies, plans, procedures, laws, and regulations which could have a significant impact on operations and reports;

(3)review the means of safeguarding assets and, as appropriate, verify the existence of such assets;

(4)appraise the economy and efficiency with which resources are employed and determine whether or not value for money is being received; and

(5)review operations or programs to ascertain whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as planned.

Audit Committee Structure:

The number of members on the Audit Committee should be determined by the size of Council and the size of the City. Five to seven members, however, is usually ideal. The City Audit Committee currently consists of seven elected members.

The Audit Committee will normally find it necessary to meet three to four times annually in order to fulfill its financial reporting responsibility.

The Relationship Between the City Auditor and the Audit Committee:

The IIA's Position on Audit Committees views internal auditing as a corporate resource, supporting the Audit Committee. This relationship enhances the stature and independence of the internal auditing function and its ability to contribute to corporate success.

The City Auditor must work effectively with all levels of management, keeping in mind the best interests of the organization as a whole.

The relationship between Audit Committees and the City Auditor encompasses reporting relationships and oversight relationships.

To be effective, the City Auditor must have organizational status sufficient to ensure a broad range of audit coverage and adequate consideration of its findings and recommendations.

Oversight Relationships:

The Audit Committee should exercise an active oversight role with respect to the City Auditor. Oversight activities should include:

(1)Reviewing and Approving the Internal Audit Mandate:

The internal audit mandate provides the functional and organizational framework within which internal auditing provides services to management and to the Audit Committee. It defines the purpose, responsibility, authority, and reporting relationships of the internal audit function.

(2)Concurring in the Appointment or Removal of the City Auditor:

This will safeguard the independence of the internal audit function in matters falling under the jurisdiction of the Audit Committee.

(3)Reviewing Plans and Budgets:

The Audit Committee must satisfy itself that the City Auditor's objectives and goals, staffing plans, financial budgets, and audit schedules provide for adequate support of the Committee's own goals and objectives.

The Audit Committee should ensure that its review of internal audit plans and budgets do not impede or inhibit management's use of the internal audit function in the pursuit of operational goals and objectives. Since management's use of the audit function often takes the form of unplanned requests for audits or special studies, management should not be expected to specify its need for anticipated internal audit resources in detail.

Relationship to Management:

In order to ensure adequate independence and objectivity in all of its activities, internal auditing must have a reporting relationship with management at the senior level. It will be especially important that internal auditing be independent of the Chief Financial Officer and Treasurer to ensure objective reviews of internal accounting control and of the financial reporting process.

(1)Reviewing Audit Results:

The City Auditor should be required to provide summary information concerning the results of reviews of financial reporting, corporate governance, and corporate control. Specific findings and recommendations of a significant nature may also be reported.

(2)Requesting Audit Projects:

The Audit Committee may request the City Auditor to perform special studies, investigations or other services in matters of interest or concern to the Committee. Such projects could include:

(a)investigation of potential or suspected fraud or other irregularities;

(b)corporate compliance with laws and regulations; and

(c)evaluation of external auditors.

(3)Requesting Quality Assurance Reviews:

The Institute of Internal Auditors recommends that quality assurance reviews of an internal City audit function be performed on a regular basis approximately every three to five years.

Regular quality assurance reviews will provide assurance to the Audit Committee and to management that internal auditing activities conform to The IIA's Standards for the Professional Practice of Internal Auditing.

The Audit Department would be subjected to the same attest audit process as other departments at the City. However, attest audits by external public accountants are conducted at a high level and depending on the scope of the audit, little specific work would be conducted on many of the smaller departments, including the Audit Department. In order to compensate for this, the City Auditor should be subjected to a peer review process.

The City Auditor is a member of the Canadian Association of Local Government Auditors (CALGA) and the US based National Association of Local Government Auditors (NALGA). An important component of each organization is a formalized peer review process which encourages members to participate in an arrangement whereby different audit organizations review the operations of other member organizations. CALGA has prepared guidelines for the Professional Practice of Municipal Internal Auditing, pertaining to independence, professional proficiency, scope of audit work, performance of audit work and management of the internal audit office. In addition, NALGA has prepared a quality control review guide and members have been organized and trained to conduct peer reviews of audit organizations.

It is anticipated that the City of Toronto Auditor would participate in the peer review process of either the CALGA or NALGA.

In addition, in the early 1980's, the members of the Institute of Chartered Accountants of Ontario approved the introduction of a program whereby every member practising public accounting in Ontario would be inspected.

The main purpose of practice inspection is to ensure that all members in the practice of public accounting maintain an appropriate level of professional standards. Primarily, the practice inspection program is intended to be educational - to help practitioners improve their professional standards, where necessary. Essentially, through a review of current accounting and audit engagement files, practice inspection identifies where a practicing member may require assistance in maintaining prescribed professional standards. The practice inspection program does not set new standards. Rather, the standards that a member is expected to maintain are those prescribed by the Canadian Institute of Chartered Accountants Handbook and the Institute of Chartered Accountants in Ontario Handbook.

Where the City Auditor is engaged in the practice of public accounting, the City Auditor should be subject to Practice Inspections.

Conclusion:

The tasks, responsibilities, and goals of Audit Committees and the City Auditor are closely intertwined in many ways.

The Audit Committee has a major responsibility in assuring that the mechanisms for corporate accountability are in place and functioning. Clearly, one of these mechanisms is solid, well-orchestrated, cooperative working relationship with the City Auditor.

8

Mandate - Audit Services Division

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 8, 1998) from the Audit Committee:

Recommendation:

That the mandate of the Audit Services Division, as outlined in the report (June 15, 1998) from the City Auditor, be approved.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 15, 1998) from the City Auditor outlining the mandate of the Audit Services Division.

The Audit Committee approved the mandate of the Audit Services Division, as set out in the aforementioned report, and directed that the mandate be forwarded to the Strategic Policies and Priorities Committee and Council for approval.

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(Report dated June 15, 1998, addressed to the Audit Committee

from the City Auditor)

Recommendation:

It is recommended that the mandate of the Audit Services Division as outlined in this report be approved.

Background:

At its meeting of May 13 and 14, 1998, Council approved the recommendation of the Toronto Transition Team that:

(1)the annual attest audit should be done by an external auditor hired by an Audit Committee of Council; and

(2)the City should have an internal audit function to provide ongoing audit services to the Corporation.

A proposed mandate of the Audit Services Division was outlined in the department's budget submission. The purpose of this report is to articulate a mandate and request its approval by the Audit Committee.

Comments:

Internal auditing is generally an independent review and appraisal of an organization's business activities and controls. The City Auditor shall have authority to conduct financial, operational and other special reviews of all departments, agencies, offices, boards and commissions. Such authority empowers the City Auditor:

(a)to conduct or cause to be conducted operational audits, defined as evaluating the management of public funds and resources from a standpoint of economy, efficiency and effectiveness, and making recommendations on operating improvements;

(b)to examine and evaluate the adequacy of the City's systems of internal control, both financial and operational;

(c)to evaluate the procedures used by management to measure and report on program effectiveness. A review of the results of such programs or activities will include an evaluation relating to the results or benefits achieved, and whether the programs or activities are meeting established objectives;

(d)to examine problem areas brought to the attention of the City Auditor by Council and senior management. To act as an ongoing resource to senior management;

(e)to carry out special assignments ranging from consulting work to investigating suspected fraud or wrongdoing;

(f)to determine whether or not applicable sections of by-laws, regulations and management directives, etc., have been complied with, as well as applicable federal and provincial legislation;

(g)to co-ordinate the financial internal audit activities with the external auditors of the City to ensure the efficient and economical use of audit resources; and

(h)To conduct attest financial audits as appropriate.

Access to Records and Property:

The City Auditor shall have access to, and authority to examine any and all documents including but not limited to books, accounts, internal memoranda, writing and tapes, reports, vouchers, correspondence files and other records, bank accounts, money and other property of any City Department, Agency, Office, Board or Commission.

It is the duty of any officer, employee or agent of the City having control of such records to permit access to, and examination thereof, upon the request of the City Auditor or his or her authorized representative. It is also the duty of any such officer, employee or agent to fully cooperate with, and to make full disclosure of all pertinent information to the City auditor or his or her authorized representative.

Conclusion:

Approval of the mandate of the Audit Services Division clarifies the role, responsibilities and authority of the City Auditor allowing for the operation of an effective auditing function at the City of Toronto.

Contact Name and Telephone No.:

Jeff Griffiths, 392-8461.

9

Audit Division Restructuring and Staff Redeployment

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 8, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 25, 1998) from the City Auditor regarding the Audit Division Restructuring and Staff Redeployment be received by the Strategic Policies and Priorities Committee and Council for information.

The Audit Committee advises having requested the City Auditor to report back to the Audit Committee on the possible redeployment of the remaining streamlined staff of the Audit Division.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 25, 1998) from the City Auditor, regarding the Audit Division Restructuring and Staff Redeployment.

In this connection, the Audit Committee also had before it communications from the following:

(1)Acting President, Canadian Union of Public Employees (CUPE Local 79) (July 6, 1998); and

(2)President, City of Toronto Administrative, Professional Supervisory Association, Incorporated (COTAPSAI) (June 1, 1998).

The Audit Committee received the report (June 25, 1998) from the City Auditor and directed that it be forwarded to the Strategic Policies and Priorities Committee and Council for information.

Mr. Denis Casey, Acting President, CUPE Local 79, and Mr. David Neil, President of COTAPSAI, both addressed the Committee

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(Report dated June 25, 1998, addressed to the Audit Committee

from the City Auditor)

Recommendation:

It is recommended that this report be received for information.

Background:

The Audit Committee at its meeting of March 24, 1998, had before it a joint report dated February6,1998, from the Chief Administrative Officer, the City Auditor and Chief Financial Officer and Treasurer on the provision of audit services to the new City of Toronto. The Committee approved the report and in doing so, requested that the restructuring of the Audit Department as proposed in the report be referred back to the City Auditor with the request that:

(a)"a dialogue be commenced with representatives of CUPE Local 79 as soon as possible;

(b)every effort be made to introduce a redeployment program for staff to be streamlined; and

(c)when he reports back to the Audit Committee a proposed organization chart for the new Audit Department be included."

In addition, at its meeting on May 13 and 14, 1998, City Council approved the joint report from the Chief Administrative Officer, City Auditor and Chief Financial Officer and Treasurer, recommending the contracting out of the attest audit. At the same meeting, City Council further recommended that the City Auditor be requested to:

(1)"submit a report to the Audit Committee on alternate work possibilities for affected bargaining unit staff; and

(2)submit a report to the next meeting of Council to be held on June 3 and 4, 1998, through the Audit Committee on the efforts made to accommodate the 30 employees affected within the Corporation."

The timing of the Audit Committee meeting, as well as the timing of various meetings with Local79 and Audit staff, did not permit the reporting on this issue to the June 3 and June 4 Council meeting.

Comments:

The contracting out of the attest audit and the consequent restructuring of the Department will result in a significant reduction in staff. The current staff establishment of the amalgamated Audit Department is 50. The number of staff will be reduced to 20 once the restructuring is complete.

In order to support staff related to the restructuring which is taking place and the downsizing required within the Audit Services Division, the following initiatives have been undertaken.

Meetings with CUPE Local 79 and Staff:

The City Auditor met with representatives of CUPE Local 79 on March 29, 1998, April 14, 1998 and May 21, 1998, to discuss various issues in connection with the downsizing of the Department. In addition, on May 29 and June 1, 1998, three information meetings led by the City Auditor and supported by Human Resources Division representatives responsible for Staffing, Labour Relations, Career Development Services and other employee counselling were held for Audit Services staff. Issues discussed included the approved organization structure, the staffing process including the time-table for filling vacancies in the new Division, opportunities for staff related to the Voluntary Exit Program, the potential for redeployment opportunities, the commitment of the Corporation to honour collective agreements and other contractual obligations, and the availability of Career Development Services to employees. Also attending these meetings was a representative from CUPE Local 79 and COTAPSAI (the Management Association of the former City of Toronto).

Staffing Process:

The Process employed to fill vacancies within the Division was a "top-down" approach, commencing with the most senior positions. At the most senior levels, the City Auditor was supported on the interview panel by a senior audit professional from outside the Corporation, a senior manager from another division and a senior Human Resources consultant. All other interview panels included a management representative from outside the Division and a senior Human Resources consultant.

To ensure the greatest opportunity for existing staff, the competitions for all professional positions were "restricted to current employees of the Audit Division including employees of the Internal Control Division of the former Municipality of Metro Toronto". In addition, in regards to the "Auditor" position, the qualifications were broadened to qualify additional staff, allowing for "experience and formal training combined with demonstrated performance and ability" as a substitute for the stipulated academic requirements. The competition for positions was consequently open to all existing Audit staff.

The Redeployment Process:

The redeployment process in regards to staff is ongoing. Of the 30 staff impacted by downsizing, accommodation has been provided for 20 to date.

Details of Staff Redeployment to date is as follows:

Total Establishment of Amalgamating Municipalities50

Proposed Establishment of Restructured Department 20

Downsizing Required 30

Placement of Downsized Staff:

Tourism Toronto (Bargaining unit employee)1

Budget Division Secondment (excluded)1

Mandatory Retirements (excluded)2

Placements outside Corporation (Bargaining unit employees)3

Social Services Division (excluded)1

*Vacancies in former Metro (Bargaining unit employees)2

*Vacancies in former Metro (excluded)3

Management staff who did not apply for positions5

Bargaining unit staff who did not apply for positions1

Voluntary exit (Bargaining unit employee) 1

20

Staff Requiring Redeployment 10

*Positions unfilled during the latter part of 1997 in anticipation of excess staff becoming available to conduct 1997 attest audits.

Internal Job Vacancies:

As appropriate, job vacancies in other parts of the City organization are being brought to the attention of Audit Division staff prior to posting. At the same time, during the information meetings, employees were encouraged to monitor bulletin boards, etc. related to other job vacancies which are required to be posted on a City-wide basis. Nevertheless, it should be noted, and staff have been informed that the number of opportunities in other Departments/Divisions will be limited due to restructuring, service rationalization and the requirement to also downsize to meet the 1998 approved budget.

External Vacancies:

The City Auditor and Human Resources Division representatives are pursuing career opportunities for staff with other public and private sector organizations. In addition, certain Audit Division employees of the former Metro have been successful in securing alternate external employment due to their personal efforts.

Voluntary Exit Program:

The voluntary exit program has been made available to all Audit Services Division staff. In this way, it is hoped that the negative impact related to employee terminations will be minimized. Personal counselling/advice/guidance and individual monetary entitlement calculations are being provided to interested staff.

Normal/Early Retirements:

Individual counselling has been made available to two members of Audit Division staff who are approaching normal retirement age 65. In addition, seven additional individuals are eligible for an early retirement pension.

Career Development Services:

Specific representatives of the Career Development Services Section of Human Resources have been identified to support the staff of Audit Services. Group and individual appointments have been arranged/are available based on the needs of the employees. Assistance is provided related to:

Educational Planning, Re-skilling and Re-training:

(a)developing skills for employees in future positions;

(b)designing individualized educational plans;

(c)advice on where to take courses; and

(d)information of skills needed in the future (internal, and by external organizations).

Career & Personal Life Decisions:

(a)assessment of career interests, skills, aptitudes, etc.;

(b)matching individual needs, values and personal style to the workplace;

(c)life stage decision-making and goal setting; and

(d)retirement and/or exiting the City.

