City of Toronto
REPORT No. 1
OF THE POLICY AND FINANCE COMMITTEE
(from its meeting on June 24, 1999,
submitted by Mayor Mel Lastman, Chair)
As Considered by
The Council of the City of Toronto
on July 6, 7 and 8, 1999
1
Energy Efficiency Office - Continuation of the Better
Buildings Partnership and Other Energy Efficiency and
Building Renewal Initiatives
(City Council on July 6, 7 and 8, 1999, adopted this Clause, without amendment.)
The Policy and Finance Committee recommends the adoption of the Recommendation of the Works Committee embodied in the following communication (June 16, 1999) from the City Clerk:
Recommendation:
The Works Committee on June 16, 1999, recommended to the Policy and Finance Committee, the adoption of the report dated June 1, 1999, from the Commissioner of Works and Emergency Services respecting the Energy Efficiency Office and continuation of the Better Buildings Partnership and other energy efficiency and building renewal initiatives.
The Works Committee reports, for the information of the Policy and Finance Committee and Council, having requested:
(1) the Commissioner of Works and Emergency Services to report back to the Policy and Finance Committee on opportunities and techniques for the Better Buildings Partnership (BBP) to provide advice to other communities on how the BBP could be replicated in other cities;
(2) the Commissioner of Works and Emergency Services to develop a detailed plan together with the Toronto Atmospheric Fund to be able to present to the Federal Government for the creation of a national BBP based on Toronto's model;
(3) the Commissioner of Works and Emergency Services and the Toronto Atmospheric Fund, in consultation with the Sustainable Energy Work Group of the Environmental Task Force, to report to the Policy and Finance Committee on the CO2 emissions inventory, the history of such inventory, goals and directives appropriate for the City to adopt, and the strategies that are being pursued and intended to be pursued to achieve these directives; and
(4) the Commissioner of Works and Emergency Services to report further on an appropriate sharing of the flow of revenue that the City is receiving from the BBP with the Toronto Atmospheric Fund, which has invested in the BBP and has been instrumental in developing and expanding the program.
Background:
The Works Committee at its meeting on June 16, 1999, had before it a report (June 1, 1999) from the Commissioner of Works and Emergency Services respecting the Energy Efficiency Office and continuation of the Better Buildings Partnership and other energy efficiency and building renewal initiatives.
Mr. Richard Morris, Manager, Energy Efficiency Office, gave a presentation to the Works Committee with respect to the foregoing matter, and submitted a copy of his presentation material with respect to the Better Buildings Partnership.
--------
(Report dated June 1, 1999, addressed to the
Works Committee from the
Commissioner of Works and Emergency Services)
Purpose:
To report on the ongoing and planned program initiatives for the reduction of carbon dioxide and other emissions that are harmful to the environment.
Funding Sources, Financial Implications and Impact Statement:
(1) Initiatives outlined in this report do not impact on the approved 1999 Budget.
(2) The Loan Recourse Fund Agreement which was executed in May, 1999, and is fully described in this report has the potential to become a new source of revenue for the City up to a maximum amount of $2 million.
Recommendations:
It is recommended that:
(1) City Council endorse the ongoing and planned program initiatives of the Energy Efficiency Office as outlined in this report, in support of the City's goals to significantly improve the local air quality and to reduce carbon dioxide emissions by 20 percent relative to 1990 levels by year 2005;
(2) the Commissioner of Works and Emergency Services develop, in consultation with the appropriate industries, residential contractor organizations, community organizations and various stakeholder associations, a residential sector public outreach program to increase awareness and participation in initiatives to improve energy/water efficiency in single family and low-rise buildings;
(3) the Commissioner of Works and Emergency Services, in consultation with the Director of Purchasing and Materials Management, and in co-operation with the Better Buildings Partnership partners, be authorized to identify by means of Request for Pre-Qualification, Request for Qualification and/or Request for Proposal processes where necessary, various community groups, energy management firms, consultants, contractors, manufacturers, retailers and other delivery and distribution channels, for the purpose of identifying these groups as qualified service delivery agents;
(4) the service delivery agents involvement in the Better Buildings Partnership continue to include their traditional role of providing sales support, marketing support, merchandising, product and equipment distribution, auditing, feasibility advice, financing, engineering design, implementation, project management, monitoring, verification and reporting, in support of the Better Buildings Partnership;
(5) the Commissioner of Works and Emergency Services be authorized to utilize funds deposited into the Better Buildings Partnership Loan Repayment Reserve Fund in support of the Better Buildings Partnership Loan Program and other program initiatives of the Energy Efficiency Office;
(6) all loan recoveries, estimated to be about $700,000.00 per year, received from public/non-profit sector building owners as a result of the repayment of loans previously made under the Better Buildings Partnership loan program be deposited into the Better Buildings Partnership Loan Repayment Reserve Fund, By-Law No. 1997-0568;
(7) all Budgeted Incentive Contributions received from Enbridge Consumers Gas in accordance with the terms of Retrofit Facilitation Agreement, be deposited into the Better Buildings Partnership Loan Repayment Reserve Fund, By-Law No. 1997-0568 upon dissolution of the Loan Recourse Fund;
(8) the administration of the Better Buildings Partnership loan program for the public and non-profit sectors be continued and be based on the criteria outlined in this report. Furthermore, that this loan program continue to provide fully secured, partially secured or unsecured loans and loan securitization on a case by case basis as determined by the Chief Financial Officer and Treasurer in consultation with the Commissioner of Works and Emergency Services, for renewal projects in existing buildings and the replacement of energy inefficient, obsolete buildings;
(9) the City Solicitor be authorized to re-draft legislation if necessary, pertaining to the foregoing recommendations, and where necessary prepare application(s) for special legislation in support of the various types of transactions to be carried out under the Better Buildings Partnership program;
(10) the Commissioner of Works and Emergency Services continue to consult with the Chief Financial Officer and Treasurer, the City Solicitor and the Director of Purchasing and Materials Management regarding the implementation of the recommendations set out above; and
(11) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.
Council Reference/Background/History:
Council of the former City of Toronto at its meeting of June 23 and 24, 1997, adopted Clause No. 18 embodied in Executive Committee Report No. 17 entitled, "Better Buildings Partnership: Criteria for Provision of Canada/Ontario Infrastructure Works Interest-Free Loans for Energy and Water Efficiency Retrofits in Non-Profit Buildings", and in so doing revised the existing lending criteria to permit the approval of partially secured and unsecured repayable loans to public sector and non-profit building owners.
At its meeting of July 14 and 15, 1997, the former Toronto City Council adopted Clause No. 13 of Executive Committee Report No. 18 entitled, "Better Buildings Partnership Program: Modifications to the Financing Framework Design of the $2 million Securitization Fund", and in so doing authorized City to enter into negotiations with Enbridge Consumers Gas and the Toronto Atmospheric Fund for the purposes of establishing a Loan Recourse Fund.
The former City of Toronto Council at its meeting of October 6 and 7, 1997, amended and adopted Clause No. 50 embodied in Executive Committee Report No. 23 entitled, "Better Buildings Partnership: Continuation of the Pilot Program into a Full-Scale Energy/Water Efficiency and Building Renewal Program Beyond 1998", and in so doing established the Better Buildings Partnership Loan Repayment Reserve Fund, By-Law No. 1997-0568
City Council at its meeting held on July 8, 1998, received for information, Clause No. 10, embodied in Report No. 6 of the Works and Utilities Committee entitled "Strategic Action Plan to Reduce Carbon Dioxide Emissions in the New City of Toronto", which outlined the expansion of the former City's of Toronto Strategic Action Plan for the reduction of carbon dioxide emissions across the new City of Toronto.
City Council at its meeting of October 28, 29 and 30, 1998, adopted Clause No. 1 embodied in Report No. 7 of the Striking Committee which recommended that sustainability be considered a primary option for the unifying and integrating concept for the Council's Strategic Planning Process and that the attainment of sustainability requires programs such as the Better Buildings Partnership which simultaneously promote economic, environmental and social equity goals.
Comments and/or Discussion and/or Justification:
The Chief Financial Officer and Treasurer, the City Solicitor, the Director of Purchasing and Materials Management and Better Buildings Partnership stakeholders have been consulted in the preparation of this report.
1.0 The Better Buildings Partnership:
In July 1990, the former Toronto City Council established the Energy Efficiency Office with a mandate to develop and implement a comprehensive energy efficiency and conservation strategy for the city. One of the programs developed in support of this mandate was the Better Buildings Partnership.
The Better Buildings Partnership was initiated by the former City of Toronto's Energy and Water Savings Committee in response to the threat of global warming. It was launched as a "Green Economic Initiative" and was further developed jointly with public and private sector parties namely; Enbridge Consumers Gas, the Toronto Atmospheric Fund, Toronto Hydro, Ontario Hydro and in consultation with a broad range of stakeholders such as the International Council of Local Environmental Initiatives, financial institutions, building owners and managers, the environmental community, trade unions, community groups, equipment manufacturers, and the construction energy/water efficiency service delivery industries.
The Better Buildings Partnership was launched as a program on June 13, 1996. Most notable amongst 26 goals and objectives that were identified for the program, were targets to generate $30 million in spending by building owners, create 400 person years of employment and reduce carbon dioxide emissions by 40,000 tonnes annually. The Better Buildings Partnership has proved to be an innovative and successful public-private partnership that has to date resulted in the renewal of more than 150 industrial/commercial/institutional (ICI) and multi-residential buildings, surpassing the program's target of 100 buildings. Better Buildings Partnership participants have spent over $60 million, more than double the target of $30 million and created 3000 person-years of employment. The environmental impact has been equally impressive, surpassing the goal of 40,000 tonnes/year reduction in carbon dioxide and other harmful pollutants, to achieve a total reduction of 65,000 tonnes/year.
Momentum has been established to build on the initial success of the Better Buildings Partnership. It is being recommended that the Better Buildings Partnership, which is primarily geared to Institutional, commercial and industrial and multi-residential buildings, be complemented by a residential sector public outreach program developed by the Commissioner of Works and Emergency Services to increase awareness and participation in initiatives to improve energy/water efficiency in single family and low-rise buildings. Consultations should be pursued through the appropriate industries, residential contractor organizations, community organizations and various stakeholder associations in order to explore the nature and scope of any future role to be assumed by these respective groups.
2.0 The Role of Energy Management Firms:
Surpassing the Better Buildings Partnership's initial targets was in large measure due to the professionalism and dedicated efforts of the three Energy Management Firms participating in the Better Buildings Partnership. It is recognized that expanding the Better Buildings Partnership across the entire amalgamated City addresses a potential market for building improvements and new construction projects which is beyond the scope and capabilities of only three Energy Management Firms carrying out work on Better Buildings Partnership projects. Request for Pre-Qualification, Request for Qualification and/or Request for Proposal processes may be required to identify various community groups, Energy Management Firms, consultants and contractors, manufacturers, retailers and other delivery and distribution channels as Better Buildings Partnership qualified agents. These agents will provide sales support, marketing, auditing, feasibility advice, financing, engineering design, implementation, project management, monitoring, verification, reporting and other program support services.
Therefore, it is being recommended that the Commissioner of Works and Emergency Services in consultation with the Director of Purchasing and Materials Management, and in co-operation with the Better Buildings Partnership partners, be authorized to identify by means of Request for Pre-Qualification, Request for Qualification and/or Request for Proposal processes where necessary, for the purpose of identifying the aforementioned groups as Better Buildings Partnership qualified service delivery agents. By increasing the number of Energy Management Firms involved in the program, a higher participation rate will be realized, resulting in a greater reduction in carbon dioxide emissions and a more successful program. Consultations will be held with Energy Management Firms as well as with the appropriate industries, organizations and various stakeholder associations in order to co-operatively determine the nature and scope of any future enhanced role to be assumed by these respective groups.
