CITY CLERK

POLICY AND FINANCE COMMITTEE

REPORT No. 4

For Consideration by

The Council of the City of Toronto

on July 27, 28, 29 and 30, 1999

2 Ontario Hydro Corridor Lands South and North of Highway 401 Wards 14 and 15
(Scarborough Wexford and Scarborough City Centre)

3 City of Toronto Welcome Policy for Community and Recreation Centres

4 Staffing Requirements - Toronto Fire Services

5 Request to Increase the Voluntary and Set Fine Provisions for Parking Meter Violations - City of Toronto By-Laws

6 Increase in Street Meter Rates

7 IHL (International Hockey League) Proposal for the Coliseum Building - National Trade Centre Complex

8 International City to City Program All Wards

9 City Tree Maintenance Backlog All Wards

10 Toronto District Heating Corporation: Incorporation Under Ontario Business Corporations Act

11 Leasing of Computer Equipment and Software Information and Technology Products and Services

12 Property Acquisition Request from LACAC W.J. Morrish Store Ward 16 (Scarborough-Highland Creek)

13 2000-2004 Capital Program and 10-Year Capital Plan Proposed Timetable, Process and Guidelines

14 Coordination of Telecommunications Matters First Report from the Council-Established Telecommunications Steering Committee

15 Request for Quotations for Self Contained Breathing Apparatus (SCBA)

16 Redirection of Emergency Hostel Funding

17 Capital Funding Support for Playhouse Child Care Centre in Ward 11

18 New Multi-Residential Property Class Additional Issues

19 Impact of Taxes on New Construction - Capped Property Classes

20 Commercial Establishments in Hospitals

21 Amalgamation of Reportable Diseases Information System (RDIS)

22 Toronto Transit Commission (TTC) - Provincial/Municipal Funding Trends and Longer Term Funding Strategies

23 Radio Communications System - Toronto Police Services and Toronto Fire Services

24 Review of Commissioner Street Transfer Station Project Expenditures

25 Edenbridge Yard, West District (Kingsway-Humber)

26 Child Care Capital Needs and Future Funding Strategies

27 Youth Employment Program - Two Wheel Drive Grant from Human Resources Development Canada

28 Funding Request for the Inner-City Games in Los Angeles (All Wards)

29 Winter Maintenance on Toronto Roads, Salting and Snow Ploughing, for the Period October, 1999 to April 2003 - Contract Nos. T-11-99 to T-17-99, Tender Call Nos. 99-1999 to 105-1999

30 Response to the Provincial Request for Proposal for Additional Long-Term Care Beds for a New City Home for the Aged

31 Adjustment to the 1999 Approved Budget of the Environmental Task Force

32 Process for Adopting a New Governance Structure for Advanced Environmental Decision Making

33 Sustainability By-Law/Legislation

34 Year 2000 Priority One Business Functions Status Report June 1999

35 Year 2000 Priority One Business Functions Status Report July 1999

36 Other Items Considered by the Committee

City of Toronto

REPORT No. 4

OF THE POLICY AND FINANCE COMMITTEE

(from its meeting on July 20, 1999,

submitted by Mayor Mel Lastman, Chair)

As Considered by

The Council of the City of Toronto

on July 27, 28, 29 and 30, 1999

1

City-Wide Development Charge By-Law

(City Council on July 27, 28, 29 and 30, 1999,amended this Clause by adding thereto the following:

"It is further recommended that:

(1) the Chief Financial Officer and Treasurer, the Acting Commissioner of Urban Planning and Development Services and the Commissioner of Works and Emergency Services be requested to submit a report to the September 16, 1999, meeting of the Policy and Finance Committee, on contribution mechanisms, including possible conditions of development approval, that ensure adequate funding of storm water quality controls and treatments to address quality impacts caused by new development or redevelopment, where implementing controls, partially or completely, on individual sites, are not feasible;

(2) the Chief Financial Officer and Treasurer, in consultation with the appropriate City staff, be requested to submit a report to the Policy and Finance Committee, within sixty days, on area specific charges, in particular, as it applies to the previous Sheppard Subway development charge imposed by the former Municipality of Metropolitan Toronto;

(3) as part of the Capital Budget Process, the Chief Financial Officer and Treasurer be requested to examine a ten-year Capital Program, annually, and the need for additional transit capital improvements, and once these improvements have been identified, a development charge be levied for these additional costs;

(4) the joint report dated July 14, 1999, from the Commissioner of Urban Planning and Development Services, the Chief Financial Officer and Treasurer, and the City Solicitor, embodying the following recommendations, be adopted:

'It is recommended 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.' ")

The Policy and Finance Committee recommends:

(1) the adoption of the report (July 12, 1999) from the Chief Financial Officer and Treasurer, subject to amending Recommendation No. (2) (2.1) by deleting therefrom the word "not", so that Recommendation No. (2) (2.1) now reads as follows:

"(2) with respect to Development Charges Exemptions or Rebates for Affordable Housing:

(2.1) Council request the Province of Ontario to pass legislation enabling the City to provide assistance, including development charges rebates, to for-profit developers where this is in exchange for an equal or greater benefit to the City in the form of affordable housing as defined from time to time by Council policy" and

(2) the adoption of the report (July 12, 1999) from the Commissioner of Urban Planning and Development Services, wherein it is recommended that the Acting Commissioner of Urban Planning and Development Services expedite the review of the future use of Section 37 of the Planning Act, and such review include consultation with the Urban Development Institute, the Canadian Institute of Public Real Estate Companies, and the Greater Toronto Home Builders Association, as well as other interested stakeholders, and report back to the Planning and Transportation Committee.

The Policy and Finance Committee reports, for the information of Council, having:

(1) referred the following communications to the Chief Financial Officer and Treasurer for report thereon to the Policy and Finance Committee:

(i) (June 22, 1999) from the Commissioner of Corporate Services and City Clerk, Corporation of the City of London; and

(ii) (July 13, 1999) from Mr. Raymond H. Mikkola, Fraser Milner; and

(2) received the following communications:

(i) (July 5, 1999) from Ms. Mary L. Flynn-Guglietti, Goodman and Carr, Barristers and Solicitors;

(ii) (July 5, 1999) from Ms. Mary L. Flynn-Guglietti, Goodman and Carr, Barristers and Solicitors;

(iii) (July 9, 1999) from the President, North York Chamber of Commerce;

(iv) (June 30, 1999) from Mr. Bill Palander, President, Toronto Real Estate Board;

(v) (July 13, 1999) from the Commissioner Economic Development, Culture and Tourism;

(vi) (July 15, 1999) from the City Clerk, advising that the Planning and Transportation Committee on July 12, 1999, received the transmittal letter (June 28, 1999) from the City Clerk and the attached material respecting the proposed development Charge By-law, for information; and

(vii) (July 1, 1999) from the Vice President Development, Bearpoint Group.

The Policy and Finance Committee submits the following report (July 12, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

To present the proposed City-wide harmonized Development Charge By-Law (attached as Schedule "A") for Council adoption, having considered the input, comments and concerns expressed by various stakeholders at the public meeting of June 24, 1999.

Funding Sources, Financial Implications and Impact Statement:

The Development Charges Background Study updated to June 9, 1999, presents the maximum development charge that can be imposed upon residential and non-residential development. If fully implemented, the charge would yield annual revenues of approximately $36.0 million, about half of which is attributable to residential development and the balance to non-residential.

For a variety of reasons discussed in the body of this report, the proposed by-law does not include a development charge in respect of non-residential development.

The by-law does, however, include a development charge in respect of residential development. The projected annual revenue based on the revised schedule of charges is estimated at $15.0 million, which is approximately the same amount that was collected through the development charge regimes of the former municipalities in 1998.

In the absence of the implementation of a new development charge by-law as described herein, the City will experience an annual revenue shortfall for capital financing purposes of $15.0 million per year.

Recommendations:

It is recommended that:

(1) the Development Charge By-Law, substantially as attached as Schedule "A", be adopted, which includes the following salient provisions:

(1.1) no charge in respect of non-residential development;

(1.2) a charge in respect of residential development, which when fully phased in by September 1, 2001, is as follows:

Residential Development Type	Development Charge ($ per dwelling unit)
	$
Single and Semi-Detached	3,912
Apartments 2Bdrm. and Larger	2,644
Apartments, 1Brdm. and Bachelor	1,692
Other Multiple Dwellings	3,172

(1.3) a two-year phase-in of the residential development charge;

(1.4) a time-limited grandfathering clause;

(1.5) an exemption for housing developed by non-profit corporations;

and that the City Solicitor be authorized to make such minor technical, stylistic and/or format changes as may be required to implement Council's direction;

(2) with respect to Development Charges Exemptions or Rebates for Affordable Housing:

(2.1) Council request the Province of Ontario to pass legislation enabling the City to provide assistance, including development charges rebates, to not-for-profit developers where this is in exchange for an equal or greater benefit to the City in the form of affordable housing as defined from time to time by Council policy; and

(2.2) a review of opportunities, further rebates and/or other mechanisms for promoting affordable housing, both condominium and rental, be undertaken in consultation with the development industry and other interested parties;

(3) the last day for applying for the recognition of a Section 14 credit towards development charges be extended to December 31, 1999;

(4) the sewage impost by-law, as provided for under the former City of Toronto Municipal Code Chapter 292, Article II, be repealed, effective August 31, 1999;

(5) for the purposes of complying with the Development Charges Act, 1997, Council adopt the Background Study, updated to June 9, 1999, including the development related capital program contained therein;

(6) the Urban Development Institute, the Greater Toronto Home Builders' Association, the Canadian Institute of Public Real Estate Companies, the Labourer's International Union of North America Local 183, and any other interested parties from the development industry, be invited to participate as sub-panel representatives of the Business Reference Group established by Council in April 1999 for the purposes of developing a comprehensive tax policy for long term equity in property tax treatment for various sectors, including the commercial and industrial sectors;

(7) the Province be requested to confirm that the Development Charges Act, 1997 permits 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;

(8) Council make the determination that no further public meeting is necessary in order to deal with the modifications made to the development charge by-law; and

(9) the appropriate City Officials be directed to take the necessary action to give effect thereto.

Council Reference:

At its meeting of May 11 and 12, 1999, Council adopted as amended Clause No.1 of Report No. 9 of the Strategic Policies and Priorities Committee (now the Policy and Finance Committee) which, among other things, recommended that the public meeting required pursuant to Section 12 of the Development Charges Act (the Act) be held on June 24, 1999, before the Policy and Finance Committee.

As required by Section 12 of the Act, notice of the public meeting was given in advance of the 20 day requirement, and the proposed by-law and the Background Study updated to June 9, 1999, were made available to the public at least two weeks prior to the public meeting.

The public meeting was held on June 24, 1999. Eighteen deputants appeared before the Committee and a total of twenty-four written submissions were received by the Committee. After having heard the deputations respecting the proposed by-law, the Policy and Finance Committee:

(1) referred the reports and communications before Committee (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 report "Proposed Development Charge By-Law" (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.".

The motions referred to in 2(f) and (3) above are the subject of concurrent reports from the Commissioner of Urban Planning and Development Services and from the Commissioner of Economic Development, Culture and Tourism, respectively.

Discussion:

The Policy and Finance Committee at its meeting of June 24, 1999, received the report of the Chief Financial Officer and Treasurer "Proposed Development Charge By-Law" (June 17, 1999), which advised with respect to the public meeting and presented a draft development charge by-law. This draft by-law outlined the maximum development charges that may be imposed in accordance with the Act and as determined in the Background Study.

The public meeting provided an opportunity for stakeholders to make their views and concerns regarding the proposed by-law known to the Committee. Through the feedback received at the public meeting, and through a further extensive consultation process subsequent to the public meeting with representatives of the development community, further input was received that assisted staff in preparing the final shape of the City's new development charge by-law. Many of these concerns refer to general policy issues arising from the implementation of the by-law. These are addressed in the body of this report. Several of the motions of Committee and concerns expressed at the public meeting are specific in nature, and the requested information or staff response are contained in the Appendices of this report.

This report recommends a revised by-law, which gives consideration to the input, comments and concerns expressed by various stakeholders throughout the process. The key issues raised and responded to in the revised by-law are summarized in Table 1 and discussed in the following sections.

Insert Table/Map No. 1

table 1 - key issues/revisions to by-law

Development Charge Policy Objectives:

The recommendations contained in this report are based upon a careful balance between the City's objectives and those of the development community. The City's objectives, which were established early in the process, include:

(i) growth ought to pay for itself so that the burden arising from development related capital costs should not fall on existing residents in the form of higher taxation and user fees;

(ii) development charges should be used to mitigate the City's capital pressures and to assist in providing the infrastructure required by future development in the City;

(iii) development charges should be fair and equitable to all stakeholders; and

(iv) development charges should not act as an unnecessary disincentive to growth and development occurring in the City.

Key Policy Issues and Recommendations:

(1) Non-Residential Development:

The revised and recommended by-law does not provide for a charge on non-residential development. There are a number of reasons for arriving at this recommendation:

(i) Toronto's locational advantage for businesses is eroding;

(ii) the property tax burden on Toronto's businesses is about twice that of surrounding municipalities; and

(iii) several fiscal impact studies have concluded that municipalities generate an operating surplus on commercial and industrial development.

Municipal financial policy should not act as an unnecessary deterrent to development nor should it undermine Toronto's competitive position. The development community expressed its concern that the imposition of development charges in Toronto would have a significant impact on the rate of commercial and industrial development in Toronto. These concerns are corroborated in the report of the Commissioner of Economic Development, Culture and Tourism, dated June 13, 1999 (which was before the Committee at the public meeting). That report concluded that no development charges ought to be imposed on commercial and industrial development.

With respect to locational advantages, the report of the Commissioner of Economic Development, Culture and Tourism acknowledged that, compared to other world-class cities, Toronto is not an expensive place to do business, and that firms have historically been willing to pay a premium to locate here. However, there are indications that the location advantage is eroding as suburban locations expand and build the critical mass necessary to offer some of the amenities that were formerly only available in the core. Similarly, twenty years ago places like Newmarket did not have convenient access to a 400 series highway. Provincial government investments to construct, improve and extend highways 400, 401, 403, 404, 407 and 410 have improved the competitive position of the 905 regions relative to Toronto. Telecommunications advances are also eroding some of the advantages of a downtown location.

The City of Toronto is facing increasing competition for commercial and industrial development. Firms have moved from the downtown to the suburbs or have chosen to expand in the suburbs rather than in the City. Commercial and industrial building permit data for the last fourteen years paint a similar picture. The value of commercial and industrial permits in the City of Toronto has not recovered from the recession as quickly as in the surrounding regions, as shown in Figure 1.

Insert Table/Map No. 1

figure 1 - comm/ind bldg permits

Development charges are only one of many municipal-related considerations affecting the business decisions of the land development community. Other considerations include market conditions, demand for their product and expectations of local economic conditions. Property taxation tends to also be a primary consideration in the real estate market.

In 1998, Current Value Assessment (CVA) was implemented across the province. Under this system, in theory, tax rates would be comparable within property classes throughout the province. Under CVA, the significant tax disparity of Toronto's commercial and industrial sectors was accentuated. Toronto's tax rate for these sectors is about twice that of the surrounding municipalities. That is, for two equally valued properties, the property in Toronto would be paying twice as much in property tax. An added cost in the form of a development charge imposed on the commercial and industrial sectors could further erode the City's competitive position in relation to other GTA municipalities. Figures 2 and 3 provide a comparison of Toronto's existing commercial and industrial tax rates with that of its surrounding municipalities.

Insert Table/Map No. 1

figure2/3 '98 comm/ind tax rates

With respect to fiscal impacts of development, numerous economic impact studies have concluded that municipalities fare much better than break-even on an operating basis on commercial and industrial development. There are several reasons for these conclusions:

(a) there are significant positive externalities associated with commercial and industrial development, the most important of which is job creation. For example, it is likely that the City's social services expenditures would decrease as a result of an industrial employer locating in the City of Toronto rather than elsewhere;

(b) there is strong evidence that commercial/industrial development cross-subsidizes the provision of municipal services to residential ratepayers. Municipal services that are provided directly to property owners such as garbage collection, parks and recreation, libraries, etc., disproportionately benefit residential ratepayers; and

(c) many municipal costs have a fixed cost component. These fixed costs create economies of scale; therefore, the cost of providing municipal services to an additional building is less than the average cost.

Based on Ministry of Finance data, the current value (CVA) of commercial and industrial properties in Toronto was less than 20 percent of the total value of taxable property in the City, yet in 1998 commercial and industrial ratepayers paid 42 percent of property taxes for municipal purposes in Toronto, as shown in Figure 4. In fact, for every additional dollar of new assessment, non-residential properties contribute 4.2 to 6.0 times more in property tax revenue than does residential development. Accordingly, from a fiscal impact perspective, any development charge against non-residential development that may potentially act as a disincentive to growth in that sector is not recommended. For greater detail on the fiscal implications of development charges on the commercial and industrial sectors, refer to the report of the Commissioner of Economic Development, Culture and Tourism dated June 13, 1999.

Insert Table/Map No. 1

fig. 4 class shares..

As a final comment, it should be noted that all of the former municipalities that charged development charges saw it fit not to impose charges on industrial development, and with the exception of North York and Scarborough, on commercial development.

(2) Residential Development and Quantum of the Charge:

Although a number of residential developers have expressed the view that no charge should be imposed on residential development, the recommended by-law continues to support a City-wide charge on residential development for the following reasons:

(i) the tax burden on residential properties compares favourably with the surrounding municipalities, unlike the tax burden on the commercial and industrial sectors;

(ii) the quantum of the charge is significantly lower than the existing and proposed charges of the surrounding municipalities, and in many cases, it amounts to less than one-quarter of their charges; and

(iii) the recommended quantum of the charge does not raise any additional revenue for the City (i.e. based on revenue neutrality).

With respect to residential tax rates under CVA, Toronto's residential tax rate of 1.26 percent of assessment is the lowest rate of any GTA municipality, and 15.0 percent lower than the average GTA residential rate of 1.48 percent. That is, for two equally valued residential properties, the realty taxes on the Toronto property would be on average 15.0 percent lower than that of equal valued property in the GTA. On the basis of property taxation, therefore, Toronto's tax rates would not appear to be a disincentive to residential development in Toronto. Figure 5 provides a comparison of Toronto's tax rate with those of surrounding municipalities.

Insert Table/Map No. 1

fig 5 comp res'l tax rates

The recommended quantum of the uniform city-wide residential charge is summarized in Table 2. Figure 6 provides a comparison of the recommended city-wide charge for single and semi-detached dwelling units in Toronto with that of selected GTA municipalities. A comparison of other residential property types yields similar results. It is noted that the rates shown for the surrounding municipalities is the maximum indicated by their respective background studies and each of these Councils may or may not elect to adopt a reduced rate. The final outcome will not be known until the respective Councils make a final decision in this regard. Based on the foregoing comparison, the recommended quantum of the residential charges is considered to be fair and reasonable.

--------

Table 2

Recommended Quantum of the Residential Development Charge

($ Per Dwelling Unit)

1998 Development Charge Revenue $14,800

Insert Table/Map No. 1

fig 6 max permissible sgle fam dtchd dwelling

The combined proceeds from development charges of the former municipalities amounted to $13.4 million in 1997 and $14.8 million in 1998. The recommended quantum of the residential charge is based on revenue neutrality, and as such, is anticipated to ensure the City receives a development charge revenue stream in the same order of magnitude previously received. Accordingly, the burden placed on development community by imposing the recommended charge remains unchanged and is not considered to be detrimental to residential development.

(3) Phasing and Implementation Issues:

The development community has raised concerns with respect to the imposition of development charges in areas where no previous charge existed (former Toronto, East York and York). These concerns are based upon the proposition that landowners and developers have formulated business plans and made financial decisions on the basis of existing and foreseeable conditions, including municipal financial requirements. The introduction of a new charge which had not been contemplated in their financial proformas will have a significant financial implication on some projects. Staff recognize that these are valid and legitimate concerns, and as such, several measures to cushion the unanticipated impacts of the transition to the new regime are recommended.

In order to ensure an orderly transition, the recommended phasing and implementation of the new development charges is as follows:

(a) any person who submits a complete building permit application prior to March 1, 2000 shall pay the lower of the existing development charges or the fees pursuant to the former City of Toronto Sewage Impost by-law, as the case may be, or the development charges as they have been enacted by City Council;

(b) any person who submits a complete building permit application subsequent to March 1, 2000, and prior to September 1, 2000, shall pay development charges as per column 2 of Table 3;

(c) any person who submits a complete building permit application subsequent to September 1, 2000, and prior to September 1, 2001, shall pay development charges as set out in column 3 of Table 3; and

(d) any person who submits a complete building permit application subsequent to September 1, 2001, shall pay development charges as set out in column 4 of Table 3.

With the recommended two-year phase-in period, the City will have a harmonized City-wide development charge by September 1, 2001.