Job Search:

(a)accessing information on jobs;

(b)writing a resume;

(c)interview preparation (including practice "mock" interviews); and

(d)networking and self-marketing.

In addition, Career Development Centres are available at the former Toronto City Hall and Metro Hall, and are being established in the North York, Scarborough and Etobicoke civic centres. Facilities/materials include:

(a)computer workstations: access to Internet/Intranet, self-assessment tools, skills training, etc.;

(b)community college and university course calendars;

(c)job postings; and

(d)career related books and materials.

Restructuring of the Audit Services Division:

The restructuring of the Audit Services Division has been ongoing and has been conducted concurrently with the finalization of 1997 audits. The organizational plan was validated by an external consultant, and approved in May 1998 by the Commissioner of Corporate Services and Chief Administrative Officer. In accordance with the request of the Audit Committee, an organization chart is included in this report as Appendix A. The current staff complement is 20 structured as outlined in the organization chart.

Conclusion:

The number of staff who will be impacted by restructuring in the Audit Services Division, as well as throughout the organization, is substantial. In this regard, the City Auditor and other senior management as well as Human Resources representatives, through extensive programs and services, are endeavouring to support/accommodate/respond to the needs of employees. These efforts are ongoing.

Contact Name and Telephone Number:

Jeff Griffiths, 392-8461.

Insert Table/Map No. 1

Appendix A - Audit Services Division

(Communication dated July 6, 1998, addressed to the Audit Committee

from Mr. Denis Casey, Acting President, CUPE Local 79)

This report was written in response to requests by the Audit Committee concerning the organization of the new department and to recommendations by City Council regarding the efforts made to accommodate affected employees.

This report responds to neither matter.

The organizational plan for the department is still unknown. This report contains only a chart which does not indicate the rationale for the new department, new job responsibilities, or the range of work. What we do know is that the span of control is well below the target recommended for the Corporation. Out of twenty employees in the department, twelve will be managers, and administratively, there will be one Secretary for nineteen people.

The secrecy surrounding the reorganization of the Audit Department is unfortunate. CUPE Local79 has applied under the Municipal Freedom of Information Act for the organizational plan. We are very disturbed about the lack of an open and democratic process. It is difficult to assess the implications when there is so little access to documents. We are all diminished by reductions in public participation.

The information in this report on the impact on affected staff is not up to date or completely correct. While six unionized staff may have been placed in other positions or have left, it is still unknown how many of the remaining ten have been promoted, how many will retire, take the exit package or remain to be placed. Other information is inaccurate. Contrary to the report, it is our understanding that job vacancies are not being brought to the attention of Audit Department staff prior to posting.

The Auditor position was identified as one suitable for union applicants and many did apply with the hope of continuing their service to the Corporation. These expectations were shattered when it became clear that unsuccessful candidates for management positions were being interviewed for the Auditor position, even though they had applied after the closing date! Employees deserve an explanation for this inequitable treatment.

The report is premature: there are too many unexplained issues. We encourage members of the Audit Committee to recommend that:

(1)The Audit Department reorganization report be distributed and reviewed publicly by this Committee; and

(2)The terms and conditions of the Collective Agreement be followed, including the responsibility to place displaced employees in another position.

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(Communication dated June 1, 1998, addressed to the Audit Committee

from Mr. David Neil, President, COTAPSAI)

I am writing to you to express our deep concerns over the restructuring process currently underway in Audit Services. At the City's request, our association attended a briefing on Monday, June1,1998, with all non-union employees impacted by the reorganization in Audit Services.

Audit staff from all across the City were told that the process for selecting the directors and managers and the remaining staff would be undertaken simultaneously and would be completed within two weeks. The time to submit an application for all remaining positions was five days. Staff were told by Human Resources staff that if they were not offered a position and they choose not to take a voluntary exit, the City would move to terminate them. Although staff had many questions regarding the City's previous obligations and efforts to find them alternative permanent positions elsewhere in the organization, all were extremely concerned and upset by the City's position.

At the meeting, the City Auditor was asked about the status of Clause 3 of Report No. 8 of the Strategic Policies and Priorities Committee to be considered at the June 3 and 4 City Council Meeting. As you know, that clause was amended by adding the following:

It is further recommended that the City Auditor be requested to:

(1)submit a report to the Audit Committee on alternate work possibilities for affected Bargaining Unit staff, and

(2)submit a report to the next Council to be held on June 3 and 4, 1998 through the Audit Committee, on the efforts made to accommodate the 30 employees affected within the Corporation.

With reference to item (2) above, the City Auditor explained that it was not possible to prepare that report and forward it to the Committee before the next Council meeting. He indicated that those employees displaced by the reorganization would be gone by the time this report on the efforts made to accommodate them was forwarded to the Audit Committee. I am very concerned that the City would consider taking such drastic action before making every 'reasonable effort' to accommodate displaced employees as Human Resources has stated it would do and in accordance with an existing agreement.

Why the urgency? The City Auditor explained that because of existing vacancies (8), retirements and attrition, only 12 actual employees would be displaced through this reorganization. He also suggested that Audit Services was not required to make its cuts until June 30, 1998.

Given the information provided by the City Auditor at the meeting, it seems reasonable that since gapping and attrition account for 18 of the 30 positions, that any decision to terminate individual employees can and should be deferred until the City Auditor submits his report to the Committee and until such time that the Audit Committee is satisfied that the City has made every effort to accommodate employees impacted by this reorganization.

I believe this approach to be prudent, financially feasible and affords to staff displaced through this process that all reasonable efforts to find alternative employment opportunities will be taken. A win-win scenario.

On behalf of all our members in Audit Services and throughout the City of Toronto, I welcome the opportunity to bring our concerns and suggestions forward to the Audit Committee for its consideration.

10

1997 Management Letter - Social Services Division -

General Welfare Assistance Program

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 8, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 25, 1998) from the City Auditor attaching the management letter of the Social Services Division - General Welfare Assistance Program, together with the report (June 26, 1998) from Commissioner of Community and Neighbourhood Services in response, be received and forwarded to Council for information.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 25, 1998) from the City Auditor attaching the management letter of the Social Services Division - General Welfare Assistance Program, together with a report (June 26, 1998) from the Commissioner of Community and Neighbourhood Services in response.

The Audit Committee advises that it received the aforementioned reports and directed that copies be forwarded to your Committee and City Council for information.

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(Report dated June 25, 1998, addressed to the Audit Committee

from the City Auditor)

Recommendation:

It is recommended that the 1997 management letter and the corresponding response relating to the audits of the accounts of the Social Services Division, General Welfare Assistance Program of the Department of Community and Neighbourhood Services, be received for information.

Comments:

I have completed the 1997 audits of the accounts of the Social Services Division, General Welfare Assistance Program, for the year ended December 31, 1997. As a bi-product of my audit, the attached management letter was issued to the Commissioner of Community and Neighbourhood Services Department. A response from the Commissioner has been received.

Conclusion:

I have reviewed the response to the management letter prepared by the Department. The responses are appropriate and will be followed up as part of our future audit work.

Contact Name and Telephone No.:

Tony Veneziano, 392-8353.

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(Report dated June 26, 1998, addressed to the Audit Committee

from the Commissioner of Community and Neighbourhood Services)

Purpose:

This report is to inform Committee on the status of the recommendations in the Management Letter of the City Auditor on the 1997 operations of the Social Services Division.

Funding Sources:

There are no financial implications.

Recommendation:

It is recommended that this report be received for information.

Background:

This report responds to the recommendations contained in the City Auditor's Management Letter on the 1997 operations of the Social Services Division.

Discussion:

The attachment to this report re-iterates the 24 recommendations in the Auditor's Management Letter and sets out the actions already undertaken by the Division or proposed to be implemented.

Conclusions:

In the majority of cases the Division has undertaken corrective action. Where corrective action is outstanding the Division intends to follow up. We have discussed the contents of the attachment with staff of the City Auditor and understand that they concur with the direction undertaken by the Division.

Contact Name:

Heather MacVicar, General Manager, 392-8952.

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Social Services Division

Response to the 1997 Toronto Auditor's Management Letter

Recommendation:

(1)The agreement with Great West Life be amended such that the City has the right to audit dental billings and/or obtain audited reports on internal controls relating to dental claim processing.

Response:

1.The Division's expenditure on dental services has been closely monitored at the Council and staff level for several years.

For 1997, the Division budgeted a net expenditure of $2.8 million and incurred actual net expenditures of approximately $2.0 million. The comparable figures for 1996 are $3.5 million and $2.9 million respectively, and for 1991, $9.0 million (budget actual).

The Division will negotiate with Great West Life for the right to audit dental billings and internal controls relating to dental claims.

It should be noted that, in 1996, the Division conducted a survey with 500 clients to evaluate the service quality provided by Great West Life. This review directly verified that services billed for these clients had in fact been provided. Further, at the time of contract renewal, an informal review of the controls in effect at Great West Life was undertaken. (The results of the review indicated these controls to be significantly superior to those in place at an alternative proponent.)

Recommendation:

(2)The Quality Control and Assurance Group perform a periodic analysis of dental claims paid by Great West Life Insurance Company to confirm the validity of payments made.

Response:

2.The Division will conduct periodic reviews to confirm with clients that they have received the services billed.

Recommendation:

(3)To minimize the occurrence of overpayments, an analysis be conducted to determine the reasons for the overpayments, and the necessary corrective action taken. This action would include the provision of additional training to caseworkers, as required. Staff should also analyze the reasons for multiple overpayments occurring, to ensure current procedures are adequate.

Response:

3.The Division has conducted reviews to identify high risk areas wherein overpayments may occur. Corrective action has commenced and the outcomes will be monitored on an ongoing basis.

Most recoverable overpayments result from client errors, unintentional or otherwise, such as: client delays in reporting changes in circumstances; failure to disclose facts; misrepresentation of facts; or, deliberate intention to defraud the system. Given their nature, these kinds of client errors are difficult for the Division to detect and control. This is exacerbated given the existing complexity of the prevailing legislation, frequent legislative changes and limitations of the current technology.

The balance of active overpayments as at April 30, 1998 was approximately $10.8 million. If this amount (which is a cumulative total over several years) is compared against the annual expenditure on welfare payments, it represents about one per cent. The average overpayment per case with an overpayment is approximately $1,100.00. This represent the total overpayment per case which is approximately 9,000 cases.

The balance in the overpayment category is due in no small measure to follow up by Division staff. Cases with multiple overpayments are the result of fraud investigations by staff.

Under the General Welfare Act, the Division was obligated to provide assistance if the client was in need, regardless of whether there was a history of overpayments. Under the Ontario Works Act, which came into effect June 1, 1998, should a client be convicted of social assistance fraud, assistance may be withheld for three months for a first offence and six months for a subsequent offence.

To improve verification processes at the point of application, the Division intends to pilot a modified Consolidated Verification Process (C.V.P.). C.V.P. is a recent initiative under the auspice-of the Business Transformation Project at the Province Level to review former Family Benefit cases prior to transfer to municipal service delivery agents. It uses a streamlined process, with a highly formalized assessment tool to detect incorrect self declared information for high risk cases, including cases with multiple overpayments. The Division has volunteered to work with the Province to modify the process for use in a municipal setting, with particular emphasis on application at point of intake.

In addition, revised overpayment policy and procedural guidelines were implemented in 1998 to assist the Division in the management of overpayments. Legislative changes have recently been enacted, resulting in changes to the overpayment policy and procedural guidelines. Training will be provided to address these changes.

Recommendation:

(4)More aggressive recovery efforts be undertaken with respect to collecting outstanding overpayments from individuals no longer receiving welfare.

Response:

4.The balance of identifiable inactive accounts is estimated to be approximately $11.5 million. In a pilot project commencing March 1996, the Division committed additional resources to establish and collect overpayments from inactive cases using the Province's Priority Initiative Funding. Recent (less than four years) inactive overpayments are pursued by a dedicated resource at each local office. Cases which have been inactive for four years or more are dealt with at the Central Overpayment and Recoveries Unit where five full-time administrative support staff (along with two caseworkers and one supervisor part-time) are responsible for tracking, monitoring and recovering these overpayments.

Once a review of the total inactive cases is completed, the Division will work with the Province and our Finance Department to write off uncollectible accounts and establish write-off procedures to ensure that a substantial build-up of old uncollectible accounts does not recur.

Recommendation:

(5)Documentation required to assess the eligibility of a welfare application be documented and copies retained in the client's file. Staff be directed to obtain the most reliable form of identification when processing applications for welfare assistance.

Response:

5.It is the Division's current policy to obtain, verify and retain in the client's file, copies of required documentation such as bank accounts and lease rental agreements. At the time of the audit, Social Insurance Numbers were not a mandatory legislated requirement for the purpose of assessing eligibility, since not all applicants have Social Insurance Numbers. Nevertheless, it has been always a practice to advise clients to apply for their cards immediately (with subsequent follow up to ensure this is done).

While the policy has always been that acceptable identification be produced, the General Welfare Act gave no legislative authority to enforce this requirement. The new Ontario Works Directives require that Social Insurance Numbers and Health Card Numbers be examined and noted on file. The Division is currently revising its identification guidelines to meet the new Ontario Works Act requirements.

Recommendation:

(6)The Policy and Administrative Unit conduct comprehensive eligibility entitlement reviews in selected area offices on a cyclical basis. An audit program should also be developed to facilitate these reviews.

Response:

6.The Division agrees with the principle of this recommendation in a static environment; however, the Division is going through massive changes in legislation this year. New changes must be implemented first, and the associated high risk areas identified. Priorities for review can then be assessed.

Recommendation:

(7)Annual work plans, developed for both P.A.R.U. and C.B.A.U., take into account high risk areas and critical issues, and include performance objectives against which the Units' activities can be measured. Reports issued to senior management should identify significant trends and problem areas, and recommend corrective action. Best practices identified at a particular area office should also be reported to management so that these practices can be implemented, as appropriate, throughout the Division.

Response:

7.Although formal risk assessment was not used to prepare the 1997 work plan, the work plan was developed based on priorities and critical issues identified by Divisional senior management and local area office managers.

During 1997, the Division's protocol for reviews was revised thoroughly and consolidated in a document titled "Performance Improvement Protocol". Therefore, commencing late that year, all review reports were to identify problem areas, make recommendations for improvement and follow up and to identify any significant trends, (and - where applicable - best of practices). Structure is in place to enable senior management of the Division to review the reports and implement any required corrective action.

Further, as a result of the revised protocol, the units incorporated the use of risk assessment in developing the 1998 work plan.

Recommendation:

(8)The mandate of both these units be reviewed and clarified, and consideration be given to consolidating these units. Staffing levels should be reviewed and allocated based on the number of reviews to be performed annually.

Response:

8.The mandates of these two units have been reviewed and subsequently the name of the two units are changed to reflect the re-defined roles and purposes in the Division.

The Policy and Administrative Review Unit is now called Program Review Unit and Cost Benefit Unit is now called Process Review Unit and both of these units are under the Performance Improvement Unit. Plans are underway to consolidate the two units. Staffing levels will also be addressed.

Recommendation:

(9)Actual time spent on each project should be maintained and compared against budgeted time. Supervisors should obtain explanations of significant variances and institute any corrective action required.

Response:

9.The Division concurs and will establish procedures to ensure that projects are completed on schedule.

Recommendation:

(10)Management take the necessary action to ensure that Policy and Administrative Review Unit and Cost Benefit Analysis Unit staff have the necessary auditing, project management and analytical skills to effectively carry out their responsibilities.