The implementation of the full-scale Better Buildings Partnership program should include where feasible, the involvement of Better Buildings Partnership utility partners, private, public/non-profit, and corporate organizations, particularly with regard to development, co-investment, management, and administration to ensure a streamlined application, approvals and loan repayment process, effective market-oriented management of deposits, and to position the Better Buildings Partnership to make timely adjustments to ongoing changes in the marketplace.
3.0 Better Buildings Partnership Financial Mechanisms/Strategies:
During 1997 and 1998, the Better Buildings Partnership assisted building owners and managers to determine the technical and financial options available for the renewal of their buildings. New lending criteria were developed to allow more retrofits to be completed in the public and non-profit sectors. The Better Buildings Partnership incorporated innovative financial strategies beyond traditional energy service financing to enhance the attractiveness of the program to building owners, the energy service community and the financial community and the financial services industry. It is of importance to note that the Better Buildings Partnership does not provide financial grants to building owners. Rather the Better Buildings Partnership program facilitated the provision of repayable interest-free loans for up to two-thirds of the retrofit project costs with the remaining one-third being secured through private sector financial institutions or the building owner's own resources such as reserve funds. In principle, the utility bill savings assisted building owners in the repayment of loans.
3.1 Canada-Ontario Infrastructure Works Program Interest-free Loans to
Public/Non-profit Sector Building Owners:
The Better Buildings Partnership was allocated $12 million under Phase 1 of the Canada Ontario Infrastructure Works Program. This program utilized a tripartite funding arrangement whereby the federal, provincial and municipal governments each contributed a one third share, in this case $4 million each. The City's share was provided by the Energy Management Firms as private sector financing. This arrangement allowed the Better Buildings Partnership to use $8 million in Canada Ontario Infrastructure Works program funding i.e. the federal and provincial shares, in conjunction with $4 million in private sector financing, to provide loans to public sector and non-profit building owners to implement energy and water efficiency measures. It is important to note that the Better Buildings Partnership program was allocated up to $1.9 million of the $12 million as administrative or sunk costs thereby allowing $10.1 million for investing in energy efficiency projects. The Better Buildings Partnership was able to decrease its administrative costs to approximately $1.4 million resulting in loans to energy efficiency projects totaling $10.6 million. Two-thirds of this amount or $7.1 million is being repaid to the City in scheduled monthly intervals over an average ten year term as noted in the following table:
| Project |
Project Amount |
2/3 Loan Amount |
| YMCA | $2,044,053.00 | $1,362,702.00 |
| Cityhome | $1,219,583.56 | $813,055.71 |
| Neill Wycik | $1,650,000.00 | $1,100,000.00 |
| Supportive Housing | $227,576.00 | $151,717.33 |
| Toronto District Catholic School Board | $3,500,000.00 | $2,333,333.33 |
| Metro United Church | $246,051.59 | $164,034.39 |
| Nisbet Lodge | $343,306.00 | $228,870.67 |
| Toronto District School Board | $1,386,000.00 | $924,000.00 |
| Totals | $10,616,570.15 | $7,077,713.43 |
As at April 30, 1999, $812,000.00 of the approximately $7.1 million in loans has been repaid resulting in an outstanding balance of $6.25 million.
3.2 Better Buildings Partnership Loan Recourse Fund:
While the overall market response exceeded the goals of the Better Buildings Partnership pilot program in both the participation rate and the technical penetration, the market response of the small-medium Institutional, commercial and industrial & Multi-residential buildings sector proved to be less than initially anticipated. Discussions with Energy Management Firms and financial institutions continue to reveal significant barriers to the successful implementation of energy efficiency projects in the small-medium institutional, commercial and industrial sector. The three most significant barriers pertain to:
(a) the lack of availability of financing;
(b) the lack of awareness of the benefits of energy efficiency; and
(c) the high transaction cost incurred by Energy Management Firms in the sales/marketing process.
In recognition of these barriers, Enbridge Consumers Gas, the Toronto Atmospheric Fund and the City have entered into an agreement and have established a Loan Recourse Fund. This Loan Recourse Fund provides the opportunity for more readily accessible loans to building owners and managers in need of financing. Specifically, the Loan Recourse Fund provides security for loans made by Enbridge Consumers Gas through its on-bill financing and is supported by its on-bill collecting program. Financing is provided through Enbridge Consumers Gas or through designated third party sources for qualified projects under the Loan Recourse Fund.
Under terms of the agreement, Enbridge Consumers Gas or a designated third party would provide loans primarily to building owners in the small/medium Institutional, commercial and industrial and multi-residential sector. The agreement also permits loans for the retrofit of large buildings where necessary. The scope, terms and conditions of the existing financing programs have been modified and adapted as new criteria for loans through Enbridge Consumers Gas or designated third party sources to match the market needs of building owners. This should result in increased access to financing and faster credit approval. Building owners are offered an opportunity to benefit through Enbridge Consumers Gas in-depth understanding of the value of implementing energy and water efficiency retrofits, the one-stop-shopping convenience provided by the company, and the establishment of an enhanced long term relationship with customers.
The agreement to establish this fund drafted jointly by the City, Enbridge Consumers Gas and The Toronto Atmospheric Fund was fully executed in May 1999.
3.2.1 Budgeted Incentive Contributions:
The agreement with Enbridge Consumers Gas includes a provision for receipt by the City of budgeted incentive contributions as approved by the Ontario Energy Board based on projected gas savings of qualified buildings participating in the Better Buildings Partnership. A budgeted incentive contribution or avoided cost is the cost in dollars to the utility for not having to produce and transmit a unit of energy (in this case, a cubic metre of gas) as a result of implementing energy saving measures within a given year. Enbridge Consumers Gas has estimated that an amount of $739,000.00 has been contributed by them into the Loan Recourse Fund to date. These payments by Enbridge to the Loan Recourse Fund are based on the magnitude of energy efficiency improvements achieved in the end used of natural gas. Contributions are calculated at the rate of $0.125 per m3 of gas efficiency.
All Better Buildings Partnership eligible projects regardless of their source of financing, including public, non-profit and private sector buildings would be able to accrue budgeted incentive contributions into the Fund based on their natural gas savings; however only projects financed by Enbridge Consumers Gas would be eligible to access the Loan Recourse Fund in the event of loan default.
The continuation of the Loan Recourse Fund will be re-evaluated after the first two years of operation. In the event that the Loan Recourse Fund is dissolved, all Budgeted incentive contributions up to a maximum of $2 million received from Enbridge Consumers Gas in accordance with the terms of the agreement, will be transferred to the City for deposit into the Better Buildings Partnership Loan Repayment Reserve Fund.
3.2.2 Operational Framework of the Loan Recourse Fund:
The key points in the operation of the Loan Recourse Fund are summarized below:
(a) the Toronto Atmospheric Fund issues a letter of direction in the amount of $2 million (this amount was previously allocated to the Better Buildings Partnership in the form of segregated funds in a Reserve Account) to initially capitalize the Loan Recourse Fund;
(b) Enbridge Consumers Gas adds to the Loan Recourse Fund by contributing budgeted incentive contributions for each Better Buildings Partnership project that is fully commissioned and that is recorded as a qualified program participant, and would be based on the projected natural gas savings that resulted from Better Buildings Partnership projects. To date $739,000.00 has been the amount expressed by Enbridge Consumers Gas as their contribution;
(c) Enbridge Consumers Gas or a designated third party agency provides financing for qualified projects under the Loan Recourse Fund. It is important to note that the City is not providing financing to any projects under the Loan Recourse Fund agreement. The Loan Recourse Fund consisting of: the Budgeted incentive contributions; interest earned on the Budgeted incentive contributions; as well as the Toronto Atmospheric Fund funds on deposit ($2 million) would be accessible only in the event of loan default;
(d) given Enbridge Consumers Gas' existing administrative capacity, the day to day administration and management of the Loan Recourse Fund as well as the financing, credit approval and collection procedures jointly established by the three parties are being carried out by Enbridge Consumers Gas staff. Enbridge Consumers Gas reviews and approves/rejects all applications for financing under their existing financing programs. The City has the right to review each potential application for technical merit, but the credit approval decision resides with Enbridge Consumers Gas and/or a designated third party financial agency; and
(e) the International Council of Local Environmental Initiatives has done preliminary financial analysis based on empirical data from similar demand side management programs which indicated a maximum loan default rate of 5 percent. Their analysis has projected that the Loan Recourse Fund balance at the end of 2007 could grow to over $10 million net of loan defaults and annual interest payments to the Toronto Atmospheric Fund on its $2 million investment. This assumes the Better Buildings Partnership can maintain an annual retrofit project volume of $40 million from 1999 to 2007.
3.3 Better Buildings Partnership Loan Repayment Reserve Fund:
As stated previously, interest-free loans totalling approximately $7.1 million dollars have been approved for the implementation of retrofits in public and non-profit sector buildings. The term of these interest-free loans average approximately ten years with repayment to the City scheduled at monthly intervals. Furthermore, up to $2 million in budgeted incentive contributions could be transferred to the City upon dissolution of the Loan Recourse Fund. Therefore, it is recommended that the Better Buildings Partnership Loan Repayment Reserve Fund be used for the purpose of receiving all loan repayment funds collected from public/non-profit building owners that had previously received loans under the Better Buildings Partnership Loan Program, estimated to be approximately $700,000.00 per year. Furthermore, all Budgeted Incentive Contributions received from Enbridge Consumers Gas in accordance with the terms of Retrofit Facilitation Agreement, will be deposited into the Better Buildings Partnership Loan Repayment Reserve Fund, By-Law No. 1997-0568 upon dissolution of the Loan Recourse Fund Given the economic and environmental success of the Better Buildings Partnership to date- $60 million in projects, 3000 person years of employment and 60,000 tonnes of carbon dioxide emissions- it is also recommended that the Commissioner of Works and Emergency Services be authorized to utilize funds deposited into the Better Buildings Partnership Loan Repayment Reserve Fund in support of the Better Buildings Partnership Loan Program and other program initiatives of the Energy Efficiency Office.
Furthermore, it is imperative that the revised security requirements of the Better Buildings Partnership loan program for public sector/non-profit sectors be continued for the following reasons:
(a) the operating environment of many non-profit organizations makes the securing of a letter of credit problematic. They are generally not in a position to offer the City 100 percent security for Better Buildings Partnership loans. In general, non-profit organizations become substantially encumbered in order to finance the acquisition of real property; and
(b) The participation rate of non-profit buildings in the Better Buildings Partnership will be significantly reduced. This adverse impact would occur as only a small number of financially secure non-profit buildings would be able to meet the City's requirements, while a large number of smaller buildings in need of renewal would be excluded from participation in the Better Buildings Partnership. A lower participation rate would make it very difficult for the City to realize its 20 percent carbon dioxide emission reduction goal.
Therefore it is recommended that the administration of the Better Buildings Partnership loan program for the public and non-profit sectors be continued and be based on the criteria outlined in this report. This loan program will continue to provide fully secured, partially secured or unsecured loans and loan securitisation on a case by case basis as determined by the Chief Financial Officer and Treasurer in consultation with the Commissioner of Works and Emergency Services, in order to facilitate the implementation of energy efficiency and building renewal projects in existing buildings and the replacement of energy inefficient, obsolete buildings in these sectors.
3.3.1 Better Buildings Partnership Loan Program Criteria:
Council of the former City of Toronto approved revised criteria to facilitate interest-free loans to the public and non-profit building sectors which modified standard security requirements to allow partially secured and unsecured repayable loans to public sector and non-profit building owners. By maintaining the revised Better Buildings Partnership loan criteria and extending loans to these building owners, the City would be lending against the projected total cash flow of the entire non-profit organization as well as the taking of a security interest on the real property and income. Naturally, this approach would take into account that the energy cost savings resulting from the retrofit, would reduce the annual operating cost and strengthen the overall cash flow of the non-profit organization.