Insert Table/Map No. 1

table 3 - dev chrg schd with 2yr phasein

(4) Section 14 Credits:

Regulations enacted pursuant to the new Act provide that owners may apply to the municipality for a credit towards development charges for payments made pursuant to agreements relating to development. The applications were required to be filed by March 1, 1999 and the City is required to advise the applicants by September 1, 1999 whether the credit is to be recognized or not. Where the municipality does not recognize the credit, the applicant may appeal to the Ontario Municipal Board. The City received 24 credit application requests prior to the March 1, 1999 deadline. A report dated June 14, 1999, from the Commissioner of Urban Planning & Development, the Chief Financial Officer and Treasurer, and the City Solicitor, was before the Committee that makes recommendations with respect to these aforementioned credit applications.

Several deputants expressed concern that their specific development be eligible for development credits. In one case, the deputant indicated that his client inadvertently overlooked the March 1 deadline. As it appears that there may be others in the same situation, staff are recommending that an extension to December 31, 1999 be given for application for Section 14 Credits.

(5) City-Wide verses Area-Specific Charges:

The City is faced with a fundamental policy decision as to whether it wishes to recover development-related capital costs on a localized benefiting area basis or, alternatively, on a uniform City-wide basis. It should be noted that with respect to the delivery of municipal services and the financing of these services through tax and rate policies (water rate, uniform tax rates, hydro rates, service levels, etc.), Council has adopted policies which implicitly recognize that as a unified City, charges, levies and user fees ought to be applied uniformly throughout the City.

Currently, Toronto's existing development charge policy has been inherited unchanged from the seven former municipalities. As a result, it consists of a patchwork of schedules and coverage areas. Where they exist, these development charge coverage areas are "uniform municipal wide" charges with respect to the former municipalities, with three exceptions:

(i) former North York Yonge Centre;

(ii) former North York Sheppard Subway Area; and

(iii) former Etobicoke Motel Strip.

A substantial majority of Ontario municipalities operate with a uniform, municipal-wide development charge policy for a number of reasons, including:

(1) many services, including roads, treatment plants and City-wide parks, provide services on a municipal-wide basis and are therefore best funded on that basis. The service areas for recreation facilities, fire halls and other services are not readily definable, as they draw users from, or provide services to, a wide and variable area;

(2) once boundaries have been defined for area-specific charges, those on the higher charge side of any particular boundary may be encouraged to appeal the policy in order to modify the location of the line, or the amount of the charge. As a result, area-specific charges are more contentious, subject to appeal and difficult to defend and administer;

(3) once a municipality has opted in favour of establishing some area-specific charges, it must deal with appeals to create new, smaller, differently configured areas. This, in turn, involves making decisions as to the treatment of sunk costs (i.e. oversizing) vs. future costs, as well as whether to charge in accordance with development potential vs. actual development as it occurs, in an attempt to achieve full cost recovery;

(4) when the City changes the timing, cost or nature of its servicing plan in any given area over time, this would potentially create the immediate need to revise area-specific charges and/or to make refunds for monies collected;

(5) the use of area-specific development charge collections is restricted to the specific purpose for which the collections were made, which reduces the City's flexibility to fund new works from a consolidated reserve fund, early in the period;

(6) with area-specific charges, the quantum of the charge will be less readily apparent to landowners and staff would have to tabulate and explain charges based on overlapping coverage areas for various services;

(7) applying the complexities of the DCA to individual areas would be much more time-consuming and contentious than doing so for the City as a whole; and

(8) the charge, in some areas, may be so high as to discourage development.

The advantage of area-specific charges which relates primarily to the fairness in directing the "true cost" of development to each area of development, is judged in this particular case, to be significantly outweighed by the factors noted above.

While some stakeholders have expressed the view that development charges should be area specific, an industry-wide proposal as to defining boundaries for the new charges has yet to be submitted.

Arguments have also been made regarding the imposition of development charges in the former City of Toronto, and particularly in the core, which did not previously have development charges. Some have suggested excluding the downtown core from development charges.

The by-law proposes a reduction in the quantum of the residential development charge so as to raise approximately the same amount of development charge revenue as was raised in the past. The total amount of financial burden imposed on the development community will not therefore exceed that which was required in previous years. Furthermore, in areas where the charge previously existed, a more generous grandfathering and phase-in of the new charge is proposed. These measures will provide a orderly transition to the new development charge regime, will cushion the impacts on those who had not anticipated the new charge and further provide a reasonable time-frame for developers to capitalize the new charges into pre-development land values.

Moreover, the fiscal impact analysis for residential development (see Appendix B) suggests that the servicing costs for new residential development can exceed the anticipated annual property tax revenue from the new development, particularly for moderately priced condominiums that are growing in popularity in the downtown core.

The arguments for area-specific charges, and more specifically a discount of the city-wide charge in the downtown core, have not outweighed the benefits of a uniform city-wide development charge. The revised and recommended by-law provides for a city-wide schedule of charges.

(6) Affordable Housing:

This report recommends that Council confirm an intention to encourage affordable housing through a development charge exemption or rebate. Several barriers and complications exist in implementing this. In the short term, an exemption can be provided to not-for-profit owners/developers and to projects developed with City assistance. In the medium to longer term, legislative amendments should be sought to enable a broader exemption or rebate.

The draft by-law presented at the public meeting did not provide any exemption for "affordable housing" as it was felt that the definition of affordable in itself would not be sufficient to ensure that the proposed housing would meet Council's "affordability" criteria and that affordable rental housing would ultimately be produced. It was also felt that a general definition may present other implementation problems, such as maintaining the units as rental units, and maintaining the rents at affordable levels once the units have been exempted from development charges.

Nonetheless, a development charges exemption for housing developments "that meet affordability criteria" was recommended by the Homelessness Action Task Force. The exemption proposed by the Task Force is one of several steps intended to reduce the cost of developing rental housing. Other obstacles in the creation of affordable rental housing include other City fees and charges, land in some cases, federal GST and provincial sales tax (PST). None of these on its own "solves" the viability problem, but together they make a considerable difference. The Province announced in March a program to rebate PST, involving per-unit savings similar to development charges. The City has adopted a "housing first" policy for municipal land (which could lead to reduced or deferred land costs in some cases), a new multi-residential assessment class, and waived fees in some cases.

The Development Charges Act, 1997, permits "full or partial exemptions for types of development"; the "types" may be determined by each municipality as long as clear rules are set.

Staff have been developing options for defining "affordable housing" for the purposes of, among other things, the development charges exemption, the Official Plan and assistance from the Capital Revolving Fund. Broadly, some possible definitions could be in terms of household income, initial price or rent, ongoing affordability, unit size, tenure, objects of the firm or agency developing or owning the project, and/or the project receiving other assistance. Legal or administrative barriers exist to implementing many of these.

A viable option is to use a criterion relating to the objects of the firm or agency developing or owning the project; specifically, development by non-profit corporations could be exempted. Likewise, receipt of City assistance is a viable criterion, although for-profit corporations would not currently be eligible. There is a reasonable basis for classifying not-for-profit development as a "type of development" under the Development Charges Act, based on the role of non-profit corporations in operating social housing with large numbers of below-market or geared-to-income units. The same applies to developments receiving other City assistance (such as through the Capital Revolving Fund or via a lease of City land). When applying for a building permit, applicants can submit information, such as copies of articles of incorporation, which would permit staff to make a determination of non-profit status or receipt of other City assistance. The proposed development charges by-law accompanying this report provides for such an exemption.

Private corporations should also be eligible for an exemption or rebate where they are developing affordable housing. The focus of staff discussions on defining "affordable housing" has been on units affordable to the lower half, more or less, of the GTA tenant income distribution, which implies rents near to or lower than average market rents by unit size. This is a lower price and income band than the vast majority of affordable low-end condominium projects, which generally provide studio or one-bedroom units affordable at about $40,000.00 income or higher. However, provincial enabling legislation will be required for a rental exemption, for a rebate to for-profit developers, and possibly for other aspects of a broader exemption or rebate. Discussions have been initiated with staff of the Ministry of Municipal Affairs and Housing on a "toolbox" (non-financial) for the City to use in pursuing housing objectives. This report recommends that the province be requested to enact such enabling legislation.

Additional information respecting issues and approaches to affordable housing is contained in Appendix D.

(7) Stormwater Quality Management:

The Background Study provides a cash-in-lieu calculation for stormwater quality as means of securing funds to provide stormwater quality controls and treatment to address quality impacts caused by development, where implementing controls on an individual development site is not feasible. Some concern was raised by the development community with regards to the calculation of the cash-in-lieu charge in the areas of the runoff area and coefficient determination, and the rationale for the capital cost factor. Furthermore, while the City has undertaken a study to produce a Wet Weather Master Plan, which will act as a framework to address stormwater quality issues, the City does not currently have a comprehensive stormwater policy or a ten-year service standard upon which to base such a charge. Given these issues, it is considered premature to include a stormwater quality charge in the proposed by-law at this time.

(8) Childcare Facilities:

The Policy and Finance Committee had before it a communication from the Children and Youth Action Committee dated June 17, 1999 to explore funding options for childcare facilities including the use of development charges. The Development Charges Act, 1997 requires that the ten-year average level of service must be taken into consideration in the calculation of a development charge that can be levied by a municipality. In this determination, both the quality and the quantity of the service must be taken into account. Under the legislation in its current form, childcare facilities are ineligible for development charge funding due to a lack of a municipally funded capital program over the previous ten year period and the absence of a five to ten-year capital program.

This report recommends that Council request the province to confirm that the DCA, 1997, permits 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.

(9) Other Provisions in the Proposed By-law:

The proposed by-law imposes development charges on residential development based on the rates set out earlier in this report. Further, the by-law proposes that development charges be payable as of the date a building permit is issued, with minor exceptions. Council may also enter into an agreement with an owner to provide that all or any part of the development charge may be paid before or after it would otherwise be payable.

The proposed by-law also provides that, where an agreement was entered into by a former municipality that had development charges (Etobicoke, North York and Scarborough), these charges are to be credited on a pro rata basis against the development charge applicable under the proposed by-law. Council may also, by agreement, provide a credit to an owner against all or part of the development charge payable in respect of a development by the provision of work that relates to a service which the City would otherwise provide as part of its capital program. The credit is equal to the reasonable cost to the owner of providing the work or service, provided that the credit shall not exceed the total amount of the development charge payable with respect to that service.

Certain exemptions are also provided for in the proposed by-law. These include exemptions for intensification of existing housing and enlargements of existing industrial buildings as required by the Act. In addition, the by-law provides for an exemption from development charges for one additional residential unit in a new single detached dwelling or semi-detached dwelling unit in line with Council's recent second suite initiative. There are a number of other exemptions for development not exceeding ten square metres of gross floor area, public hospitals, colleges and universities, land owned by the City or the Board of Education, dwelling rooms (i.e., rooming houses), places of worship and cemeteries and burial grounds. In addition, an exemption is to be given where an agreement entered into by a former municipality expressly exempted the lands, buildings or structures from development charges.

The proposed by-law also provides for certain redevelopment credits. This provision allows for an owner to claim a credit against the development charge otherwise payable where an existing structure is to be demolished.

(10) Sewer Impost By-law of the former City of Toronto:

Although the former City of Toronto did not collect charges pursuant to a development charge by-law, City of Toronto Municipal Code Chapter 292, Article II imposes a sewage impost fee of $0.70 per square feet for townhouses, apartments, and non-residential floor area. As sanitary sewer and wastewater infrastructure will now be included services within the development charge by-law, the imposition of a sewage impost fee represents a duplication of charges which is not permitted pursuant to the Act. Should Council adopt the proposed development charge by-law, the City Solicitor should be directed to take the appropriate action to repeal the sewage impost provision contained in the Toronto Municipal Code.

(11) Motions of the Policy and Finance Committee:

As noted previously, a number of motions were adopted at the meeting of the Policy and Finance Committee at its meeting on June 24, 1999. Some of the directions have been responded to in the body of this report. Others which are described below are specific in nature and accordingly are addressed, to the greatest extent possible, in the appendices of attached to this report. These include:

(a) Appendix A which responds to motion no. 1 requesting that the Chief Financial Officer and Treasurer report on the submissions made by the deputants at the June 24^th meeting;

(b) Appendix B which responds to motions no. 2(a), (b) and (e)(I) - (v) requesting that the Chief Financial Officer and Treasurer report on the fiscal implications to the City of development and other related matters;

(c) Appendix C which responds to motion no. 2(c) requesting the Chief Financial Officer and Treasurer to report on the area-specific charges used in Richmond Hill;

(d) Appendix D which responds to motion no. 2(d) requesting that the Chief Financial Officer and Treasurer, in consultation with the Commissioner of Community and Neighbourhood Services and the City Solicitor, report on the recommended development charge approach that maintains City policy with respect to affordable housing; and

(e) Appendix E which responds to motion no. 2(e)(vi) requesting that the Chief Financial Officer and Treasurer provide a comparison of development activity between the former municipalities that had development charges and those that did not, particularly in the former City of York where such charges were waived.

Conclusions:

This report summarizes the terms and conditions of the revised and recommended development charge by-law, and addresses the key policy issues. The feedback received at the public meeting on June 24, 1999, and throughout the consultation process with representatives of the development industry, has been invaluable in assisting staff in establishing the final shape of the City's new development charge by-law.

The Development Charges Background Study, updated to June 9, 1999, sets out the maximum development charge that can be imposed upon residential and non-residential development. Various stakeholders and staff from the City's Economic Development Department have expressed concern that the one-time funding potential from charges imposed upon new development runs the risk of reducing the rate of development in the commercial and industrial sectors, whose property tax rates are significantly higher than that of any surrounding municipality.

The revised by-law recommends imposing development charges only on new residential development. The projected average annual development charge revenue based on the revised schedule of charges is estimated at $15.0 million, which is approximately the same amount that was collected through the development charges of the former municipalities in 1998.

In addition to the type of development for which development charges are to be imposed, other key policy issues included the quantum of the charge, transition provisions, Section 14 credits, city-wide verses area-specific charges, affordable housing and section 37 agreements.

With respect to the quantum of the residential development charge, the recommended by-law prescribes a charge at 78.2 percent of the maximum charge calculated in accordance with the Act. This quantum produces revenue neutrality for the City in relation to the development charge revenue garnered in previous years and achieves a harmonization of a charge citywide.

With respect to transition provisions, the revised and recommended by-law provides for a two-year phasing-in period to the new development charge, which will result in a harmonized city-wide charge by September 1, 2001. The by-law also extends the grandfathering provision to March 1, 2000, to ensure those development applications in process are not faced with an unanticipated financial impact. The purpose of these provisions is to ensure an orderly transition to the new development charge regime as well as provide a modest incentive for development to proceed expeditiously.

With respect to affordable rental housing, the recommended by-law provides for an exemption from development charges for housing developed by non-profit corporations, and, subject to the bonusing restrictions of the Municipal Act, to housing developed with capital or land-lease assistance from the City. It is also recommended that the Province be petitioned to permit development charge rebates to for-profit developers where this is in exchange for an equal or greater benefit to the City in the form of affordable housing as defined from time to time by Council policy.

Clarification of the application of Section 37 agreements was also an issue. Section 37 of the Planning Act is a separate and distinct tool available to municipalities with respect to development, whereby an exchange occurs between a developer and the City, of extra density for specific facilities or benefits. It is intended that there be a clear separation between Section 37 contributions and development charges. A clarification of the application of Section 37 agreements is the subject of a concurrent report.

The Act provides for owners to apply for a credit towards development charges for payments made pursuant to agreements related to development. The City has received 24 credit applications prior to the legislated deadline of March 1, 1999. As it appears that some developers may have overlooked the March 1 deadline, staff are recommending and extension of the credit notice to December 31, 1999.

The contents and policies embodied in the proposed by-law and in this report have been formulated in consultation with the appropriate Department Heads.

Contact Names:

Joe Farag, Director, Development, Policy and Research, Finance Department, 392-8108;

Barbara Leonhardt, Director, Policy and Research, City Planning, 392-8148;

Anna Kinastowski, Director, Planning and Administrative Tribunal Law, Legal Department,

392-0080;

Brenda Librecz, Managing Director, Economic Development Division, 397-4700; and

Joanne Campbell, General Manager, Shelter, Housing and Support Services, 392-7885.

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Authority: Policy and Finance Committee Report No. , Clause ,

as adopted by City of Toronto Council on July 27, 28 and 29, 1999

Enacted by Council:

City of Toronto

By-law No.

Being A By-law Respecting Development Charges

Whereas the City of Toronto has and will continue to experience growth through development;

And Whereas development requires the provision of physical infrastructure and other services by the City;

And Whereas the Development Charges Act, 1997, S.O. 1997, c.27 (the "Act"), authorizes Council to pass by-laws for the imposition of development charges against land;

And Whereas Council desires to ensure that the capital cost of meeting development related demands for, or the burden on, City services does not place an undue financial burden on the City or its existing taxpayers while, at the same time, ensuring new development contributes no more than the net capital cost attributable to providing the historic level of services and meeting the requirements of section 5(1) of the Act;

And Whereas the City has undertaken a study of, among other matters, the matters raised in section 10 of the Act and section 8 of O.Reg 82/98, services, service levels, expected development, development-related facilities and the costs thereof;

And Whereas Council at its meeting dated May 11, 12 and 13, 1999, had before it a report entitled "City of Toronto Development Charge Background Study" prepared by C.N. Watson & Associates Ltd. dated April 19, 1999 (the "Study);

And Whereas Council at its meeting held on May 11, 12 and 13, 1999 directed that the meeting pursuant to Section 12 of the Act be held at the Policy and Finance Committee;

And Whereas the Study was made available to the public at least two weeks prior to the public meeting and Council gave more that twenty days notice to the public and a meeting pursuant to section 12 of the Act was held on June 24, 1999 before the Policy and Finance Committee, prior to and at which the Study, the Addendum to the Study dated June 9, 1999 and the proposed development charge by-law were made available to the public and Committee heard comments and representations from all persons who applied to be heard;

And Whereas Policy and Finance Committee at its meeting held on July 20, 1999, further considered the Study, the Addendum to the Study and a staff report dated July **, 1999 which responded to the comments and representations from the persons heard at the public meeting.

And Whereas Council in adopting Clause of Report No. of the Policy and Finance Committee at its meeting held on , 1999, has indicated that it intends to ensure that the increase in the need for services attributable to the anticipated development will be met by approving a capital forecast including the works underlying the development charge calculation;

And Whereas Council, on , 1999 held a meeting open to the public, at which Council considered the Study, the Addendum to the Study, reports from City staff and written submissions from the public;

Now Therefore The Council of the City of Toronto Hereby Enacts as Follows:

Definitions:

(1) In this by-law, and including the recitals and schedules hereto,

(1) "accessory use" means that the building or structure is naturally and normally incidental to or subordinate in purpose or both, and exclusively devoted to a principal use, building or structure;

(2) "apartment unit" means any residential dwelling unit within a residential building, or the residential portion of a mixed use building, where such unit is accessed through a common entrance or entrances from the street level and an interior corridor, and the building contains three or more units with such access;

(3) "bachelor unit" means a residential unit consisting of a self-contained living area in which culinary and sanitary facilities are provided for the exclusive use of the occupant but not including a separate bedroom;

(4) "bedroom" means any room used or designed or intended for use as sleeping quarters but does not include a living room, dining room, kitchen or one area to be used as a den, study or other similar area;

(5) "board of education" has the same meaning as that specified in the Education Act or any successor legislation;

(6) "Building Code Act" means the Building Code Act, 1992, S.O. 1992, c.23, as amended or any successor legislation;

(7) "building permit" means a permit issued pursuant to the Building Code Act which permits the construction of all buildings and structures above grade.

(8) "capital cost" has the same meaning it has in the Act;

(9) "Chief Building Official" means a chief building official appointed or constituted under section 3 of the Building Code Act;

(10) "City" means City of Toronto;

(11) "complete building permit application" means an application submitted to the Chief Building Official for either a foundation and/or full building permit which complies with all technical requirements of the Building Code Act and includes the payment of all applicable fees;

(12) "Council" means the Council of the City of Toronto;

(13) "development" means any activity or proposed activity in respect of land that requires one or more of the actions referred to in section 9 of this by-law and includes a trailer or mobile home park, the redevelopment of land or the redevelopment, expansion, extension or alteration, or any two or more of them, of a use, building or structure, except interior alterations to an existing building or structure which do not intensify the use of the building;

(14) "development charge" means a charge imposed pursuant to this by-law;

(15) "dwelling unit' means living accommodation comprising a single housekeeping unit within any part of building or structure used, designed or intended to be used by one person or persons living together, in which both culinary and sanitary facilities are provided for the exclusive use of such person or persons;

(16) "dwelling room" means a room used or designated for human habitation and may include either but not both culinary or sanitary conveniences, but does not include:

(i) a room in a hotel, in a dwelling unit or in a tourist or guest home;

(ii) a bathroom or kitchen; or

(iii) a windowless storage room that has a floor area of less than 10 square metres;

(17) "Former Municipalities" means the former Municipality of Metropolitan Toronto, the former Cities of Etobicoke, North York, Scarborough, Toronto and York and the former Borough of East York as they existed on December 31, 1997;

(18) "grade" means the definition provided for in the zoning by-law applicable to the Former Municipality in which the development is located at the time the complete building permit application is submitted to the Chief Building Official;

(19) "gross chargeable area" means in the case of a non-residential building or structure, or in the case of a mixed-use building or structure in respect of the non-residential portion thereof, the total area of all building floors above or below grade measured between the outside surfaces of the exterior walls, or between the outside surfaces of exterior walls and the centre line of party walls dividing a non-residential use and a residential use, except for:

(i) a room or enclosed area within the building or structure above or below grade that is used exclusively for the accommodation of heating, cooling, ventilating, electrical, mechanical or telecommunications equipment that service the building;

(ii) loading facilities above or below grade; and

(iii) a part of the building or structure below grade that is used for the parking of motor vehicles or for storage or other accessory use.