Response:

10.A number of staff have already received training to improve their auditing, risk assessment, project management and analytical skills, and the intent is to adequately equip all staff with the appropriate skills. In addition, unit staff have been provided training the following areas:

(i)computer Software such as Microsoft Access and Excel;

(ii)survey techniques;

(iii)statistical sampling;

(iv)report writing; and

(v)team building.

Upgrading of staff skills will continue.

Recommendation:

(11)Social Services staff, in consultation with the Year 2000 Project Director, expedite the completion of the systems inventory, identify and prioritize critical systems that must be year2000 compliant, and determine the resources required in this regard. The status of provincial and other external systems that impact on the Social Services Division should be determined and appropriate action taken to ensure that the Division's operations are not adversely impacted.

Response:

11.Since October 1997, the Division has been meeting on an ongoing basis with the Ministry of Community & Social Services on the Year 2000 issue for the Provincial social assistance benefit insurance system (MAIN).

Under the leadership of the Y2K Corporate Committee, in May 1998, the Division completed and provided the Committee with the Y2K survey for the Division's mission critical systems, hardware inventory, software inventory, and listing of vendors. All mission critical systems are under evaluation within the guidelines of the Division, Department and the Corporation. It is anticipated that all Y2K issues within the control of the Division will be addressed by the end of 1998, and the Division continues to vigorously pursue the Province to expeditiously undertake its responsibilities with respect to the benefit issuance system.

Recommendation:

(12)Procedures be established such that backup copies of information residing on the Caseworker Technology System, Ontario Works Technology System, Welfare Fraud Database and Appeals Database are stored off-site.

Response:

12.The Division now has back-up and off-site storage policies and procedures in operation. In general all file servers (Caseworker Technology, Ontario Works Technology, Novell) in the Division are backed up every night on cartridge. Once a week, the back up cartridge is forwarded by courier to the Corporate Archives and Record Centre for off-site storage. An off-site log is kept in each location for control and audit purpose.

The Appeals and the Provincial Fraud databases are backed up every night locally by the Systems Support Person and, every week, the disks are sent off-site to Metro Hall, 12th floor for storage.

Recommendation:

(13)A listing of all overpayments maintained as a memorandum record in client files be developed and maintained on an ongoing basis, until conversion to C.I.M.S.

Response:

13.The Division will regularly prepare and maintain a list of overpayments currently not captured by MAIN, due to the limitation of the system, in amounts over $9,999.98.

Recommendation:

(14)Social Services staff take the necessary action to ensure that passwords are not shared by staff.

Response:

14.There are technical limitations on security features for the provincial NT585 data entry computer since this is part of the MAIN system which was implemented in the early 1970's. Each area office was allotted a limited number of passwords. Also, there is no audit trail within the NT585 data input screen. Consequently there is no ability for management to identify who is doing the input. However, as specified in the Division's Automation Handbook - Let's Get Technical, data operators should not share the same password while they are performing data input. This policy will be re-enforced.

In the Division, all data entry, with the exception of the Income Reporting Statement, has now been transferred to Caseworker Technology. Effective July 1998, Caseworker Technology will be enhanced with Income Reporting capability. All data entry will therefore be handled completely by CWT which has a much more advanced and superior security system.

Recommendations:

(15)Systems staff investigate the problem with respect to loss of file information from the Appeals Log System and corrective action be taken immediately.

(16)Procedures be established such that passwords are changed periodically and that log on identifications are deleted from the system when staff leave or are transferred out of the Appeals Unit.

Response:

15,16.The Appeals Data Base is currently being converted into a more functional and accurate Access programme.

Information which formerly could not be retrieved on the FoxBASE appeals database was old data therefore the decision was made to convert the information currently on the FoxBASE system onto an Access programme. This programme is currently in the testing phase.

Procedures have been put in place to ensure that the passwords for the staff who have edit rights to the appeals data is changed every three months. This information/change date will be centralized with the local systems support person.

Also, procedures have been established to ensure that when staff leave or are transferred out of the Appeals unit they are immediately denied system access.

Recommendation:

(17)A summary report be developed for senior management, highlighting key statistics, trends and providing analysis with respect to variances between area offices and against pre- determined standards.

Response:

17.During the past year and more, the monthly statistical package has undergone continuous revisions in order to better organize and provide meaningful information. Currently, there is an executive summary that meets senior management's requirements, and local office breakdowns have been incorporated. All other identified senior management needs are expected to be incorporated in the June 1998 report.

Recommendation:

(18)The monthly statistical report be revised to provide a breakdown of statistical information by area office, distinguish between active and inactive outstanding overpayment balances, as well as provide a status of backlogs and a reconciliation of the disposition of items.

Response:

18.As stated in the response to recommendation 17, the monthly statistical report has undergone substantial revisions which include incorporating breakdowns of statistical information by local office. The reporting of active outstanding overpayments is now done separately by way of individual sections in the monthly statistical report, and this practice will be extended to inactive cases. Where information is available it has been reconciled and accounted for. The Division has initiated an Information Technology project to assist in its ability to collect all required information necessary for better caseload management.

Recommendation:

(19)Cheque signing procedures be reviewed at all area offices and revised, such that the custody of blank cheques, plates and keys is segregated.

Response:

19.The practice for most area offices is to segregate the storage of blank cheques, signature plate and keys in different safes in instances where there is more than one safe and this practice is operationally efficient. In some area offices, e.g. Area Office E, where physical space is limited and there is only one safe, the plate will be stored in a locked container in the safe.

Recommendation:

(20)The Daily Payment Reject Report be forwarded directly to a Supervisor for review and to ensure necessary corrective action is taken.

Response:

20.The Division will ensure that supervisors will oversee the completion of this process and review the work done by the Clerk II.

Recommendation:

(21)Area office staff be directed to investigate cashed cheques not on the issuance report immediately upon receipt of the listing from the Financial Services Unit. Any cashed cheques outstanding for more than three months should be reported by the Financial Services Unit to the Quality Control and Administration Group for follow up.

Response:

21.This is the Division's current policy. However, a number of limitations in MAIN have been identified by the local offices which prevented this task to be done in the time frame required. The Division will conduct a review to identify the source of the problems and recommend appropriate procedures to resolve this issue.

Recommendation:

(22)The total of uncashed cheques shown as a reconciling item on the bank reconciliation be supported by a listing of the cheques, and any old outstanding cheques be followed up on a timely basis.

Response:

22.This has been done. A supporting schedule of any reconciling item is attached to the reconciliation and any old outstanding cheque is followed up on a timely basis as appropriate.

Recommendations:

23.The sample of attendance records be selected from the Time Entry System for verification.

24.Attendance recording procedures at all area offices should be reviewed and any unnecessary recording of information be eliminated.

Response:

23,24.The Division will ensure that the sample for review will be selected from the Time Entry System and periodic follow up reviews will be conducted by the Performance Improvement Unit to ensure continuous compliance. Any unnecessary recording of information will be eliminated.

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(Copy of the 1997 audits of the accounts of the Social Services Division, General Welfare Assistance Program for the year ended December 31, 1997, has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July 24, 1998, and a copy thereof is on file with the City Clerk.)

11

1997 Management Letter - Former Metropolitan

Toronto Library Board

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 8, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 25, 1998) from the City Auditor attaching the management letter of the former Metropolitan Toronto Library Board, together with the communication (May27, 1998) from Treasurer of the former Metropolitan Toronto Library Board in response, be received and forwarded to Council for information.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 25, 1998) from the City Auditor attaching the management letter of the former Metropolitan Toronto Library Board, together with response (May 27, 1998) from the Treasurer of the former Metropolitan Toronto Library Board.

The Audit Committee advises that it received the aforementioned reports and directed that copies be forwarded to your Committee and City Council for information.

--------

(Report dated June 25, 1998, addressed to the Audit Committee

from the City Auditor)

Recommendation:

It is recommended that the 1997 management letter and the corresponding response relating to the audits of the accounts of the former Metropolitan Toronto Library Board, be received for information.

Comments:

I have completed the 1997 audits of the accounts of the former Metropolitan Toronto Library Board, for the year ended December 31, 1997. As a bi-product of my audit, the attached management letter was issued to the CEO and Secretary of the Board. A response from the Treasurer has been received.

Conclusion:

I have reviewed the response to the management letter prepared by the Board. The responses are appropriate and will be followed up as part of our future audit work.

Contact Name and Telephone No.:

Jerry Shaubel, 392-8462.

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(Communication dated May 27, 1998, addressed to the City Auditor

from Mr. Larry Peterson, Treasurer, former Metropolitan Toronto Library Board)

We hereby respond to your management letter of the Metropolitan Toronto Library Board for the year ended December 31, 1997.

Year 2000 Computer Issues:

Recommendations:

(1)consideration should be given to establishing a year 2000 project team with overall responsibility for ensuring all potential year 2000 problems are identified and addressed. A year 2000 conversion plan should be developed as soon as possible. It may be appropriate to contact staff at the City of Toronto, who have recently established a specific year 2000 project team to address this issue. The work being done by this team may be of use to the library; and

(2)Management should establish purchasing policies requiring that any new computer software is certified as "year 2000 compliant."

Response:

A project team was established under the library's current Information Technology Steering Committee to look at and resolve Year 2000 issues. The Chair and Co-chair of this committee have met with the City of Toronto Year 2000 Committee and are working with this group on a continuing basis. The City Committee has been extremely helpful and we hope to be able to utilize software and/or licenses that they would obtain for testing. Sharing of information and resources will continue.

We have been practising a general policy that all software that the Toronto Reference Library obtains is year 2000 compliant.

Cash and Bank:

Recommendation:

(3)Cheques which are stale-dated should be removed from the outstanding cheque list, investigated and either set up as liabilities or included in income on a timely basis.

Response:

Stale-dated cheques total $3,070.00. These cheques will be either included in income or reissued after appropriate investigation.

Purchases:

Recommendation:

(4)The Library should only pay for goods received. In addition, when items are returned to the supplier after a payment has been made, the Finance Department should be informed and the corresponding credit recorded promptly.

Response:

We agree with the recommendation. We have implemented a procedure whereby supplier invoices are changed whenever there are differences between what the library is invoiced for and what is actually received.

Payroll:

Recommendation:

(5)Unclaimed payroll cheques should be returned to staff other than those who are responsible for processing the payroll. These returned cheques should be securely stored until they are claimed by the payees. Unclaimed cheques should be investigated.

Response:

We agree with the concern. There are currently less than ten employees who receive payroll cheques and there are virtually no cheques that are unclaimed. The only exception to this was during 1997 when many cheques were issued to former employees for pay equity settlements. Some unclaimed cheques were returned to Payroll for the specific purpose of making further attempts to locate these individuals. Eventually, unclaimed cheques are cancelled and the liability is set up in the general ledger.

On an ongoing basis, there is no need to change our current practise.

Recommendation:

(6)The Board's policy on vacation carryover should be enforced. Staff with balances in excess of the policy should be required to agree with their managers on a plan to reduce accrued vacation days to the limit prescribed by the policy.

Response:

We agree with the recommendation. Individual Managers/Team Leaders have set up plans with individual employees in order to ensure accrued days over the maximum limit get used as soon as possible. Vacation carryover days should be reduced significantly within the next 12-24 months.

Total banked vacation days were not reduced in 1997 because of the following:

(1)seventy-one additional days were accrued to employees as some employees moved into a length of service category which entitled them to more vacation time per year;

(2)the 1997 10 day library closure during peak holiday time meant that employees who would normally use their vacation days during this time period did not due to the fact that they had been laid off; and

(3)the 10 day closure reduced the number of days worked per year, therefore reducing the number of days from which employees could take vacation days without disrupting the operations.

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(Copy of the 1997 audits of the accounts of the former Metropolitan Toronto Library Board for the year ended December 31, 1997, has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July 24, 1998, and a copy thereof is also on file with the City Clerk.)

12

1997 Management Letter - Hostel Services Division

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 8, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 25, 1998) from the City Auditor attaching the management letter of the Hostel Services Division, together with the report (June 15, 1998) from Commissioner of Community and Neighbourhood Services in response, be received and forwarded to Council for information.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 25, 1998) from the City Auditor attaching the management letter of the Hostel Services Division, together with the response from the Commissioner of Community and Neighbourhood Services.

The Audit Committee advises that it received the aforementioned reports and directed that copies be forwarded to your Committee and City Council for information.

--------

(Report dated June 25, 1998, addressed to the Audit Committee

from theCity Auditor)

Recommendation:

It is recommended that the 1997 management letter and the corresponding response relating to the audits of the accounts of the Hostel Services Division, Department of Community and Neighbourhood Services, be received for information.

Comments:

I have completed the 1997 audits of the accounts of the Department of Community and Neighbourhood Services, Hostel Services Division, for the year ended December 31, 1997. As a bi-product of my audit, the attached management letter was issued to the Commissioner of Community and Neighbourhood Services. A response from the Commissioner has been received.

Conclusion:

I have reviewed the response to the management letter prepared by the Department. The responses are appropriate and will be followed up as part of our future audit work.

Contact Name and Telephone No.:

Rafiq Dosani, 392-8438.

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(Report dated June 25, 1998, addressed to the Audit Committee

from the Commissioner of Community and Neighbourhood Services)

Purpose:

This report provides the responses of the Hostel Services Division to recommendations made in the Audit Management letter regarding Hostel Services.

Funding Sources, Financial Implications and Impact Statement:

None

Recommendation:

It is recommended that this report be received for information.

Council Reference/Background/History:

None.

Comments and/or Discussion and/or Justification:

The following are the staff responses to the recommendations submitted by City Audit.

General:

Recommendation No. (1):

Staff agree with the recommendation and will revisit it in 1999 at which time the majority of capital renovations and associated relocations will be finished and thus final computer systems will be in place.

Robertson House/Family Residence/Women's Residence:

Recommendation No. (2):

Staff agree with this recommendation. While there are supervisory reviews of files, no formal guidelines or records of the reviews are currently in place. Staff from the three locations will meet during 1998 to develop these forms.

Recommendation No. (3):

Systematic on-line checks of residents do occur prior to issuance of allowances. There are circumstances, however, where a client could show as being on active assistance and using the shelter system. For example, a family who was illegally evicted could come into the shelter early in the month having already used most of their cheque to pay rent. This family would require Personal Needs Allowance (PNA) to cover food and basic needs while in the motel program. There could also be circumstances where a client would show as active on an on-line check when in fact they had only received a drug card and had not in fact received a cash issuance.

Staff are aware that there may be some possibility of duplicate payment but do not feel the amount involved warrants weekly on-line checks of every single family/individual in the program. At the present time, there is no way for welfare workers doing a similar check regarding hostel users. This capacity may be available in the system in the future.

Recommendation No. (4):

Staff agree with this recommendation. The pilot of the computer software, which will do the reconciliation, will begin at Family Residence on July 1. The program will then be extended to other locations if found to be successful. Managers will approve these reconciliations.

Purchased Hostel Services:

Recommendations No. (5) and No. (6):

Staff agree with these recommendations. The Divisional Goals for 1998-99 includes the development of a site check list which will include a basic review of billing procedures. Also included in the Divisional Goals is the development of an annual comprehensive review of shelters which would include a method for reviewing financial statements and projections.