The basic requirements for approving interest-free loans is based on the building owner's financial capability, including the taking of a security interest on the real property and income in addition to the following considerations:
(a) use of portions of the non-profit organizations reserve funds as a down payment to ensure that the project has a positive cash flow;
(b) assignment of revenue streams until all debt obligations are satisfied taking into consideration energy and operational cost savings;
(c) perfected security interest in the real property as well as existing personal property; and
(d) the realizable salvage value of installed equipment and systems.
Other standard practices and procedures are to be continued to ensure a reasonable expectation of repayment of funds from public and non-profit organizations participating in the Better Buildings Partnership.
3.3.2 The Roles of the Chief Financial Officer and City Treasurer and the Commissioner of Works and Emergency Services:
We have consulted with the Chief Financial Officer and City Treasurer to determine the potential delineation of roles and responsibilities as follows:
(a) the Chief Financial Officer and City Treasurer would review and approve the credit worthiness of each loan application and would also recognize Council's directive for the granting of fully secured, partially secured and unsecured loans to public sector and non-profit building owners; and
(b) the Commissioner of Works and Emergency Services would review the technical, economic and environmental impact potential of each project. The Commissioner would make recommendations with respect to the acceptance/standing of each loan based on the contribution of the project to the City's carbon dioxide reduction goal notwithstanding the credit worthiness of the applicant and in recognition of Council's directive for the granting of fully secured, partially secured and unsecured loans to public sector and non-profit building owners.
Conclusions:
The Better Buildings Partnership has made a significant impact across the City of Toronto by:
(a) communicating the benefits of energy efficiency and building renewal retrofits;
(b) establishing highly effective public/private partnerships; and
(c) implementing environmental improvements to reduce carbon dioxide and other harmful emissions that adversely affects our citizens health and the environment.
The program has demonstrated to the community, ways and means by which energy/operating costs savings can be used to underwrite renewal projects to improve both the asset value of buildings, the environmental conditions and at the same time contribute to reductions in harmful emissions. Many of the Better Buildings Partnership participants/building owners stated that had it not been for the Better Buildings Partnership and the benefits realized through participation, they would not have contemplated a building renewal project.
At this time the City is well on its way to fully entrenching a major economic and environmental and sustainability instrument that contributes to; job creation, economic renewal, training and development of the workforce, recycling of the City's building stock, enhanced corporate image both locally and globally, competitiveness, and most importantly, a major contribution to the reduction of carbon dioxide emissions that contribute to climate change as well as other harmful emissions that cause urban smog.
If the recommendations presented in this report are adopted by Council, the Better Buildings Partnership can continue to implement a high level of retrofit activity in the New City of Toronto, consistent with the goals, objectives and benefits foreseen by Council. The Commissioner of Works and Emergency Services will continue to consult with the Chief Financial Officer and Treasurer, the City Solicitor and the Director of Purchasing and Materials Management regarding the implementation of the recommendations set out above.
Contact Name and Telephone Number:
John Warren, Director, Environmental Services
Technical Services Division
Tel: (416) 397-4625; Fax: (416) 392-627
2
Capital Loan Guarantee for Earl Haig Community
Day Care Centre to Develop a Child Care Centre
(City Council on July 6, 7 and 8, 1999, adopted this Clause, without amendment.)
The Policy and Finance Committee recommends:
(1) the adoption of the Recommendation of the Community Services Committee embodied in the following communication (June 17, 1999) from the City Clerk; and
(2) that the General Manager, Transportation Services Division, be requested to review and/or absorb some or all of the cost of funding a barrier fence to protect the playground, and report thereon to the Policy and Finance Committee, if necessary:
Recommendation:
The Community Services Committee on June 17, 1999, recommended to the Policy and Finance Committee the adoption of the report dated June 1, 1999, from the Commissioner of Community and Neighbourhood Services respecting the Capital Loan Guarantee for Earl Haig Community Day Centre.
--------
(Report dated June 1, 1999, addressed to the
Community Services Committee from the
Commissioner of Community and Neighbourhood Services)
Purpose:
The purpose of this report is to seek Council approval for the City of Toronto to provide a loan guarantee for Earl Haig Community Day Care Centre to develop a child care centre.
Funding Sources, Financial Implications and Impact Statement:
The former Metropolitan Toronto Council established Criteria for Capital Loan Guarantees for non-profit child care programs in the report "Capital Loan Guarantee for John Wanless Child Care Program" adopted June 1, 1994. This report proposes that the City of Toronto guarantee a loan of $1 million for the development of a child care program at 1671 Queen Street. While the City would not be providing direct funding to this project the City would need to meet requirements for certification under the established debt and obligation limit.
Recommendations:
It is recommended that:
(1) subject to sufficient performance safeguards, the City of Toronto guarantee a capital loan of up to $1,000,000.00 to be arranged by Earl Haig Community Day Care Centre;
(2) the nature and terms of the guarantee, including any requirement for potential certification under the established debt and obligation limit, be subject to the concurrence of the Treasurer, City Solicitor and the Commissioner of Community and Neighbourhood Services; and
(3) the appropriate City Officials be authorized to take the necessary action to give effect thereto.
Council Reference/Background/History:
Earl Haig Community Day Care Centre is proposing to develop a new child care facility named the Beach and Child Family Centre at 1667-1671 Queen Street East. The proposed centre will serve 113 children from birth to school age. Earl Haig Organizations currently operates the Earl Haig Community Day Care Centre which serves 136 children from birth to 12 years of age. The organization has a history of 18 years of service to the community and has had a subsidy contract with the municipality since 1981.
The proposed new location offers the opportunity to significantly increase the service available to infants and toddlers. The organization, while operating in a fiscally solvent position does not have sufficient funds to pay for the construction costs of the new facility. The Province of Ontario no longer funds major capital costs of child care development. As a result, there have been significant barriers to the growth of child care services in support of the principles of service equity.
The former Metropolitan Toronto Council approved loan guarantees for Allenby Day Care Centre, John Wanless Child Care, and Charlottetown Blvd Child Care and established criteria for Capital Loan Guarantees in a report adopted by Council June 1, 1994.
Comments and/or Discussion and/or Justification:
The Earl Haig organization has submitted a business plan to the Department in support of its application of a City Loan Guarantee. The construction costs will be funded through a loan and the loan payments will be financed through parent fees. In order to successfully obtain a loan from a commercial lender, the organization requires a loan guarantor. A preliminary review by Departmental officials of the centre's financial plan has been completed. Further discussions with the operator and the Treasurer will continue to refine the business plan but the preliminary analysis indicates that the plan is viable.
It is expected that this project will meet the established criteria for loan guarantees.
Conclusions:
The Department recommends that Council approve a loan guarantee for Earl Haig Community Day Care Centre subject to sufficient safeguards and in accordance with the established criteria.
Contact Name:
Brenda Patterson, Director, Contract and Quality Compliance, Children's Services Division
Tel.: 392-3319; patterso@csis.csis.csd.metotor.on.ca
The Policy and Finance Committee submits the following communication (June 17, 1999) from Councillor Sandra Bussin, East Toronto, Ward 26:
I strongly endorse the report before the Policy and Finance Committee for a capital loan guarantee for the Earl Haig Community Day Care Centre proposal.
I consider Earl Haig Day Care Centre to be one of the finest providers of children's care facilities in East Toronto. The proposal before you is a very comprehensive one which will provide another satellite day care facility. This will include a most needed 24 hour hospice care program.
As a former School Trustee, I have been involved with this day care board and management and consider it to be of the highest calibre. The Board is professional, responsive and financially viable.
3
Capital Funding Support for Pelmo Park Child Care Centre
(City Council on July 6, 7 and 8, 1999, adopted this Clause, without amendment.)
The Policy and Finance Committee recommends the adoption of the Recommendation of the Community Services Committee embodied in the following communication (June 17, 1999) from the City Clerk:
Recommendation:
The Community Services Committee on June 17, 1999, recommended to the Policy and Finance Committee the adoption of the report dated June 1, 1999, from the Commissioner of Community and Neighbourhood Services respecting Capital Funding Support for Pelmo Park Child Care Centre.
--------
(Report dated June 1, 1999, addressed to the Community
Services Committee from the Commissioner of
Community and Neighbourhood Services)
Purpose:
The purpose of this report is to seek approval to adjust the funding allocated to Pelmo Park Child Care Centre from the Child Care Capital Reserve to reflect their actual relocation costs.
Funding Sources, Financial Implications and Impact Statement:
The Child Care Capital Reserve was originally established by the former Metropolitan Toronto Council in 1997 to assist child care centres facing closure as a result of capital renovations to schools in which they were located. The fund was later augmented and extended in July 1998 by Toronto Council to support child care programs being evicted from schools. There are sufficient funds in the Child Care Capital Reserve to accommodate the additional relocation and renovation costs being encountered by Pelmo Park Child Care Centre, originally approved for funding at the July 29, 30, 31, 1998 meeting of Toronto Council.
Recommendations:
It is recommended that:
(1) approval for up to $150,000.00 be allocated to Pelmo Park Child Care Centre from the Child Care Capital Reserve to support the renovation costs associated with their relocation to Westminster United Church; and
(2) the appropriate officials be authorized to take the necessary action to give effect thereto.
Council Reference/Background/History:
The former Metropolitan Toronto Council established a Child Care Capital Reserve in 1997 to assist child care centres facing closure as a result of capital renovations to the schools in which they were located. At its July 29,30,31, 1998 meeting, Toronto Council extended the criteria and guidelines governing the use of the Child Care Capital Reserve to assist child care programs being evicted from schools and facing renovations costs in the sites to which they were being relocated. Council specifically approved funds associated with the relocation of Pelmo Park Child Care Centre, Silverthorne Day Care and Playhouse Child Care Centre. Based on an expected move to a property located on the grounds of Humber Memorial Hospital, approval for $25,000.00 was given to cover what were expected to be Pelmo Park's share of the relocation costs.
Comments and/or Discussion and/or Justification:
Pelmo Park Child Care Centre was expected to leave its location at Pelmo Park School by August 31, 1998. Preliminary negotiations with Humber Memorial Hospital to relocate the child care centre to a building on the hospital grounds were based on the assumption that the necessary renovations would be shared by the Hospital and the centre. Pelmo's share was estimated to be $25,000.00. Because the proposed relocation did not have appropriate zoning, the move of the child care centre to its new location was delayed and the program was forced to operate from two interim locations. In September, 1998, a portion of the program was temporarily relocated to Westminster United Church while the remainder of the program was able to secure a month by month extension in the existing school location. Although the zoning for the child care centre was eventually resolved the program was unable to secure sufficient security of tenure at the hospital site and as a result pursued an alternate plan. Westminster United Church agreed to house the entire child care program and to provide an agreeable long term lease arrangement. The centre must complete its renovation to the church facility in time to relocate all the children to the new site by September 1999.
In order to complete the renovations necessary to meet the licensing requirements of the Day Nurseries Act, up to $150,000.00 in capital funding is required. This is $125,000.00 more than originally approved by Council. Pelmo Park Child Care Centre does not have the funds to pay for these added renovations costs. Without additional capital funding support, the centre will be forced to close. This would have a serious impact on the stock of licensed space available to support subsidized families and could also hinder the City's ability to maintain the full level of subsidized service required under the service contract with the Province.