(20) "gross floor area" means in the case of a dwelling unit the total area of all floors above grade measured between the outside surfaces of exterior walls or between the outside surfaces of exterior walls and the centre line of party walls dividing the dwelling unit from any other dwelling unit or other portion of a building;

(21) "local board" has the same meaning as defined in the Act;

(22) "mobile home" means any dwelling that is designated to be made mobile, and constructed or manufactured to provide a permanent residence for one or more persons, but does not include a travel trailer or tent trailer;

(23) "multiple dwelling unit" means all dwellings units other than single detached, semi-detached and apartment units and includes row dwellings and townhouses;

(24) "non-profit housing" means housing which is or is intended to be offered primarily to persons or families of low income on a leasehold or co-operative basis and which owned or operated by:

(i) a non-profit corporation being a corporation, no part of the income of which is payable to or otherwise available for the personal benefit of a member or shareholder thereof; or

(ii) a non-profit housing co-operative having the same meaning as in the Co-operative Corporations Act, R.S.O. 1990, c. C.35, as may be amended from time to time.

(25) "owner" means the owner of land or a person who has made application for an approval of the development of land against which a development charge is imposed;

(26) "party wall" means a wall jointly owned and jointly used by two parties under an easement agreement or by right in law and erected at or upon a line separating two parcels of land each of which is, or is capable of being, a separate real estate entity;

(27) "place of worship" means that part of a building or structure that is exempt from taxation as a place of worship under the Assessment Act, as amended or any successor legislation;

(28) "residential use" means land or building or structures of any kind whatsoever or any portion thereof, used, designated or intended to be used as living accommodations for one or more individuals and includes a unit designated for combined live/work uses;

(29) "semi-detached dwelling" means a residential building consisting of two dwelling units having one vertical wall or one horizontal wall, but no other parts, attached to another dwelling unit where the dwelling units are not connected by an interior corridor;

(30) "services" (or "service") means those services designated in Section 4 to this by-law;

(31) "single detached dwelling unit" and "single detached" means a residential building consisting of one dwelling unit and not attached to another structure used for residential uses or purposes and includes mobile homes;

Designation of Services:

(2) It is hereby declared by the Council of the City that all development of land within the City will increase the need for services.

(3) Once this by-law is in force, the development charge applicable to a development as determined under this by-law shall apply without regard to the services required or used by any individual development.

(4) Development charges shall be imposed for the following categories of services to pay for the increased capital costs required because of increased needs for services arising from development:

(i) roads;

(ii) sanitary sewerage;

(iii) water works;

(iv) fire;

(v) library;

(vi) parks and recreation;

(vii) transit; and

(viii) development-related studies.

Application of By-law - Rules:

(5) For the purpose of complying with section 6 of the Act, rules have been developed and are provided for in this by-law as follows:

(a) the rules for determining if a development charge is payable in any particular case and for determining the amount of the charge shall be in accordance with sections 7 through 35 of this by-law;

(b) the rules for determining the exemptions shall be in accordance with sections 11 through 14 of this by-law;

(c) the rules for determining the indexing of development charges shall be in accordance with section 27 of this by-law;

(d) the rules for determining the phasing in of development charges shall be in accordance with sections 32 and 33 of this by-law;

(e) the rules respecting the redevelopment of land shall be in accordance with section 16 of this by-law;

(f) the area to which this by-law applies shall be the area described in section 7 of this by-law.

(6) Development charges shall be payable in the amounts set out and phased in accordance with Sections 32 and 33 and Schedule A , where the lands are located in the area described in section 7 and the development of the lands requires any of the approvals set out in section 9.

Areas to which By-law applies:

(7) This by-law applies to all lands in the geographic area of the City whether or not the land or use is exempt from taxation under section 3 of the Assessment Act.

(8) This by-law shall not apply to lands that are owned by and used for the purposes of:

(a) the City or a local board thereof; and

(b) a board of education.

Approvals for Development:

(9) Development charges shall be imposed on all lands, buildings or structures that are developed for residential development if the development requires:

(a) the passing of a zoning by-law or of an amendment to a zoning by-law under section 34 of the Planning Act;

(b) approval of a minor variance under section 45 of the Planning Act;

(c) a conveyance of land to which a by-law passed under subsection 50(7) of the Planning Act applies;

(d) the approval of a plan of subdivision under section 51 of the Planning Act;

(e) a consent under section 53 of the Planning Act; and

(f) the issuing of a permit under the Building Code Act in relation to a building or structure.

(10) No more than one development charge for each service designated in section 4 shall be imposed upon any lands, buildings or structures to which this by-law applies even though two or more of the actions described in section 9 are required before the lands, buildings or structures can be developed.

Exemptions:

Exemptions for Intensification of Housing:

(11) This by-law does not apply with respect to the creation of

(a) an enlargement to an existing dwelling unit;

(b) one or two additional dwelling units in an existing single detached dwelling or semi-detached dwelling;

(c) one additional dwelling unit in any other existing residential building; or

(d) one additional dwelling unit in a new single detached dwelling or semi-detached dwelling.

(12) Notwithstanding section 11, development charges shall be imposed if the total gross floor area of the additional one or two units exceeds the gross floor area of the existing single detached dwelling unit.

(13) Notwithstanding section 11, development charges shall be imposed if the additional unit in an existing dwelling unit has a gross floor area greater than;

(a) in the case of a semi-detached or row dwelling, the gross floor area of the existing dwelling unit; and

(b) in the case of any other residential building, the gross floor area of the smallest dwelling unit contained in the residential building.

Other Exemptions:

(14) Notwithstanding the provisions of this by-law, development charges shall not be imposed with respect to:

(a) development creating or adding an accessory use or accessory structure not exceeding 10 square metres of gross floor area;

(b) a public hospital receiving aid under the Public Hospitals Act, colleges and universities established pursuant to the Ministry of Colleges & Universities Act and used for the purposes set out in the respective legislation;

(c) dwelling rooms located within a building or structure but does not include apartment units, bachelor units or dwelling units;

(d) lands, buildings or structures which are the subject of an agreement entered into by a former Municipality which agreement in words expressly exempted the lands, buildings or structures from development charges;

(e) lands, buildings or structures used or to be used for a place of worship or for the purposes of a cemetery or burial ground; and

(f) non-profit housing.

Amount of Charge:

Residential:

(15) The development charges described in Schedule A to this by-law shall be imposed on residential uses of lands, buildings or structures, including a dwelling unit accessory to a non-residential use and, in the case of a mixed use building or structure, on the residential uses in the mixed use building or structure, according to the type of residential unit, and calculated with respect to each of the services according to the percentage of charge by service set out in Schedule B to this by-law.

Redevelopment:

(16) Notwithstanding any other provision of this by-law, where, as a result of the redevelopment of land, a demolition permit has been issued within the thirty-six months previous to the submission of a complete building permit application with respect to the whole or a part of a building or structure existing on the same land, or a building or structure is to be converted from one principal use to another principal use on the same land, the development charges otherwise payable with respect to such redevelopment shall be reduced by the following amounts:

(a) in the case of a residential building or structure, or the residential uses in a mixed-use building or structure, an amount calculated by multiplying the applicable development charge under section 15 of this by-law by the number, according to the type of dwelling units that have been or will be demolished or converted to another principal use; and

(b) in the case of a non-residential building or structure or the non-residential uses in a mixed-use building or structure, the amount of two dollars and twenty-seven cents ($2.27) multiplied by the gross chargeable area that has been or will be demolished or converted to a residential use;

provided that such amounts shall not exceed, in total, the amount of the development charges otherwise payable with respect to the redevelopment.

Calculation and Payment of Development Charges:

(17) (a) Development charges applicable to residential development shall be calculated, payable and collected as of the date a building permit is issued in respect of the building or structure for the use to which the development charge applies, unless the development charge is to be paid at a different time pursuant to sections 19 or 20 herein or pursuant to an agreement entered into between the City and the owner under subsection 27(1) of the Act.

(b) Notwithstanding the provisions of this by-law, where a complete building permit application has been received by the Chief Building Official prior to September 1, 2001, the development charges applicable to residential development shall be calculated as of the date of the complete building permit application and shall be payable and collected as of the date a building permit is issued in respect of the building or structure for the use to which the development charge applies.

(18) Notwithstanding section 10, if two or more of the actions described in section 9 occur at different times, additional development charges shall be imposed in respect of any increased or additional dwelling units permitted by that action.

(19) Notwithstanding section 17, Council may enter into an agreement with any person who is required to pay a development charge providing for all or any part of the development charge to be paid before or after it would otherwise be payable.

(20) (a) Notwithstanding section 17, the development charge with respect to water works, sanitary sewerage and roads to be calculated in accordance with the percentage by service set out in Schedule B, shall be payable, with respect to an approval of a plan of subdivision pursuant to section 51 or a consent pursuant to section 53 of the Planning Act, immediately upon the parties entering into a subdivision agreement or a consent agreement;

(b) The outstanding balance of the development charge applicable to residential development with respect to a plan of subdivision or a consent application as the case may be, shall be calculated, payable and collected at the rate in effect on the date a building permit is issued in respect of the building or structure for the use to which the development charge applies.

(c) Where pursuant to an agreement entered into by a former Municipality which required payments pursuant to a by-law of the former Municipality enacted pursuant to the Development Charges Act, R.S.O. 1990, Ch. D9, unless the agreement provides otherwise, any payment of the development charge pursuant to the agreement shall be a pro rata credit against the outstanding balance of the development charge applicable to residential development which shall be calculated on a pro rata basis, payable and collected as of the date a building permit is issued in respect of the building or structure for the use to which the development charge applies provided that the amount of any such credit shall not exceed, in total, the amount of the development charge otherwise payable.

(d) Where pursuant to an agreement entered into by a former Municipality which required the provision of work pursuant to the Development Charges Act, R.S.O. 1990, Ch. D, relating to a service set out in section 4, unless the agreement provides otherwise, the provision of services pursuant to the agreement shall be a pro rata credit equal to the reasonable cost to the owner of providing the work or service, against the balance of the development charge applicable to residential development which shall be calculated on a pro rata basis, payable and collected as of the date a building permit is issued in respect of the building or structure for the use to which the development charge applies provided that the amount of any such credit shall not exceed the total amount of the development charge payable with respect to that service applicable to that development and calculated in accordance with the percentages set out in Schedule B.

(21) Where a development charge or any part of it remains unpaid after it is payable, the amount unpaid shall be added to the tax roll and shall be collected in the same manner as taxes.

(22) For the purpose of the calculation and collection of development charges pursuant to this by-law, where the provisions of this by-law conflict with or differ from the provisions of zoning by-laws of the former Municipalities, the provisions of this by-law shall be applied except that the definition of "grade" as defined in section 1(r) shall prevail.

Payment by Services:

(23) Notwithstanding the provisions of this by-law, Council may, by written agreement, provide a credit to an owner against all or part of the development charge payable in respect of a particular development by the provision of work that relates to one or more of the services referred to in section 4 , provided such work or services are at a standard that is equal to but not greater than the standard for the equivalent service for which a development charge is payable hereunder. Such agreement shall provide for a credit equal to the reasonable cost to the owner of providing the work or service, provided that the credit shall not exceed the total amount of the development charge payable with respect to that service and calculated in accordance with Schedule B applicable to that development.

(24) If the City and the owner cannot agree as to the reasonable cost of doing the work under sections 20d) and 23, the dispute shall be referred to the appropriate City Commissioner having operational responsibility for the service being provided.

(25) Nothing in this by-law prevents Council from requiring, as a condition of any approval given under the Planning Act that the owner, at the owner's expense, install such local services and local connections as Council may require and are related to the development.

Front Ending Agreements:

(26) Council may enter into front ending agreements with an owner or owners of land in accordance with section 44 of the Act.

Indexing:

(27) The development charge set out in Schedule A shall be adjusted by the City Treasurer without amendment to this by-law annually on September 1, commencing on September 1, 2002, in accordance with the most recent annual change in the Statistics Canada Quarterly Construction Price Statistics, Catalogue Number 62-007. For greater certainty, Catalogue 62-007-XPB should be referred to. With respect to the new housing price indice, Table 4.1 (Toronto-House only) shall be used and with resect to apartment construction, Table 5.1 (Toronto) shall be used.

Schedules:

(28) The following schedules to this by-law form an integral part thereof:

Schedule A - Residential Development Charges and Phase In Provisions

Schedule B - Residential Development Charge Expressed as a Percentage of Charge by Service

Headings for Reference Only:

(29) The headings inserted in this by-law are for convenience of reference only and shall not affect the construction or interpretation of this by-law.

Severability:

(30) If, for any reason, any provision, section, subsection or paragraph of this by-law is held to be invalid, it is hereby declared to be the intention of Council that all the remainder of this by-law shall continue in full force and effect until repealed, re-enacted or amended, in whole or in part or dealt with in any other way.

Date By-law in Force, Phasing of By-law and Term of By-law:

(31) This by-law shall come into force on September 1, 1999.

(32) The development charge calculated, payable and collected pursuant to this by-law shall be phased in accordance with Schedule A.

(33) Notwithstanding the provisions of this by-law, where a complete building permit application has been submitted to the Chief Building Official prior to March 1, 2000, the development charge calculated, payable and collected shall be the lesser of:

(i) the charge calculated, payable and collected pursuant to this by-law; or

(ii) the charge otherwise calculated, payable and collected pursuant to By-laws 1995-164 and 1995-165 of the former City of Etobicoke, By-laws 31597 and 31598 of the former City of North York and By-law 141-97 of the former Municipality of Metropolitan Toronto, By-laws 24630 and 24646 of the former City of Scarborough or the sewage impost by-law as provided for under the former City of Toronto Municipal Code Chapter 292, Article II as the case may be and as may have been amended.

(34) This by-law shall continue in full force and effect for a term not to exceed five (5) years from the date of its enactment, unless it is repealed at an earlier date.

Additional Development Charges:

(35) Additional Development Charges may be imposed pursuant to other by-laws.

Enacted And Passed this day of July, 1999

Mayor City Clerk

Schedule ''A''

City of Toronto

Residential Development Charges + Phase in Provisions

Residential Development Charge Per Dwelling Unit

Sept 01, 1999 Sept 01, 2000 After

Former Municipality/ Category - Aug 31, 2000 - Aug 31, 2001 Sept 01, 2001

Single and Semi-Detached

East York 1,304 2,608 3,912

Etobicoke - City Wide 3,160 3,536 3,912

Etobicoke - Motel Strip 3,581 3,747 3,912

North York - City Wide 3,912 3,912 3,912

North York - City Centre 3,912 3,912 3,912

North York - Sheppard Subway Corridor 3,912 3,912 3,912

Scarborough 3,912 3,912 3,912

Toronto 1,304 2,608 3,912

York 1,304 2,608 3,912

Sub-Total

Other Multiples

East York 1,057 2,115 3,172

Etobicoke - City Wide 2,681 2,926 3,172

Etobicoke - Motel Strip 3,042 3,107 3,172

North York - City Wide 3,172 3,172 3,172

North York - City Centre 3,172 3,172 3,172

North York - Sheppard Subway Corridor 3,172 3,172 3,172

Scarborough 3,172 3,172 3,172

Toronto 1,617 2,395 3,172

York 1,057 2,115 3,172

Apartment 2 Bdrm & Larger

East York 881 1,763 2,644

Etobicoke - City Wide 2,221 2,433 2,644

Etobicoke - Motel Strip 2,523 2,583 2,644

North York - City Wide 2,513 2,579 2,644

North York - City Centre 2,644 2,644 2,644

North York - Sheppard Subway Corridor 2,644 2,644 2,644

Scarborough 2,644 2,644 2,644

Toronto 1,348 1,996 2,644

York 881 1,763 2,644

Apartment 1 Bdrm & Bachelor

East York 564 1,128 1,692

Etobicoke - City Wide 1,579 1,636 1,692

Etobicoke - Motel Strip 1,692 1,692 1.692

North York - City Wide 1,692 1,692 1,692

North York - City Centre 1,692 1,692 1,692

North York - Sheppard Subway Corridor 1,692 1,692 1,692

Scarborough 1,692 1,692 1,692

Toronto 914 1,303 1,692

York 564 1,128 1,692

Note: Charges to be Indexed in Accordance With By-Law

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Schedule "B"

Residential Development Charge Expressed

As A Percentage of Charge by Service

(A List of Appendices A to E appended to the foregoing by-law, was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk).

The Policy and Finance Committee also submits the following report (July 12, 1999) from the Commissioner of Urban Planning and Development Services:

Purpose:

To respond to your Committee's request for a further report respecting Section 37 of the Planning Act in the context of development charges.

Source of Funds:

Not applicable.

Recommendation:

That the Acting Commissioner of Urban Planning and Development Services expedite the review of the future use of Section 37 of the Planning Act, and such review include consultation with the Urban Development Institute, the Canadian Institute of Public Real Estate Companies, and the Greater Toronto Home Builders Association, as well as other interested stakeholders, and report back to the Planning and Transportation Committee.

Executive Summary:

Council has a broad responsibility to provide social stability, a high quality of life and a good environment in order to sustain economic growth. This is not a simple goal which can be achieved over night with simple solutions. A community as diverse as the new City of Toronto must equip itself with as many tools as possible to address the complicated issues confronting the City as it strives for economic growth, but the list of available planning tools is short.

Council is considering the implementation of development charges as a city-wide, highly structured tool to address growth-related demands placed on it by new development. As Development Charges have a targeted purpose, Council must find other means, short of raising taxes, to address and finance existing service deficiencies and other municipal objectives. The only significant planning tool available to the City is the ability to secure facilities and financial contributions pursuant to Section 37 of the Planning Act.

Section 37 is a separate tool, distinct from development charges in that it relates only to securing public benefits in exchange for increases in height and/or density negotiated with developers as part of the planning approval process. Section 37 is a tool with few legislated requirements and which can be targeted by Council to address local and city wide planning objectives. Development charges are regulated by the Province to only be used in relation to new demands for services arising from new growth. It is important to keep in mind some key facts about Section 37:

(i) has been available since 1983 to secure public benefits in exchange for increases in height and/or density;

(ii) has been used in former Metro municipalities in limited manner e.g. only 2.5 percent of 1997/98 development applications in former City of Toronto and North York involved Section 37;

(iii) is the only instrument available to secure affordable housing ($19 million and land for an estimated 6000 social housing units secured in former City of Toronto); and

(iv) is a key planning tool which helps to achieve a wide range of other community benefits e.g. daycare facilities, Hockey Hall of Fame, Design Exchange, heritage preservation, parks.

There are common interests and areas of agreement between the City and the development industry about the use of Section 37 and development charges. These include: the prevention of duplication of charges for the same specific services and the simplification and clarification of policy to increase certainty by clearly setting out when the tool is to be used, what public benefits it can be used for, the financial impact attached to the provision of the public benefits, and how accountability will be assured. Staff is committed to working with the development industry and other stakeholders in formulating the new Section 37 policies quickly.

This report presents a series of general principles which will form the basis of future discussion around Official Plan policies and implementation guidelines. These principles respond to the concerns with Section 37 which have been raised during the consideration of the development charges matter.

Background:

In a report dated June 11, 1999, to the Policy and Finance Committee meeting of June 24, 1999, the Commissioner of Urban Planning and Development Services reported on a number of matters including:

(a) the differences between Development Charges and Section 37 of the Planning Act;

(b) the past implementation of Section 37;

(c) the future proposed relationship of Section 37 to Development Charges;

(d) preliminary principles of Official Plan policies regarding Section 37 agreements; and

(e) the use of Section 37 prior to the new Official Plan provisions coming into effect.

At its meeting of June 24, 1999, your Committee requested that the Commissioner of Urban Planning and Development Services report on the following:

(a) in consultation with other City officials, on ways of simplifying and clarifying the application of Section 37 Agreements;

(b) 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);

(c) 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

(d) 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.

The purpose of this report is to respond to these specific requests in the context of the information provided in the June 11, 1999 report referenced above.

Comments:

(1) Introduction:

From the June 24, 1999, requests of the Policy and Finance Committee noted above and subsequent discussions held with representatives of the development community, the concerns which are most apparent are: that Section 37 contributions would provide or pay for services specifically funded through development charges (i.e. duplication of charges); that the process requires simplification and clarification; and that the development industry requires more certainty about the City's expectations.