Seaton House:

Recommendations No. (7) and No. (8):

A review of the billings records for April, May and June 1998 indicate that in any given month less than 5 per cent of clients have not paid their rent. The total cost of this unpaid rent is less than $2,600.00. Rental owed and paid by residents are recorded, though not in an accounts receivable ledger. Staff are able to calculate "written off" fees without difficulty. It appears that the essential information is available, though perhaps not in the computerized ledger form which would be preferred by Audit. At this time, staff do not feel that this issue is priority, but will consider the recommendation when the redesign of Seaton House is completed with the concurrent changes to the computer system which will be required.

Recommendation No. (9):

Staff agree with this recommendation. Password policies and lockout features will be introduced in 1998.

Conclusions:

Divisional staff will proceed with the implementation of recommendations where appropriate.

Contact Name:

Anne Longair, Hostel Services Division, Tel: (416-392-5417), Fax: (416-392-8876).

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(Copy of the 1997 audits of the accounts of the Department of Community and Neighbourhood Services, Hostel Services Division for the year ended December 31, 1997, has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July 24, 1998, and a copy thereof is also on file with the City Clerk.)

13

1997 Management Letter - The Hummingbird Centre for

the Performing Arts

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 8, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 25, 1998) from the City Auditor attaching the management letter of the Hummingbird Centre for the Performing Arts, together with the communication (June16, 1998) from General Manager and Chief Executive Officer of the Centre in response, be received and forwarded to Council for information.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 25, 1998) from the City Auditor attaching the management letter of the Hummingbird Centre for the Performing Arts, together with the response (June 16, 1998) from the General Manager and Chief Executive Officer of the Centre.

The Audit Committee advises that it received the aforementioned report and communication and directed that copies be forwarded to your Committee and City Council for information.

--------

(Report dated June 25, 1998, addressed to the Audit Committee

from the City Auditor)

Recommendation:

It is recommended that the 1997 management letter and the corresponding response relating to the audits of the accounts of the Hummingbird Centre for the Performing Arts, be received for information.

Comments:

I have completed the 1997 audits of the accounts of the Hummingbird Centre for the Performing Arts, for the year ended December 31, 1997. As a bi-product of my audit, the attached management letter was issued to the General Manager and CEO. A response from the General Manager and CEO has been received.

Conclusion:

I have reviewed the response to the management letter prepared by the Centre. The responses are appropriate and will be followed up as part of our future audit work.

Contact Name and Telephone No.:

Jerry Shaubel, 392-8462.

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(Communication dated March 6, 1998, addressed to Ms. Elizabeth Bradley,

General Manager and CEO, the Hummingbird Centre for the

Performing Arts, from the City Auditor)

We have completed the audit of the financial statements of The Hummingbird Centre for the Performing Arts for the year ended December 31, 1997. The primary purpose of our audit is to express an opinion on the financial position of the organization as at that date and the results of its operations for the year then ended.

This letter contains our observations and recommendations relating to matters that came to our attention during the normal course of our examination and, as a result, may not include matters which a more extensive or comprehensive examination might disclose. These observations and recommendations are presented for your consideration.

Observation:

The year 2000 computer issues have received significant media coverage over the past year or so. In our previous year's management letter, we recommended that the Centre implement a coordinated work plan to ensure that any hardware and software issues related to this problem are addressed on a timely basis. Management's response indicated that the computer consultant supporting the Centre's systems has assured management of a timely solution to this problem.

While it appears that there is adequate time to address this issue, many computer system professionals recommend that this issue be dealt with as soon as possible. Certain publications in Canada for example have indicated that organizations which began year 2000 system conversions as early as six years ago are encountering obstacles. Revenue Canada, for instance, began upgrading its system nine years ago and has set a January 1, 1999 deadline to give its information technology officials a full year to work out any last minute problems.

The year 2000 issue has an impact far beyond critical business and financial systems. It will affect potentially any computer processor at the Centre, including micro-processors, whose processing of information is somewhat dependent on dates. Examples of systems that could be potentially affected at the Centre would include:

(i)Telephone systems

(ii)Elevators

(iii)Security systems

(iv)Lighting systems

(v)Maintenance schedule on operational equipment such as heating and air conditioning

(vi)Cash register systems

Recommendations:

(1)Consideration should be given to establishing a year 2000 project team with overall responsibility for ensuring all potential year 2000 problems are identified and addressed. A year 2000 conversion plan should be developed as soon as possible. It may be appropriate to contact staff at the City of Toronto, who have recently established a specific year 2000 project team to address this issue. The work being done by this team may be of use to the Centre.

(2)Management should establish purchasing policies requiring that any new software is certified as "year 2000 compliant".

Observation:

The Board of Directors of the Centre, at its meeting held on February 25, 1998, established five sub-committees and appointed members to each. However, there appears to be no specific, written mandate which outlines the responsibilities of each of the sub-committees.

Recommendation:

(3)The Board should formalize the mandate outlining the responsibilities of each of its sub-committees.

Observation:

The Associate Manager, Developing and Community Programs, is in charge of promotion and administration relating to Inner Circle memberships. She maintains the database of members and applies the payments received directly by her in the form of cheques and credit card payments to member's accounts. Having one individual perform these functions represents a weakness in the system. Such a weakness could be minimized by having an independent reconciliation of members renewing in a given period to monies collected in that same period and performing an independent review to assess reasonableness of collections. Neither of these compensating control procedures are in place.

Recommendation:

(4)A periodic reconciliation of current Inner Circle members to fees collected should be done by supervisory personnel and evidence of this reconciliation should be maintained. Explanations for discrepancies should be obtained and documented.

Observation:

During the summer vacation period, a temporary employee working in the accounts payables area made a number of duplicate payments to suppliers in error. One supplier notified the Centre of a duplicate payment which resulted in a review of all invoices paid during this period and the necessary corrections being done.

In cases where the duplicate payments were made, the missing copies of back-up documents indicating receipt of goods were obtained from the suppliers and these copies, with the cheque, were reviewed and approved for payment by the appropriate staff.

Recommendation:

(5)In cases where an invoice submitted for approval and payment is supported by documents which are not originals, this fact should be highlighted for the department heads and other signatories attention. When reviewing these invoices and supporting documents, the department heads should take special care to ensure that payment is not being made twice.

Observation:

Cheques received in the mail are logged in a journal and restrictively endorsed by the Assistant to the Manager, Finance and Personnel. The cheques are then handed over to the Accounts Receivable clerk for recording and depositing. The journal records are agreed to cheques deposited by the same Accounts Receivable clerk.

Recommendation:

(6)In order to improve internal control, the reconciliation of the log of cheques received to deposits made should be done by an individual other than the Accounts Receivable clerk.

Observation:

The Centre has, through its development activities, sought opportunities for corporate and individual partners to participate in the funding of operations and capital projects of the Centre. Management formulated and issued a policy relating to the recognition of these funds termed as "sponsorship revenue" effective January 1, 1996. The policy lacks a definition of a sponsorship. Problems relating to timing of revenue recognition for example could be encountered when the sponsor receives a benefit in kind that spans a limited number of years in return for the "sponsorship". Although the current policy was discussed with the Auditor, transactions during 1997 indicate that some clarification is required.

Recommendation:

(7)Management should review the sponsorship revenue policy. A definition of sponsorship revenue should be contained within the policy.

We have discussed the contents of this letter with Mr. Roy Reeves, Manager, Finance and Personnel, and would be pleased to discuss it further with you if you so wish.

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(Communication dated June 16, 1998, addressed to the Audit Committee,

from Ms. Elizabeth Bradley, General Manager and CEO, the Hummingbird Centre

for the Performing Arts, in response to the Auditor's 1997 Management Letter)

Attached for your information is my response to the auditor's 1997 management letter of TheHummingbird Centre for the Performing Arts.

Contact Name and Telephone Number:

Roy Reeves, 393-7455

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(Communication dated May 1, 1998, referred to above, addressed to the Board of Directors of the

Hummingbird Centre for the Performing Arts, from Mr. Roy W. Reeves, Senior Manager,

Finance and Personnel for the Hummingbird Centre for the Performing Arts)

This memorandum is management's response to the recommendations presented in the letter to the General Manager & CEO of March 6, 1998.

Recommendation (1):

Consideration should be given to establishing a year 2000 project team with overall responsibility for ensuring all potential year 2000 problems are identified and addressed. A year 2000 conversion plan should be developed as soon as possible. It may be appropriate to contact staff at the City of Toronto, who have recently established a specific year 2000 project team to address this issue. The work being done by this team may be of use to the Centre.

Management's Response:

Management had identified this as a potential problem with the core accounting system over one year ago. Management provided to the Board last year a written warranty from the computer systems service provider that a year 2000 compliant upgrade to this software would be purchased and installed in 1998. This application is being tested for installation at the present time.

Management appreciates the observation that any computer processor may be affected and the list of possible systems of exposure.

Management appreciates the gravity of the concern and has asked department heads to provide from all relevant suppliers written warranties of their systems being year 2000 compliant.

If the department heads identify a system with deficiencies in relation to compliance this system will be reviewed for upgrade or replacement as part of the 1999 special item improvements.

Recommendation (2):

Management should establish purchasing policies requiring that any new software is certified as "year2000 compliant".

Management's Response:

Management agrees with this recommendation.

The purchasing policy of the Centre is being brought forward to the Board for approval with the addition of the suggested clause.

Recommendation (3):

The Board should formalize the mandate outlining the responsibilities of each of its sub-committees.

Management's Response:

Management agrees with this recommendation.

Recommendation (4):

A periodic reconciliation of current Inner Circle members to fees collected should be done by supervisory personnel and evidence of this reconciliation should be maintained. Explanations for discrepancies should be obtained and documented.

Management's Response:

Management agrees with this recommendation.

This recommendation highlights the sort of difficulty the Centre encounters because so many activities are handled primarily only by one staff person. The software supporting this loyalty program is dated and efforts are underway to update and/or upgrade this software. Preliminary demonstrations of currently available software running on a Windows95 platform indicate an easy capability to provide monthly membership renewal report reconcilable by accounting to the deposits banked. Management is hopeful that this transition will be started this year.

Recommendation (5):

In cases where an invoice submitted for approval and payment is supported by documents which are not originals, this fact should be highlighted for the department heads and other signatories attention. When reviewing these invoices and supporting documents, the department heads should take special care to ensure that payment is not being made twice.

Management's Response:

Management does not agree with this recommendation.

The circumstances which gave rise to the duplicate payment occurred during an extended vacation of the accounts payable clerk. It is a normal policy of the accounts payable clerk to never pay copies of invoices but only the original. In circumstances in which this is impossible, the accounts payable clerk will always check the supplier file that an original invoice has not been previously paid.

In the circumstances observed by the auditor, the duplicate supplier invoice number was incorrectly input into the accounting system by the clerk which would normally have flagged a duplicate and the clerk did not follow the procedure of verifying in the supplier file that an original invoice had been previously paid.

Management believes this was an exceptional and isolated occurrence. Sufficient internal controls in the payment of invoice process currently exist sufficient to prevent duplicate payments.

Recommendation (6):

In order to improve internal control, the reconciliation of the log of cheques received to deposits made should be done by an individual other than the Accounts Receivable clerk.

Management's Response:

Management agrees with this recommendation.

The resolution of this potential conflict has been resolved with the establishment of the organizations comprehensive Pay for Performance compensation system for all salaried employees of the Centre, the assignment of the reporting for this clerk to the Senior Manager, Finance & Personnel, the removal of the cost of this employee from the Food & Beverage department budget for fiscal 1998, and the assignment of alternative accounting duties to the Food & Beverage Clerk in accordance with the departments needs and in compliance with good internal control practice (including the above noted recommendation by the auditor).

Recommendation (7):

Management should review the sponsorship revenue policy. A definition of sponsorship revenue should be contained within the policy.

Management's Response:

Management directed a significant effort in fiscal 1996 to develop and recommend a policy for the appropriate recognition of revenue and expenses resulting from the new sources of revenue the Centre had developed under the initiatives of the General Manager & CEO.

In this process due consideration was given to the CICA Guidelines for Non-For-Profit entities and the maintenance of the Centre's status as a registered charitable organization.

On review of the transactions in 1997, the auditor has raised two concerns.

(1)The policy developed by management and approved by the Board does not specify in a definition those revenues to be considered as "Sponsorship" and thereby to be subject to the revenue and expense recognition rules of the policy.

(2)The policy directs that "sponsorship" revenues will be recognized, in general, when either received or receivable. The recognition of receivables (business arrangements other than solely philanthropic sponsorship revenues -- gifts that are tax receiptable) were embraced by this policy.

Management's recognition of revenues and related expenses for certain transactions in 1998 was questioned by the auditor as to their appropriateness for compliance with generally accepted accounting principles.

While management believes this recognition complies with the policy approved by the Board, a potential conflict with the Sponsorship Policy and GAAP appears to exist.

Management recommends that the resolution of this issue be assigned to the Finance Sub-Committee for consideration.

14

1997 Management Letter - Canada's Sports Hall of Fame

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 8, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 24, 1998) from the City Auditor attaching the management letter of Canada's Sports Hall of Fame, together with the communication (June11, 1998) from Executive Director in response, be received and forwarded to Council for information.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 24, 1998) from the City Auditor attaching the management letter of Canada's Sports Hall of Fame, together with the response (June11, 1998) from the Executive Director of Canada's Sports Hall of Fame.

The Audit Committee advises that it received the aforementioned report and communication and directed that copies be forwarded to your Committee and City Council for information.

--------

(Report dated June 24, 1998, addressed to the Audit Committee,

from the City Auditor)

Recommendation:

It is recommended that the 1997 management letter and corresponding response relating to the audit of the financial statements of Canada's Sports Hall of Fame, be received for information.

Comments:

I have completed the 1997 audit of the financial statements of Canada's Sports Hall of Fame, for the year ended December 31, 1997. As a bi-product of my audit, the attached management letter was issued to the Chair of Canada's Sports Hall of Fame. A response from the Executive Director of Canada's Sports Hall of Fame has been received.

Conclusion:

I have reviewed the response to the management letter prepared by the organization. The responses are appropriate and will be followed up as part of our future audit work.

Contact Name and Telephone No.:

Rafiq Dosani, 392-8438.

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(Communication dated June 11, 1998, from Mr. Allan Stewart,

Executive Director, Canada's Sports Hall of Fame)

Following are our responses to the management letter in relation to our 1997 audit.

(1)We intend to contact Bell Canada and ADT Security Systems in regards to items 1 and 2 on the list of systems affected by the year 2000 issue. We will also discuss items 3 and 4 with Total Video Communications, the supplier of all interactive and video displays.

(2)Although no new software purchase is contemplated, year 2000 compliancy will be imperative in the event that new software is obtained.

(3)Although our current account is not interest bearing, we agree that deposits can be made more frequently, however this will incur additional parking charges due to the bank location in the downtown Toronto core.

(4)We have decided to institute a physical inventory count of significant assets on November 1 of each year, which will be compared to the asset register.

(5)Although we are in the process of fleshing out these written procedures, we do have a difference of opinion regarding the benefit of numerical control of tickets when it is weighed against the cost and human resource time required. We would also suggest that the budget approval is already covered under the annual operating budget approved by the board of governors.

(6)A written policy with regard to surplus cash investment will be prepared. Presently all investments are in low risk areas. At this time donated services are accepted using common sense, however we have no problem with drafting a brief policy which I suspect would essentially exclude some product, especially in the tobacco industry.

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(A copy of the Financial Statements of Canada's Sports Hall of Fame for the year ended December31, 1997, has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee of July 24, 1998, and a copy thereof is also on file with the City Clerk.)