Conclusions:
The Department supports the centre's revised relocation and renovation plan and recommends that Council approve support for the revised renovation estimate of up to $150,000.00. There are adequate funds remaining within the Child Care Capital Reserve to accommodate the increased renovation costs associated with the relocation of Pelmo Park Child Care Centre to the Westminster United Church site.
Contact Name:
Brenda Patterson, Director, Contract and Quality Compliance , Children's Services Division,
Tel.: 392-3319; email: patterso@csis.csis.csd.metrotor.on.ca
4
Future Provision of Laundry Services
(City Council on July 6, 7 and 8, 1999, amended this Clause by adding to Recommendation No. (1) embodied in the report dated May 19, 1999, from the Commissioner of Community and Neighbourhood Services, the words "and, if negotiations for the sale are not successful, staff continue discussions with respect to a continued joint venture or profit-sharing arrangement", so that such recommendation shall now read as follows:
"(1) staff be directed to enter into negotiations for the sale of the Central Laundry facility to Lakeshore Laundry and Linen Concept Ltd., and to report back to City Council on the outcome of the negotiations, and, if negotiations for the sale are not successful, staff continue discussions with respect to a continued joint venture or profit-sharing arrangement;".)
The Policy and Finance Committee recommends the adoption of the Recommendation of the Community Services Committee embodied in the following communication (June 17, 1999) from the City Clerk:
Recommendation:
The Community Services Committee on June 17, 1999, recommended to the Policy and Finance Committee the adoption of the report dated May 19, 1999, from the Commissioner of Community and Neighbourhood Services respecting the future provision of laundry services.
The Community Services Committee reports, for the information of the Policy and Finance Committee, also having had before it a communication (June 15, 1999) from Ms. Anne Dubas, President, Canadian Union of Public Employees, Local 79, suggesting that all laundry services should be performed by City employees; and noting that CUPE Local 79 members look forward to providing quality and timely laundry services to the residents of the Homes for the Aged Division
--------
(Report dated May 19, 1999, addressed to the
Community Services Committee from the
Commissioner of Community and Neighbourhood Services)
Purpose:
To explain the outcome of the cost benefit analysis undertaken by staff, following City Council adoption of Clause No. 16 of Report No. 7 of the Community and Neighbourhood Services Committee (July 29, 1998), with respect to options for the future provision of laundry services to the Homes for the Aged, and to gain City Council authority to enter into negotiations for the sale of the Central Laundry facility.
To advise City Council regarding the recommended optimal approaches for laundering both linens and residents' personal clothing, and to advise Council regarding the anticipated time frame for reporting back regarding cost and service implications related to re-introducing a system of in-house personal laundry.
Funding Sources, Financial Implications and Impact Statement:
Following the May 1984 Metropolitan Toronto Council decision to establish a Homes for the Aged Central Laundry through a joint venture with K-Bro Linen Systems Inc. (K-Bro), Council directed staff to establish a Homes for the Aged Central Laundry Reserve Fund. This fund was established to pay for all required laundry capital upgrades. The Central Laundry Reserve Fund has been self-supporting over the years, as the laundering agreement established between the Homes for the Aged and K-Bro required K-Bro to pay the Homes for the Aged a royalty from all of the other K-Bro customers whose laundry was processed at the Central Laundry facility. These royalty payments were regularly deposited to the Central Laundry Reserve Fund. As of May 19, 1999, the fund had a balance of $1.5 million.
In September 1998, K-Bro terminated its agreement with the City of Toronto. As a result of the circumstances surrounding the termination, the parties have exchanged correspondence identifying areas of financial dispute. In addition, when K-Bro terminated the agreement, their unions filed complaints with the Ontario Labour Relations Board. The City of Toronto is a respondent to these proceedings. The Board has adjourned the hearings until December 1999. The Legal Division is representing the City in these proceedings and staff of the Legal Division have been consulted in the preparation of this report. Should the City be found to have any liability with respect to either the outstanding financial issues between itself and K-Bro, or any liability as a result of an Ontario Labour Relations Board ruling, these costs will be paid for from the Central Laundry Reserve Fund.
Last, on September 25, 1996, Council authorized the Homes for the Aged to make future allocations from the Central Laundry Reserve Fund to any laundry-related operating or capital cost within the Homes for the Aged. If City Council directs staff to negotiate the sale of the Central Laundry facility and authorizes the re-introduction of in-house personal laundry, there will be new operating and capital costs associated with establishing the in-house laundry facilities. The funds acquired from the sale of the central laundry, combined with the existing $1.5 million in the Central Laundry Reserve Fund can be earmarked to deal with these expenditures. In this manner, there will be no immediate impact on the net cost associated with the Homes' operation.
Staff from the Finance Department have been consulted in the preparation of this report and are supportive of the approach and assessed financial implications.
Recommendations:
It is recommended that:
(1) staff be directed to enter into negotiations for the sale of the Central Laundry facility to Lakeshore Laundry and Linen Concept Ltd., and to report back to City Council on the outcome of the negotiations;
(2) the negotiations and sale be undertaken and completed by a staff team, with representation from Homes for the Aged, Legal, and Corporate Services;
(3) the proceeds from the sale be deposited to the Central Laundry Reserve Fund and held in this account until staff report back to City Council regarding the costs associated with re-introducing in-house personal laundry facilities in the nine Homes for the Aged that do not presently have these facilities;
(4) staff report back to City Council, through the Community Services Committee, by the end of 1999, outlining the financial and service impacts of laundering residents' personal clothing in each of the 10 Homes;
(5) subject to the approval of City Council to establish in-house personal laundry facilities, the Central Laundry Reserve Fund be used as a source of funds for the start-up costs associated with the in-house laundries; and
(6) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.
Background:
On May 25, 1984, Metropolitan Toronto Council approved a laundry agreement (ten-year term with two five-year renewal options) between Stork Diaper Services Alberta Ltd. (now K-Bro Linen Systems Inc.) and Metro to provide laundry services to the Homes for the Aged. Pursuant to this joint venture agreement, a Central Laundry was designed and built on property located at 795 Middlefield Road.
As part of the initial agreement with K-Bro, Metro established a Homes for the Aged Central Laundry Reserve Fund. K-Bro was allowed to acquire other laundry customers and process their laundry volume out of the Middlefield Road plant. In exchange for this right, K-Bro was required to pay a royalty to the Homes for the Aged, and these royalty payments were deposited to the Central Laundry Reserve Fund. In turn, the Reserve was used to fund all capital upgrades and equipment repairs and purchases, ensuring that no net cost was incurred by Metro (City) related to the day-to-day operation of the Central Laundry facility. As of May 19, 1999, the Central Laundry Reserve Fund had a balance of $1.5 million.
In 1996, K-Bro was sold to the Berkshire Group of Boston (BG). Around the same time, K-Bro purchased a major laundry facility, also located within the City of Toronto. As outlined in previous staff reports, the working relationship between K-Bro and Homes for the Aged deteriorated in the time period following these K-Bro business decisions, and K-Bro clearly communicated to Homes for the Aged that they were desirous of increased profit at the Middlefield Road plant, as a prerequisite of continuing business at that location. Throughout 1997 and early 1998, the Division continued discussions with K-Bro regarding the central laundry operations. However, these discussions were not successful, and on July 3, 1998, K-Bro issued the City of Toronto with notice of termination with an effective date of September 30, 1998.
On July 29, 1998, in response to the notice of termination served by K-Bro, and through adoption of Clause No. 16 of Report No. 7 of the Community and Neighbourhood Services Committee, City Council directed the Homes for the Aged to:
(1) immediately arrange for the services of an alternative full service laundry operator (within the resources available), who has the qualifications, expertise, and capacity to process the volume of laundry generated by the City of Toronto operations;
(2) enter into an agreement with the selected alternative laundry operator effective October 1, 1998;
(3) develop and issue a Request for Proposals (RFP) with respect to the future ownership of the Central Laundry and the future provision of laundry services to the Homes for the Aged and other City of Toronto operations served by the Central Laundry; and
(4) report back to City Council with respect to the results of the RFP process, outlining the possible options, and providing advice regarding the most desirable option which provides benefit to the City of Toronto, its operations, and its clients/residents.
All of these directives have been actioned, and this report provides the required further information for further decision making.
With respect to Recommendations Nos. (1) and (2), Lakeshore Laundry and Linen Concept Ltd. (Lakeshore) assumed operation of the laundry service, under an interim agreement, effective October 1, 1998. The transfer to Lakeshore was extremely well-managed and transition problems generally encountered in such a change were minor in nature, and were mitigated by regular Lakeshore staff problem-solving visits to the various Homes. In general, the service from the interim operator has been very good.
As directed in Recommendation No. (3), staff issued a Request for Proposals (RFP) with respect to the future ownership of the Central Laundry and the future provision of laundry services to the City's operations. This RFP was issued on January 29, 1999. The submissions have now been evaluated and the process used is the subject of this report.
Last, ancillary to implementing strategies directly related to managing the issues that arose over time regarding services provided under the laundering agreement, the Homes for the Aged Division spent considerable time planning and implementing a multi-year plan to improve efficiency and effectiveness. On May 8, 1996, through adoption of Clause No. 1 of Report No. 5 of the Human Services Committee, Metropolitan Toronto Council endorsed a report entitled "Discussion Paper Respecting the Future Direction of the Municipal Homes for the Aged". This report identified a number of possible strategic directions to improve the Division's effectiveness. One of these potential strategies was the possible sale of the Central Laundry facility. The report identified that laundry of linens was not a core business of the Homes for the Aged, and suggested that there might be merit in exploring the potential to sell off the physical asset and contract for the supply of laundry services. Although no definitive action was taken on the direction at that time, this report explores this option.
Comments and/or Discussion:
Following City Council authority to develop and issue a Request for Proposals (RFP) with respect to the longer term direction of the Central Laundry (including options related to both ownership of the Central Laundry and the provision of laundering service), the Homes for the Aged Division used a Request for Proposals process to select and secure the services of a management consulting firm to assist in developing the Central Laundry RFP. As a result of this process, the Division secured the services of Deloitte Touche Tomatsu (Deloitte) as its public/private partnership advisor to assist in the design, development, and evaluation of a Request for Proposal process to determine viable alternatives for the future of its Central Laundry facility.
The Homes for the Aged Division established a process team, with representation from Homes for the Aged, Purchasing, and Deloitte, to scope out the content and approach of the RFP and to develop a process and criteria for evaluation and selection. The objectives of the RFP established by the team were to meet the complex laundering service needs of the Homes for the Aged and their residents and to find a solution that provided maximum financial and economic benefit to the City and the Community and Neighbourhood Services Department.
To ensure the integrity of the RFP process, proponents were advised to submit any questions that might arise out of their preparatory work directly to Deloitte (in writing). Deloitte responded to questions on the City's behalf. In this way, staff were able to guarantee proponents of objectivity and equity in terms of access to and interpretation of information.
The RFP was issued by the City's Purchasing Division on January 29, 1999, to a total of 16 companies who had previously advised the City of their interest. In addition, the RFP was advertised in the Toronto Star, the Globe and Mail, the Daily Commercial News, and on the City's web page on the Internet. The RFP generated considerable interest in Ontario and the U.S. Ten potential bidders attended the mandatory site visits and three companies (one U.S. and two Canadian) ultimately met the full requirements of the RFP process and made formal submissions.
Deloitte reviewed each submission, analyzed the content, and submitted their findings to the project team. Utilizing Deloitte's expertise, the team considered the strengths and weaknesses of the individual submissions, and the risks and benefits of the various approaches suggested by the bidders. Factors considered in determining the recommended course of action included:
(i) financial impact;
(ii) organizational/operating risk;
(iii) proponent's capacity; and
(iv) evidence of ability to provide quality of service on an ongoing basis.