This report presents general principles which will form the basis of future discussion with the development industry and other stakeholders around Official Plan policies and implementation guidelines, including interim guidelines which can be employed during the transition period between the existing regulatory environment and the new Official Plan. These principles respond to the concerns with Section 37 which have been raised during the consideration of the development charges matter.

(2) Funding Services And Facilities Through Development Charges And Section 37:

(2.1) Development Charges:

Development charges must be determined in a very structured manner in accordance with a formula set out in the Development Charges Act and the accompanying Regulations. The general intent of development charges is to ensure that new growth largely pays for itself and that the capital costs of services attributable to new development are not borne by the existing community. The types of services for which a development charge may be imposed or not imposed are also set out in the legislation. The services which are proposed to be funded through the draft Development Charge By-law are listed in Table 1 attached to this report.

Examples of services not eligible to be included in the calculation of, or to receive funding from, development charges, are:

heritage preservation, cultural or entertainment facilities (except libraries), park land acquisition, public hospitals, waste management, municipal administration headquarters, and tourism facilities.

Examples of services which could be funded through development charges, but which for various reasons are not proposed to be funded through the proposed Development Charge By-law are:

GO Transit facilities, daycare, electrical power service facilities, and social housing.

The development charge calculation cannot include, and development charge funds cannot be directed to, the capital costs of any new or upgraded services provided to the existing community or the capital costs of any services provided for new growth at a level of service above the average level across the municipality for the 10 years preceding the background study.

(2.2) Section 37:

Unlike development charges, Section 37 is a planning tool with few legislated requirements for its use. It enables a municipality to secure the provision of city-wide, community-wide and/or local public benefits. Such public benefits are not restricted to new development only, nor to specified types of services. Appendix A contains some examples of the previous implementation of Section 37 in the City. The range of possible public benefits allows the furtherance of key municipal planning objectives, including a very significant one in today's context: the City's affordable housing strategy. Without Section 37, the City's affordable housing strategy would be severely hindered.

An important distinction between development charges and Section 37 is that Section 37 can be used to meet existing needs or deficiencies in a community, because its use is not restricted in legislation to facilities or services for new development. It is emphasized that City Council has few alternate means of funding services to satisfy an existing community need or deficiency other than through the use of Section 37, with the capital budget being the main alternative.

The June 11, 1999, report outlined the key aspects of the use of Section 37 including the legislative authority, the use of agreements to secure benefits and the principles embodied in the various planning instruments of the new City.

In summary, a fundamental principle in operationalizing the use of Section 37 in the context of development charges is that no duplication of charges should occur, meaning that the same specific service should not be paid for more than once by the development industry. Following this principle and based on the above discussion, it can thus be seen that Section 37 may be used to secure public benefits which:

(i) address service needs or deficiencies in the existing community;

(ii) are facilities, services or matters which cannot be, or have not been, funded by development charges; or

(iii) represent the municipal share of funding for facilities or services which are only partially funded through development charges.

(2.3) Comparison of Limitations of Development Charges and Section 37

Table 1, attached to this report, illustrates the facilities, services and matters which are proposed to be funded by development charges, and those which cannot be, or are not being, funded through the Development Charge By-law and for which it is proposed that Section 37 be used to secure them. If City Council should decide not to use Section 37, then a number of public benefits could not be secured, and the City's ability to achieve certain important objectives such as the affordable housing strategy would be seriously hindered.

(3) General Principles Governing Future Use of Section 37:

The use of Section 37 is a valuable planning tool, but its credibility rests on a rigorous and disciplined approach. Rules governing its use are required to be included within the Official Plan and in implementation guidelines adopted by Council. Without such rules, the tool will fall into disrepute and its effectiveness would spiral downward. The general Section 37 policies currently contained in the former City of Toronto Official Plan were developed in a different economic environment, and in an era of no development charges, for what is now the central core of the new City of Toronto. There is now a need to revisit the quantum in light of the new economic environment, in the context of city-wide development charges, and in light of the variations in the characteristics of development activity across the entire City. Clear, concise and simple rules would provide:

(i) clarity and certainty for the development industry and the public;

(ii) equity and fairness as between developers;

(iii) simplicity and ease of implementation; and

(iv) transparency and thus credibility.

Staff will fast-track the formulation of the guidelines for the city-wide use of Section 37 in consultation with the development industry and other stakeholders. Building on our experience to date, the following are the general principles which will form the basis of such discussions.

(3.1) When Section 37 is to be used:

(a) project must meet test of good planning, and in the context of a significant density increase, good planning includes a net community benefit;

(b) establish reasonable, fair minimum thresholds for development size and density increase for the use of Section 37 that make sense City-wide; and

(c) density increase to be generally approved by way of an Official Plan Amendment and rezoning (i.e. review how Section 37 would be applied for rezoning only).

(3.2) What public benefits are to be secured:

(a) clearly defined list of potential public benefits which does not overlap with specific services funded through development charges;

(b) clear rules regarding priorities and apportioning among City-wide, local off-site, and on-site public benefits;

(c) public benefits generally consist of capital facilities and funding for capital facilities.

(3.3) Value of public benefits:

(a) cost of public benefits should generally be a consistent percentage of the value of the increase in density; the percentage attributed to off-site benefits would be lower than the percentage attributed to on-site benefits; and

(b) clearly defined, fair and expedient procedures for determining value of density increases.

(3.4) Accountability for public benefits secured:

(a) regular (e.g. annual) reporting on status and disposition of public benefits secured; and

(b) reserve accounts will be created for cash contributions.

Other matters raised by the development industry, and which will be included in the discussions around the future use of Section 37, include the possibility of a financial cap on the level of the public benefits, and the re-naming of the contributions secured. Ultimately, it is intended that the requirements for Section 37 be clearly stated in the City's Official Plan, and the discussions will also cover whether the list of services for which Section 37 would be utilized should be included in the Official Plan policies.

(4) Response to Other Issues:

(4.1) Area-specific agreements respecting development charges:

The Commissioner of Urban Planning and Development Services was also requested to report on 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). There are numerous agreements in the former municipalities which include provisions for development charges and staff resources are not available to review all agreements entered into by the former municipalities.

With respect to the Port Union Village Area, Carma Developers Limited entered into a Subdivision Agreement with the former City of Scarborough dated June 22, 1995, which provided for certain matters including park development to be undertaken by the developer. The agreement provides a credit for the cost of the improvements undertaken by the developer against development charges to be paid, and in accordance with the requirements of the Act, the credit will continue to be honoured. The agreement does not, however, provide that the development charges collected must be expended in the Port Union Village Area. Council will determine the expenditure of development charge monies by determining the priority of the capital projects described in the background study based on its approval of the capital budget.

(4.2) Public art program:

The City's public art requirements have also been cited by the development industry as being another charge or levy on development. A public art program is currently operational in the former City of Toronto, and is implemented independently of development charges, parks contributions, and Section 37 public benefits. It is only related to Section 37 insofar as Section 37 agreements are sometimes used as the instrument to secure the public art obligation. The public art program is not implemented only in an official plan amendment or rezoning situation, but also in site plan applications where the minimum project size threshold (20,000 m2) is exceeded. Public art is not a charge or levy but a commitment from the developer to enhance the development by integrating public art.

Conclusions:

Section 37 is a key planning tool which helps to achieve a wide range of community benefits. The tool can be targeted by City Council to address local and city-wide planning objectives. In future, it will be implemented in conjunction with development charges in a coordinated manner. A rigorous and disciplined approach to the use of Section 37 will provide greater clarity and certainty, be fair to all parties, be simple to implement, and be transparent. Clear, concise and simple rules governing its use will provide credibility and accountability. There will be no duplication of charges through the coordinated implementation of development charges and Section 37. Whereas general principles governing the future implementation have been set out, more detailed Official Plan policies and implementation guidelines will be established in consultation with the development industry and other stakeholders.

Contact Name:

Peter Langdon, Metro Hall, Telephone: (416) 392-7617, Fax: (416) 397-4080;

E-mail: plangdon@toronto.ca

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Appendix A

Examples and Discussion of Section 37 Public Benefits

(a) Affordable housing:

Provision of affordable housing is an important City objective. City Council has already approved the use of Section 37 to secure contributions to the Capital Revolving Fund for Affordable Housing. Section 37 is also used to secure replacement rental housing in situations where demolition of existing rental housing is proposed under the new Official Plan provisions. A distinction will be made with respect to the "value" of the benefit that the City secures in the context of the replacement of rental housing. In securing such replacement housing, Council is simply maintaining an existing resource and meeting the Council objective of "no net loss" of the affordable stock. In the former City of Toronto, Section 37 has been used to secure land for an estimated 6000 social housing units and approximately $19 million in contributions for social housing. Council has recently approved the use of the remainder of this fund (approximately $10 million) to seed the Capital Revolving Fund for Affordable Housing.

(b) Heritage preservation:

Heritage preservation and restoration is another important City objective which can be furthered through use of Section 37. The Ontario Heritage Act is not as strong as many would like in its ability to preserve designated historical buildings, and can only deal with preservation as opposed to restoration. Section 37 can be used to secure both preservation and restoration, and can also deal with buildings of historical significance which are not designated under the Ontario Heritage Act. This public benefit is usually, but not always, an on-site benefit. Previous examples of developments where Section 37 has been used to secure heritage preservation and restoration include BCE Place (Hockey Hall of Fame) and the Gooderham and Worts mixed use development among many examples in the former City of Toronto, and the Lambton Tavern site in former York.

(c) Daycare facilities:

Daycare facilities have been secured in the former City of Toronto through Section 37 to the extent of 537 spaces, 329 of which have been constructed to date. The former Scarborough and North York have also used Section 36/37 to fund daycare facilities. Such facilities can be located either on-site or off-site. Previous examples of developments where Section 37 has been used to secure daycare facilities include: Canada Life, BCE Place, Eaton Centre, Waterpark Place, and Scotia Plaza.

(d) Parks and open space and related improvements:

Acquisition of land for parks and open spaces, and funding for improvements to parks and open spaces, have also been secured through the use of Section 37. Park land acquisition cannot be funded through development charges, so there is no conflict there. Acquisition of park or open space lands, or securing of funding for improvements thereto, through Section 37 is not a substitute for parks contributions under Section 42 (Parks Levy By-laws). Rather, it is a supplement to the use of Section 42 for those communities which have been recognized by City Council as being parks deficient or where a special capital project not listed in the development charge Background Study has been approved by City Council.

(e) Other cultural or institutional facilities or local improvements:

Section 37 may also be used to secure rare, unique opportunities for special cultural or institutional facilities which arise due to the peculiar characteristics and objectives of a development proposal. Examples are the Hockey Hall of Fame in BCE Place, and the Design Exchange. In addition, where City Council has recognized an existing community deficiency, or approved a special community project which is not on the list of capital projects in the development charge Background Study, directly related local improvements or funding therefor can be secured through Section 37.

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Table 1

Facilities, Services and Matters to be Funded Through Proposed Development Charge By-law and Provided or Funded Under Proposed Use of Section 37 of Planning Act

Development Charge By-law: (related to new growth only) For All Development Applications As Per Proposed Development Charge By-law

Use of Section 37 of the Planning Act: (related to new growth and/or existing community deficiencies) Only for Development Applications in Exchange for Increases in Height And/or Density

Fire facilities Roads and related costs Sanitary sewers Storm water management Water supply and water mains Library facilities and materials Parks improvements Community centres and arenas Transit Development related studies

Affordable housing - Capital Revolving Fund contributions - Replacement rental housing as a result of demolitions Heritage preservation and restoration Child care facilities Park land acquisition over and above Section 42 contributions Park/open space improvements for the existing community and over and above Section 42 contributions, where existing local deficiencies have been recognized by City Council Other cultural or institutional facilities or local improvements e.g. Hockey Hall of Fame, Design Exchange

The Policy and Finance Committee reports, for the information of Council, having also had before it during the consideration of the foregoing matter the following communications which were forwarded to all Members of Council with the agenda and supplementary agendas of the July 20, 1999, meeting of the Policy and Finance Committee and copies thereof are also on file in the office of the City Clerk:

(i) (June 22, 1999) from the Commissioner of Corporate Services and City Clerk, Corporation of the City of London, advising that the Municipal Council on June 21, 1999, adopted a resolution on the recommendation of the Development Charges Monitoring Committee, and in so doing requested the Provincial Government to establish a policy to require all government agencies, including Crown Corporations, to adhere to local planning and development regulations/legislation which adherence would include the payment of local development charges; and directed that a copy of the foregoing resolution be forwarded to all municipalities in Ontario that have a community college;

(ii) (July 5, 1999) from Ms. Mary L. Flynn-Guglietti, Goodman and Carr, Barristers and Solicitors, summarizing her submission made to the Policy and Finance Committee on June 24, 1999; and amongst other things, recommending that Council adopt the suggestions of the Commissioner of Economic Development, Culture and Tourism and vote to waive development charges on commercial/industrial properties;

(iii) (July 5, 1999) from Ms. Mary L. Flynn-Guglietti, Goodman and Carr, Barristers and Solicitors, advising that they are acting on behalf of Wittington Properties Limited and Diamante Development Corporation; that their client entered into a Section 37 Agreement with the City of Toronto on October 16, 1997; that no request for a building permit has been filed at this time and they do not anticipate receiving one prior to the deadlines as set out in the proposed Transition Rules of the new Development Charges By-law; that at the time their client entered into the Development Agreement, there were no development charges for the City of Toronto; that if their client had been made aware of the fact that there would be development charges for this development, they may not have agreed to the proposed payments as set out in the Development Agreement; and recommending that Council recognize that parties who entered into agreements prior to a development charge being implemented not now be forced to make an additional payment through the Development Charges By-law;

(iv) (July 9, 1999) from the President, North York Chamber of Commerce, expressing objection to the reintroduction of Development Charges on commercial properties that create employment; and, amongst other things, stating that the City should promote the reuse of commercial properties for employment use and remove development charges;

(v) (June 30, 1999) from Mr. Bill Palander, President, Toronto Real Estate Board, advising that the Toronto Real Estate Board believes that Development Charges have been a significant barrier to housing affordability and economic development for several years; that Development Charges are a way in which municipalities can require those who develop land to contribute to the capital costs necessary to service new developments; that this means joint responsibility and the fair sharing of the costs between new growth and the existing taxpayer; that any radical change in the City of Toronto will have an impact on development, investment and jobs; that the intent of the provincial reforms to the Act in 1997 was to reduce charges; that the real estate industry realizes that development charges are needed to pay for new growth services which is not in dispute; that they have a problem with the level of these charges; that the cost 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; and that those services which end up benefiting the entire community must be paid for by all residents as a matter of fairness;

(vi) (July 13, 1999) from Raymond H. Mikkola, Fraser Milner, registering a complaint by Telefirma (4000 VP) Inc., ("Telefirma"), the owner of 3215 Steeles Avenue and 4000 Victoria Park Avenue, in the City of Toronto, that the amount of the development charge imposed by the City in respect of the first phase of the Call-Net Centre development at the above property was incorrect or was based on incorrect data and that the amount credited to the owner (being nil) against development charges was incorrect; that Telefirma paid such development charges to the City on April 15th, 1999; that at the time of Telefirma's payment of the development charges, the City did not grant to Telefirma, or enter into an agreement with a view to granting Telefirma, credits against the road and Highway 404 ramp land conveyances and improvements which the City has required be undertaken by Telefirma; and that these conveyances constitute services under the Municipality's development charge by-law; therefore Telefirma is entitled to a credit equal to the reasonable cost of their installation and value of their conveyance;

(vii) (July 15, 1999) from the City Clerk advising that the Planning and Transportation Committee on July 12, 1999, received the transmittal letter (June 28, 1999) from the City Clerk on this matter, and the material attached thereto, for information;

(viii) (July 1, 1999) from Kris Menzies, MCIP, RPP, Vice President, Development, Bearpoint Group, representing 1285613 Ontario Limited, the residential land developer for 50 and 60 Oak Street; and expressing an objection to the proposed residential development charge as it relates to single and semi-detached units and other multiples as this increased charge shall adversely prejudice this development; and

(ix) (July 13, 1999) from the Commissioner of Economic Development, Culture and Tourism reviewing the expected impact of implementing harmonized residential development charges in the City of Toronto; and recommending that this report be received for information.

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The following persons appeared before the Policy and Finance Committee in connection with the foregoing matter:

- Mr. Steve Diamond, on behalf of the Urban Development Institute, the Greater Toronto Homebuilders Association and CIPREC, (Canadian Institute of Public Real Estate Companies);

- Councillor Jack Layton, Don River;

- Mr. Phil Giffin, Vice President and General Manager of Real Estate, Sun Life of Canada, and also representing the Toronto Board of Trade; and submitted a brief in regard thereto;

- Ms. Julie Di Lorenzo, representing Diamante Development;

- Mr. Thomas Kowal, Barrister Solicitor, North York Chamber of Commerce; and

- Mr. Rosario Marchese, M.P.P., Trinity-Spadina.

(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.)

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following joint report (June 14, 1999) from the Commissioner, Urban Planning and Development Services, the Chief Financial Officer and Treasurer and the City Solicitor:

Purpose:

To obtain Council approval of staff recommendations with respect to claims received for Section 14 credits pursuant to the Development Charges Act.

Funding Sources, Financial Implications and Impact Statement:

Not applicable

Recommendations:

It is recommended that:

(1) that Council endorse the recommended decisions presented in this report with respect to the section 14 credit applications;

(2) that the applicants for credits be advised in writing of Council's decision prior to September 1, 1999; and

(3) that 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.

Council Reference/Background/History:

The City is currently considering enacting a new development charge by-law. The new by-law will be City-wide in application and enacted pursuant to the new Development Charges Act which received Royal Assent on December 8, 1997. Regulations pursuant to the new Act set out a procedure with respect to credits given or required to be given under section 14 of the previous Development Charges Act. The regulations serve to preserve the entitlement of an owner to section 14 credits pursuant to the old Act for payments made pursuant to agreements entered into by the owner prior to the enactment of the new development charge by-law. The intention is that the owner should not be required to pay twice. For example, an owner may have previously paid for services pursuant to an agreement and those services are now included in the development charge by-law. The owner should not pay a second time for the same service pursuant to the development charge by-law but, should receive a credit for the payment made against any future development charges.

The regulations require applicants to apply for the credit by March 1, 1999, and the municipality is required to give written notice by September 1, 1999, whether it agrees to recognize the credit or refuses to recognize the credit. Where the City refuses to recognize the credit application, the applicant may appeal to the Ontario Municipal Board within 30 days of receiving notice of the City's refusal.

The City is in receipt of twenty-four credit applications submitted by the March 1, 1999, deadline. Staff from the Planning, Finance and Legal Departments reviewed the applications and reviewed the agreements on which the application for credit was based. The applications, together with staff's recommended decisions are set out below.

There are five applications for credits listed below where the agreement entered into by the former municipality with the owner specifically exempted the development from any future development charges. The City must recognize this contractual obligation. One application (West Hill Redevelopment Company Limited) should be exempted based on a decision made in 1988 by the Council of the former City of Scarborough which permitted owners to prepay their levies on development applications in return for an exemption from future development charges. This commitment should also be recognized. There are a number of applications where staff recommend that the credit request should be recognized in accordance with the terms of agreements previously entered into. The recognition of the credit will prevent a duplication of payments. It should be noted however, that the amount of the credit cannot exceed the total development charge which will otherwise be payable pursuant to the new by-law.

There are also a number of applications which staff recommend that the credit request not be recognized. In large part, these applications relate to developments which were the subject of agreements pursuant to section 37 of the Planning Act. Section 37 is applied only where an owner seeks an increase in the height and/or density otherwise permitted in the zoning by-law. The value of the public benefits contribution is commonly proportional to the value of the increased density. In effect, there is, as is required by the legislation, an exchange between the developer and the City, of extra height or density for the specified facilities or benefits. Section 37 matters are negotiated as a package of benefits in return for the increased height or density. Development which complies with the Zoning By-law does not trigger a section 37 contribution. Any cash contributions received through section 37 for a particular project are deducted from the capital cost of that project in the Background Study in accordance with the provisions of the Act. Therefore, a service or facility project completely funded or provided through section 37 and other grants, subsidies or contributions would not be included in the project list on which the development charge calculation was based or, if only partly funded by a contribution through section 37, would be discounted in the calculation of the development charge to the extent of that financial contribution.