15

1997 Management Letter - Toronto Hydro

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 8, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 24, 1998) from the City Auditor attaching the management letter of Toronto Hydro, be received and forwarded to Council for information.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 24, 1998) from the City Auditor attaching the management letter of Toronto Hydro prepared jointly by the Auditor of the former City of Toronto and Ernst & Young, which includes management's response.

The Audit Committee advises that it received the aforementioned report and directed that a copy be forwarded to your Committee and City Council for information.

--------

(Report dated June 24, 1998, addressed to the Audit Committee,

from the City Auditor)

Recommendation:

It is recommended that the management letter of Toronto Hydro dated March 13, 1998, be received for information.

Comments:

The audit of the 1997 financial statements of the Toronto Hydro was conducted jointly by Ernst & Young and the Auditor of the former City of Toronto. As a normal bi-product of the audit, management letters are usually issued which contain comments on systems and procedures arising from the audit. Included in the attached management letter are management's responses to the observations and recommendations.

Conclusion:

I have reviewed the management letter, as well as the responses from management. The proposed mandate of the City Audit function extends to Toronto Hydro and as a result, the issues raised by the statutory auditors will be followed up in 1998 by the City Auditor.

Contact Name and Telephone No.:

John Woods, 392-7172.

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(A copy of the communication dated March 13, 1998, addressed to Ms. Catherine David Nolan, Director of Finance, Toronto Hydro, from K.M. Hartwick, Ernst & Young, Chartered Accountants, has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July 24, 1998, and a copy thereof is also on file with the City Clerk.)

16

1997 Management Letter - The Parking Authority of Toronto

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits, for the information of Council, the following transmittal letter (July 8, 1998) from the Audit Committee and reports having received same:

Recommendation:

That the report (June 24, 1998) from the City Auditor attaching the management letter of The Parking Authority of Toronto, be received and forwarded to Council for information.

Background:

On July 7, 1998, the Audit Committee had before it a report (June 24, 1998) from the City Auditor attaching the management letter of the Parking Authority of Toronto.

The Audit Committee advises that it received the aforementioned report and directed that a copy be forwarded to your Committee and City Council for information.

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(Report dated June 24, 1998, addressed to the Audit Committee,

from the City Auditor)

Recommendation:

It is recommended that the management letter of the Parking Authority of Toronto dated March9,1998, be received for information.

Comments:

The Auditor of the former City of Toronto has completed his audit of the financial statements of the Parking Authority of Toronto, for the year ended December 31, 1997. As a bi-product of his audit, the attached management letter was issued to the President of the Authority. In normal circumstances, a response by management is usually requested. Both issues raised in the letter are general observations as opposed to recommendations, and accordingly, a response is not required. However, I have requested that the Executive Director of Information Technology, contact the President of the Parking Authority of Toronto, to review Year 2000 issues.

Contact Name and Telephone No.:

John Woods, 392-7172.

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(Communication dated March 9, 1998, addressed to Mr. Maurice Anderson, President,

The Toronto Parking Authority, from the former City of Toronto City Auditor)

I have completed my examination of the financial statements of the Parking Authority of Toronto for the year ended December 31, 1997. During the course of my examination I determined that the system of internal controls was reliable and no areas of significant weakness were noted. My observations outline below deal specifically with matters of future concern.

These observations have been discussed with Mr. G. Daigle, Director of Finance and Administration.

Year 2000 Computer Issue:

The CICA recently published a guide to provide information to entities about the potential problems that financial and operational systems may incur when dates after December 31, 1999 are processed.

The problem applies to all sizes of businesses including networked microcomputers and related application and system software and potentially to standalone microcomputers and related software. The CICA states that: "Management is responsible for assessing and addressing the effects of the year2000 issue on the organization...Managements responsibility also includes addressing the effect that other organizations' non-compliant or non-compatible systems may have on the organization." Even if the Authority has achieved internal Year 2000 compliance, could it still suffer losses because of supplier inability to achieve compliance?

While the financial information system of the Authority appears to be compliant, based on a recent application software and hardware upgrade, there is still a need to develop a formal plan and timetable to fully explore the issue as it relates to other internal microprocessors and those external issues that may arise from key suppliers.

The seriousness of this problem and the need to address it cannot be overemphasized. I appreciate that staff have been involved in amalgamation-related issues, however, this too is a matter of urgency.

It is also interesting that the TSE is requiring all publicly listed companies to disclose their plans for dealing with the Year 2000 problems. The TSE has instructed all companies listed on the exchange to include information on how they are addressing the Year 2000 problem in annual reports mailed to shareholders between April 1, 1998 and December 31, 1999.

There is the possibility that the province may require disclosure of similar information in municipal financial statements. In this context it is important to have a formalized plan to deal with the Year2000 problem.

Please give this matter the serious attention it deserves.

City Auditor:

Pursuant to the reorganization of the new City of Toronto, the December 1997 report of the Toronto Transition Team recommended that:

(1)the annual attest audit should be done by an external auditor hired by an Audit Committee of Council;

(2)the City should have an internal audit function to provide ongoing services to the Corporation.

As anticipated that the time frame from issue of an RFP to the selection of an external attest auditor will be completed as early as June 3, 1998. This will provide sufficient lead time for the new external auditor to appropriately plan an audit strategy acceptable to the requirements of the City including the Toronto Parking Authority.

In the meantime, Mr. J. Griffiths, the present City Auditor, will continue the restructuring of the existing complement of audit staff to provide the new City of Toronto with an effective internal audit function which includes an ongoing evaluative audit process including cooperation and coordination with the external auditor.

It has been my personal pleasure to have served the Authority as City Auditor for the past three years. I wish to thank you and the Board for the careful consideration of my reports. If there is further information or assistance either I or the present City Auditor, Mr. J. Griffiths CA, can provide, pending the appointment of the external auditor, we would be pleased to do so.

17

1997 Financial Statements of The Metropolitan Toronto

Housing Company Limited

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends that:

(1)the Financial Statements for the year ended December 31, 1997, and the accompanying report of the Auditor be approved and adopted;

(2)the City Auditor be appointed under the Business Corporation Act as the auditor of the Housing Company's shareholder until the next annual meeting or until a successor is appointed, and the Secretary of the Housing Company be directed to give the City Auditor written notice of such appointment;

(3)all acts, contracts, proceedings, appointments, elections and payments enacted, made, done and taken by the directors and officers of the Housing Company referred to in the minutes of the meetings of the Board of Directors or referred to in the 1997 Financial Statements and/or the accompanying Auditor's report be approved, ratified and confirmed; and

(4)the incumbent directors be re-elected for a further one-year term or until the 1999 annual shareholder's meeting or the appointment/re-election of their successors.

The Strategic Policies and Priorities Committee submits the following report (July 8, 1998) from the Audit Committee:

Recommendation:

That the 1997 Financial Statements of The Metropolitan Toronto Housing Company be received and Council so advised.

Background:

At its meeting held on July 7, 1998, the Audit Committee had before it a report (June 26, 1998) from the Chief Financial Officer and Treasurer forwarding the 1997 Financial Statements of the Metropolitan Toronto Housing Company.

The Audit Committee advises that it received the aforementioned Financial Statements, which were circulated to all Members of Council with the Agenda for the Audit Committee meeting held on July7, 1998.

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(Report dated June 26, 1998, addressed to the

Audit Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To present the 1997 Financial Statements of The Metropolitan Toronto Housing Company Limited.

Funding Sources, Financial Implications and Impact Statement:

None.

Recommendation:

It is recommended that the Financial Statements of The Metropolitan Toronto Housing Company Limited be received for information.

Comments:

The Auditor for the former Municipality of Metropolitan Toronto has completed the 1997 financial statement audits of The Metropolitan Toronto Housing Company Limited and these statements are presented for your information.

Conclusion:

Receive the 1997 Financial Statements of The Metropolitan Toronto Housing Company Limited .

Contact Name and Telephone Number:

Al Shultz, Director of Accounting Services, 397-5240.

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(Communication dated June 22, 1998, from Ms. Anne Hertz, Corporate Secretary,

Metropolitan Toronto Housing Company Limited)

Attached is a letter of transmittal which must accompany the Housing Company's Financial Statements then they are considered by Council as part of the 1998 Annual Meeting of the Shareholder. In addition to Housing Company Board recommendations related to the financial statements, Council must also adopt recommendations with respect to the appointment of the Auditor, confirmation of the proceedings of the Board of Directors for 1997 and re-election of the directors.

In keeping with the new requirements that the Financial Statements and the accompanying report of the Auditor be reviewed by the Audit Committee prior to their consideration by Council, the statements and Auditor's report have been forwarded to the Treasurer for the appropriate review. It is our understanding that they will be reviewed by the Audit Committee at its meeting on June 30, 1998 and forwarded to the appropriate Standing Committee from there.

Thank you for your assistance in this matter. If you have any questions, please do not hesitate to contact me. I can be reached at 392-6125.

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(Communication dated June 3, 1998, from the Corporate Secretary,

the Metropolitan Toronto Housing Company Limited)

By-law No. A-1, as amended, of The Metropolitan Toronto Housing Company Limited ("the Housing Company") provides that the annual meeting of the shareholder shall be held at Metro Hall in the City of Toronto as determined by the Board of Directors and at a time when the Council of the City of Toronto is meeting. When the Metropolitan Corporation was in existence, the Housing Company's annual shareholder meeting was the part of a Council meeting at which the relevant report was dealt with, and the same will apply for the new City.

The Housing Company does not offer its shares to the public, and the Business Corporations Act, requires that the directors of such a corporation place before each annual meeting of shareholders the financial statements for the period that began immediately after the end of the last reported-on financial year and ended not more than six months before the annual meeting.

The Board of Directors of the Housing Company at its meeting held on May 25, 1998, had before it the Financial Statements of the Company for the year ended December 31, 1997, and the accompanying report of the City Auditor. The Board approved the Financial Statements and directed that they and the Auditor's report be forwarded to the City Clerk for submission to the 1998 annual meeting of the shareholder to be held at the next convenient meeting of the City Council.

The Business Corporations Act requires directors of corporations to be elected at annual meetings for terms not longer than the third annual meeting next following. Under the provisions of the Housing Company's By-law No. A-1, as amended, the term of office of each director continues until the next annual meeting following his/her election or appointment and until his/her successor is elected or appointed.

As a result of

(i)Articles of Amendment modifying the Company's constating Articles so as to stipulate a minimum and maximum number of directors (rather than the 17 directorships that had existed since 1993);

(ii)a special resolution of the City under the Business Corporations Act setting the notice of the Company's directors at nine; and

(iii)adoption at Council's meeting of February 4, 5 and 6, 1998, of recommendations for the filling of the nine directorships (made in anticipation of such Articles of Amendment and such special resolution),

all of which became effective on April 1, 1998, the following individuals were appointed from among the memberships of the immediately preceding boards of the Company and the City of Toronto Non-Profit Housing Corporation ("Cityhome") to fill the nine new directorships (the terms of all other previous incumbents were formally discontinued):

Marvin Sadowski;

Madeleine Fleming;

John Alleyne;

Catherine Bertucci-Menchetti;

Councillor Michael Feldman;

John Metson;

David Monk;

Wayne Stickley; and

Councillor Michael Walker.

The same nine persons also became at that time the directors of Cityhome, to facilitate the City's plans to amalgamate the two housing entities by 1999.

In the circumstances, each of the nine incumbent directors should be re-appointed as directors of the Housing Company for another term.

The 1997 Financial Statements and the accompanying report of the Auditor should be processed for consideration by the appropriate City Committee(s) and Council as the governing body of the Housing Company's sole shareholder at its 1998 annual meeting, along with the following recommendations:

(1)the Financial Statements for the year ended December 31, 1997, and the accompanying report of the Auditor be approved and adopted;

(2)the City Auditor be appointed under the Business Corporations Act as the auditor of the Housing Company's shareholder until the next annual meeting or until a successor is appointed and the Secretary of the Housing Company be directed to give the City Auditor written notice of such appointment;

(3)all acts, contracts, proceedings, appointments, elections and payments enacted, made, done and taken by the directors and officers of the Housing Company referred to in the minutes of the meetings of the Board of Directors or referred to in the 1997 Financial Statements and/or the accompanying Auditor's report be approved, ratified and confirmed; and

(4)the incumbent directors be re-elected for a further one-year term or until the 1999 annual shareholder's meeting or the appointment/re-election of their successors.

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(A copy of the 1997 Financial Statements of The Metropolitan Toronto Housing Company Limited has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July 24, 1998, and a copy thereof is also on file with the City Clerk.)

18

Donation for Caribana

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends:

(1)the adoption of the following report (July 15, 1998) from the Chief Financial Officer and Treasurer; and

(2)that Mayor Lastman send a letter of thanks to the Royal Bank of Canada expressing the City of Toronto's appreciation for its donation in support of the 1998 Caribana Festival.

The Strategic Policies and Priorities Committee submits the following report (July 15, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

To inform Council of the proposed donation of $50,000.00 from the Royal Bank of Canada in support of the 1998 Caribana Festival and, upon receipt and deposit, to request approval for the disbursement of these funds to the Caribbean Cultural Committee.

Funding Sources, Financial Implications, Impact Statement:

The Royal Bank wishes to donate $50,000.00 to the City as a part of its $100,000.00 contribution in support of the 1998 Caribana Festival. Upon the receipt and deposit of this donation, funds in an equivalent amount would be disbursed to the Caribbean Cultural Committee.

Recommendations:

It is recommended that:

(1)the donation of $50,000.00 from the Royal Bank be deposited when received;

(2)a receipt which can be used for income tax purposes, be issued to the Royal Bank; and

(3)a cheque for $50,000.00 be issued to the Caribbean Cultural Committee in respect of the 1998 Caribana Festival.

Council Reference/Background/History:

At its meeting on April 16, 1998, City Council adopted, as amended, Report No. 5 of the Strategic Policies and Priorities Committee, entitled "Financial Support to the Caribbean Cultural Committee and Caribana". This report included a report from the Chief Financial Officer and Treasurer recommending that if any donations to the City are received with the request that the City use such monies to support Caribana, the Chief Financial Officer and Treasurer report to Council for instructions on the disbursement of such donations.

The Royal Bank announced at the end of May that it would contribute $100,000.00 towards the administrative costs of the Caribana Festival. An amount of $50,000 has been designated by the Royal Bank as sponsorship for the Caribana Festival and has been forwarded to the Caribbean Cultural Committee. The remaining $50,000.00 is proposed to be in the form of a donation to the City for the Caribana Festival.

Under income tax legislation, authority to issue receipts for income tax purposes is granted to specific types of organizations including all Canadian municipalities. Authority to issue income tax receipts is not available to the Caribbean Cultural Committee. The $50,000.00 donation to the City allows the City to issue a receipt for income tax purposes and provides Council with the opportunity to direct the funds for use by the Caribbean Cultural Committee for the 1998 Caribana Festival.

Conclusions:

The allocation of this donation to the Caribbean Cultural Committee reflects the City's continuing commitment to the 1998 Caribana Festival.

Contact Name:

Ken Colley, Finance Department, 395-6715.

19

Policy - Disaster Situations and Requests

for Emergency Relief

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the report (July15, 1998) from the Chief Administrative Officer.