The following provides a high level analysis of the five bids received from the three proponents:
(a) Bidder "A" is an American based organization, with considerable experience in operating and managing similar commercial laundry facilities. They did not, however, provide any site-specific or project-specific information nor reference any experience in Canada.
They proposed to operate the facility under a five-year management agreement, with the following key financial components: City maintains 100 percent ownership; a fixed cost annual management fee and an additional annual operating expense to hire two on-site managers; a "projected" cost per pound for clean laundry, with a caveat to adjust the rate, up or down, at the start of the agreement based on actual wage and utilities costs. Although Bidder "A" anticipated reducing its cost to the City following start up and operating experience, there was no guarantee that the costs would be less than those cited in the proposal.
(b) Bidder "B" is the Canadian arm of an American firm. The Bidder claims to be the largest health care support services provider in Canada. They have hands-on experience in operating commercial health care laundry facilities. Bidder "B" offered a cost-plus-fee approach on the following terms: a five-year term; a year one management fee; price per pound charged to the City to be based on a profit/loss operating budget to be agreed upon, with profits from any non-City accounts divided with the City on a 75:25 basis. Although they were unable to identify an accurate price per pound, they provided an estimated range of the price per pound.
(c) Bidder "C" submitted three separate proposals to the City; the first outlined their proposal for a management agreement; the second outlined their proposal for a joint venture; and the third outlined their proposal for purchase of the physical asset and subsequent contract to process the laundry generated in the Homes.
Bidder "C" is a Canadian firm, established in 1998, who took over the operations of one of the largest commercial laundry facilities in North America (in operation for more than 30 years). The key employees of Bidder "C" were previously employed by the commercial operation that they took over, and therefore have experience in operating it.
Bidder "C" also was the selected interim operator for the Central Laundry, and has been operating the Central Laundry since October 1998.
In terms of its bid for a management agreement, Bidder "C" offered either a five-year or a ten-year contract; the price per pound quoted varied marginally between the five-year and ten-year agreement. The quoted ten-year price was lower than both Bidders "A" and "B"; the five-year price was marginally higher than Bidder "A" and lower than Bidder "B". They provided a separate price for the laundering of residents' personal clothing. The management agreement proposed also provided for profit sharing of revenue from outside accounts, in the amount of 100 percent of the profits generated on the first five million pounds above an anticipated City volume of 10 million pounds, at a minimum of ten cents per pound. Thereafter, the profits would be shared equally. There is no guaranteed volume of business or rate.
With respect to the joint venture bid, the City would be in a position to receive its proportional share in Bidder "C"'s profits and dividends, based on their percentage of equity ownership.
In their third bid, Bidder "C" offered to purchase all of the City's laundry assets; in return, they are asking for a five or ten year laundering contract. Their bid prices for a laundering contract are the same as those quoted in the management agreement option. In terms of the purchase of the assets, Bidder "C" has made an initial offer, setting out different purchase prices for a purchase with a five-year contract and a purchase with a ten-year contract.
Evaluation of Proponents and Bids:
Bidders "A" and "B" are not being recommended by staff. The analysis completed by Deloitte provided evidence that costs could not be accurately estimated up front and therefore the Division would have to include contingency in its operating budget in order to guard against possible price adjustments. In addition, although the City would receive royalties for all non-City business, if the bidders did not generate the business, the City would not have a source of ongoing income to offset the costs of capital equipment replacement, repairs and maintenance of the plant.
The experience of the Division to date is that there is considerable Homes for the Aged staff time invested in supporting a joint venture and/or management agreement. As identified in the Division's strategic directions exercise, laundry should not be a core business of the Division and staff time would be better utilized in directly ensuring service for residents.
For the same reasons, Bidder "C"'s bids for a management agreement or joint venture are not recommended. In particular, staff have concerns about the joint venture proposal, as it proposes that the City become a shareholder in a private sector business.
However, Bidder "C"'s offer to purchase the laundry assets is an option recommended by staff, based on the merits of the Deloitte analysis.
First, Bidder "C" is recommended as service provider, based on their significant experience in long term care laundry service. They offer a quality assurance program and approach with a strong customer service focus, which encompasses all aspects of their laundry service. They have provided a strong contingency plan, including the provision of processing the Homes' volume at their other plant located in Toronto, should there ever be an interruption of essential utilities, etc. at the Middlefield Road location. In this manner, their plan ensures the uninterrupted laundry service to the Homes. An added value of Bidder "C"'s bid is that, if selected, it would present the least possible disruption to residents and the Homes, as Bidder "C" is currently operating out of the Middlefield Road location as the Homes' interim launderer.
Second, the selling price would provide an infusion of capital to the Homes that could be used to improve the provision of personal laundry service to residents, by re-introducing in-house laundry facilities in each of the nine Homes currently without these facilities.
By way of background, only one of the ten Homes currently has the capacity to do personal laundry on site. Although each of the operators of the Central Laundry has tried hard to meet the needs for personal laundry service, this is the area of highest dissatisfaction amongst residents and families. There are regular complaints about personal laundry, ranging from concerns related to lost items, shrinkage, and lengthy turnaround time. Some of these complaints are simply a by-product of the volumes being processed in an off-site location and the large commercial equipment being used, rather than a result of operator quality control issues.
In resident and family satisfaction surveys, the levels of satisfaction between the Home in which personals are done in-house and the other nine Homes in which the personals are sent out are quite different. For example, in the Home where personals are done in-house, over 73 percent of residents cite a high level of satisfaction (vs. 54 percent in other Homes); family satisfaction in the Home where personals are done on site is regularly above 75 percent (vs. 68 percent in other Homes). For these reasons, the Division would like to explore the feasibility of setting up in-house personal laundry facilities in each of the remaining nine Homes, using a portion of the proceeds from the sale to fund this initiative. A full cost benefit analysis will be submitted to City Council at a later date, prior to taking any definitive action.
Conclusion:
The preferred service provider is Lakeshore Laundry and Linen Concept Ltd. This recommendation is based on their performance history, their strong customer service orientation, and the fact that they have the capacity to provide uninterrupted service to residents through their contingency plan.
Their proposal for the outright purchase of the building, land and assets presents the best value for the Division and the City. An appraisal was completed by the City's Real Estate Division in early May 1999, which provides evidence that the offered purchase price from Lakeshore is fair and reasonable. Staff recommend negotiating with Lakeshore on the terms of their initial offer, with the results of these negotiations being reported back to City Council.
If negotiations for the sale of the assets are unsuccessful, the next most viable option would be a management agreement with Lakeshore. Staff will report back to City Council if this direction is required, as a result of unsuccessful negotiations.
The one remaining concern that the Division has regarding the future of laundry service is the cost identified for laundering residents' personal clothing. The price quoted by Lakeshore for laundering these items appears high. Personal laundry is the highest area of dissatisfaction amongst residents and families. One of the Homes houses and staffs its own in-house personal laundry. In this Home, satisfaction is higher and laundry costs are lower. However, it is a Home with fairly light resident care needs, and the Division needs time to research and analyze projected costs to re-introduce in-house laundry facilities in the remaining nine Homes.
Staff are of the opinion that it is a preferred option, from both a cost and quality perspective, to launder the personal clothing in-house. In order to determine and better understand the costs and benefits of this approach, the Homes propose to conduct an in-depth study incorporating all financial and quality aspects of laundering personal clothing and to report back to City Council with the results.
Contact Name:
Sandra Pitters, General Manager, Homes for the Aged Division, Tel: 392-8907; Fax: 392-4180;
E-mail: sandra_pitters@toronto.ca
Carl Hunter, Director, Support Services, Homes for the Aged Division, Tel: 392-8912;
Fax: 392-4180; E-mail: carl_hunter@toronto.ca
5
Spadina LRT Barriers
Ward 24 (Downtown)
(City Council on July 6, 7 and 8, 1999, deferred consideration of this Clause to the next regular meeting of City Council to be held on July 27, 1999, and the Chair, Toronto Transit Commission, the Interim Chief General Manager, Toronto Transit Commission, the Chair, Planning and Transportation Committee and the Commissioner of Works and Emergency Services were requested to submit a joint report thereon directly to Council.)
The Policy and Finance Committee reports having requested the Chief Financial Officer and Treasurer to submit a report directly to Council, for its meeting scheduled to be held on July 6, 1999, respecting the funding required for the construction of the permanent barriers on Spadina Avenue.
The Policy and Finance Committee submits the following communication (June 23, 1999) from Councillor Olivia Chow, City Councillor, Downtown:
Recommendation:
It is recommended that the funding of $1 - $1.5 million required to construct permanent barriers on Spadina Avenue be found from the under-expenditure of TTC 1999-2000 Capital Budget.
Background:
During the budget deliberation in the spring, the Budget Committee referred the funding required to construct permanent barriers on Spadina Avenue to the June meeting of the Budget Committee. The instruction during that time was to find the funds from within the TTC budget (from under-expenditure).
Council approved the construction of permanent barriers on Spadina Avenue in the spring of this year. Unfortunately, the TTC made a decision that since it is a transportation issue, the City's Transportation Department should fund the project. The Transportation Department decided that since the barriers will be constructed to assist streetcars, TTC should pay for them. As a result, even though the design of these barriers was done a year ago, no funding was put aside for them!
In approving these permanent barriers, Council also said that the temporary ones on Spadina should be removed by December 1, 1999.
Without a decision on where the funds would come from, these permanent barriers will not be built this year. Cars will continue to cause accidents by hitting TTC streetcars until mid-2000, the next budget cycle.
6
Other Items Considered by the Committee
(City Council on July 6, 7 and 8, 1999, received this Clause as information, subject to striking out and referring Item (b), entitled "City of Toronto Development Charges By-law, Claims for Credit Pursuant to the Development Charges Act", embodied therein, back to the Policy and Finance Committee for further consideration.)
(a) Membership - Policy and Finance Committee.
The Policy and Finance Committee reports having received the following communication:
(May 25, 1999) from the City Clerk, advising that City Council on May 11 and 12, 1999, in adopting, as amended, Clause No. 1 of Report No. 6 of The Striking Committee, entitled "Appointment of Members of Council to Standing and Other Committees of Council, Various Boards and Special Purpose Bodies", appointed the following Members of Council to the Policy and Finance Committee, for a term of office commencing the effective date of the new governance structure, i.e., June 14, 1999, and expiring November 30, 2000:
1 Member of each of the following 5 Standing Committees, who is not the Chair of that Committee:
Moeser, Ron (Administration Committee)
Kelly, Norman (Community Services)
Brown, Elizabeth (Economic Development and Parks)
Pantalone, Joe (Planning and Transportation)
Disero, Betty (Works)
4 Members who are not Members of any Standing Committee of Council or of the Audit Committee:
Chong, Gordon
Jakobek, Tom
Nunziata, Frances
Rae, Kyle
(The Mayor, as Chair, and Councillor C. Ootes, Deputy Mayor, are also Members of the Committee.)
(b) City of Toronto Development Charges By-law, Claims for Credit Pursuant to the Development Charges Act.