The credit applications are summarized as follows:

Developer/Owner	Location	Type and Date of Agreement	Request from	Recommended Decision
Concord Adex Developments Corp.	Railway Lands Central and West, Toronto	Development Levy Agreement dated October 21, 1994	Letter from Aird & Berlis dated February 26, 1999 solicitors for Concord Adex Developments Corp.	Exemption from Development Charges should be recognized in accordance with Article 4 of the Agreement
West Hill Redevelopment Company Limited	2240 Markham Road, Toronto (formerly Scarborough)	Servicing Agreement dated March 1, 1989	Letter from Lebovic Enterprises dated February 25, 1999	Levies were prepaid as authorized by Council of former City of Scarborough in 1988 Exemption from Development Charges should be recognized
Emm Financial Corp.	Queen Street East and Woodbine Avenue, Toronto	Agreement pursuant to Section 37 of the Planning Act dated May 22, 1996	Letter from Metrus Development Inc. dated February 16, 1999	Exemption from Development Charges should be recognized in accordance with Clause 5.9 of the Agreement
Canada Lands Company CLC Limited	Railway Lands Central described as Blocks 18C and 19 and parts of Blocks 20A and 20B	Development Levy Agreement dated October 21, 1994	Letter from Fraser Milner dated February 26, 1999, solicitors for Canada Lands Company CLC Limited	Exemption from Development Charge should be recognized in accordance with Article 4 of the Agreement
The Molson Companies Limited	640 Fleet Street, Toronto	Agreement pursuant to Section 37 of the Planning Act dated June 19, 1996	Letter from Goodman and Carr dated March 1, 1999, solicitors for Molson Companies Limited	Exemption from Development Charges should be recognized in accordance with clause 15.12 of the Agreement
CN Tower Limited (Owner) and TrizecHahn Office Properties Ltd. (Lessee)	CN Tower Precinct Lands	CN Tower Precinct Agreement dated September 22, 1997	Letter from Goodman Phillips & Vineberg dated September 22, 1997, solicitors for TrizecHahn Office Properties Ltd.	Exemption from Development Charges should be recognized in accordance with Clause 8.6 of the Agreement
1090011 Ontario Limited	1901 Eglinton Avenue East, Toronto (formerly Scarborough)	TSI Charge Agreement dated September 11, 1997	Letter from Lebovic Enterprises dated February 25, 1999	TSI will be rebated to owner in accordance with terms of the agreement as other properties develop & pay their proportionate share of the TSI. This should not be recognized as a credit against development charges
Canadian Pacific Properties Inc. and Southtown Inc.	Railway Lands East, Toronto	Precinct Agreements dated August 28, 1992, August 31, 1994 and November 26, 1996	Letter from McCarthy, Tetrault dated February 17, 1999, solicitors for Canadian Pacific Properties Inc.	Credit should be recognized in accordance with Clause 7.1 of the Agreement
Canada Post Corporation	45 Bay Street, Toronto	Precinct Agreement dated November 29, 1996	Letter form Fraser Milner dated February 26, 1999, solicitors for Canada Post Corporation	Credit should be recognized in accordance with Article 5 of the Agreement
Canadian Pacific Properties Inc. And Omers Realty Corporation	4800 Yonge Street, Toronto (formerly North York)	Development Agreement dated September 30, 1988	Letter from McCarthy Tetrault dated February 17, 1999, solicitors for Canadian Pacific Properties Inc. and Omers Realty Corporation	Credit should be recognized in accordance with terms of the agreement
West Hill Redevelopment Company Limited	440 Passmore Avenue, Toronto (formerly Scarborough)	Development Agreement dated February 4, 1988	Letter from Lebovic Enterprises dated February 26, 1999	Credit should be recognized for sewer impost levies paid pursuant to the agreement
Aspen Ridge Homes (Markham Gardens) Inc.	Sheppard Avenue East and Progress Avenue, Toronto (formerly Scarborough)	Subdivision Agreement dated June 19, 1995	Letter from Metrus Development Inc. dated February 16, 1999	Credit should be recognized in accordance with clause 16 of Sch B of the Agreement
The Torchin Group	southeast corner of Finch Avenue and Middlefield, Toronto (formerly Scarborough)	Subdivision Agreement dated July 10, 1990	Letter from Aird & Berlis dated February 25, 1999, solicitors for The Torchin Group	Credit should be recognized for sewer impost levies paid pursuant to the agreement
Sun Life Assurance Company of Canada	180 and 188 University Avenue and 192 Adelaide Street West, Toronto	Collateral Agreement dated April 12, 1990	Letter from Goodman and Carr dated February 25, 1999, solicitors for Sun Life Assurance Company of Canada	Credit should not be recognized
City Front Developments Inc.	400 Front Street West, Toronto	Agreement pursuant to Section 37 of the Planning Act dated September 3, 1998	Letter from Goodman and Carr dated February 26, 1999, solicitors for City Front Developments Inc.	Credit should not be recognized
Wittington Properties Limited and Diamante Development Corporation	5, 21 and 29 Soho Street, 1 Phoebe Street, 12, 20, 32 and 34 Beverley Street, Toronto	Agreement pursuant to Section 37 of the Planning Act dated October 16, 1997	Letter from Goodman and Carr dated February 26, 1999, solicitors for Wittington Properties Limited	Credit should not be recognized
Inge Schumacher and Anita Bentzien-Lichius	220 Bay Street, Toronto	Agreement pursuant to Section 37 of the Planning Act dated June 26, 1991	Letter from Goodman and Carr dated March 1, 1999, solicitors for Inge Schumacher and Anita Bentzien-Lichius	Credit application should not be recognized
1209011 Ontario Inc. and Woodcliffe Corporation	Yonge-Summerhill, Toronto	Subdivision Agreement dated February 12, 1996	Letter from Thornville Developments Limited dated March 1, 1999	Credit application should not be recognized
TrizecHahn Office Properties Ltd.	Bay-Adelaide Centre Development	Agreement pursuant to Section 37 of the Planning dated October 21, 1988	Letter from Goodman Phillips & Vineberg dated March 1, 1999, solicitors for TrizecHahn Office Properties Ltd.	Credit application should not be recognized
The Cadillac Fairview Corporation Limited	Eaton Centre development	Development Agreement dated September 10, 1982	Letter from Goodman Phillips & Vineberg dated March 1, 1999, solicitors for The Cadillac Fairview Corporation Ltd.	Credit application should not be recognized
The Cadillac Fairview Corporation Limited	CBC Broadcast Centre Block	Agreement pursuant to Section 37 of the Planning Act dated August 12, 1988	Letter from Goodman Phillips & Vineberg dated March 1, 1999, solicitors for The Cadillac Fairview Corporation Ltd.	Credit application should not be recognized
Wyndham Court Canada Inc.	Gooderham & Worts site	Agreement pursuant to Section 37 of the Planning Act dated December 29, 1995	Letter from Goodman Phillips & Vineberg dated March 1, 1999, solicitors for Wyndham Court Canada Inc.	Credit application should not be recognized
Avro Quay Limited	Marine Terminal 27	Agreement pursuant to Section 37 of the Planning Act dated April, 1998	Letter from Goodman Phillips & Vineberg dated March 1, 1999, solicitors for Avro Quay Limited	Credit application should not be recognized
Wittington Properties Limited	Yonge Street and Highway 401	No Agreement Signed	Letter from Goodman Phillips & Vineberg dated March 1, 1999, solicitors for Whittington Properties Limited	Credit application is premature

Conclusions:

Staff are satisfied that the recommended decisions are appropriate and should be approved by Council. The applicant has the opportunity to appeal Council's refusal to recognize a credit to the Ontario Municipal Board.

Contact Names:

Anna Kinastowski, Director Barbara Leonhardt, Director Joe Farag, Director Planning & Development Law Policy & Research Development, Policy & Research

Legal Services Division City Planning Division Finance Department

Tel: (416) 392-0080 Tel: (416) 392-8148 Tel: (416) 392-8108

Fax: (416) 397-4420 Fax: (416) 392-3821 Fax: (416) 397-0835)

(City Council also had before it, during consideration of the foregoing Clause, the following communications:

(i) (July 22, 1999) from Mr. Dalton C. Shipway, requesting that Council include the stormwater quality control requirements and cash-in-lieu options in the proposed City-wide Development Charges By-law;

(ii) (July 24, 1999) from Mr. Vance Latchford, requesting that a more workable solution be considered with respect to the proposed residential Development Charges By-law; and

(iii) (July 22, 1999) from Mr. John L. Hopkins, advising that the City needs to sustain stormwater quality control requirements, and identifying a method of calculating the cost in lieu of work to provide a storm water cleansing pool.)

(Mayor Lastman, at the meeting of Council on July 27, 28, 29 and 30, 1999, declared his interest in the foregoing Clause, 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.)

2

Ontario Hydro Corridor Lands South and North

of Highway 401 Wards 14 and 15

(Scarborough Wexford and Scarborough City Centre)

(City Council on July 27, 28, 29 and 30, 1999,amended this Clause by striking out the recommendations of the Policy and Finance Committee and inserting in lieu thereof the following:

"It is recommended that $0.7 million be taken from the Parkland Reserve Fund; and $2.3 million be taken from the Civic Centre Expansion Fund, for a total amount of $3.0 million for the acquisition of parkland in the Hydro Corridor in the following communities on an equal funding allocation basis:

- North Bridlewood;

- Wishing Well; and

- Terraview - Willowfield;

on the condition that approximately 12.5 acres of Priority 1 lands be acquired north of Highway 401 in the South Bridlewood Community, for stormwater management purposes, as previously approved by City Council.")

The Policy and Finance Committee:

(1) recommends the adoption of the Recommendations of the Policy and Finance Committee embodied in the confidential communication (July 21, 1999) from the City Clerk respecting Ontario Hydro lands North and South of Highway No. 401; and

(2) reports having requested the Scarborough Community Councillors to meet prior to the meeting of City Council scheduled to be held on July 27, 1999, to give consideration to the issue of the Ontario Hydro Corridor Lands, and forward recommendations thereon directly to Council for its meeting scheduled to be held on July 27, 1999.

The Policy and Finance Committee submits the following communication (June 1, 1999) from the City Clerk, Scarborough Community Council:

Recommendation:

The Scarborough Community Council directed that the Strategic Policies and Priorities Committee be advised that the Scarborough Community Council reaffirms it 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.

Recorded Vote:

Upon the question of the adoption of the foregoing motion by Councillor Tzekas:

Yeas: Councillors Altobello, Ashton, Balkissoon, Berardinetti, Duguid, Kelly, Mahood,

Tzekas -8

Nays: Nil

Decided in the affirmative by a unanimous vote of the members of Community Council present and voting.

Background:

The Scarborough Community Council, at its meeting on May 26, 1999, had before it:

(1) a communication (May 5, 1999) from the City Clerk, advising that the Strategic Policies and Priorities Committee, on May 4, 1999:

(a) referred the Recommendations of the Budget Committee embodied in the communication (April 30, 1999) from the City Clerk, to the Scarborough Community Council for review and recommendations thereon;

(b) requested the Commissioner of Works and Emergency Services to submit a report to the next meeting of the Scarborough Community Council on how this acquisition fits in with the City's stated objective for pedestrian/bicycle paths in Scarborough, and on whether the funds being requested could be better spent in Scarborough to achieve that objective;

(c) requested the Commissioner of Economic Development, Culture and Tourism, in consultation with the Chief Financial Officer and Treasurer, to submit a report to the aforementioned meeting of the Scarborough Community Council, on the original intent of the Beare Road landfill reserve; and

(2) a communication (May 17, 1999) from Councillor Cho requesting that Scarborough Community Council defer this matter to the meeting scheduled to be held on June 22, 1999, at 8:00 p.m. in order that deputants may be heard at that time.

The Scarborough Community Council reports having:

(1) approved Councillor Cho's request and deferred this issue for consideration at 8:00 p.m. on June 22, 1999; and

(2) directed that:

(a) the Budget Committee recommendations;

(b) the reports requested from the Commissioner of Works and Emergency Services and the Commissioner of Economic Development, Culture and Tourism; and

(c) the following motion by Councillor Kelly, be considered at that time:

"That the Scarborough Community Council recommend that an amount of money be committed to purchase park lands north of Highway 401, equivalent to the amount expended in the Terraview-Willowfield community, funding for such purchase to be taken from the Scarborough Parks Reserve Fund."

--------

(Communication dated May 5, 1999, from the City Clerk

addressed to the Scarborough Community Council)

The Strategic Policies and Priorities Committee on May 4, 1999:

(1) referred the Recommendations of the Budget Committee embodied in the communication (April 30, 1999) from the City Clerk, to the Scarborough Community Council for review and recommendations thereon;

(2) requested the Commissioner of Works and Emergency Services to submit a report to the next meeting of the Scarborough Community Council on how this acquisition fits in with the City's stated objective for pedestrian/bicycle paths in Scarborough, and on whether the funds being requested could be better spent in Scarborough to achieve that objective; and

(3) requested the Commissioner of Economic Development Culture and Tourism, in consultation with the Chief Financial Officer and Treasurer, to submit a report to the aforementioned meeting of the Scarborough Community Council, on the original intent of the Beare Road landfill reserve.

Background:

The Strategic Policies and Priorities Committee at its meeting on May 4, 1999, had before it a communication (April 30, 1999) from the City Clerk, advising that the Budget Committee on April 30, 1999, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the recommendations of the Corporate Services Committee embodied in the communication (April 22, 1999) from the City Clerk, viz:

(1) the additional lands required to increase the developers 0.3 acres to one full acre be purchased by the City from the developer, to be funded from the Beare Road Trust Fund; and

(2) consideration be given to fund portions of the Priority 2 and 3 lands north of Highway No. 401 in the three existing communities of Wishing Well and North and South Bridlewood; and that this be funded on a proportional basis from the Beare Road Trust Fund.

subject to adding the following:

"that the costs associated with the purchase of the lands be no more than the balance in the Beare Road Trust Fund."

--------

(Communication dated April 30, 1999, addressed to the

Strategic Policies and Priorities Committee

from the City Clerk)

Recommendations:

The Budget Committee on April 30, 1999, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the recommendations of the Corporate Services Committee embodied in the report (April 22, 1999) from the City Clerk, subject to adding the following:

"that the costs associated with the purchase of the lands be no more than the balance in the Beare Road Trust Fund."

Background:

The Budget Committee had before it a report (April 22, 1999) from the City Clerk advising that the Corporate Services Committee on April 19, 1999, recommended to the Budget Committee and Council, that:

(1) the additional lands required to increase the developers 0.3 acres to one full acre be purchased by the City from the developer, to be funded from the Beare Road Trust Fund; and

(2) consideration be given to fund portions of the Priority 2 and 3 lands north of Highway No. 401 in the three existing communities of Wishing Well and North and South Bridlewood; and that this be funded on a proportional basis from the Beare Road Trust Fund.

--------

(Communication dated April 22, 1999, addressed to the

Budget Committee from the City Clerk)

Recommendations:

The Corporate Services Committee on April 19, 1999, recommended to the Budget Committee, and Council, that:

(1) the additional lands required to increase the developers 0.3 acres to one full acre be purchased by the City from the developer, to be funded from the Beare Road Trust Fund; and

(2) consideration be given to fund portions of the Priority 2 and 3 lands north of Highway No. 401 in the three existing communities of Wishing Well and North and South Bridlewood; and that this be funded on a proportional basis from the Beare Road Trust Fund.

Background:

The Corporate Services Committee on April 19, 1999, had before it the following:

(i) report (March 22, 1999) from the Commissioner of Corporate Services responding to Council's directive to report on the potential cost of the acquisition of Priority 1, 2 and 3 lands as identified in "Stormwater Management, Naturalization and Open Space Opportunities Report" prepared by XCG Consultants Ltd., and recommending that the Corporate Services Committee provide direction to staff on this matter; and

(ii) communications from the following persons addressed to Councillor Norm Kelly, Scarborough Wexford, expressing their opposition to the purchase of the subject lands:

(a) (February 8, 1999) from Mr. Phil Egginton, President, South Bridlewood Community Association;

(b) (February 12, 1999) from Ms. Sheryle Saunders, President, North Bridlewood Residents Association;

(c) (February 15, 1999) from Mr. Robert Brown, President, Wishing Well Acres Community Association; and

(d) (February 23, 1999) from Mr. Robert Brown, President, Wishing Well Acres Community Association.

Councillor Michael Tzekas, Scarborough Wexford, appeared before the Corporate Services Committee in connection with the foregoing matter.

--------

(Report dated March 22, 1999, addressed to the

Corporate Services Committee from the

Commissioner of Corporate Services)

Purpose:

To respond to Council's directive to report on the potential cost of the acquisition of Priority 1, 2 and 3 lands as identified in "Stormwater Management, Naturalization and Open Space Opportunities Report" prepared by XCG Consultants Ltd.

Financial Implications:

No financial implications at this time.

Recommendation:

It is recommended that the Corporate Services Committee provide direction to staff on this matter.

Background:

In August, 1998, the City in collaboration with the Toronto and Region Conservation Authority retained XCG Consultants Ltd. (XCG) to investigate opportunities for stormwater management, naturalization and open space planning purposes in the Ontario Hydro surplus corridor lands in the West Highland Creek and Massey Creek watersheds and to prioritize critical land parcels for acquisition. The study is divided into two areas, north and south of Highway 401.

The south study area extends north-westerly from Kennedy Road across Birchmount Road and Warden Avenue to Highway 401 and is further divided into two sections. The first being part of the Dorset Park Community, between Kennedy and Birchmount Roads and the second being part of the Maryvale Community, west of Warden Avenue and extending north to Highway 401.

City Council on February 2, 3 and 4, 1999, amended and adopted Clause No. 12 of Report No. 1 of The Scarborough Community Council and thereby directed staff to report to the Corporate Services Committee for subsequent submission to the Budget Committee and Council on:

(a) the negotiation of the purchase of Priority 2 and 3 lands identified in the XCG Consultants report, between west of Warden and south of Highway 401 provided that the purchase be subject to funds being available from the former Scarborough Parks Reserve; and

(b) the potential cost of acquisition of Priority 1, 2 and 3 lands.

Norstar Development Corporation had an agreement of purchase and sale with Ontario Hydro whereby they are to acquire all of the hydro corridor in the Maryvale Community (approximately six acres) and approximately twelve of approximately eighteen acres of the corridor in the Dorset Park Community.

At its meeting held on March 2, 3 and 4, 1999, City Council approved the acquisition of Priority 1 lands (11.83 acres) from Norstar Development Corporation, within the Dorset Park Community and lying between Birchmount and Kennedy Roads at a purchase price of $6,000,000.00.

Of the remaining 6.34 acres of Priority 1 lands between Birchmount and Kennedy, Hydro has agreed to sell approximately 0.34 acres to Birchmount Kennels which operates an animal clinic and kennel on the adjoining property. The kennel owners have been long term tenants at this location. Further study is required to determine the impact development of this tract may have on the balance of the Priority 1 lands in this area. Purchase of this tract may also prove difficult because of the adjoining commercial use and may require a complete buy out and/or relocation of the kennel operation. The City, by virtue of an existing lease agreement between Ontario Hydro and the former City of Scarborough, controls approximately 4.75 acres which continue to be used for stormwater storage. The remaining lands which front Kennedy Road and extend northerly adjacent to the leased stormwater ponds (1.25± acres) are the subject of ongoing negotiation with Hydro.

The Priority 2 and 3 lands south of Highway 401 and west of Warden Avenue are the subject of an OMB hearing initiated by Norstar Development Corporation. The OMB hearing which also included the lands between Kennedy and Birchmount Roads was adjourned on March 3, 1999, for a period of six months to allow Norstar to complete the sale of the 11.83 acres of Priority 1 lands between Kennedy and Birchmount to the City.

Comments:

Norstar Development Corporation has no interest in selling the lands between Warden Avenue and Highway 401 and wishes to complete the OMB hearing as soon as possible, in order to proceed with development.

Prior to the City negotiating the purchase of the corridor lands between Birchmount and Kennedy it had been the objective of the Economic Development, Culture and Tourism Department to consolidate the parkland contribution from the entire Norstar Development in both the Dorset and Maryvale communities in the Maryvale Community. The original development would have generated a one acre park, large enough to accommodate a play structure and some landscape elements for the local neighbourhood and would have fulfilled the Department's objective and community wishes. The remaining development as proposed will generate a parkland contribution of 0.3 acres which is considered by Parks staff too small to be of benefit to the community. Staff of Economic Development, Culture and Tourism have discussed the acquisition of additional parkland with the developer, who has advised that while he does not wish to sell the entire six acres, he would be willing to sell two or three lots to enhance the size of the park. However, nothing has been resolved to date.

Parks staff have advised the Maryvale Community currently exceeds the former Scarborough Official Plan guidelines for parkland, however, the area of the community bordered by Warden, Ellesmere and Highway 401 lacks a park.

Potential Cost of Acquisition:

As noted earlier, the acquisition cost of 11.83 acres of Priority 1 lands in the Dorset Community is $6,000,000.00. The acquisition cost of all or a portion of the Priority 2 and 3 lands in the Maryvale Community would probably result in similar per acre costs.

Conclusion:

Not applicable.

Contact Name:

Roly Mayr, Facilities and Real Estate, 396-4930, Fax 396-4241, rmayr@city.scarborough.on.ca

Frank Kershaw/Michael Schreiner, Economic Development, Culture and Tourism.

--------

(A copy of the maps attached to the foregoing report was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

--------

The Policy and Finance Committee also submits the following communication (June 28, 1999) from the City Clerk:

The Policy and Finance Committee on June 24, 1999, had before it the following communications:

(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; and

(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 greenspace 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.