The Strategic Policies and Priorities Committee reports having:

(1)requested the Chief Administrative Officer to meet with Nancy Loewen, President of Construction Volunteers Canada, to discuss opportunities for a collaborative partnership that would not interfere with the City's response to disaster emergencies; and

(2)received the report (April 22, 1998) from the City Clerk, forwarding a copy of Clause 4 of Report No. 4 of the Strategic Policies and Priorities Committee, headed "Funding Request - Conditions of Mount Royal Park, Montreal, Quebec, Following Ice Storm", which Council at its meeting held on April 16, 1998, struck out and referred back to the Strategic Policies and Priorities Committee for further consideration.

The Strategic Policies and Priorities Committee submits the following report (July 15, 1998) from the Chief Administrative Officer:

Purpose:

(1)to provide a policy to guide City Council in its response to disaster situations or requests for emergency relief in Canada and/or around the world; and

(2)to reconsider the recommendations in Report No. 4 of the Strategic Policies and Priorities Committee, which was before Council of the City of Toronto at its meeting on April16,1998.

Source of Funds:

None recommended.

Recommendations:

(1)in emergency/disaster situations, the City will consider government to government or municipality to municipality requests. Based on the nature of the disaster, the availability of resources, and budgetary considerations, the City will consider the provision of staff and/or equipment for the disaster area;

(2)the Mayor or designate will provide immediate response to emergency/disaster situations in consultation with the Chief Administrative Officer, the Medical Officer of Health, and the Commissioner of Works and Emergency Services. Ratification will follow Council's usual committee process. Once the disaster is over the City will seek reimbursement as appropriate;

(3)in extreme national or international disaster situations, upon request, Council will consider its ability to help launch public appeals for funding for areas of devastation;

(4)granting in response to disaster situations is not recommended and should only be considered against the City's grants policy to ensure accountability; and

(5)City Council recognize and commend all staff involved in providing emergency relief service to eastern Ontario during the ice storm in January, 1998, and that no further support or grants be provided in relation to this emergency.

Council Reference/Background/History:

City Council at its April 16, 1998, meeting, struck out and referred back Clause No. 4 of Report No.4 from the Strategic Policies and Priorities Committee meeting of April 7, 1998, for further consideration:

"The Strategic Policies and Priorities Committee recommended that:

(1)a grant in the amount of $10,000.00 be provided to the City of Montreal to assist in repairing the damage to Mount Royal Park in Montreal caused by the ice storm;

(2)the grant be deemed to be in the interests of the Municipality;

(3)the necessary funds be provided in the 1998 Operating Budget; and

(4)the Chief Administrative Officer report to the next meeting of the Strategic Policies and Priorities Committee on a policy to guide City Council in responding to disaster situations and providing emergency relief to areas in Canada and/or around the world."

Comments and/or Discussion and/or Justification:

In January 1998, severe ice storms swept through Eastern Ontario and Southern Quebec, leaving cities, towns, and villages with severe storm damage. With approval of the Mayor in consultation with senior staff, Toronto responded in an exemplary humanitarian fashion.

During the storm in January municipalities were twinned with each other under the direction of the Provincial Emergency Coordinator. Expert staff and/or equipment were dispatched from the City in response to specific requests from the Provincial Emergency Coordinator. Toronto was requested to use its resources and expertise to work in Kingston and Smith Falls. Montreal and other cities and towns worked with neighbouring communities and received other sources of help.

Respondents included Parks and Recreation (Forestry), Fire Services, Transportation, Police, Toronto Hydro Electric Commission, Social Services, Works, and Toronto Ambulance. Their efforts were coordinated through the Toronto Police, Emergency Management Section of the Public Safety Unit. More than 200 staff were involved in this action and approximately $2 million was expended to assist eastern Ontario. Staff are currently seeking opportunities for reimbursement as appropriate.

Disaster response is a specialized field of work that needs clear direction, coordination, and a quick appropriate response. All levels of government have tiered response disaster plans that ensure an appropriate assessment of need and coordination of requests for deployment of help. At the international level, this tier response is usually coordinated by the International Red Cross/Crescent or a United Nations Agency.

This will help to ensure that there is no duplication of effort or unskilled people being placed in dangerous situations. As a city we should consider government to government, and/or municipality to municipality requests, as part of the coordinated disaster response plan.

Providing grants in disaster situations is not recommended by staff. The City can contribute in many valuable ways, as it did in the ice storm, by providing the expertise and time of our specialty staff teams. Funding requests should be subject to the City's grants criteria. This includes staff assessment and review of the project against other needs, as well as a determination of whether the request falls within the City's mandate. A review of the financial information of the group making the request, in light of the conditions attached to grants funding, should also be undertaken.

In situations of extreme disaster, it is not unusual for some municipal councils to launch public appeals for funding to help bring to the attention of the public the plight of people in disaster areas.

Lessons Learned:

Disaster planning is more than evacuations and emergency services; it also includes plans for preserving our ecosystems, quality of life and maintaining city infrastructure over the long term.

The storm in January helped the City to identify the need to review all parts of the Toronto Disaster Plan in light of amalgamation, and has highlighted the need to include ecological disaster planning as part of the City's disaster plan. This experience also highlighted the need to pay special attention to the importance of effective and responsive mobile communications in the field. A review process for the Toronto Disaster Plan is well underway and will be submitted to City Council at a later date for approval.

The coordination of requests for help, necessary approvals, and deployment of resources was done in a timely and effective way in January. The Toronto Disaster response plan is now being reviewed to include a protocol for responses to disasters in other locations. This protocol will also include mechanisms for necessary approvals, communication plans, and staff and equipment dispatch mechanisms.

Conclusions:

(1)the City should consider government to government, or municipality to municipality requests for disaster assistance;

(2)the most appropriate response for the Corporation is where appropriate, to contribute in-kind staff and supplies;

(3)in some extreme circumstances Council may wish to launch public appeals for funds; and

(4)granting in disaster situations is not recommended.

Contact Name:

Fran Perkins 392-1088 and Barry Gutteridge 397-9292.

The Strategic Policies and Priorities Committee also submits Clause 4 of Report No. 4 of the Strategic Policies and Priorities committee, headed "Funding Request - Conditions of Mount Royal Park, Montreal, Quebec, Following Ice Storm", which City Council at its meeting held on April 16, 1998, struck out and referred back to the Strategic Policies and Priorities Committee for further consideration:

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City Council on April 16, 1998, struck out and referred this Clause back to the Strategic Policies and Priorities Committee for further consideration.)

The Strategic Policies and Priorities Committee recommends that:

(1)a grant in the amount of $10,000.00 be provided to the City of Montreal to assist in repairing the damage to Mount Royal Park in Montreal caused by the ice storm;

(2)the grant be deemed to be in the interests of the Municipality;

(3)the necessary funds be provided in the 1998 Operating Budget; and

(4)the Chief Administrative Officer report to the next meeting of the Strategic Policies and Priorities Committee on a policy to guide City Council in responding to disaster situations and providing emergency relief to areas in Canada and/or around the world.

The Strategic Policies and Priorities Committee submits the following communication (Undated) from Nancy Loewen, President and Director, Construction Volunteers Canada, Bénévoles Canadiens du Bâtiment:

Mayor Mel Lastman, City Council, City Administration, members of the general public and media, Good Day. It is good to be back in Ontario after volunteering in Quebec 3 weeks. While I was in Quebec, I stayed in the home of the Mayor of St. Valentin, a community without power for 29 days. It is hard to imagine how these people coped. We are returning to Ontario with a gift from the Mayor of St. Valentin, maple sugar made in a sugar shack for Mayor Lastman. My name is Nancy Loewen, and I am President of a newly-formed charitable organization called Construction Volunteers Canada. I wear many hats including a construction hard hat. I would like to introduce to you one of our 250 construction volunteers, Mr. Al Miley of Al Miley and Associates, tree experts from Markham, Ontario. Mr. Miley and 17 volunteers volunteered in the ice storm in the outskirts of Ottawa. Mr. Miley and two of his climbers recently completed volunteer work in two townships in Quebec. They have seen first-hand the massive destruction not only in Ontario, but also in Quebec.

Another tree arborist from Tree Specialists, Oakville, and myself toured Mount Royal Park in February of this year. Try to visualize oaks in the picnic area of the Park split right down the middle. Visualize the Park's cemetery trees smashed, flowers and dirt on the grave sites overturned, and the Park's wildlife bird sanctuary in ruins. The Tree Specialists was the second volunteer placement in the Park. Prior to them, we placed Juret Construction and an additional volunteer from Toronto in the Park. Our organization has offered assistance to the Salvation Army, E.M.O. (Emergency Measures Ontario), Army, O.P.P., Centre de Coordination de la Sécurité Civile du Québec and many churches throughout Quebec and Ontario. Note: Attachment letter from FCM, their quote "its restoration is a cause warranting support".

We are requesting as a token of unity, generosity, compassion and environmental concern, that the newly amalgamated City of Toronto, as the largest City in Canada and one of the leaders in innovative environmental projects, assist our historical City of Montreal by:

(a)Contributing a donation in the amount of $10,000.00. Because of the implications relative to tax hikes in the new City of Toronto, Construction Volunteers Canada will make every effort to contribute towards the $10,000.00, with Mount Royal Park fundraisers in the New City of Toronto. Our combined donation can be forwarded to the City of Montreal (Ville de Montreal) attention Pierre Bourque, Mayor. The Mayor is an ex officio member of a charity called "Friends of the Mountain, Montreal". This charitable group, whose goal is to protect Mount Royal Park, is trying to raise one quarter of $20 million. The Park is visited by approximately four million people yearly.

Our organization Construction Volunteers Canada has high praise for "Friends of the Mountain". Their high goals are to be commended. However, as with any charity there is no certainty as to the collection of the full proceeds. Because the senior levels of government are involved in several ice storm related matters in Ontario, Quebec and the Maritimes, and the City of Montreal does not have all the financial resources expected, the private sector is trying to raise a significant amount of money. Mount Royal Park is viewed as a historical landmark by people from all over the world who visit it on a repetitive basis.

Note: Because I will be out of province again for approximately one and a half months, volunteering in the aftermath of the ice storm, we are asking the request for a donation be earmarked for budget consideration.

(b)Carefully reviewing funding for ice storm relief in Ontario, Quebec and the Maritimes and if the funding is deemed insufficient or slow forthcoming, that the City of Toronto show leadership and expedite funding by lobbying senior levels of government, especially with respect to the trees which have suffered trauma. (In order to ensure that the wounds created by the ice storm will not decay, it is vital that the correct pruning cuts are made to reduce the amount of decay and this be carried out quickly to ensure survival of our once spectacular trees).

(c)When the City of Toronto reviews the issue of twinning in the amalgamation process, that if the City of Toronto is not twinned with Montreal, they consider twinning with the City of Montreal in their time of crisis, in an effort to promote good will and share resources.

An example of good will and support was expressed during our stay in St. Valentin, Quebec, when St. Valentin's twin sister City from Japan sent delegates to St. Valentin during the ice storm.

We have been told by Friends of the Mountain that Japan has recently made a donation for Mount Royal Park.

In closing, our people worked two months during the ice storm of 1998 and are exhausted, but happy and fulfilled because they derive energy from the disaster victims who encourage and inspire them to promote good will. Because of the positive feedback, I intend to devote the rest of my life to this charity to support our fellow Canadians. I am very proud of our construction crews who never complained when the "going got tough" in complicated and dangerous surroundings.

We are not finished working the ice storm project, and delaying the donation is agreeable to our organization, because we will be returning to help the Quebec farmers, and we are also offering assistance to western New Brunswick. As pointed our earlier in the report, I wear many hats including a construction hard hat, therefore, I will be out of province for approximately one a half months. This should give the Budget Committee plenty of time to review our financial request.

Sincerely on behalf of our Directors and Membership.

The Strategic Policies and Priorities Committee also submits the following communication (March 20, 1998) from Mr. James W. Knight, Executive Director, Federation of Canadian Municipalities (FCM):

Nancy Loewen has asked me to write to you on the matter of the efforts of Construction Volunteers Canada to raise funds to repair damage to Mount Royal Park caused by the January ice storm.

In the midst of the storm, FCM played an important role in communicating the severity of the situation to its members, and in providing them with information on how their resources could be deployed to the afflicted areas.

The response from municipalities across the country was extraordinary. Fund raising campaigns were launched, hydro crews were dispatched and emergency supplies were shipped.

In some cases, individual municipalities offered support to particular communities with which they had a prior partnership or twinning arrangement. In other cases, aid was provided for use in wherever deemed appropriate by local authorities.

Nancy Loewen had asked that FCM might contact its members specifically urging support to Mount Royal Park. Clearly as a national organization with members throughout the affected area, we are not in a position to urge one particular project ahead of another. We can confirm, however, that Mount Royal Park, one of Canada's oldest urban parks, has suffered extreme damage and its restoration is a cause warranting support.

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Ms. Nancy Loewen, President & Director, Construction Volunteers Canada, Bénévoles Canadiens du Batiment, appeared before the Strategic Policies and Priorities Committee on April 7, 1998, in connection with the foregoing matter.

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(A copy of background information and photographs, appended to the communication from Nancy Loewen, President and Director, Construction Volunteers Canada, Bénévoles Canadiens du Bâtiment are on file in the office of the City Clerk.)

(City Council on April 16, 1998, had before it, during consideration of the foregoing Clause, a communication (April 13, 1998) from the President and Director, Construction Volunteers Canada, providing additional information concerning the request for a donation of $10,000.00 for Mt.RoyalPark.)

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Ms. Nancy Loewen, President, Construction Volunteers Canada, appeared before the Strategic Policies and Priorities Committee in connection with the foregoing matter.

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(A copy of the communication dated July 21, 1998, from Nancy Loewen, President and Director, Construction Volunteers Canada, Bénévoles Canadiens du Bâtiment, has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July 24, 1998, and a copy thereof is also on file with the City Clerk.)

20

Selection of External Attest Auditors 1998 - 2002

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends adoption of the recommendations in the following transmittal letter (July 21, 1998) from the Audit Committee:

Recommendation:

That the recommendations in the joint report (July 20, 1998) from the Chief Financial Officer and Treasurer and the City Auditor, be adopted.

Background:

On July 21, 1998, the Audit Committee had before it a joint report (July 20, 1998) from the Chief Financial Officer and Treasurer and the City Auditor regarding the selection of External Attest Auditors for the period 1998 - 2002.

The Audit Committee recommends adoption of the aforementioned joint report.

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(Joint report dated July 20, 1998, addressed to the Audit Committee,

from the Chief Financial Officer and Treasurer and the City Auditor)

Purpose:

To recommend the appointment of external attest auditors for the years 1998 - 2002.

Funding Sources:

The 1998 costs of $979,700 for external audit fees are provided in the 1998 budget. Over the five years of the proposed contract external audit fees will amount to $4,898,500 for the City and its Agencies, Boards and Commissions.

Recommendations:

(1)That the firm of Ernst & Young, Chartered Accountants, be appointed auditors for the City and its Agencies, Boards and Commissions for the years 1998-2002; and

(2)That the TTC be requested to amended the appointment of auditors for 1998 by replacing the firm of Deloitte and Touche with the firm of Ernst & Young.

Background:

Council at its meeting of May 13 and 14 approved the engagement of external auditors to perform the attest audit function for the City and its Agencies, Boards and Commissions.

An RFP for audit services was issued on May 15,1998. The RFP was advertised in the Globe and Mail and interested proponents were directed to submit proposals by June 8, 1998. A proponent's meeting was held on May 29, 1998 to allow proponents to have any questions addressed. As a result of this process, four proposals were received and proponents were invited to make presentations to the Audit RFP Review Committee. These presentations were held on Thursday June 18, 1998.