The Policy and Finance Committee reports having:
(1) referred the following reports and communications (with the exception of the report (June 17, 1999) from the Chief Financial Officer and Treasurer, entitled "Proposed Development Charge By-law"), to the Chief Financial Officer and Treasurer, together with all the submissions made by the deputants appearing at the June 24, 1999, meeting of the Policy and Finance Committee, for report thereon to the meeting of the Policy and Finance Committee scheduled to be held on July 20, 1999, such report to be prepared in consultation with appropriate Department Heads;
(2) requested the Chief Financial Officer and Treasurer to submit a report to the July 20, 1999, meeting of the Policy and Finance Committee:
(a) on additional tax assessment revenue that the City will obtain from each of these Developments;
(b) on the cost of providing services;
(c) examining and reporting on the area specific charges used in Richmond Hill as opposed to a City-wide charge;
(d) in consultation with the Commissioner of Community and Neighbourhood Services and the City Solicitor, on a recommended approach to development charges that maintains the City policy that would lower the cost for the construction of affordable rental housing;
(e) in consultation with the Commissioner of Urban Planning and Development Services:
(i) on the development projects, by former municipalities currently in the Development approval process., e.g., OPA, re-zoning, site plan etc.;
(ii) on the amount of development charges that would be payable by project;
(iii) on the amount of tax revenue that would accrue to the City on an annual basis;
(iv) on the costs associated with servicing these projects;
(v) on an explanation of the rationale used to determine the costs; and
(vi) providing a comparison in development activity between the former municipalities that had Development Charges and those that did not, particularly in the former City of York where said Charges were waived during the past two or three years; and
(f) requested the Commissioner of Urban Planning and Development Services, to submit a report to the July 20, 1999, meeting of the Policy and Finance Committee:
(i) in consultation with other City officials, on ways of simplifying and clarifying the application of Section 37 Agreements;
(ii) as to whether there are any specific agreements related to Development Charges within the former Municipalities, i.e., Port Union Agreement Village Area (Port Union Road and Lawrence Avenue);
(iii) on the programs and facilities that can be funded through the new Development Charges Act as well as what may be funded by Section 37 and restrictions to each; and
(iv) on the regime to be put in place so that the development industry would have certitude in being able to measure the City's expectations;
(3) requested the Commissioner of Economic Development, Culture and Tourism to submit a report to the July 20, 1999, meeting of the Policy and Finance Committee on the economic impact on residential development if Development Charges were imposed; and
(4) concurred with the Recommendations embodied in the following report (x) (June 17, 1999) from the Chief Financial Officer and Treasurer, viz:
"(1) this report be received for information; and
(2) this report, together with the proposed Development Charge By-law, be forwarded to Planning and Transportation Committee for its review in accordance with Council's direction.":
(i) (June 14, 1999) from the Commissioner of Urban Planning and Development Services, the Chief Financial Officer and Treasurer, and the City Solicitor recommending that:
(1) Council endorse the recommended decisions presented in this report with respect to the section 14 credit applications;
(2) the applicants for credits be advised in writing of Council's decision prior to September 1, 1999; and
(3) where a credit is being recognized, the applicant be advised that the amount of the credit will not exceed the amount of the development charge to be otherwise paid.
(ii) (June 11, 1999) from the Commissioner of Urban Planning and Development Services and the City Solicitor describing the past and current implementation of Section 37 of the Planning Act; outlining the anticipated future relationship of the use of Section 37 to the Development Charge By-law; advising that the use of Section 37 and the imposition of development charges are separate and distinct tools available to the City; that in the future use of Section 37 across the City, after adoption of a city-wide Development Charge By-law, it is intended that both tools be implemented concurrently, but in a coordinated manner and with a clear separation between the two; that a fundamental principle regarding the future relationship of Section 37 agreements to development charges is that there will be no duplication of charges; that Section 37 public benefits will be those facilities, services or matters which cannot be, or have not been, funded through development charges, those which satisfy an existing community need or deficiency, and those representing the municipal share of funding for services or facilities only partially funded through development charges; that Section 37 agreements will also avoid duplicating charges under Section 42 of the Planning Act (parks contributions), and under any future Education Development Charge By-law; and recommending that this report be received for information;
(iii) (June 15, 1999) from the Chief Financial Officer and Treasurer reporting on the status of the Development Charge Reserve funds for the fiscal period ending December 31, 1998, and the purpose for which these funds are held; advising that under the Development Charges Act, 1997 (DCA, 1997) all existing development charge by-laws enacted under the old Act will expire on August 31, 1999; that to that end, the City is in the process of implementing a new City-wide development charge by-law to replace all existing by-laws; providing a summary of the development charge by-laws in place in each of the former municipalities; further advising that upon the expiry or repeal of the existing development charge by-laws, the reserve funds established under the old Act will be rolled into the development charge reserve funds under the DCA, 1997 or a general capital reserve fund if none exist; that the money in the reserve fund established for a service may be spent only for capital costs determined under paragraph 2 to 8 of subsection 5(1) of the DCA, 1997; that it is anticipated that a number of these projects will evolve over time in response to the specific needs of new development; that as a result, the cost, timing and nature of such projects may be altered as part of the City's annual capital budgetary process; that it is intended that development charge draws will be made for such projects based on the development-related percentages which have been identified in the Background Study; and recommending that this report be received for information;
(iv) (June 13, 1999) from the Commissioner of Economic Development, Culture and Tourism advising that the purpose of this report is to review the expected impact of implementing harmonized development charges in the City of Toronto; and recommending that:
(1) the Commissioner of Economic Development, Culture and Tourism and the Chief Financial Officer and Treasurer report to the Policy and Finance Committee on July 20, 1999, on options for reducing the impact of development charges on non-residential development in the City of Toronto; and
(2) the Assessment and Tax Policy Task Force, which is charged with developing comprehensive tax policies for the next municipal reassessment in 2001, be requested to review the municipal fiscal impacts of land use by property type;
(v) (June 1, 1999) from the City Clerk advising that the Budget Committee on June 1, 1999, during its consideration of a report (May 26, 1999) from the Chief Financial Officer and Treasurer, entitled "Development Charge Background Study - Capital Program Review", amongst other things, recommended to the Policy and Finance Committee, and Council, the adoption of the report (May 26, 1999) from the Chief Financial Officer and Treasurer, subject to adding the following:
"That City Council request the Province to amend the Development Charges Act to allow the City to factor into the City's calculation of the development charge the provincial expenditure of capital dollars for child care over the past 10 year period".;
(vi) (June 17, 1999) from the City Clerk advising that the Children and Youth Action Committee on May 28, 1999, during its consideration of oral reports from the General Manager, Children's Services, Community and Neighbourhood Services Department, and the Manager City-Wide Policy and Programs, Urban Planning and Development Services, on Child Care Capital Needs and possible mechanisms in the Official Plan which could be used to fund those needs, recommended that City Council request the Province to amend the Development Charges Act, 1997, to permit a municipality to take into account, for the purpose of determining the "average level of service" referred to in paragraph 4 of subsection 5(1) of the Act, previous provincial expenditures in providing a service if the cost of providing the service has been transferred from the Province to the municipality;
(vii) (June 15, 1999) from Mr. Howard Cohen, President, Context Development Inc., requesting an opportunity to appear before the Policy and Finance Committee respecting the New Development Charges for the City of Toronto; and forwarding comments in regard thereto;
(viii) (June 18, 1999) from Mr. Gordon F. Willcocks, McCarthy Tétrault, advising that the Canadian Pacific Properties Inc. and Southtown Inc. (collectively "CPPI"), the owners of the Railways Lands, have entered into "Precinct Agreements" under the authority of Section 16 of the City of Toronto Act; that the issue of both hard and soft services for the CPPI lands, including social service requirements, had been comprehensively addressed in these agreements; that the agreements also acknowledge that the provision of hard and soft services in the Railway Lands by CPPI will be treated as the provision of services in lieu of the payment of all or any development charges; and further that in view of these existing agreements, including a comprehensive scheme for the provision of services to the Railway Lands, the Development Charge By-law now proposed by the City of Toronto should not be applied to the Railway Lands, generally, and the CPPI Lands in particular;
(ix) (June 18, 1999) from Mr. Paul J. Peterson, McCarthy Tétrault, advising that they are acting on behalf of The Canada Life Assurance Company, the owner of the majority of Sherway Gardens Shopping Centre located within the Sherway Centre Secondary Plan area; that the Secondary Plan identified infrastructure elements including expressway ramps and intersection improvements that are to be included within a development levy or development charge; that his client has proceeded to fund the environmental assessment study due to be finalized for approval in July and is cooperating with other area landowners in the construction of at least one of the area road improvements identified in the Secondary Plan; expressing concern that these road have not been sufficiently identified in the development charge by-law and background study; and requesting confirmation that the design and construction of these works will be recognized as services in lieu of development charges and will be eligible for development charge credits;
(x) (June 17, 1999) from the Chief Financial Officer and Treasurer providing information with respect to the public meeting to be held under the Development Charges Act and of the terms and conditions of the proposed development charges by-law; and recommending that:
(1) this report be received for information; and
(2) this report, together with the proposed Development Charge By-law, be forwarded to Planning and Transportation Committee for its review in accordance with Council's direction;
(xi) (June 21, 1999) from Robin Campbell, Executive Director, Ontario Non-Profit Housing Association, expressing concern about the affordable housing situation in this City and throughout the province; stating that if the City of Toronto enacts a new Development Charges By-law, there is a need for an exemption for affordable rental housing targeted to housing which can demonstrate long term affordability; and requesting that the City consider a rebate approach to the development charges only for private sector developers and allow exemptions for non-profit developers who meet the affordability criteria;
(xii) (June 18, 1999) from Mr. Myron Swartz, Chair, Industrial Advisory Committees, advising that the West Toronto Industrial Advisory Committee (WTIAC) represents a range of industries and businesses in the central City west of the downtown core; that the Committee includes representation from such companies as Nestle Canada, Irwin Toy, Quality Meats, Cadbury and the Toronto Carpet Factory; that after reviewing and discussing the Finance Department's report proposing new development charges, the Committee is very concerned that charges on industrial and commercial development in the City will have a serious negative impact on area businesses and the City's economy and identifying specific areas where the Development Charges would have an adverse impact; and that the Industrial Advisory Committee unanimously adopted the following motion:
"The West Toronto Industrial Advisory Committee believes that development charges on industrial and commercial development in the City will be another tax on business and will have a serious negative impact on area businesses and the City's economy. The West Toronto Industrial Advisory Committee opposes any industrial or commercial development charges and strongly urges that City Council not impose charges on industrial or commercial development.";
(xiii) (June 22, 1999) from Mr. John M. Alati, Davies, Howe Partners, advising that their client (Orchid Hills Developments Limited) are the proponents of a 375 unit condominium development on Merton Street in the City of Toronto; that this matter has been with the Ontario Municipal Board since September, 1997; that the City Planning Department had delayed submitting its final position to Council, postponing further action on this matter; that once Council reviewed the Planning Department's submission, Council then adopted their client's development proposal at the March 2, 1999, Council meeting; that their client is presently waiting for the City to finalize its Section 37 agreement; that the resulting delays occasioned by the City meant that their client may be subject to development charges that it would otherwise not have had to pay had its proposal been disposed of in a more timely manner; and requesting an opportunity to appear before the Policy and Finance Committee on June 24, 1999, to make submissions on the imposition of the new development charges as it affects their client's land;