The Policy and Finance Committee:

(1) deferred consideration of the aforementioned communications, and the following 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 Scarbrough Parks Reserve Fund.

--------

(A copy of the communication (June 24, 1999) from Ms. Lynda Wheeler, President, Terraview-Willowfield Residents' Association, and a map of the area, attached to the foregoing communication from the City Clerk was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

The Policy and Finance Committee also submits the following communication (July 16, 1999) from the City Clerk:

Recommendation:

The Scarborough Community Council recommends that an amount of money be committed to purchase park lands north of Highway 401, equivalent to the amount expended in the Terraview-Willowfield community, funding for such purchase to be taken from the Scarborough Parks Reserve Fund.

Background:

The Scarborough Community Council, at its meeting on July 15, 1999, had before it:

(1) a previously deferred communication (May 5, 1999) from the City Clerk, advising that the Strategic Policies and Priorities Committee, on May 4, 1999:

(a) referred the recommendations of the Budget Committee embodied in the communication (April 30, 1999) from the City Clerk respecting the acquisition of Ontario Hydro corridor lands to the Scarborough Community Council for review and recommendations thereon, specifically "that the costs associated with the purchase of the lands be no more than the balance in the Beare Road Trust Fund";

(b) requested the Commissioner of Works and Emergency Services to submit a report to the Scarborough Community Council on how this acquisition fits in with the City's stated objective for pedestrian/bicycle paths in Scarborough, and on whether the funds being requested could be better spent in Scarborough to achieve that objective;

(c) requested the Commissioner of Economic Development, Culture and Tourism, in consultation with the Chief Financial Officer and Treasurer, to submit a report to the aforementioned meeting of the Scarborough Community Council, on the original intent of the Beare Road landfill reserve; and

(2) a joint report (June 1, 1999) from the Commissioner of Economic Development Culture and Tourism and the Commissioner of Works and Emergency Services responding to the aforementioned direction, and submitting for information their report on the acquisition of Scarborough Ontario Hydro corridor lands for pedestrian/bicycle paths and on the origin and status of the Beare Road Ski Facility Trust Fund.

The Scarborough Community Council reports having received the aforementioned joint report.

--------

The following persons appeared before the Community Council in connection with the foregoing matter:

- Theresa Dorgan;

- Dave Wheeler representing Lynda Wheeler, Terraview-Willowfield Residents' Association;

- Elio Baldassarre;

- Lister Tennant;

- John Guzzi;

- Brenda Albuquerque-Boutilier;

- Joan Nicholson;

- Katarzyna Tota;

- Wayne Hall, North Bridlewood Residents' Association;

- Sheryle Saunders, President, North Bridlewood Residents' Association;

- Marika Bandera, Dorset Park Community Ratepayers' Association;

- Elaine Brown;

- Phillip Egginton, Past President, Bridlewood Community Association; and

- Barbara McCarron.

--------

(Joint Report dated June 1, 1999, addressed to the

Scarborough Community Council from the

Commissioner of Economic Development,

Culture and Tourism and the Commissioner

of Works and Emergency Services)

Purpose:

To report as requested on the acquisition of Scarborough Ontario Hydro corridor lands for pedestrian/bicycle paths, and on the origin and status of the Beare Road Ski Facility Trust Fund.

Financial Implications:

None.

Recommendation:

It is recommended that this report be received for information.

Council Reference:

In referring the Budget Committee's recommendations (April 30, 1999) respecting the acquisition of Ontario Hydro corridor lands (priority 2 and 3) to Scarborough Community Council, the Strategic Policies and Priorities Committee on May 9, 1999 requested that the following reports also be submitted to Scarborough Community Council:

(1) the Commissioner of Works & Emergency Services report on how the proposed acquisition fits with the City's stated objective for pedestrian/bicycle paths in Scarborough, and on whether the funds being requested could be better spent in Scarborough to achieve this objective; and

(2) the Commissioner of Economic Development, Culture & Tourism, in consultation with the Chief Financial Officer & Treasurer, report on the original intent of the Beare Road Ski Facility Trust Fund.

Discussion:

Acquisition of Ontario Hydro Corridor Lands for Pedestrian/Bicycle Paths:

A 1998 report prepared for the City of Toronto by Victor Ford and Associates entitled "Inventory of Cycling Trail Opportunities in Rail and Hydro Corridors", reviewed all rail and Hydro corridors lands in the City. The study report ranked potential trail corridors in two groups. Group 1 projects were considered most easily doable and Group 2 projects were considered doable but with more significant constraints or barriers to overcome. The former Warden Hydro Corridor lands north of Highway No. 401 were ranked as a Group 1 project. The corridor lands south of Highway No. 401 were ranked as a Group 2 project because there are several mid-block crossings which make it difficult to provide route continuity.

The 1998 Study did not identify priorities for trail implementation, however, the next phase of this work, to be completed in time for consideration as part of the Year 2000 Capital Budget process, will identify such priorities, based on the needs of a City-wide network of off-street trails and on-street bicycle routes. This assessment will be undertaken in conjunction with pertinent City staff, representing the Economic Development, Culture and Tourism, Urban Planning and Development Services and Works and Emergency Services Departments, as well as with representation from the Toronto Cycling Committee.

Although we are not able to comment at this time whether the funds being requested could be better spent in other areas of Scarborough to achieve the City's pedestrian/bicycle trail objectives, based on a preliminary review, it would appear, at this time, that the lands north of the 401 offer greater potential to form an integral part of a future route network. This is primarily due to the opportunity which they offer to connect with the Finch Hydro corridor, which could, over the longer term, provide east-west trail access across the northern part of the City. To help achieve greater route continuity, it is very important that the Hydro corridors not be severed where they offer such opportunities.

Origin and Status of the Beare Road Ski Facility Trust Fund:

Metro Toronto opened the Beare Road Landfill Site in 1967 with the approval of Scarborough Council. The 80.5-hectare site, originally with a capacity of 3.3 million tonnes, received solid waste through 1988. Metro and Scarborough agreed to expand the Beare Landfill's capacity by 635,000 tonnes in 1971 and 5.4 million tonnes in 1974. The latter resulted in the creation of the Beare Road Ski Facility Trust Fund.

Under the terms of the 1974 agreement, Metro issued $750,000.00 in debentures to cover the cost of developing a downhill ski facility at Beare Road. This accommodated Scarborough's desire, first expressed in 1971, to improve the site for recreational purposes. Metro would design the facility and manage disbursements from the trust account; Scarborough would lease the property as of 1978, undertake construction, and assume any excess costs. Any payments would be refunded to Metro if Scarborough failed to build the facility according to the development plan (Clause No. 1 of Report No. 12 of the Works Committee, adopted by Metro Council on October 22, 1974).

In 1982, Scarborough cancelled this agreement, terminated its lease of the Beare Road site, and explicitly relinquished any claim to funds in the trust account (Clause No. 1 of Report No. 46 of the Board of Control, adopted by Scarborough Council on September 20, 1982). In return, Metro was to use the trust account to develop a regional downhill ski facility at Beare Road, with all development plans and activities for the site being reviewed by Scarborough staff (Clause No. 8 of Report No. 10 of the Works Committee, adopted by Metro Council on October 1, 1982).

Metro undertook preliminary work on the ski facility into the early 1990s before abandoning the project. The facility made its last appearance in a budget document in the 1992-1996 Metro Parks Capital Works Program, when inflation and program changes had pushed cost estimates to $12,500,00.00. Beyond economics, the viability of the project was impacted by solid waste management planning (which, beginning in 1988, explored interim landfilling options in the Beare Road area) and by the Province's 1990 park planning initiative in the Rouge watershed.

As plans emerged for the Rouge Park, Metro officials acknowledged that a ski facility at Beare Road would likely be rejected by the Province, given the project's incompatibility with other land uses in and around the park and the range of possible environmental impacts. The Commissioner of Parks and Property noted that while Metro was not legally obliged to develop the ski facility, this did not "diminish the original intent or spirit behind the [project], which was to provide something of benefit to the community in return for permission to place additional refuse on the site." The Commissioner urged consideration of other uses at or enhancements to the site or surrounding areas in the context of the Rouge Park plan:

"The Ski Hill Trust Account Funds could help in a number of ways in implementing the plan, such as land acquisition, landscape regeneration, the development of trails and other facilities, and so on, to the benefit of residents of Scarborough and beyond. I would suggest, therefore, that the funds in the Ski Hill Trust Account be considered in discussions about management structure and funding arrangements for the Rouge Park. The funds may provide to be a very useful contribution towards the park by Metropolitan Toronto and, as such, it would be premature to relinquish or otherwise dispose of the funds until that potential has been explored fully" (Clause No. 7(d) of Report No. 10 of the Parks, Recreation and Property Committee, as adopted by Metro Council on August 11, 1993).

The Metro Solicitor subsequently advised that "there exists no legally binding obligation on the Metropolitan Corporation to utilize neither the original corpus of the fund, nor the interest accumulated thereon, for the purpose of the development of a ski facility at that site, nor, for that matter, for the development of any successor park facilities, such as the Rouge Park, in that area" (Clause No. 22(g) of Report No. 37 of the Management Committee, adopted by Metro Council on September 15, 1993).

Use of funds in the trust account continues to be entirely at the discretion of Council. Despite its name, the Beare Road Ski Facility Trust Fund is not a trust fund within the meaning of the Trustee Act, which defines municipal responsibilities in respect to the management of trust funds. Regardless of the source of funds, the Act requires that the municipality pass a by-law approving acceptance of the arrangement setting out the terms of the trust and the obligations undertaken by the trust. The by-law outlines the intent and purpose of the trust and the responsibilities of the trustee. No such by-law was passed by Metro Council in respect to the Beare Road account.

Furthermore, Metro Council did not adopt, and Toronto City Council has not adopted, a policy on the use of funds in the trust account. However, Metro twice rejected using the account for operating expenses in connection with the Rouge Park Alliance and Metro's Solid Waste Management Division (Clause No. 6 of Report No. 7 of the Financial Priorities Committee, adopted by Metro Council on March 7, 1996 and Clause No. 6 of Report No. 5 of the Environment and Public Space Committee, adopted by Metro Council on May 7 and 8, 1997).

In 1994, Scarborough City Council asked Metro to use the trust account to purchase the Glen Eagles site for inclusion in the Rouge Park, with any remaining balance being "retained for use within Rouge Park with priority given to the landscape rehabilitation and development of the Beare Road Landfill Site" (Clause No. 24 of Report No. 9 of the Administrative and Finance Committee, adopted by Scarborough Council on March 30, 1994). No action ensued until the Province approved the Rouge Park Management Plan in 1994 and Metro Council conditionally endorsed a management structure for the Park in 1995.

The trust account has typically been drawn on by Metro and the new City of Toronto for parks purposes at or in the vicinity of the Beare Road Landfill Site:

(a) about $220,000.00 was expended in 1984-88 on electrical work, consulting fees, aerial surveys, and soil, noise, and gas studies connected with the Beare Road ski facility;

(b) $1,300,000.00 was allocated in 1995-99 for trail and vegetation management work in the Rouge Park ($300,000.00 in Clause No. 2 of Report No. 5 of the Environment and Public Space Committee, adopted by Metro Council on April 5, 1995; $500,000.00 in Clause No. 14 of Report No. 4 of the Environment and Public Space Committee, adopted by Metro Council on April 9, 1997; and $500,000.00 in Clause No. 1 of Report No. 3 of the Strategic Policies and Priorities Committee, adopted by Toronto City Council on March 2, 3 and 4, 1999);

(c) up to $2,000,000.00 was committed in 1999 from the trust account and the sale of City properties to the purchase of the Glen Eagles site for inclusion in the Rouge Park (Clause No. 1 of Report No. 4 of the Corporate Services Committee, adopted by Toronto City Council on April 13, 14 and 15, 1999); and

(d) $1,000,000.00 was allocated in 1998, on the recommendation of the Budget Committee, to the Highland Creek Trail Extension project (Clause No. 23 of Report No. 6 of the Strategic Policies and Priorities Committee, adopted by Toronto City Council on April 29 and 30 1998).

With the above expenditures and commitments, there is currently about $2,200,000.00 in the Beare Road Ski Hill Trust Fund.

Conclusions:

This report comments on how the proposed acquisition of certain Ontario Hydro corridor lands fits with the City's stated objective for pedestrian/bicycle paths in Scarborough, and whether the funds requested could be better spent elsewhere in Scarborough to achieve this objective. The origin and status of the Beare Road Ski Facility Trust Fund is also described.

The Chief Financial Officer and Treasurer and the City Solicitor have been consulted in the preparation of this report.

Contact Names:

Frank Kershaw , 392-8199; Wayne Reeves, 392-1901, Economic Development, Culture and Tourism

Ann Rexe, 396-7156, Daniel Egan, 392-9065, Works & Emergency Services

The Policy and Finance Committee reports, for the information of Council, having also had before it report and communications:

(i) confidential report (July 9, 1999) from the Chief Financial Officer and Treasurer responding to a request from the Policy and Finance Committee on June 24, 1999 respecting the Scarborough Parks Reserve Fund, a copy of which was forwarded to all Members of Council under confidential cover;

(ii) (July 19, 1999) from Councillor Raymond Cho, Scarborough-Malvern, strongly urging the Committee to keep the Beare Road Trust Fund monies for the improvement of this locale and the future greening of this wasteland community, as it was originally designated to do; and advising that he is strongly opposed to the use of the Beare Road Trust Fund to establish parklands in communities that are far distant from the site where the money was originally intended to be used; and

(iii) (July 20, 1999) from Councillor Sherene Shaw, Scarborough Agincourt, requesting that if consideration is given to purchasing any of these category 2 and 3 lands north of Highway 401 in the three existing communities of Wishing Well and North and South Bridlewood, the acquisition of lands in Ward 17 receive equal consideration and also be supported specifically in the North Bridlewood community.

The following persons appeared before the Policy and Finance Committee in connection with the foregoing matter:

- Mr. Keith Drachenberg;

- Ms. Joan Nicholson and filed a written submission respecting the foregoing matter, and a petition signed by residents requesting that the City purchase, for park use, all of the land of the corridor south of the 401;

- Ms. Sheryle Saunders, President, North Bridlewood Residents Association;

- Ms. Brenda Albuquerque-Boutilier;

- Ms. Ruth Jorgensen;

- Mr. Wayne Hall;

- Mr. John McKenzie and filed a written submission;

- Mr. James Robb, Friends of the Rouge Watershed, who gave an overhead slide presentation and filed a written submission;

- Mr. Lister Tennant;

- Mr. Phil Egginton, Past President, Bridlewood Community Association;

- Mr. David Wheeler; and

- Councillor Mike Tzekas, Scarborough Wexford.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, a confidential communication (July 21, 1999) from the City Clerk, embodying the following:

(Extract from the confidential communication

dated July 21, 1999, from the City Clerk

addressed to the City Council.)

Recommendation:

It is recommended that:

The Policy and Finance Committee recommends that $0.7 million be taken from the Parkland Reserve fund; and $2.3 million be taken from the City Centre Expansion fund for a total amount of $3.0 million, for the acquisition of Ontario Hydro Corridor lands; and that the above amount be equally divided amongst the following communities, for the purchase of priority 2 and 3 Hydro Corridor lands for park purchases:

- North Bridlewood;

- South Bridlewood;

- Wishing Well; and

- Terraview-Willowfield.)

(City Council also had before it, during consideration of the foregoing Clause, a confidential report (July 9, 1999) from the Chief Financial Officer and Treasurer, such report to remain confidential in accordance with the provisions of the Municipal Act, save and except the recommendations embodied therein:

(Extract from the confidential report

dated July 9, 1999, from the Chief Financial Officer and Treasurer

addressed to the Policy and Finance Committee.)

Recommendation:

It is recommended that:

(1) due to the limited amount of funds available in the former City of Scarborough Reserve Funds, a priority plan be developed by the Scarborough Community Council to allocate funding towards the purchase of the most needed portions of the Hydro Lands; and

(2) the Beare Road Trust Fund not be used for the acquisition of lands in the Hydro Corridor but rather continue to fund projects in and around Rouge Park.)

(City Council also had before it, during consideration of the foregoing Clause, the following confidential communications:

(i) (July 19, 1999) from Councillor Raymond Cho, Scarborough Malvern;

(ii) (July 20 1999) from Councillor Sherene Shaw, Scarborough Agincourt;

(iii) (July 15, 1999) from Ms. Joan Nicholson;

(iv) (Undated) petition filed by Ms. Joan Nicholson;

(v) (July 19, 1999) from Mr. John McKenzie, Save the Rouge Valley System; and

(vi) (July 20, 1999) from Mr. James Robb, Friends of the Rouge Watershed.)

3

City of Toronto Welcome Policy for

Community and Recreation Centres

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause by:

(1) amending Recommendation No. (2) embodied in the joint report dated July 19, 1999, from the Chief Financial Officer and Treasurer and the Commissioner of Economic Development, Culture and Tourism, by striking out the words "fee exempted", and inserting in lieu thereof the words "paid and unpaid", and by striking out the word "participants" and inserting in lieu thereof the word "participant", so that such recommendation shall now read as follows:

"(2) commencing September 1, 1999, the Commissioner of Economic Development, Culture and Tourism begin to track the use and demand for paid and unpaid programs by participant;"; and

(2) adding thereto the following:

"It is further recommended that:

(a) all introductory swimming programs (except for private classes) for children three to five years old remain free of charge, as previously approved by City Council by its adoption of the User Fees Harmonization Option 'B' contained in the 1999 Operating Budget for Parks and Recreation;

(b) any person who is in a family living under the Low Income Cut-Off will be permitted to register for any one program, anywhere in the City, with no restrictions other than those faced by paying users;

(c) no one qualifying for free recreations services will face any disadvantages in registration; there will be no preferential registration for paying customers, nor will there be delays in processing applications for free recreation that delay entrance to the registration process;

(d) each centre will schedule opportunities for users to apply for free status, and that those opportunities be advertised and occur prior to the program registration dates; and

(e) the Commissioner of Economic Development, Culture and Tourism, be requested to:

(i) submit a report to the Economic Development and Parks Committee, in November 1999, on a policy regarding the use of access cards;

(ii) review the effect this new policy will have on seniors, particularly those seniors participating in therapeutic programs throughout the City of Toronto, and whether the needs of the seniors who are shut-ins are being met, and how they will be costed, if at all, and report thereon to Economic Development and Parks Committee;

(iii) review whether the impact of user fees being imposed can be measured by attendance records and report thereon to the Economic Development and Parks Committee;

(iv) undertake a study of the area bounded by Kennedy Road, Antrim Crescent, Glamorgan Drive south to Ellesmere Road and Dundalk Road as it relates to the Welcome Policy for Community and Recreation Centres and report thereon to the Economic Development and Parks Committee; and

(v) report to Council, through the Economic Development and Parks Committee, prior to the year 2000 budget-setting exercise, on the impact of the imposition of user fees on actual usage of community centre programs; and

(f) the following motion be adopted:

'WHEREAS the City of Toronto should have an equitable approach to user fees that will ensure all residents have access to high quality community recreation and leisure programs; and

WHEREAS recreation programs are important municipal services which contribute significant personal, social, economic and environmental benefits which enhance the well-being of Toronto citizens, their neighbourhoods and the economy; and

WHEREAS City Council must attempt to make a high level of fundamental services accessible to everyone across the City of Toronto, regardless of income or age;

NOW THEREFORE BE IT RESOLVED THAT the Commissioner of Economic Development, Culture and Tourism be requested to submit a report to the Economic Development and Parks Committee on the concept of a "Recreation Access Card" system based on a base level of recreation access points being granted to each household in the City of Toronto.' ")

The Policy and Finance Committee recommends the adoption of the recommendations of the Budget Advisory Committee embodied in the following communication (July 19, 1999) from the City Clerk; and further, that the Commissioner of Economic Development, Culture and Tourism be requested to report in time for the year 2000 Operating Budget, on the experience of individual participation in the suggested program.

The Policy and Finance Committee submits the following communication (July 19, 1999) from the City Clerk:

Recommendations:

The Budget Advisory Committee on July 19, 1999, recommended to the Policy and Finance Committee:

(1) that the joint report (July 19, 1999) from the Chief Financial Officer and Treasurer and the Commissioner, Economic Development, Culture and Tourism be adopted, subject to adding:

"that the Commissioner of Economic Development, Culture and Tourism be authorized to spend up to $100,000.00 in 1999 from the Corporate Contingency Account in subsidy funding to ensure individual access to 'for-fee' programs on an as-needed basis in communities not currently deemed to be high-needs."

(2) that the following motion be adopted:

"WHEREAS the Toronto Transit Commission, Police, Fire, Parks and Recreation programs have identified in-year changes since the approval of the 1999 Operating and Capital Budgets;

NOW THEREFORE BE IT RESOLVED that the Chief Administrative Officer advise all City departments, agencies, boards and commissions to ensure that 1999 spending is contained within the approved 1999 budgets and that corrective action be taken accordingly;

AND BE IT FURTHER RESOLVED that all policy changes with financial implications be only considered for the year 2000 budget cycle."