The Audit RFP Review Committee, comprised of staff from the City's Finance Department, City Auditor's Office, TTC, Toronto Public Library and Toronto Hydro evaluated the proposals on the basis of the written submissions and the presentations made by the proponents.

The review process involved evaluating three main criteria as follows:

(1)Pricing

(2)Proposed Services and Alternatives

AuditAbility of the firm to perform the required audit services.

Tax AdviceExperts available to advise the City and its Agencies Boards and Commissions on tax matters , as required.

IT AdviceExperts available to advise the City and its Agencies Boards and Commissions on Information Technology issues, as required.

(3)Proponents Qualifications, Performance, Capabilities and References

Clients ServedDoes the firm have experience with large Ontario municipal clients? Appendix A provides a list provided by each of the Proponents.

ReferencesHave audits been completed on time and on budget ?

Audit ApproachDoes the firm's audit approach take advantage of the latest technology and audit procedures ?

Proposed Staffing PlanIs the mix of audit staff adequate for the services required ?

Qualifications of Staff What is the experience level of staff proposed to work on the audit ?

The results of the review were as follows:

To obtain additional comfort with the selection process supplemental questions were submitted to the leading three proponents. These questions were designed to further clarify the costing presented by the proponents and the firms' ability to complete the audit requirements.

Additional information requested included a clarification of pricing components, comments on possible adjustments to costs as a result of the amalgamation of entities and/or the use of common systems by the City and the entities. Proponents were asked to show their knowledge of the audit issues for the City by discussing the issues and the actions to be undertaken by the firm during the first three months.

The firms were also requested to describe the staffing mixed proposed by the firm. A clarification of the number of hours contained in the firms' submissions for IT and Tax advice were also requested as was the assumed involvement of internal audit in the review of conversion procedures to migrate to one FIS system.

Conclusion:

Having reviewed the responses to the Request for Proposal and the presentations made by the proponents, it is recommended that the firm of Ernst & Young, Chartered Accountants, be appointed as external auditors for the period 1998-2002.

Contact Names and Telephone Numbers:

A. C. Shultz-416 397 5240

G. Kippen-416 397 4617

W. K. Colley-416 395 6715

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Appendix A

Clients:

21

1997 Management Letters of the former Municipalities

- Metropolitan Toronto, City of Toronto, City of Scarborough,

City of Etobicoke, City of York and Borough of East York

(City Council on July 29, 30and 31, 1998, received this Clause.)

The Strategic Policies and Priorities Committee submits the transmittal letter (July 21, 1998) from the Audit Committee, without recommendation.

The Strategic Policies and Priorities Committee reports having requested the Chief Financial Officer and Treasurer to meet with the City Auditor and report directly to Council on July 29, 1998, on the City's risk management as it pertains to insurance coverage, as well as the adequacy of the insurance reserve fund and on the significance of unfunded liabilities to the City.

The Strategic Policies and Priorities Committee submits the following transmittal letter (July21,1998) from the Audit Committee:

Recommendations:

The Audit Committee recommended to the Strategic Policies and Priorities Committee and Council that:

(1)Council require that all future financial statements prepared by management be consistent and complete in full disclosure of operating and capital costs;

(2)the Provincial Government be requested to pursue entering into reciprocal agreements with each province and that management pursue similar action in terms of the United States of America, for the collection of parking ticket fines. If this is not possible, then Management be requested to pursue the option of obtaining the services of a collection agency to collect outstanding parking ticket fines, with the costs of collection to be added to each fine;

(3)Council request the Manager of Provincial and Parking Offences to report to the Corporate Services Committee on a $500.00 as well as a $5,000.00 threshold for reporting on persons who owe outstanding parking fines;

(4)the Chief Financial Officer report to the Corporate Services Committee on the former guidelines for parking tag withdrawals, together with an update on any recent changes to these guidelines;

(5)Council request the Police Services Board to make available to City Council the report on the Jane Doe case which is expected to be submitted to the Police Services Board, in camera, for consideration by the City in connection with its risk management responsibilities; and

(6)the 1997 management letters of the former municipalities of Metropolitan Toronto, City of Toronto, City of Scarborough, City of Etobicoke, City of York and Borough of East York be received for information and forwarded to Council.

The Audit Committee reports having:

(a)requested the City Auditor to report to a future meeting of the Audit Committee on the City's risk management as it pertains to insurance coverage, as well as the adequacy of the insurance reserve fund;

(b)requested the City Auditor to provide a report to the Audit Committee in the fall of 1998 on the significance of unfunded liabilities to the City;

(c)highlighted for the Chief Administrative Officer the importance of implementing and reporting on program performance measurements;

(d)noted the lack of a formal agreement with Sun Life to ensure all benefit payments made are proper and that an agreement be entered into as soon as possible; and

(e)deferred consideration of the response (June 24, 1998) from KPMG until its next meeting.

Background:

On July 21, 1998, the Audit Committee had before it a report (June 22, 1998) from the City Auditor recommending that the 1997 management letters of the former municipalities of Metropolitan Toronto, City of Toronto, City of Scarborough, City of Etobicoke, City of York and Borough of East York, be received and forwarded to Council for information.

The Audit Committee also had before it the following:

(i)(July 6, 1998) from the Commissioner of Corporate Services responding to the Finance Department management letter as it specifically relates to the former City of Toronto's financial system, the issue referred to was about installing BANNER 2000;

(ii)(June 30, 1998) from the Treasurer of the former City of Toronto addressed to the Commissioner of Corporate Services responding to the management letter (June 25, 1998) of the Auditor of the former City of Toronto;

(iii)(July 16, 1998) from the Chief Financial Officer & Treasurer responding to the management letter of the Auditor on the 1997 operations of Metropolitan Toronto;

(iv)(June 24, 1998) from KPMG responding to the management letter of the City Auditor in connection with the 1997 operations of the former City of York.

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(Report dated June 22, 1998, addressed to the Audit Committee,

from the City Auditor)

Recommendation:

It is recommended that the 1997 management letters of the former municipalities of Metropolitan Toronto, City of Toronto, City of Scarborough, City of Etobicoke, City of York and Borough of East York, be received for information and forwarded to Council.

Comments:

The former Councils of the amalgamating municipalities of Metropolitan Toronto each appointed statutory auditors to audit the 1997 financial statements of their respective municipalities. As a normal bi-product of the audit process, management letters are usually produced identifying areas of control and/or administrative weaknesses, along with recommendations for improvement. The following management letters have been prepared by the auditors of each municipality:

MunicipalityAuditor

Municipality of Metropolitan TorontoJeffrey Griffiths, CA

City of TorontoJohn Woods, CA

City of ScarboroughKPMG

City of Etobicoke and Borough of East YorkDeloitte & Touche

City of YorkKPMG

A management letter for the City of North York was not issued by Coopers and Lybrand although a letter was received from them indicating that there were no issues that required reporting.

Conclusion:

Each of these management letters has been reviewed by the City Auditor of the new City of Toronto. As part of the work plan of the Audit Division, ongoing reviews will be conducted in order to ensure that the issues identified in these letters have been addressed satisfactorily.

Contact Name and Telephone No.:

Jeff Griffiths, 392-8461

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(Report dated July 16, 1998, addressed to the Audit Committee,

from the Chief Financial Officer and Treasurer headed,

"Response to City Auditor's Management Letter")

Purpose:

This report is to inform Committee on the status of the recommendations in the Management Letter of the City Auditor on the 1997 operations of Metropolitan Toronto and certain issues for the amalgamated City.

Funding Sources:

There are no financial implications.

Recommendations:

It is recommended that this report be received for information.

Background:

This report responds to the recommendations contained in the City Auditor's Management Letter on the 1997 operations of Metropolitan Toronto and certain issues for the amalgamated City.

Discussion:

The attachment to this report reiterates 48 recommendations in the Auditor's Management Letter and sets out the actions already undertaken by the City or proposed to be implemented.

Conclusions:

In the majority of the cases the City has undertaken corrective action. Where corrective action is outstanding, the Division intends to follow up. We have discussed the contents of the attachment with staff of the City Auditor and understand that they concur with the comments made on behalf of management.

Contact Name and Telephone Number:

A. C. Shultz

Director of Accounting Services

Finance Department

416 397 5240

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(Report dated July 6, 1998, addressed to the Audit Committee,

from the Commissioner of Corporate Services headed,

"Finance Department - Management Letter")

Purpose:

In reply to the Finance Department Management letter as it specifically relates to the former City of Toronto's financial system, the issue referred to was about installing BANNER 2000.

Funding Sources, Financial Implications and Impact Statement:

N/A

Recommendations:

N/A

Council Reference/Background/History:

N/A

Comments and/or Discussion and/or Justification:

After review, it has been determined that this software upgrade and implementation is now not required. The only maintenance work continuing is the work previously contracted by the City which terminates in 1999.

Conclusions:

Therefore, with the cancellation of the BANNER 2000 installations, no additional work or expenditures, except those already contracted, will be incurred.

Contact Name:

Jim Andrew, Executive Director

Information & Technology

2-8421

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The following have previously been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July24,1998, and a copy thereof is also on file in the office of the City Clerk:

-a copy of the 1997 Management Letters from the former Municipalities of Metropolitan Toronto, City of Toronto, City of Scarborough, City of Etobicoke, City of York and Borough of East York, attached to the City Auditor's letter titled, "Management Letter - Toronto Finance Department, April 30, 1998;

-a copy of the letter titled, "1998 Issues re the Management Letter" and "Chief Financial Officer & Treasurer's Response to 1997 Audit Management Letter" (Appendix A)

(City Council on July 29, 30 and 31, 1998, had before it, during consideration of the foregoing Clause, the following report (July 28, 1998) from the Chief Financial Officer and Treasurer:

In Clause No. 21, Report No. 15 of the Strategic Policies and Priorities Committee, the Audit Committee:

(a)requested the City Auditor to report to a future meeting of the Audit Committee on the City's risk management as it pertains to insurance coverage, as well as the adequacy of the insurance reserve fund, and

(b)requested the City Auditor to provide a report to the Audit Committee in the fall of 1998 on the significance of unfunded liabilities to the City.

Strategic Policies and Priorities Committee at its meeting on July 24, 1998 requested that I meet with the City Auditor and report directly to the July 29, 1998 Council meeting on who should report on the above issues. The Auditor and I met and we both agree that I should report to both the Budget and Audit Committee on the Insurance and Unfunded Liabilities issues.

It is recommended that I report first to the Budget Committee in the fall on the above matters, with a recommendation that the matters then follow to the Audit Committee for its consideration on the above topics.)

22

Ontario Lottery Corporation - Advance Funding Program

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the following joint report (July 21, 1998) from the Commissioner of Corporate Services, the Commissioner of Community and Neighbourhood Services and the City Clerk:

Purpose:

The purpose of this report is to update Council on the recently announced Ontario Lottery Corporation Advance Funding Program and to recommend next steps.

Funding Sources, Financial Implications and Impact Statement:

The City is not currently resourced to administer this new project. However, guidelines provided by the Ontario Lottery Corporation allow for a municipality to charge administration fees on a cost recoverable basis. No further information is currently available on the fee formula and cost limits from the Ontario Lottery Corporation.

Recommendations:

It is recommended that:

(1)the appropriate City Officials be authorized and directed to clarify and negotiate if necessary, allocations criteria, schedules, program delivery options, compensation and other program related issues with the Ontario Lottery Corporation and other appropriate provincial officials for the Advance Fund;

(2)the appropriate City Officials be authorized and directed to recover full costs for the administration of the Advance Fund on a fee for service basis directly from the Ontario Lottery Corporation;

(3)subject to the successful negotiation of the content of recommendations (1) and (2) staff report to City Council regarding the City's participation in the Advance Fund program; and,

(4)the appropriate City officials be authorized and directed to take the necessary steps to give effect thereto.

Background:

The Alcohol and Gaming Commission licensed all roving three-day roving charity casino events across Ontario. In May of 1996, the provincial government announced that it would be replacing the roving charity casinos with permanent charity gaming club sites. On March 31, 1998, all licensing for three-day roving charity casino events was discontinued in anticipation of the permanent casino initiative. To assist charities financially in the interim until the permanent locations were set up, the Province announced that it would be setting up a $40 million Advance Fund. This advance funding would be accessible to all charities eligible for timeslots in the permanent charity casinos and would be repaid from proceeds from future charity casino events.

On June 26, 1998, the provincial government announced the cancellation of its permanent charity casino initiative. Any future casino expansion in Ontario will now require municipalities to hold referenda concurrent with municipal elections. It was also announced that the Ontario Lottery Corporation would be operating four charity casino pilot projects located in communities that had already had positive municipal referendum decisions. The pilot projects will be located in Thunder Bay, Sault Ste. Marie, Brantford and Point Edward.

The $40 million Advance Fund Program will remain in place to help charities in need this year. However, there is currently no provincial allocations process in place to distribute these funds. Therefore, the province is turning to local municipalities to step in and perform these duties on behalf of the Ontario Lottery Corporation for the next eight months. This program is "one time funding" for this year only. The framework for distributing future casino revenues to charities will be developed by the charities, the province and the Ontario Trillium Foundation, an agency of the Ontario government, over the next few months.

Staff have been advised that the City of Toronto's allocation under the Advance Funding program is $8.8 million. Priority for the Advance Fund is to be given to groups that were previously licensed to conduct roving charity casino events; however, the funding is also extended to other organizations who meet the established eligibility criteria as set out in the Alcohol and Gaming Commission (AGCO) Lottery Licensing Policy Manual. Approximately 4,600 charities would be eligible for this funding in the City of Toronto. Each municipality is responsible for reviewing the applications and submitting recommendations for allocations to the Ontario Lottery Corporation based on local needs and priorities. The recommended roster of charities and allocations is then reviewed by the Ontario Lottery Corporation for eligibility in consultation with the AGCO for final approval. The charities' cheques are produced by the OLC.

Discussion:

Since the recent provincial announcements and distribution of the application forms, city staff have received numerous phone calls from charitable organizations inquiring about the Advance Fund program. When the Advance Fund program was first announced, it was described as an advance against proceeds from future charity casino events. Since the province has effectively cancelled the permanent charity casino initiative, and most municipalities, including the City of Toronto, have rejected the proposal for permanent charity casinos in their communities, the opportunity for charities to repay funds from charity casino events no longer exists. City staff addressed this concern with provincial officials and were advised verbally that the Advance Funding program is in fact a grant program open to eligible charitable organizations in all municipalities. We have requested confirmation of this in writing and will forward this information to Council as soon as it is received.

The provincial guidelines state that the size and budgetary needs of a charitable group and the benefit of their services should be used by municipalities as benchmarks for determining an individual allocation. Groups who demonstrate a definite financial need, will be given precedence over agencies with operating surpluses. Municipalities are allowed to set an administrative fee for this grant allocation service on a cost recoverable basis. This means that charities would be charged a fee for the processing of their grant request. The City of Toronto has never charged a fee for the administration of a grant application from any charities and would be very concerned in principle about the appropriateness of levying an administrative charge upon request for financial assistance. All administrative costs should be recovered directly from the Ontario Lottery Corporation.

Actions to be taken:

Applications under the Advance Funding program have already been received by City Clerk's staff at all civic centre locations, as per the directions outlined in the provincial letter to the charities. Staff are prepared to answer documentation requirement queries and assist charities with the completion of the application forms. A direct information line has also been set up to handle the large number of inquiries from the public (392-4275).