(xiv) (June 22, 1999) from Mr. John M. Alati, Davies, Howe Partners, advising that their client (Graywood Developments Limited) had a development proposal for 29.2 hectare parcel of land in the former City of Scarborough approved by the Ontario Municipal Board pursuant to a decision issued on December 7, 1998; that after the decision was issued, the City sought leave to appeal the OMB decision to the Court and also a Section 43 review of the OMB's decision; that the application for leave to appeal was dismissed and the request for the Section 43 review was denied; and requesting an opportunity to appear before the Policy and Finance Committee on June 24, 1999, respecting the proposed new Development Charges as it affects their client;
(xv) (June 22, 1999) from Mr. John M. Alati, Davies, Howe Partners, advising that their client (Jasamax Holdings Inc.) had a residential plan of subdivision comprised of 61 lots approved by the Ontario Municipal Board on March 11, 1998, for lands it owns in the Governor's Bridge area in the former Borough of East York; that delays to their client's efforts at finalizing and registering its development proposal have been contributed to as a result of the municipality's efforts at undertaking certain storm sewer modifications and improvements which were preconditions to proceeding; and requesting an opportunity to appear before the Policy and Finance Committee on June 24, 1999, respecting the proposed new Development Charges as it affects their client;
(xvi) (June 21, 1999) from Mr. Murray H. Chusid, Q.C., Blaney, McMurtry, Stapells, Friedman, advising that they act for Graywood Developments Inc. with respect to the Maple Leaf Foods Brownfield Site on St. Clair Avenue West between Gunns Road and CP Spur Line; expressing concern with regard to the imposition of development charges generally and specifically relating to this proposed development; advising that when their client assessed the purchase of this property it did not factor in development charges; enclosing a report prepared by Clayton Research Associates Limited dated June 1999 entitled "Economic Implications of the Proposed New Development Charges in the City of Toronto" with respect to the Maple Leaf Foods Brownfield site; and requesting an opportunity to appear before the Policy and Finance Committee on June 24, 1999, respecting the proposed new Development Charges as it affects their client;
(xvii) (June 23, 1999) from Mr. H. Scott Rutledge, President, Rutledge Development Corporation, forwarding reasons why they are very concerned at the prospect of development charges being imposed; and respectfully recommending that the Committee do not impose development charges on new commercial/industrial projects in Toronto;
(xviii) (June 23, 1999) from Mr. Marc Hewitt, Senior Vice President, Development, Concord Adex Developments Corporation, writing to confirm that they are in support of the recommendation to exempt the lands referred to in Schedule "B" of the Development Levy Agreement from the proposed Development Charge By-law, as detailed in the joint report (June 14, 1999) from the Commissioner of Urban Planning and Development Services the Chief Financial Officer and Treasurer and the City Solicitor;
(xix) (June 23, 1999) from Mr. Mark Noskiewicz, Goodman Phillips and Vineberg, advising that they are the Solicitors for Leisureworld Inc. ("Leisureworld"), an experienced provider of long-term care facilities (nursing homes) and retirement services in the Province of Ontario; writing on behalf of Leisureworld requesting that nursing homes be exempt from the proposed City of Toronto Development Charges By-law; and submitting reasons why nursing homes should be exempt;
(xx) (June 22, 1999) from Mr. John M. Alati, Davies, Howe Partners, advising that they are Solicitors acting on behalf of Gerrard-Clonmore Developments Inc., the owners of lands located at Gerrard and Clonmore; that the property was previously owned by Runnymede Development Corporation and there is a lengthy history involving efforts to obtain approvals for the redevelopment of the subject lands; requesting an opportunity to appear before the Policy and Finance Committee respecting the proposed Development Charges By-law; and further advising that it is their client's submission that the subject lands be exempt from the payment of any new charges or in the alternative subject to a credit for the pre-paid charges adjusted with accrued interest since the time of payment, which were paid in accordance with the terms of an agreement entered into pursuant to Section 50 of the Planning Act;
(xxi) (June 23, 1999) from Shelly Jamieson, Vice President, Eastern Operations, Extendicare (Canada) Inc., advising that it is unclear from the draft by-law whether nursing homes or long-term care facilities are exempt from development charges, and that nursing homes should be exempt from development charges for the following reasons:
(1) nursing homes or long-term care facilities provide essential services that are badly needed in Toronto at this time;
(2) long-term care facilities are subsidized by the Ministry of Health, and the funding assistance provided by the Ministry does not factor in development charges of this magnitude; and
(3) the major component (over 65 per cent) of the proposed non-residential charge is in respect of roads and transit services and that long-term care facilities place virtually no load on such services;
(xxii) (June 23, 1999) from Mr. Bill Davis, Director, Government Relations Committee, The Toronto Automobile Dealers' Association, on behalf of the 117 dealers who reside within the City of Toronto and are members of the Association, expressing their grave concern with the Development Charges Act; that the industry believe that the indiscriminatory usage of development charges will act as a disincentive to new growth and development in the City of Toronto, will cause the business community to look to other locations for development and may impact on employment opportunities in the near future as development will go to other communities, and requesting that the Committee seriously consider the impact of these new directions on development and jobs in the city;
(xxiii) (June 21, 1999) from Mr. David P. Smith, P.C., Q.C., Fraser Milner, urging members of Council to vote against the proposed development charges by-law as this proposal will inevitably make the City's central area less competitive, will push considerable economic activity to the 905 area and expressing concern with regard to the effect this will have on the downtown core;
(xxiv) (June 22, 1999) from Mr. James W. Harbell, Stikeman, Elliott, on behalf of a number of developers of residential condominiums in the former City of Toronto, an area that has no current development charges, expressing their concern that the draft by-law as currently worded, may inadvertently penalize the condominium form of tenure vis a vis other forms of tenure, in the instance where the landowner has secured a building permit prior to the end of the year, having met the submission deadline of September 1, but has not received draft condominium approval and requesting that the Committee direct staff to make the necessary amendments to the transition provisions of section 38(a) of the draft by-law to provide that it will not apply to application for draft plan of condominium for which a building permit has been issued by the end of this year in the former municipalities of East York, Toronto and York;
(xxv) (June 23, 1999) from Mr. Stephen H. Diamond, McCarthy Tétrault, advising that they are the solicitors for the Urban Development Institute, the Greater Toronto Home Builders' Association and the Canadian Institute of Public Real Estate Companies, expressing their opposition to the implementation of development charges as they are currently proposed; requesting that the Committee defer this matter to its July 20, 1999, meeting; and stating that the fundamental concerns that the industry has regarding the implementation of development charges are as follows:
(1) the basis for the quantum of the development charges for both non-residential and residential development has been overstated;
(2) the manner and time frames in which the charges are proposed to be implemented;
(3) the economic impact of development charges on the viability of both non-residential and residential development generally and particularly as it relates to development in the City's core; and
(4) the additional financial burdens that the City may continue to impose with respect to Section 37 contributions, public art contributions, potential stormwater charges etc. that need to be eliminated in their current application;
(xxvi) (June 24, 1999) from Mr. Patrick Berne, E.E.M. Financial Corporation, Woodbine Humber Developments Inc., and Belridge Investments Limited, stating that there should be consistency for the entire City, not the differential phase in, as currently proposed; that there needs to be a transition period to phase in these charges across the City with the option to the developer of selecting to grandfather agreements within the transition period, to maintain both economic and subdivision/development agreement integrity; and that the definition of "bedroom" in the draft by-law requires amendment to reflect a building code definition;
(xxvii) (June 23, 1999) from Mr. R. Blazevski, M.C.I.P., Senior Manager of Development, Tridel, advising that Tridel currently has 4 condominium projects under construction in the old City of Toronto; that the proformas and updated construction numbers have indicated that very modest returns are expected for these projects and that if development charges would have been required for these sites, most like they would not have proceeded with these developments; and that the implementation of development charges in Toronto's downtown will make market affordable housing a virtually impossible development option and will force their company to re-evaluate future projects and land offerings in the City Centre; and requesting that the Committee see its way clear not to support such a detrimental impact on residential development;
(xxviii) (May 28, 1999) from the Chair and the President and Chief Executive Officer, The Toronto Board of Trade, expressing concern regarding the City of Toronto proposed development charges by-law; advising that the new charges will occur at a time when the development and construction industries are beginning to recover from a lengthy downturn; that the City should be pursuing initiatives that reduce the cost of doing business in the City rather than increasing it; that high development charges will serve as yet another added incentive to locate outside of Toronto where land values, municipal taxes, and development costs are lowers;
(xxix) (June 24, 1999) Ms. Jane Doyle and Mr. Von Palmer, Toronto Real Estate Board, advising that the Board believes that development charges have been a significant barrier to housing affordability and economic development for several years; these charges ultimately affect the affordability of resale homes since these costs are passed on in the form of an increased sale price; that the impact of charges on the business sector would be the loss of jobs and investment to other jurisdictions with lower costs; that the by-law contain transitional and grandfathering provisions and provide for some type of exemption for commercial and industrial properties and that relief for the rental and affordable housing market should also be considered; and stating that the Board does not dispute that these charges are needed to pay for new growth services but that it has a problem with the level of these charges; and suggesting that the costs of new growth services must be contained by establishing reasonable and sustainable levels of services and by basing development charges on the actual benefits related to new growth;
(xxx) (June 24, 1999) Ms. Nancy Singer, Design Motives, Urban Planning Services, expressing concern that there is no recommendation to exempt homeless housing initiative projects from any development charges; and urging the Committee put in place a process that facilitates and does not further impede these much needed projects from being built; and
(xxxi) (June 24, 1999) from Mr. Peter Van Loan, Fraser Milner, on behalf of Call-Net Enterprises, the owner of Sprint Canada and of a 47-acre parcel of land at Steeles Avenue and Highway, a site designated for office and industrial uses; advising that Call-Net does not wish to take a position with regard to the imposition of development charges on commercial development but that if the City chooses to impose development charges, they would fully expect that the capital works required at Steeles Avenue and Highway 404 be included as a growth-related service covered by the charge; and further that in the event the City decides not to recognize the necessary Steeles/404 improvements as a capital project to be singled out as a service under the new development charges by-law, they request that the City's portion of these improvements be paid for from the unallocated funds currently proposed for collection through development charges, or from general revenues.
The Chief Financial Officer and Treasurer gave a presentation to the Policy and Finance Committee respecting the foregoing matter, and filed a copy of her presentation material.
The following persons appeared before the Policy and Finance Committee in connection with the foregoing matter:
- Mr. Bud Purves, Vice President of Developments, TrizecHahn Developments;
- Ms. Andrea Gabor, Toronto Board of Trade, and filed a written submission in regard thereto;
- Mr. Steve Diamond, Mr. Randy M. Grimes and Mr. Robert W. Webb, P. Eng., on behalf of the Urban Development Institute, the Greater Toronto Homebuilders Association and CIPREC, (Canadian Institute of Public Real Estate Companies);
- Mr. Patrick Berne, representing EMM Financial Corporation, Woodbine Humber Development Inc., and Belridge Investment Limited;
- Ms. Julie Di Lorenzo, representing Diamante Development, 1305226 Ontario Inc. and Devon International, and also on behalf of Ms. Gina De Lorenzo, Mr. Paul Butt, Coldwell Banker Terrequity Realty and Mr. Paolo Palamara, Devon International;
- Mr. Murray Chusid, Q.C., Blaney McMurtry Stapells Friedman, representing Graywood Developments Inc.;
- Mr. Nestor Repetski, Winick Realty Corporation;
- Mr. Vince Brescia, Development Promotions, Labourers Local 183;
- Ms. Carol Jamieson, Adagio Development Corporation;
- Mr. Murray Goldman, The Goldman Group;
- Mr. Peter Van Loan, Fraser Milner;
- Mr. John Alati, Davies Howe Partners, representing Jasamax Holdings Inc., Graywood Developments Inc. and Orchid Hills Developments Limited;
- Mr. Michael B. Vaughan, QC;
- Mr. Peter Jakovcic, Black Creek Business Area Association;
- Ms. Mary Flynn-Guglietti, Goodman and Carr;
- Mr. John M. Sullivan, Senior Vice President, Office Development, The Cadillac Fairview Corporation Limited; and
- Ms. Maureen Houlihan, Manager of Housing Administration, Neighbourhood Services, WoodGreen Community Centre, representing the Ontario Non-Profit Housing Association.
Ms. Von Palmer, Toronto Real Estate Board and Ms. Jane Doyle, Director, Toronto Real Estate Board, who were unable to remain for the duration of the meeting filed a copy of their presentation material.
The following Members of Council also appeared before the Policy and Finance Committee in connection with the foregoing matter:
- Councillor Brian Ashton, Scarborough Bluffs; and
- Councillor Doug Holyday, Markland Centennial.