(3) that a guideline be set that for every dollar of over expenditure in 1999, one dollar be deducted from the year 2000 Operating Budget, save and except snow removal; and

(4) that the Policy and Finance Committee confirm the July 19, 1999 meeting of the Budget Advisory Committee.

The Committee also reports having requested the Commissioner of Economic Development, Culture and Tourism to ensure that the City's policy of providing free services to those in need is well advertised and well known throughout the City.

Background:

The Budget Advisory Committee had before it a joint report (July 19, 1999) from the Chief Financial Officer and Treasurer and the Commissioner of Economic Development, Culture and Tourism, recommending that:

(1) the Commissioner of Economic Development, Culture and Tourism, in conjunction with the Chief Financial Officer and Treasurer monitor the Parks and Recreation Division's 1999 Operating Budget and report back to the Policy and Finance Committee together with the September 30, 1999 Operating Budget Variance Report on the Division's ability to absorb the revenue loss of $29,789.00 associated with the addition of seven community centres to the high-needs category;

(2) commencing September 1, 1999, the Commissioner of Economic Development, Culture and Tourism begin to track the use and demand for fee exempted programs by participants;

(3) the Commissioner of Economic Development, Culture and Tourism, the Commissioner of Community and Neighbourhood Services and the Commissioner of Urban Planning and Development Services develop a clear definition of the term High Needs, to aid in the identification and designation of communities which may be considered for subsidies or special treatment due to social or economic hardship in time for the finalization of the Fall/Winter Recreation Guide for 2000;

(4) the Commissioner of Economic Development, Culture and Tourism report to the Economic Development and Parks Committee with a formal "Welcome Policy" to enable its implementation for the 2000 Fall/Winter season;

(5) any further amendment to the Interim "Welcome Policy" respecting the addition of community centres to the high-needs category and the extension of the individual access policy to two programs per individual per season or a 20 percent reserve be considered concurrently with the formal "Welcome Policy" requested in Recommendation No. (4) above; and

(6) expansion of the user fee welcome criteria beyond Council's decisions to date and the funding implications be considered in the review of the 2000 and 2001 operating budget process.

The Budget Advisory Committee also had before it the following:

(a) report (July 9, 1999) from the City Clerk, addressed to the Policy and Finance Committee, advising of the action taken by City Council, at its meeting held on July 6, 7 and 8, 1999, with regard to Clause No. 6 contained in Report No. 1 of The Economic Development and Parks Committee, headed "Interim 'Welcome Policy' for Users of Recreation Program - All Wards";

(b) communication (July 8, 1999) from Mayor Mel Lastman, advising that City Council, at its meeting held on July 6, 7 and 8, 1999, requested that a report be provided on funding options concerning the City of Toronto's Parks and Recreation "Welcome Policy"; and also requested that all respective Council motions be referred to the July 20, 1999 meeting of the Policy and Finance Committee; and further advising that he would appreciate the assistance of the Budget Advisory Committee in reviewing budget options for funding the "Welcome Policy" within the time frames established by Council; and

(c) communication (July 19, 1999) from Councillor Pam McConnell, Don River, regarding the foregoing matter.

The following persons appeared before the Budget Advisory Committee in connection with the foregoing matter:

- Ms. Cyndy Ireland, S.H. Armstrong Community Centre, and filed a copy of her submission;

- Councillor Chris Korwin-Kuczynski, High Park;

- Councillor Joe Mihevc, York Eglinton; and

- Ms. Karen Warsic, Social Planning Council.

--------

(Joint report dated July 19, 1999, addressed to the

Budget Advisory Committee from the

Chief Financial Officer and Treasurer and the

Commissioner of Economic Development, Culture and Tourism)

Purpose:

This report identifies an approach to addressing the proposed expansion of the "Welcome Policy" to include additional high-needs communities as well as the extension of the interim individual access policy from one program, per individual, per season, to two programs, per individual, per season.

Financial Implications:

Expansion of the "Welcome Policy" for the inclusion of additional high needs communities and extension of the individual access policy would require the provision of up to $854,211.00 to be added to Parks and Recreations 1999 Operating Budget. This funding would cover the loss of budgeted revenue associated with the September 1, 1999 implementation of harmonized recreation user fees approved by City Council at its meeting of April 26 and 27, 1999. An additional $1,643,502.00 would be required in 2000 resulting in a total financial impact of $2,497,695.00 for this purpose.

Approval of Council's recommendations at its last meeting will result in additional funding up to $29,789.00 to cover the revenue loss associated with the inclusion of seven additional community centres in 1999, should the Parks and Recreation 1999 Operating Budget be unable to absorb the unanticipated revenue loss with an additional $55,323.00 required for 2000.

Recommendations:

It is recommended that:

(1) the Commissioner of Economic Development, Culture and Tourism, in conjunction with the Chief Financial Officer and Treasurer monitor the Parks and Recreation Division's 1999 Operating Budget and report back to the Policy and Finance Committee together with the September 30, 1999 Operating Budget Variance Report on the Division's ability to absorb the revenue loss of $29,789.00 associated with the addition of seven community centres to the high-needs category;

(2) commencing September 1, 1999, the Commissioner of Economic Development, Culture and Tourism begin to track the use and demand for fee-exempted programs by participants;

(3) the Commissioners of Economic Development, Culture and Tourism, Community and Neighbourhood Services and Urban Planning and Development Services develop a clear definition of the term High Needs, to aid in the identification and designation of communities which may be considered for subsidies or special treatment due to social or economic hardship in time for the finalization of the Fall/Winter Recreation Guide for 2000;

(4) the Commissioner of Economic Development, Culture and Tourism report to the Economic Development and Parks Committee with a formal "Welcome Policy" to enable its implementation for the 2000 Fall/Winter season;

(5) any further amendment to the Interim "Welcome Policy" respecting the addition of community centres to the high-needs category and the extension of the individual access policy to two programs per individual per season or a 20 percent reserve be considered concurrently with the formal "Welcome Policy" requested in Recommendation No. (4) above; and

(6) expansion of the user fee welcome criteria beyond Council's decisions to date and the funding implications be considered in the review of the 2000 and 2001 operating budget process.

Council Reference/Background/History:

At its meeting of April 26 and 27, 1999, City Council adopted Option "B" as the preferred option for harmonizing user fees for recreation programs as part of the 1999 Operating Budget deliberations. This option offers free non-specialized programs (drop-in, subscriber, introductory instructional) to pre-schoolers, children and youth and free drop-in programs for older adults. All remaining programs for older adults and all adult programs are available on a for-fee basis. Implementation of this option effective September 1, 1999 results in a revenue loss of $800,000.00 in 1999 and an additional loss of $1 million in 2000. The financial impact of Option "B" was included in the Parks and Recreation 1999 Operating Budget.

The total cost of Option "B" also reflects annual revenue losses of $411,000.00 associated with fee exemptions or subsidies to residents unable to afford the cost of these programs. Option "B" addressed the need to ensure accessibility to recreation programs by identifying seventeen communities as being "high need", according to a definition developed from income and family structures. An additional $300,000.00 was also provided for potential increased demand in recreation program offerings.

At its meeting of July 6, 7 and 8, 1999, City Council had before it Clause No. 6 contained in Report No. 1 of The Economic Development and Parks Committee entitled "Interim "Welcome Policy" for Users of Recreation Programs", from the Commissioner of Economic Development, Culture and Tourism advancing an interim policy for addressing accessibility needs for both individuals and communities using recreation programs in order to complete the Fall/Winter Parks and Recreation Guide.

City Council approved the addition of seven community centres to the list of high-needs communities at an estimated annual cost (revenue loss) of $86,000.00: Jimmie Simpson; Rockcliffe Middle School; O'Conner; Chalkfarm; Bliss Carman Senior Public School; Galloway Road Public School; and Oakdale Community Centre.

Council also referred a series of motions to the Policy and Finance Committee for further consideration at its meeting of July 20, 1999 and requested the Chief Financial Officer and Treasurer to report to the Policy and Finance Committee therewith on funding options. These motions include, inter alia, the following:

(a) the indicator of Low Income Cut-Off (LICO), as set out in the report dated July 5, 1999, from the Commissioner of Economic Development, Culture and Tourism, be used as the key indicator to rank community centres serving high-needs communities;

(b) the list of centres serving high-needs communities be extended to 15 additional centres (where approximately one-third of the population is living below the LICO) at an additional cost of $600,000.00;

(c) the interim individual access policy be extended to two programs per week, per individual, at an additional cost of $400,000.00 and that adequate publicity and outreach programs be implemented as part of this funding;

(d) the Commissioners of Economic Development, Culture and Tourism, Community and Neighbourhood Services and Urban Planning and Development Services be requested to submit a report to Council on priority neighbourhoods using common criteria;

(e) funding of $1 million be provided from the Corporate Contingency Account or any other source identified by the Chief Administrative Officer; and

(f) all Community Centres listed in the report dated July 5, 1999, from the Commissioner of Economic Development, Culture and Tourism be included in the high-needs category at a total cost of $1,708,230.00, such funds to be provided from the Corporate Contingency Account.

Discussion:

Interim "Welcome Policy" - Accessibility of Recreation Programs under Option "B":

The implementation of Option "B" effective September 1, 1999, provides for all existing programs offered at 17 centres serving high need communities to be free of charge. These centres are listed in the top third of the table contained in the report dated July 5, 1999, from the Commissioner of Economic Development, Culture and Tourism. This priority list of centres serving high need areas is based primarily on the socio-economic indicators of "Percent of Children Aged 0 to 17 in Families Receiving Social Assistance" and "Lone Parent Families as a Percentage of Total Families. $400,000.00 is included in the Parks and Recreation Division's 1999 Operating Budget for this purpose.

Moreover, the individual access component of Option "B" provides for one program per person per season and reserves 10 percent of fee-based programs for individuals who are in need of financial assistance. This 10 percent reserve would be flexible depending on the neighbourhood being served.

This strategy is consistent with former Scarborough figures whereby an average participant registers for two to three programs per year. $300,000.00 has been included in the City's 1999 Operating Budget for potential increased demand. Former Scarborough data has been used in the absence of a City-wide participant profile.

The motions tabled at the last Council meeting for consideration in this report if adopted, significantly change Council's intent during the budget deliberations when adopting Option "B" in the user fee options particularly from a financial perspective. Adoption of any of the referred motions would effectively move Council's previous decisions from Option "B" to Option "B+".

Proposed Amendments to the Interim "Welcome Policy":

(a) High-Needs Communities:

City Council's approval of adding seven centres to the list of high-needs communities results in a revenue loss of $29,789.00 for 1999 and $55,323.00 for 2000 for a total loss of $85,112.00. Given the estimated loss for 1999 is not sizeable, it is recommended that the Parks and Recreation Division absorb this revenue loss within its 1999 Operating Budget. The Commissioner of Economic Development, Culture and Tourism, in conjunction with the Chief Financial Officer and Treasurer, will monitor the Division's budget and will report back to the Policy and Finance Committee together with the September 30, 1999 Operating Budget Variance Report on the Division's ability to absorb the revenue loss.

The recommended use of Low Income Cut-off (LICO) as the key indicator to rank community centres serving high-needs communities captures working poor families in addition to welfare receiving families since the measure to be utilized in this instance is "Percent of Incidence of Economic Families Living Below the LICO". On the basis of this indicator, the amended priority list of 24 community centres serve populations where 38 percent or greater live below the LICO.

The motion to extend the list of centres serving high-needs communities by an additional 15 centres intended to capture all neighbourhoods where approximately one-third of the population is living below the LICO. This would create a priority list of centres serving communities with a LICO of 33.8 percent, resulting in a revenue loss of $209,000.00 for 1999 and $389,000.00 for 2000 for a total revenue loss of $598,000.00.

The intended additions to the priority list rested in the second third of the table contained in the above-noted report. However, it should be noted that Council's approval of the seven centres formed part of this 15. As a result, only an incremental eight centres would need to be added to the priority list to maintain the LICO of 33.8 percent. The financial impact of this amendment would result in a revenue loss of $183,413.00 in 1999 and $340,623.00 in 2000 for a total impact of $524,036.00.

Finally, the motion to add all community centres in the table contained in the Commissioner's report of July 5, 1999 as high-needs communities would require an additional 14 centres to be added to the priority list over and above those centres addressed from the preceding motion. This would result in further erosion of the revenue base by $240,991.00 in 1999 and $447,556.00 in 2000 for a total additional revenue loss of $688,547.00. Approval of this motion would also reduce the LICO to 5 percent, and essentially, programs would be provided to all communities free of charge regardless of ability to pay.

The total financial impact of amending the Interim "Welcome Policy" by adding community centres to the high-needs category results in a revenue loss of $454,211.00 for 1999 and $843,502.00 for 2000 for a total revenue loss of $1,297,695.00.

(b) Individual Access:

A motion to extend the interim individual access policy from one program per individual, per season to two programs per individual, per season would result in foregone revenue of $400,000.00 in 1999 and a further $800,000.00 in 2000 for a total impact of $1.2 million. This financial impact is in addition to the revenue loss arising from the motions discussed in section (a) above given the individual access component of the "Welcome Policy" impacts on fee-for programs provided City-wide in addition to the offering of free programs in high-needs communities.

As previously noted, no data is currently available to develop an average City participant profile at this time to enable a better assessment of potential need for individual financial assistance.

Amendment to the Interim "Welcome Policy" respecting the addition of community centres to the high-needs category and the extension of the individual access policy to two programs per individual per season or a 20 percent reserve results in a total financial impact of $854,211.00 in 1999 and $1,643,502.00 in 2000 for a total revenue loss of $2,497,695.00.

Funding Options:

Any motions adopted beyond the $86,000.00 already adopted by Council at its last meeting are not recommended at this time until experience in implementation over a full year is gained. Funds are not available in the program 1999 operating budget to absorb any further financial impacts arising from the referred motions. While the 1999 operating budget corporate contingency is available to handle emergency in year changes, this item with its major policy and service level implications should be considered in the context of the 2000 operating budget in accordance with the financial protocols outlined in a report to Policy and Finance Committee that will be considered on July 20, 1999.

Conclusion:

The harmonization of user fees for recreation programs will be implemented September 1, 1999. The option adopted by City Council addresses the need to make programs accessible to individuals, families and communities that may find recreation programs unaffordable. There is no dispute that several communities in Toronto are in need. However, adding too many Communities into a subsidy/exemption policy at this time without the benefit of experience in implementing Council's previous decision would be premature, from a management and fiscal perspective.

Proper time to develop criteria based on experience, and careful consideration of all factors to ensure equity is delivered, should be undertaken once a sufficient learning period has taken place. Council's original list of 17 centres for exemptions, plus the addition of seven more as identified, is prudent at this stage. The issues should be studied and the impacts should be monitored and reported back to Committee and Council in preparation for the 2000 Fall/Winter season and the 2001 Operating Budget cycle.

Contacts:

Josie LaVita, Acting Director, Budget Services, 397-4229, Ms. Claire Tucker-Reid, General Manager, Parks and Recreation, 392-8182.

The Policy and Finance Committee also submits the following communication (July 9, 1999) from the City Clerk:

I am enclosing for your information and any attention deemed necessary, Clause No. 6 contained in Report No. 1 of The Economic Development and Parks Committee, headed "Interim 'Welcome Policy' for Users of Recreation Program - All Wards", which was adopted, as amended, by the Council of the City of Toronto at its meeting held on July 6, 7 and 8, 1999.

May I draw your attention to the amendment by Council found at the beginning of the Clause.

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(Clause embodied in Report No. 1 of The

Economic Development and Parks Committee, headed

"Interim "Welcome Policy" for Users of Recreation

Program - All Wards" as adopted by the Council of the

City of Toronto at its meeting held on July 6, 7 and 8, 1999)

(City Council on July 6, 7 and 8, 1999, amended this Clause by adding thereto the following:

"It is further recommended that:

(1) the following seven Community Centres be added to the list of high-needs communities, and that $86,000.00 be allocated from the Corporate Contingency Account to cover the loss of revenue:

(a) Jimmie Simpson;

(b) Rockcliffe Middle School;

(c) O'Connor;

(d) Chalkfarm;

(e) Bliss Carman Senior Public School;

(f) Galloway Road Public School; and

(g) Oakdale;

(2) the homeless, the vulnerable and low income persons be exempted from being charged user fees at the Harrison Baths and, if these groups constitute the majority of users at the baths, City staff exempt the Harrison Baths from user fees; and

(3) the following motions be referred to the Policy and Finance Committee for further consideration at its meeting to be held on July 20, 1999; the Chief Financial Officer and Treasurer be requested to submit a report to the Policy and Finance Committee, for consideration therewith, respecting funding options, and the Committee report thereon to the next meeting of Council to be held on July 27, 1999; and that, in the interim, staff be instructed not to publish user fee charges on any of the sites that potentially would have been exempted, and that a draft insert to the recreation guide be prepared, once the prices are established:

Moved by Councillor Ashton:

'That Recommendations Nos. (2), (3) and (6) embodied in the motion by Councillor McConnell be referred to the Policy and Finance Committee for consideration.'

Moved by Councillor Brown:

'That the motion by Councillor McConnell be amended to provide that if any community or high-needs area has been omitted in error, they be automatically included.'

Moved by Councillor McConnell:

'It is further recommended that:

(1) the indicator of Low Income Cut-off (LICO), as set out in report dated July 5, 1999, from the Commissioner of Economic Development, Culture and Tourism, be used as the key indicator to rank community centres serving high-needs communities;

(2) the list of centres serving high-needs communities be extended to 15 additional centres (where approximately one-third of the population is living below the LICO) at an additional cost of $600,000.00;

(3) the interim individual access policy be extended to two programs per week, per individual, at an additional cost of $400,000.00, and that adequate publicity and outreach programs be implemented as part of this funding;

(4) prior to July 15, 1999, staff be requested to provide each Member of Council with a schedule of programs and respective fees for the fall programs;

(5) the Commissioners of Economic Development, Culture and Tourism, Community and Neighbourhood Services, and Urban Planning and Development Services be requested to submit a report to Council on priority neighbourhoods using common criteria; and

(6) funding of $1.0 million be provided from the Corporate Contingency Account or any other source identified by the Chief Administrative Officer.'

Moved by Councillor Bussin:

'It is further recommended that all of the Community Centres listed in the report dated July 5, 1999, from the Commissioner of Economic Development, Culture and Tourism be included in the high-needs category at a total cost of $1,708,230.00, such funds to be provided from the Corporate Contingency Account.'

Moved by Councillor Bussin:

'It is further recommended that, as the S. H. Armstrong Community Centre meets the eligibility requirements of the Interim Welcome Policy related to low income cut-offs, no fees be applied to the Community Centre's activities.'

Moved by Councillor Bussin:

'It is further recommended that the S.H. Armstrong Community Centre receive a grant-in-lieu to reflect individual access needs.'

Moved by Councillor Korwin-Kuczynski:

'That the motion by Councillor Miller be amended by adding after the words "Parkdale Community Centre" the words "and the McCormick Recreation Centre".'

Moved by Councillor Miller:

'It is further recommended that the Parkdale Community Centre be identified on the priority listing of Centres at a level identical to that of the Masaryk-Cowan Community Centre.'

Moved by Councillor Miller:

'It is further recommended that the Commissioner of Economic Development, Culture and Tourism be requested to submit a report to the September 1999 meeting of the Economic Development and Parks Committee on all early childhood education and children/youth programs for which fees are proposed.'

Moved by Councillor Pantalone:

'It is further recommended that the Commissioner of Economic Development, Culture and Tourism be requested to review the catchment area used for the McCormick Community Centre and, should an error be found, take appropriate and immediate action.'

Moved by Councillor Prue:

'It is further recommended that the Crescent Town Club area be included as a high needs community area and that, in the absence of a municipally-funded Community Centre, the Commissioner of Economic Development, Culture and Tourism be instructed to:

(1) work with the Board of Directors of the Crescent Town Recreation Complex to determine what recreation needs are not currently being met, and submit a report to Council, through the Economic Development and Parks Committee, on the programs required and the costs associated therewith;

(2) provide the necessary funds for those services, where appropriate, from the Corporate Contingency Account for the balance of this year; and

(3) include this unique circumstance area in any future plans as a program jointly funded between the Board of Directors of the Crescent Town Recreation Complex and the City of Toronto.'

Moved by Councillor Rae:

'It is further recommended that the St. Lawrence Community Recreation Centre be included as a high-needs community.' ")

The Economic Development and Parks Committee recommended that:

(1) City Council receive the report (June 4, 1999) from the Commissioner of Economic Development, Culture and Tourism for information; and

(2) the communications (June 15, 1999) from Councillor Olivia Chow, Child and Youth Advocate, and (June 21, 1999) from Councillor Pam McConnell, Don River, be referred to the Chair of the Economic Development and Parks Committee, for discussions thereon with the aforementioned Councillors and the Commissioner of Economic Development, Culture and Tourism, and report thereon directly to City Council for its meeting of July 6, 7 and 8, 1999, the said report to include financial implications.