If authorized by Council, City Clerk's lottery licensing staff will conduct an initial eligibility review according to the AGCO criteria and will confirm which groups have previously held roving charity casino events. The next step is to establish a process for administrative review and prioritization of the funding requests for this group. To address this need, an internal staff team comprised of representatives of the Community Grants team and Clerk's lottery licensing group will be organized to undertake a more detailed review according to provincial criteria and local municipal standards. Recommendations for charity allocations for the priority group will be forwarded to Council for approval.

The internal staff team will also review the feasibility of establishing a review and approval process for the remaining applications from charities not previously licensed for casinos and report back to Council in the early fall. Council approved rosters for all allocations must be received by the Ontario Lottery Corporation by March 31, 1999. This constraint makes any recommended allocation process very time sensitive.

Conclusions:

This report outlines all available information on the Ontario Lottery Corporation's Advance Fund program and proposed recommendations for its management. The recommendations are based upon very preliminary discussions with representatives from the Ontario Lottery Corporation, the Ontario Gaming Secretariat, the Ontario Alcohol and Gaming Commission and staff from City Clerk's and Community & Neighbourhood Services. Further clarification and negotiation must take place with the province on program guidelines and criteria, schedules and process for recovering administration costs related to operating this Fund.

The development and implementation of the review and approval process for all charities will be contingent upon the City's ability to negotiate fair and equitable terms and schedules with the Ontario Lottery Corporation. Successful administration of the Advance Fund will require the coordinated partnership of City Clerk's Division and the various City departments who administer grants programs.

Contact Name:

Barbara McEwan, Director, Legislative Services. 392-4373.

(Copies of communications dated June 24, 1998, from Mr. Garth Manness, President, Ontario Lottery Corporation, have been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July 24, 1998, and copies thereof are also on file with the City Clerk.)

23

Status of Special Committees and Task Forces

(City Council on July 29, 30and 31, 1998, deferred consideration of this Clause to the meeting of Council scheduled to be held on October 1, 1998.)

The Strategic Policies and Priorities Committee recommends the adoption of the report (July 21, 1998) from Mayor Lastman, subject to:

(1)amending Recommendation No. (1)(b) by adding at the end thereof:

"by a sunset date to be approved by Council in order to continue";

(2)amending Recommendation No. (2) by:

(a)deleting therefrom "the Miller Committee";

(b)striking out the words "report to Council" and replacing them with the words "recommend to Council"; and by

(c)adding "and that the World City Committee report to Council through the Economic Development Committee"; and

(3)adding a Recommendation (4) to read as follows:

"(4)(a)the members of the Assessment and Tax Policy Task Force be thanked for all their work;

(b)the Assessment and Tax Policy Task Force be disbanded, as its mandate is now completed; and

(c)in future, any matters related to tax issues be reported through the Strategic Policies and Priorities Committee."

The Strategic Policies and Priorities Committee submits the following report (July 21, 1998) from Mayor Mel Lastman:

Purpose:

This report proposes principles to guide the establishment of new task forces and recommends changes to the reporting relationships of certain special committees and task forces.

Funding Sources, Financial Implications and Impact Statement:

The recommendations in this report have no financial impact.

Recommendations:

It is recommended that:

(1)before creating a special committee or task force, Council should ensure that:

(a)the work cannot be undertaken by an existing Standing Committee of Council;

(b)the mandate of the new special committee or task force is time limited;

(c)the special committee or task force will report to Council through a Standing Committee; and

(d)the staff and other resources required to support the work of the special committee or task force are identified and available within existing resources;

(2)the Miller Committee and Task Forces on Community Access and Equity, Agencies, Boards and Commissions and the Environment immediately report to Council through the SPPC in order to bring them into conformity with the principles in recommendation (1) above; and

(3)the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Comments:

Since January, Council has created a number of Task Forces and Special Committees. Each of these committees is doing valuable work. However, as a Council, we must take care not to overwhelm staff and ourselves with committees and task forces. Therefore, I am recommending that Council adopt the following principles to guide the establishment of task forces and special committees in the future.

Before creating a special committee or task force, Council should ensure that:

(a)the work cannot be undertaken by an existing Standing Committee of Council;

(b)the mandate of the new special committee or task force is time limited;

(c)the special committee or task force will report to Council through a Standing Committee; and

(d)staff and other resources are available to support the work of the special committee or task force.

The attached chart lists the names, reporting relationships and completion dates of the main task forces and special committees. The majority of these special committees and task forces function in a manner that is consistent with the principles outlined above. Most will complete their mandates by the end of this year. Most also report to Council through Standing Committees. There is a proposal to have the World City Committee begin reporting to the Economic Development Committee which is now up and running.

The Miller Committee and Task Forces on Community Access and Equity, Agencies, Boards and Commissions and the Environment currently report directly to Council. To bring them into conformity with the principles, they too should report through a Standing Committee. As their mandates cut across several policy portfolios, I am recommending that these task forces and special committee report to Council through the SPPC.

Finally, I have requested the CAO to monitor the status of the task forces and special committees as part of the review of the committee structure that his staff are undertaking for the Miller Committee.

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Status Of Special Committees And Task Forces

24

Other Items Considered by the Committee

(City Council on July 29, 30and 31, 1998, received this Clause, for information.)

(a)Fleet Vehicles Use and Toronto Police Services Vehicle Practices

The Strategic Policies and Priorities Committee reports having requested the Chief Administrative Officer:

(1)to review administrative structures, policies, standards to meet the standards of accountability and operating requirements reflected in the recommendations in the transmittal letter (July 14, 1998) from the Budget Committee and report back to the Strategic Policies and Priorities Committee; and

(2)to report to the Strategic Policies and Priorities Committee on the responsibility of staff, the Standing Committees and the Budget Committee in the day to day decision making process with respect to the disbursement of funds.

(July 14, 1998) from the Budget Committee recommending practices for all new vehicle and equipment purchases, leases and lease renewals by the Corporation, its Agencies, Boards and Commissions, (with the exception of the Toronto Transit Commission), and the Toronto Police Service.

(b)Amendment to Temporary Borrowing By-law

The Strategic Policies and Priorities Committee reports having received the transmittal letter (July 14, 1998) from the Budget Committee with respect to an amendment to Temporary Borrowing By-law No. 12-1998.

(July 14, 1998) from the Budget Committee advising that it had received the report (July 13, 1998) from the Chief Financial Officer and Treasurer outlining the rationale for the amendment to Temporary Borrowing By-law No. 12-1998 and outlining the repayment schedule for the Provincial loan approved by Council at its meeting on April 30, 1998.

(c) Auditor's Report and Financial Statements of the Homes for the Aged Interest Trust Fund for the Year Ended December 31, 1997

The Strategic Policies and Priorities Committee reports having received the Auditor's Report and Financial Statements of the Homes for the Aged Interest Trust Fund for the year ended December 31, 1997:

(July 8, 1998) from the Audit Committee forwarding a report (June 25, 1998) from the City Auditor and the Financial Statements of the Homes for the Aged Interest Trust Fund for the year ended December 31, 1997, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(d)Auditor's Report and Financial Statements of the Canadian National Exhibition for the Year Ended December 31, 1997

The Strategic Policies and Priorities Committee reports having received the Auditor's Report and Financial Statements of the Canadian National Exhibition for the year ended December 31, 1997:

(July 8, 1998) from the Audit Committee forwarding a report (June 25, 1998) from the City Auditor and the Financial Statements of the Canadian National Exhibition for the year ended December 31, 1997, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(e)Auditor's Report and Financial Statements of Canada's Sports Hall of Fame for the Year Ended December 31, 1997

The Strategic Policies and Priorities Committee reports having received the Auditor's Report and Financial Statements of Canada's Sports Hall of Fame for the year ended December 31, 1997:

(July 8, 1998) from the Audit Committee forwarding a report (June 25, 1998) from the City Auditor and the Financial Statements of Canada's Sports Hall of Fame for the year ended December 31, 1997, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(f)1997 Financial Statements of the Toronto Transit Commission

The Strategic Policies and Priorities Committee reports having received the 1997 Financial Statements of the Toronto Transit Commission:

(July 8, 1998) from the Audit Committee forwarding a report (June 17, 1998) from the City Clerk forwarding from the Urban Environment and Development Committee the 1997 Financial Statements of the Toronto Transit Commission, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(g)Repeal of Legislation - Appointment of City Auditor (Former City of Toronto)

The Strategic Policies and Priorities Committee reports having received the transmittal letter (July 8, 1998) from the Audit Committee forwarding a report (June 25, 1998) from the City Auditor of the former City of Toronto closing out the Audit Department of the former City of Toronto and recognizing staff:

(July 8, 1998) from the Audit Committee forwarding a report (June 25, 1998) from the City Auditor of the former City of Toronto, recording, as an historic event, the closing out of the Audit Department of the former City of Toronto, and recognizing the staff who have carried through to completion the audits of the 1997 financial statements of the former City of Toronto and all its local boards.

(h)1997 Financial Statements of the Board of Directors of the Hummingbird Centre for the Performing Arts

The Strategic Policies and Priorities Committee reports having received the 1997 Financial Statements of the Hummingbird Centre for the Performing Arts:

(July 8, 1998) from the Audit Committee forwarding a report (June 25, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of the Hummingbird Centre for the Performing Arts, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(i)1997 Financial Statements of the City of Toronto Non-Profit Housing Corporation and the Toronto Historical Board

The Strategic Policies and Priorities Committee reports having received the 1997 Financial Statements of The City of Toronto Non-Profit Housing Corporation and the Toronto Historical Board:

(July 8, 1998) from the Audit Committee forwarding a report (June 26, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of The City of Toronto Non-Profit Housing Corporation and the Toronto Historical Board, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(j)1997 Financial Statements of Toronto Civic Employees Pension and Benefit Fund and Toronto Fire Department Superannuation and Benefit Fund

The Strategic Policies and Priorities Committee reports having received the 1997 Financial Statements of the Toronto Civic Employees Pension and Benefit Fund and Toronto Fire Department Superannuation and Benefit Fund:

(July 8, 1998) from the Audit Committee forwarding a report (June 26, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of the Toronto Civic Employees Pension and Benefit Fund and Toronto Fire Department Superannuation and Benefit Fund, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(k)1997 Financial Statements of the Metropolitan Toronto Police Services Board Supplemental Pension Benefits Trust Fund, the Metropolitan Toronto Police Benefit Fund, the Metropolitan Toronto Pension Fund and the Board of Management of the Metropolitan Toronto Zoo

The Strategic Policies and Priorities Committee reports having received the 1997 Financial Statements of the Metropolitan Toronto Police Services Board Supplemental Pension Benefits Trust Fund, the Metropolitan Toronto Police Benefit Fund, the Metropolitan Toronto Pension Fund and the Board of Management of the Metropolitan Toronto Zoo:

(July 8, 1998) from the Audit Committee forwarding a report (June 26, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of the Metropolitan Toronto Police Services Board Supplemental Pension Benefits Trust Fund, the Metropolitan Toronto Police Benefit Fund, the Metropolitan Toronto Pension Fund and the Board of Management of the Metropolitan Toronto Zoo, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(l)1997 Financial Statements of Various Arenas and Community Centres

The Strategic Policies and Priorities Committee reports having received the 1997 Financial Statements of various Arenas and Community Centres:

(July 8, 1998) from the Audit Committee forwarding a report (June 26, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of the Committee of Management for the North Toronto Memorial Arena, Committee for the Scadding Court Community Centre, Committee of Management for the Eastview Neighbourhood Community Centre, Committee of Management for the McCormick Playground Arena, Board of Management for the Harbourfront Community Centre, Board of Management for the Ted Reeve Arena and Grounds, Board of Management of the 519 Church Street Community Centre, Board of Management for Community Centre 55, Board of Management for the Cecil Street Community Centre, Board of Management for the Ralph Thornton Community Centre, Committee of Management for Forest Hill Memorial Arena, Committee of Management for William H. Bolton Arena, Board of Management for the Central Eglinton Community Centre, Committee of Management for the George Bell Arena, Board of Management for the Greektown on the Danforth Business Improvement Area, and the Board of Management for the Bloor-Yorkville Business Improvement Area, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(m)1997 Financial Statements of the Corporation of the City of Etobicoke, the Corporation of the City of York, the Corporation of the City of Scarborough, The Corporation of the City of Toronto, the Corporation of the City of North York, the Municipality of Metropolitan Toronto and the Corporation of the Borough of East York

The Strategic Policies and Priorities Committee reports having received the 1997 Financial Statements of The Corporation of the City of Etobicoke, The Corporation of the City of York, The Corporation of the City of Scarborough, The Corporation of the City of Toronto, The Corporation of the City of North York, the Municipality of Metropolitan Toronto and The Corporation of the Borough of East York:

(July 8, 1998) from the Audit Committee forwarding a report (June 26, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of The Corporation of the City of Etobicoke, The Corporation of the City of York, The Corporation of the City of Scarborough, The Corporation of the City of Toronto, The Corporation of the City of North York, the Municipality of Metropolitan Toronto and The Corporation of the Borough of East York, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 7, 1998.

(n)1997 Financial Statements of the Toronto Harbour Commissioners

The Strategic Policies and Priorities Committee reports having received the Auditor's Report and 1997 Financial Statements of the Toronto Harbour Commissioners:

(July 21, 1998) from the Audit Committee forwarding a report (July 15, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of the Toronto Harbour Commissioners, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 21, 1998.

(o)1997 Financial Statements of the Board of Management for 70Berkeley Street (Alumnae Theatre Company)

The Strategic Policies and Priorities Committee reports having received the Auditor's Report and 1997 Financial Statements for 70 Berkeley Street (Alumnae Theatre Company):

(July 21, 1998) from the Audit Committee forwarding a report (July 15, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of the Board of Management for 70 Berkeley Street (Alumnae Theatre Company), copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 21, 1998.

(p)1997 Financial Statements of the Toronto Cultural Advisory Corporation

The Strategic Policies and Priorities Committee reports having received the Auditor's Report and 1997 Financial Statements of the Toronto Cultural Advisory Corporation:

(July 21, 1998) from the Audit Committee forwarding a report (July 14, 1998) from the Chief Financial Officer and Treasurer and the 1997 Financial Statements of the Toronto Cultural Advisory Corporation, copies of which were forwarded to all Members of Council with the Agenda for the Audit Committee meeting held on July 21, 1998.

(q)Paying Cash for Paid Duty Officers - Caribana

The Strategic Policies and Priorities Committee reports having received the communication (July 7, 1998) from the Chairman of the Toronto Police Services Board:

(July 7, 1998) from the Chairman of the Toronto Police Services Board reporting, as requested on why Paid Duty Officers have to be paid up front in cash for Caribana.

(r)Social Housing Local Service Costs

The Strategic Policies and Priorities Committee reports having approved, in principle, the joint report (July 22, 1998) from the Commissioner of Community and Neighbourhood Services and the Chief Financial Officer and Treasurer, and having referred the said joint report to the Chief Administrative Officer with the request that he report back to the Strategic Policies and Priorities Committee on the outcome of the negotiations with the Province:

(July 22, 1998) from the Commissioner of Community and Neighbourhood Services and Chief Financial Officer and Treasurer, regarding social housing local service costs.

Respectfully submitted,

MEL LASTMAN,

Chair

Toronto, July 24, 1998

(Report No. 15 of The Strategic Policies and Priorities Committee, including additions thereto, was adopted, as amended, by City Council on July 29, 30 and 31, 1998.)