(Mayor Lastman declared his interest in the foregoing matter, in that partners at the same law firm as his son, who is not a real estate lawyer and does not personally act on these files, are representing applicants and have worked on related files.)
(Mayor Lastman, at the meeting of Council on July 6, 7 and 8, 1999, declared his interest in the foregoing Item (b), in that partners at the same law firm as his son, who is not a real estate lawyer and does not personally act on these files, are representing applicants and have worked on related files.)
(c) Council-Committee Structure.
The Policy and Finance Committee reports having deferred consideration of the presentation from the Director, Secretariat, Printing and Reproduction, City Clerk's Division, respecting the new Council-Committee Structure, until its meeting scheduled to be held on July 20, 1999.
(d) Proposal by the Balmy Beach Rugby Club to Erect Two
Ground Signs in the City's Road Allowance Adjacent To
Ashbridges Bay Park (East Toronto).
The Policy and Finance Committee reports having received the following communication from the City Clerk, Toronto Community Council, having regard that this item is included in the Budget:
(April 8, 1999) from the City Clerk, advising that the Toronto Community Council on March 30, 1999, during its consideration of a report (March 15, 1999) from the Commissioner of Urban Planning and Development Services, forwarded the proposal by the Balmy Beach Rugby Club to erect two ground signs in the City's road allowance adjacent to Ashbridges Bay Park, to the Policy and Finance Committee, for consideration within the five year Capital Plan.
(e) Ontario Hydro Corridor Lands South of Highway No. 401 Wards 14 and 15 - Scarborough Wexford and Scarborough City Centre.
The Policy and Finance Committee reports having:
(1) deferred consideration of the following communication and motion until its meeting scheduled to be held on July 20, 1999:
Moved by Councillor Disero:
"That the Recommendation embodied in the following communication be amended by adding thereto the following words "subject to the Agreement of the vendor", so that the Recommendation shall read as follows:
"The Scarborough Community Council directed that the Strategic Policies and Priorities Committee be advised that the Scarborough Community Council reaffirms its previous position regarding the acquisition of land in the Hydro Corridor north of Ellesmere, south of Highway 401, subject to reducing the amount of land to be acquired to two acres, as opposed to the entire corridor; funding for such acquisition to be taken from the Scarborough Parks Reserve Fund, subject to the Agreement of the vendor."; and
(2) requested the Chief Financial Officer and Treasurer to submit a report to the aforementioned meeting of the Policy and Finance Committee respecting the Scarborough Parks Reserve Fund:
(i) (June 1, 1999) from the City Clerk, advising that the Scarborough Community Council on May 26, 1999, during its consideration of a communication (May 5, 1999) from the City Clerk respecting the possible acquisition of Ontario Hydro Corridor Lands South of Highway 401, amongst other things, directed that the Strategic Policies and Priorities Committee be advised that the Scarborough Community Council reaffirms its previous position regarding the acquisition of land in the Hydro Corridor north of Ellesmere, south of Highway 401, subject to reducing the amount of land to be acquired to two acres, as opposed to the entire corridor; funding for such acquisition to be taken from the Scarborough Parks Reserve Fund.
(ii) (June 24, 1999) from Mr. Jim Robb, Friends of the Rouge Watershed, providing information and outlining reasons why funding for the acquisition of additional green space within the Hydro lands in Ward 14 should be provided from a source other than the Beare Road Landfill Reserve Fund.
________
Ms. Linda Wheeler, appeared before the Policy and Finance Committee in connection with the foregoing matter and filed a copy of a map of the area.
(f) External Firms Retained for Insurance Claim Defence.
The Policy and Finance Committee reports having referred the following communication to the Chief Financial Officer and Treasurer for report thereon to the Policy and Finance Committee:
(June 1, 1999) from the City Clerk, advising that the Audit Committee on May 25, 1999, during its consideration of a communication from the City Clerk, entitled "External Firms Retained for Insurance Claim Defence", recommended that Ernst and Young provide a cost evaluation of the report requested by Councillor Lindsay Luby to the Policy and Finance Committee.
(g) Contracting of Consulting Services in 1998.
The Policy and Finance Committee reports having:
(1) received the following report; and
(2) requested the Chief Administrative Officer to submit a further report thereon to the Policy and Finance Committee providing an objective to reduce the amount of outside consultants by either providing these services in-house or a better justification for the use of said consultants:
(June 14, 1999) from the Chief Administrative Officer, providing a summary of the consulting services contracted by City Departments, Agencies, Boards and Commissions in 1998; advising that a report on contracting and consulting services will be submitted on an annual basis; and recommending that this report be received for information.
________
Councillor Brian Ashton, Scarborough Bluffs, appeared before the Policy and Finance Committee in connection with the foregoing matter.
(h) John Street Roundhouse - TrizecHahn Corporation Proposal Report.
The Policy and Finance Committee reports having:
(1) requested the City Solicitor to submit a report directly to Council for its meeting to be held on July 6, 1999, for consideration with Clause No. 1 of Report No. 1 of the Administration Committee, on whether there should be a new RFP issued or whether the existing RFP can stand given the new financial arrangement proposed; and
(2) requested the Chief Financial Officer and Treasurer to submit a report directly to Council for its meeting scheduled to be held on July 6, 1999, for consideration with the aforementioned Clause:
(i) respecting the Capital Funding required for this project, and
(ii) respecting the report (June 23, 1999) from the Chief Administrative Officer.
(i) (June 15, 1999) from the City Clerk, advising that the Administration Committee on June 15, 1999, during its consideration of a report (June 10, 1999) from the Commissioner of Corporate Services, entitled "John Street Roundhouse - TrizecHahn Corporation Proposal Report", amongst other things, approved the following Recommendation No. (6) embodied in the aforementioned report:
"(6) this report be referred to the Policy and Finance Committee for a report on capital funds directly to City Council;".
(ii) (June 23, 1999) from the Chief Administrative Officer, recommending that:
(1) the net Capital Funds required for Bays 1-11 and all other related services in the amount of $1,412,920.00 be approved subject to the Chief Financial Officer and Treasurer reporting on the provision of funds; and
(2) the appropriate City Officials be authorized to take the necessary actions.
(iii) (June 22, 1999) from Mr. Cameron Heaps, President, Steam Whistle Brewing, advising that the funds requested are essential in making the Roundhouse unusable by any tenant and will allow the site to be transformed into one of this City's greatest attractions.
(Mayor Lastman declared his interest in the foregoing matter, in that the applicants solicitor is a partner at the same law firm as his son, who is not a real estate lawyer and does not personally act on these files, are representing applicants and have worked on related files.)
(Mayor Lastman, at the meeting of Council on July 6, 7 and 8, 1999, declared his interest in the foregoing Item (h), in that the Applicant's solicitor is a partner at the same law firm as his son, who is not a real estate lawyer and does not personally act on these files, and is representing applicants and has worked on related files.)
(i) Toronto Police Service - Costs of Policing the Serbian Demonstrations in Toronto.
The Policy and Finance Committee reports having:
(1) received the following report; and
(2) requested the Chief Financial Officer and Treasurer to meet with the Chief of Police and his Administrative staff, as soon as possible, to review the Police Budget, particularly their discretionary funding, to ensure compliance with the approved Budget, and report thereon to the Policy and Finance Committee:
(June 15, 1999) from the Chief Financial Officer and Treasurer, providing a status report of the impact of the costs of policing the Serbian demonstrations in Toronto on the Toronto Police Service's Operating Budget; advising that the financial implications of the Serbian demonstrations on the Toronto Police Service's Operating Budget have yet to be determined and will be reported through the September Operating Budget variance report; and recommending that this report be received for information.
(j) Request to Increase the Voluntary and Set Fine Provisions for Parking Meter Violations - City of Toronto By-laws.
The Policy and Finance Committee reports having:
(1) deferred consideration of the following communication until its meeting scheduled to be held on July 20, 1999; and
(2) requested the Chief Financial Officer, the City Solicitor, in consultation with the Commissioner of Works and Emergency Services, and any other appropriate officials, to submit a report to the aforementioned meeting of the Policy and Finance Committee:
(i) on the level of enforcement in residential areas especially on Sundays and what revenues are generated;
(ii) on a process whereby the City can repeal the by-law that prohibits parking in a space where there is a broken meter;
(iii) on the change-over days for alternate side street parking;
(iv) on whether the enforcement issue addresses where there may be some grace period allowed so that there is no over-zealous enforcement; and
(v) on the different enforcement by-laws and procedures of each of the former Area Municipalities:
(April 30, 1999) from the President, Toronto Parking Authority, advising that the Board of Directors of the Toronto Parking Authority on April 6, 1999, adopted a staff memorandum (March 30, 1999) from Mr. N. Spensieri, wherein it is recommended that:
(1) the Board adopt the position that the Voluntary Fine/Set Fine provisions for parking meter related violations in the City of Toronto be increased from the current level of $10.00 and $15.00 respectively, to $20.00 and $30.00 respectively;
(2) the City of Toronto Council request the City Solicitor to examine the feasibility of increasing the Voluntary Fine and Set Fine provisions for parking meter related violations from the current level of $10.00 and $15.00 respectively, to $20.00 and $30.00 respectively; and
(3) subject to the Board's approval of the foregoing recommendations, the Board forward this decision to the City of Toronto Clerk for distribution to Council and the appropriate City officials.
(k) Response to the Provincial Request for Proposal for Additional Long-Term Care Beds for a New City Home for the Aged.
The Policy and Finance Committee reports having:
(1) deferred consideration of the following communication and report until the meeting of the Policy and Finance Committee scheduled to be held on July 20, 1999, in order to afford more time for a thorough review;
(2) requested the Provincial Government to extend the July 30, 1999, deadline for response to the Province of Ontario's Request for Proposal respecting additional long-term care beds; and
(3) requested the Commissioner of Community and Neighbourhood Services, in consultation with the Chief Financial Officer and Treasurer, to submit a report to the July 20, 1999, meeting of the Policy and Finance Committee on:
(i) how the City's exposure can be reduced;
(ii) a policy of projecting what the City's future role should be respecting long-term care;
(iii) what the City's participation within the ratio of a balanced service delivery system should be;
(iv) what number of beds should be provided in the future; and
(v) whether there is an opportunity to submit a co-operative bid with the private sector.
(i) (June 17, 1999) from the City Clerk, advising that the Community Services Committee on June 17, 1999:
(A) recommended to the Policy and Finance Committee that:
(i) City Council be requested to direct the Commissioner of Community and Neighbourhood Services to respond to the Province of Ontario's Request for Proposal for additional long-term care beds for a new City Home for the Aged prior to the July 30, 1999, deadline; and
(ii) City Council be requested to endorse maintaining the same level of operating service for both the existing and expanding Homes for the Aged portfolio; and
(B) requested the Commissioner of Community and Neighbourhood Services to report to the Policy and Finance Committee for its meeting on June 24, 1999, on the budgetary implications of building a new Home for the Aged; and
(ii) (June 22, 1999) from the Commissioner of Community and Neighbourhood Services, recommending that:
(1) should City Council adopt the recommendation of the Community Services Committee directing staff to respond to the RFP for new long term care beds by the deadline of July 30, 1999, City Council recognize and endorse in principle the multi-year cost implications of this decision in both the capital and operating budgets for the fiscal year, starting in 2000 (as outlined in this report); and
(2) if a proposal is submitted to and approved by the Ministry of Health, staff report back with a more detailed financial impact analysis, prior to signing any agreement with the Ministry of Health.
Respectfully submitted,
MEL LASTMAN
Chair
Toronto, June 24, 1999
(Report No 1 of The Policy and Finance Committee, including additions thereto, was adopted as amended, by City Council on July 6, 7 and 8, 1999.)