The Economic Development and Parks Committee submits the following report (June 4, 1999) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

To provide information on accessibility to recreation programs in light of Council's decision on harmonization of recreation user fees, and recommending that the report be received for information.

Background:

The recent decision by City Council on April 26 and 27, 1999, on the harmonization of recreation user fees has presented an opportunity to the Parks and Recreation Division to develop a policy that will ensure accessibility to recreation programs for residents who are unable to afford the cost of these programs.

Council adopted Option "B" with respect to harmonization of recreation programs. This option provided for non-specialized programs (drop-in, subscriber, introductory instructional) to be free for pre-schoolers, children and youth. It also provided free drop-in programs for older adults and for-fee programs for other older adult programs and for all adult programs. The "Welcome" policy, insofar as it deals with reducing financial barriers to participation, would apply to specialized programs for pre-schoolers, children and youth and for all other programs (except for older adult drop-in) for adults and older adults.

There are severe time constraints for developing such a policy as the Fall/Winter Parks and Recreation Guide, "Toronto Fun", goes to print in July 1999. Accordingly, the Division is advancing an interim policy for welcoming all users. This policy will address the need for accessibility for both individuals and communities. In keeping with Parks and Recreation's practice of encouraging input and advice from community residents, it is the intent of staff to consult with residents and appropriate community agencies to develop a proactive "Welcome Policy" to be in place for the fall of the year 2000.

Guiding principles for the interim accessibility:

The Division is committed to ensuring all City residents year-round accessibility to high quality community recreation and leisure programs regardless of their ability to pay. A "Welcome" or accessibility policy must be:

- accessible and equitable to all;

- reduce barriers to access in a seamless fashion;

- be handled in confidence with sensitivity to individual;

- apply to both individuals and communities;

- clearly welcome all to participate in enjoyable, healthful, satisfying and creative use of leisure time; and

- proactive in terms of increasing participation in recreational opportunities.

Benefits of Recreation for Individuals and High Need Communities:

Recreation contributes significant personal, social, economic and environmental benefits which enhance the well-being of Toronto citizens, their neighbourhoods and the local economy. This is particularly the case for high need individuals and communities as options may be more limited.

Through various studies, recreation has been demonstrated to:

- increase one's self esteem and confidence;

- reduce alienation, loneliness and anti-social behaviours;

- promote ethnic and cultural harmony;

- build strong families, the foundation of a stronger society;

- be critical, if integrated and accessible, to the quality of life of people with a disability and disadvantaged individuals;

- provide youth employment opportunities;

- reduce incidence of teen pregnancy;

- increase one's ability to work as part of a team; and

- increase youth's ability to complete schooling.

Individual Accessibility Policy - Interim Approach:

The interim policy is based on previous consultations with staff, residents and community agencies, done in the preparation of information for the User Fee Committee of City Council. It provides an individual with a choice of directly approaching a full-time recreation staff at the centre level or, for those who desire greater anonymity, of writing to a staff removed from centre operations.

An individual accessibility policy needs to be non-stigmatizing to the person, efficient and effective to administer and able to be clearly documented and controlled from a financial standpoint. The applicant will have to provide written evidence of financial need in general terms (no figures required). This can be provided by a social service agency or other professions familiar with the family (public health nurse, doctor, lawyer, school principal, etc.). A drug or benefit card, U.I.C. stub or other such documentation is also acceptable. In exceptional circumstances (e.g., homeless), written evidence may not be available. Supervisory staff will have the authority to approve subsidy. The key here is to ensure that site staff get to know their community.

Any number of members of one family are eligible. However, only one program per season per individual will be subsidized or as space may permit. In the case of children and youth, a specialized program would be subsidized as other programs are offered free of charge. Further, a minimum of 10 percent of program spaces within for-fee programs will be set aside, on a preliminary basis, for individuals in financial need. At some centres, this may increase to a higher level, and in communities that are among the highest need, even 100 percent of the spaces may be available for subsidy. The Division acknowledges that 25 percent of the children in the City are considered to be living in a financially challenging situation. Reaching out to these children and their families is a challenge that the Division embraces. The Division will seek more proactive methods as a result of further consultation.

The principle of this strategy (reserving a minimum of spaces for those in financial need) could be extended to other community based groups that use our facilities and outdoor spaces. For instance, each community based sports group utilizing public facilities could be encouraged to have a policy whereby a minimum of 10 percent of their spaces would be set aside for participants who cannot afford the registration fee. The Division will be reporting in the Fall of this year on permitting policies.

The Division is reviewing for the future the possibility of implementing a membership card system which would allow different fees to be charged based on family income or financial need. This is in keeping with direction received from City Council. A membership approach to individuals and families facing financial barriers to participation would involve the provision of a credit for a capped supply of recreation programs. For instance, a child may be able to choose from a menu of programs including advanced learn to swim, specialized day camp, etc., up to the maximum credit. The credit would be based on a calculated formula relating to what a family or individual would use on a City-wide average basis.

Welcome Policy for High Need Neighbourhoods:

One of the actions coming out of the user fee harmonization decision was "that high need communities be exempt from paying user fees for specialized programs" and that "an access policy be considered that would ensure low income families and individuals are not penalized" (Economic Development Committee Meeting No. 3, February 18, 1999). Existing programs at centres serving the local needs of these neighbourhoods would be offered free of charge. In keeping with this, staff have identified recreation centres whose local programming primarily serves neighbourhoods of high need. Participants from these neighbourhoods require special consideration in order to maximize their potential for enjoyment of recreation programs and activities. Generally, participants already rely on social services support. Recreation services, with the complementary support of social services, are delivered to attain the full benefit of recreation activity for participants.

Identification of centres serving neighbourhoods of high need is based on certain key demographic indicators in addition to the experience and judgement gained through many years of providing recreation programs and activities to various communities in the former municipalities. The two socio-economic key indicators used are Children zero to 17 years of age in families on Social Assistance and Lone Parent Families as a Percentage of Total Families. Attached is a map indicating the distribution of recreation centres in census tracts that reflect these key indicators. From the various centres on this map, the Division selected certain centres that should be a priority for free recreation programs given the Division's experience and, in particular, the percentage of young people on Social Assistance in the census tracts served by these centres.

The Division appreciates that selection of the key socio-economic indicators is a simple approach to a complex issue. For instance, the Urban Planning and Development Services is currently undertaking an exhaustive study on certain communities within the City that may require additional and/or continued investment in them by the City and other parties. This "investment" will be essential to ensure a continued and/or improved quality of life for the residents who reside in these neighbourhoods.

Indeed, this report specifies that enhancing the quality of life for residents is a prime objective of the Official Plan. The Official Plan is intended to be a corporate policy tool to provide a "geographic and urban structure for the Social Development Strategy .... for community development and service delivery." The end result of the study by Urban Planning and Development Services will certainly inform Parks and Recreation Services' proposal for the formal "Welcome" policy.

Welcome Policy Financing:

The Welcome policy is formally funded up to $700,000.00 ($400,000.00 for high need and $300,000.00 for increased demand). The strategy to provide for those in financial need, a minimum of 10 percent of maximum registration in a given program, will help avoid direct additional costs. Increased demand in particular is difficult to forecast. The Division will be reporting back on this matter after our experience with the Fall program series. The "Welcome" policy may have to be adjusted with respect to particulars or with respect to level of available subsidy.

For the pre-school, children and youth group, subsidy will only be necessary for specialized programs. Currently, the take-up on specialized programs represents 4.8 percent of the total program offering for these groups. Based on former Scarborough figures, an average participant registers for two to three programs per year. This is consistent with the interim individual access policy of allowing one program per season per individual to be subsidized. In the future, a new City-wide average participant profile will help inform the Division's recommendations with respect to a membership card system and an appropriate credit cap within budget guidelines.

Information and Consultation Strategy:

The Division intends to take a proactive approach to ensuring that interested residents in financial need are aware of the Welcome policy. The policy will be published in "Toronto Fun". Notices will be placed in all our facilities. Social Service agencies will be advised of the policy and asked to advise their clients and to publicize the "Welcome" policy.

In the longer term, the Division intends to promote formalized neighbourhood linkages with community groups and agencies that will consider the "whole" person and that person's various needs, including recreation services. Further, staff will review recreation service delivery at the local level with recreation advisory councils so as to address the accessibility requirements of individuals in all neighbourhoods.

For the final Welcome policy, the Division will invite interested community groups, social service agencies and stakeholders to review the interim policy and suggest refinements and different approaches to ensuring that all residents feel "welcome" to use recreation services. A report will be forwarded to the Economic Development and Parks Committee in time for implementation of a permanent Welcome policy by September 2000.

Contact Name:

Mr. Mario Zanetti, 392-7252.

Insert Table/Map No. 1

Census Tracts Denoting Lone Parent Families

Insert Table/Map No. 2

Census Tracts Denoting Lone Parent Families

The Economic Development and Parks Committee also submits the following communication (June 15, 1999) from Councillor Olivia Chow, Children and Youth Advocate:

Recommendations:

It is recommended that:

(1) the current definition of youth used by Parks and Recreation which caps the age of youth at 18 years of age be changed to cap the age of youth at 24 years of age, which is consistent with the definition of youth applied by other levels of government and community-based agencies;

(2) the measure used for defining High Need Communities be revised from the current one of 0-17 year olds on social assistance to a measure of families living below the Low Income Cutoff (LICO), and that the list of centres serving High Need Communities be revised to reflect this change; and

(3) given the need for additional resources to meet the needs of youth in under-serviced, high need areas, the Youth Sub-Committee of the Children and Youth Action Committee recommends that:

(a) the $300,000.00 put aside by the Budget Committee for service demands that result from harmonization be allocated for the specific purpose of creating new recreation programs for children and youth aged 6 to 24, in under-served, high need areas; and

(b) Parks and Recreation Department undertake the development of these new programs in consultation with youth in order to develop programming that will meet the needs and increase participation among youth who do not currently access recreation programs.

Council Reference/Background/History:

The Youth Sub-Committee of the Children and Youth Action Committee adopted the foregoing recommendations on June 14, 1999. The Youth Sub-Committee will bring these motions forward to the Children and Youth Action Committee at its June 25, 1999 meeting. In view of the fact that the Economic Development and Parks Committee will discuss this item at its June 21 meeting, the Youth Sub-Committee is forwarding its recommendations directly to the Economic Development and Parks Committee for consideration.

The Economic Development and Parks Committee also submits the following communication (June 18, 1999) from Paris Gardos, Youth Advocate, For Youth Project:

I am writing on behalf of the For Youth Project (FYP) to address the issue of the Interim Welcome Policy proposals for the City of Toronto's recreation programs. I want to urge this Committee to support an equitable, accessible and quality public recreation system for the City of Toronto. The For Youth Project is a partnership initiative comprised of eight organizations serving the former City of York. Through our involvement with youth in York in the policy development area and our work with the Youth Committee of the Children's and Youth Action Committee, FYP has been deeply involved in the consultations around the recreation user-fees issues.

The proposals outlined for the Interim Welcome Policy proposals clearly violate the Guiding Principles outlined for it. Our understanding of the focus of the policy is to

- reduce barriers;

- be accessible and equitable to all; and

- increase participation.

These goals cannot be implemented by considering the definition of youth strictly between the ages of 13 and 18. The understanding our organization had when Council approved option "B" in April was that youth up to the age of 24 would be included. Clearly excluding youth that are still high school age will not assist in reducing barriers or increasing participation. The proposal will create a recreation system that is not accessible to all.

Many neighbourhoods in the former City of York do not have access to local community recreation services. This geographic area has large numbers of youth, new Canadians and families who receive some form of social assistance. Unfortunately, this does not appear to be reflected in the calculations that determine which communities will get support through the Interim Welcome Policy. By not including in the formula average household income as well as the percentage of new Canadians living in the area, the method for determining need resulted in the exclusion of the former City of York.

In the Interim Welcome Policy proposals, the benefits of recreation are clearly stated:

- help reduce anti-social behaviours;

- promote ethno-cultural harmony;

- improve a community's quality of life.

These goals are undermined if they do not apply to all communities in Toronto. The former City of York has very limited recreation services for youth especially considering the absence of even one fully resourced community centre. By continuing policies that allow for high costs and low levels of service, youth in this area are being placed at even higher risk. Many youth in this area hoped to see a fair and equitable improvement in recreation services under the amalgamation. With the current Interim Welcome Policy proposals, the lack of recreation services for youth will reach crisis levels.

Our organization urges you to ensure that any recreation policy takes into consideration the need for equitable and accessible recreation services for youth in the former City of York as it will ultimately affect the future well being of all Toronto's youth.

I want to thank you for your attention in this matter. The For Youth Project can be reached at (416) 652-2273.

The Economic Development and Parks Committee also submits the following communication (June 21, 1999) from Councillor Pam McConnell:

I am very concerned about Item seven on today's Agenda - The Implementation Strategy for the "Welcome Policy".

There are several elements of the Policy, and the implementation strategy as a whole, that I believe unintentionally diverge from the direction given by Council and the understanding we had at Committee of what the policy would be.

I have three areas of concern:

(1) Age

When the matter was before committee and Council, the youth exempted from user fees included everyone up to 24 years old (see attached memo). In the current implementation plan, youth between 18 and 24 are required to pay.

(2) Program Categories

It is unclear in the current implementation plan if all programs run on a drop-in or instructional basis under the old system continue to be treated as drop-in or instructional programs under the current implementation plan.

(3) Free Access to People Living in Poverty

Council rejected Option B+, which would have given free access to adult drop-in programs. Both Council and Committee were assured that free adult drop-in was unnecessary since people living in poverty would have access through special funding for high needs areas. Under the current implementation plan, the high needs component does not take adults living in poverty into account at all, it provides solely for children living in poverty, and even there, ignores very poor neighbourhoods like Alexandra Park and Parkdale.

I understand that staff need to print the recreation calendars in very short order. Obviously, these calendars must include the user fee information. There are some serious concerns about the content of the implementation strategy, but little time to deal with them.

I think our only recourse is to have staff meet with the Chair of the Committee to review the implementation strategy to ensure that it complies with the policy direction staff were given, and that staff report to Council with the final draft of the implementation strategy. I would be happy to offer any assistance I can in this process.

Thank you for your consideration in this matter.

Insert Table/Map No. 1

Options Comparison

The Economic Development and Parks Committee also submits the following communication (June 18, 1999) from Punam Khosla, Planner and Karen Wirsig, Planner, Community Social Planning Council of Toronto:

Re: Implementation of Parks and Recreation "Welcome" and User-fee policies

The Community Social Planning Council of Toronto has been involved in City Council's process to establish a new user-fee policy since last summer. Our primary concern about the new policy is access for everyone in Toronto to high-quality recreation programs and services, regardless of ability to pay. We have held meetings with residents and community organizations across the new Toronto who are committed to making recreation a fundamental municipal service.

We are very concerned about the autumn implementation proposals for the new user-fee and "welcome" policies. They do not appear to correspond to the spirit of the decision on user-fees and access, made by City Council last April.

We understood that the decision would ensure access for children and youth - up to age 24, and their families, to a broad range of recreation programs and services across the new City. We also understood that provisions were made to provide all programs at no fee to "high needs" communities in the City.

Upon the study of the "Welcome" policy, along with draft pricing policies from a number of community recreation centres, it has become evident that a very narrow interpretation of Council's decision is being made.

- Although documentation put forward by staff during the budget process clearly indicated that the age limit for youth was 24 (please see attached), it has now been indicated as 18.

- Although Council decided that there would be no charge for programs in three-quarters of the program categories for children and youth, it is now proposed that only a small number of programs will be offered without charge at each centre.

- Although children and youth were designated priorities by Council in adopting the new policy, there has been no attempt to introduce new programs for them in centres where existing programming is inadequate.

- The criteria for determining "high needs" communities does not capture the actual conditions of Toronto's diverse neighbourhoods. It would be more accurate to base the definition on average household income and proportion of newcomers who have recently settled in the area (both available from census data).

As a result, we urge you to support the motions coming forward from the Youth Sub-Committee and, given the very short time-frame, recommend that a meeting be convened as soon as possible between concerned City Councillors, community representatives and Parks and Recreation staff responsible for implementing the new policies.

If you have any questions about the foregoing, please don't hesitate to contact Punam Khosla at 351-0095, extension 240.

Thank you very much for your consideration.

CITY OF TORONTO

ECONOMIC DEVELOPMENT COMMITTEE

USER FEE OPTIONS

Thursday, February 18, 1999

Insert Table/Map No. 1

User Fee Options

Insert Table/Map No. 2

User Fee Options

(City Council on July 6, 7 and 8, 1999, had before it, during consideration of the foregoing Clause, the following report (July 5, 1999) from the Commissioner Economic Development Culture and Tourism:

Purpose:

To provide additional information on this policy as requested by Economic Development and Parks Committee.

Source of Funds:

The harmonization of User Fees for recreation programs has already been approved by City Council. This report provides information, as requested by Economic Development and Parks Committee, on an option to increase the availability of free programmes at centres serving high need communities. Cost of this option is $600,000.00 approximately and is not currently funded.

Recommendation:

This report is provided for your information.

Council Reference/ Background:

At the last Economic Development and Parks Committee, communications from Councillor Olivia Chow, Children and Youth Advocate, and from Councillor Pam McConnell to the Chair of Economic Development and Parks Committee were referred for discussions among the Chair of Economic Development and Parks Committee, the two aforementioned Councillors and the Commissioner of Economic Development, Culture and Tourism with direction to report thereon directly to City Council for its meeting of July 6, 1999, the said report to include financial implications.

Discussion:

A number of specific issues were raised at this subsequent meeting among the Councillors concerned and the Commissioner. The five main issues are set out below with comments.

(1) Youth are to be defined as having an upper age of 24 rather than 18

The Department is agreeable to this definition as it was used, from time to time, during the User Fee debate. This definition would apply to the youth programme category, e.g., programmes aimed at youth and young adults.

• Free recreation programs and age based applications

The Department, in accordance with "Option B" with regard to recreation user fees, is setting out free and for fee programmes based on programme categories as defined, i.e., pre-school, children's and youth programmes are to be offered free of charge when they are drop-in, subscriber and introductory instructional. This is distinct from saying, for instance, all youth who take drop-in programmes could do so free of charge even if the programme they are entering is classified as adult. An age based approach to fee exemption would mean additional lost revenue to the Department. This revenue loss would be based primarily on youth participation free of charge in programmes aimed at adults. Staff estimate that the revenue loss could range to 15 percent of adult programmes. This translates into $251,034.00 for adult drop-in, $98,365.00 for adult subscriber and $526,538.00 for adult instructional for a additional revenue loss of $876,000.00.

• Programme definitions

The Councillors asked staff to review how programme definitions were being applied. There was some concern that many programmes for children and youth are being classified as fee-based rather than free under the "Option B" formula. Staff are in the process of reviewing this matter both for the upcoming Fall season and for the subsequent Winter season. Staff will review all programs being submitted for publication in the recreation guide. Each District Director will sign off for their respective district.

Centres serving high need areas

"Option B" provided for all existing programmes offered at centres serving high need neighbourhood to be free of charge. Funding for this initiative under "Option B" is $400,000.00. Staff had defined a priority list of centres serving high need areas based primarily on the socio-economic indicator of "Percent of Children Aged 0-17 in Families Receiving Social Assistance". At the request of the Councillors McConnell and Chow, staff have agreed to include a Low Income Cut-Off measure in defining a priority list. The measure is that of "Percent of Incidence of Economic Families Living Below the LICO". This measure captures the working poor families in addition to welfare receiving families.

A new priority list of centres serving high need areas is attached utilizing the LICO measure. This list includes a group of centres that would receive current programmes free of charge with the approved cap of $400,000.00 in revenue loss. At the request of the Councillors concerned, the list is extended to include approximately $600,000.00 of additional lost revenue that would accommodate the majority of centres on the list whereby if 1/3 of the population is living below the LICO measurement, then the centres activities would be provided at no fee. There is no funding for this additional $600,000.00. This information is provided for Council's review and discussion.

• Individual Access

The individual access component of the Interim Welcome Policy provides for one programme per person per season and reserves 10 percent of fee-based programmes for individuals who are in need of financial assistance. This 10 percent reserve would be flexible depending on the neighbourhood served.

Staff were asked to consider a 20 percent reserve and to report on the cost of such a reserve if there was full subscription. An additional 10 percent reserve, if fully subscribed, would cost $463,000.00 in forgone revenue. This additional 10 percent could also be applied to raising the access level to 2 programmes per person per season.

Contact Name:

Mario Zanetti

Director of Parks and Recreation - South District

392-7252.)

Insert list from comm(9)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (July 6, 1999) from Councillor Maria Augimeri, Black Creek:

I have noticed that there are major errors in the High Need Community Chart (page 4 of Supplementary Report), the grossest of which is that a prominent High Need Community Centre in the Jane-Finch community - the Oakdale Community Centre, has been omitted from the top third of the list.

Since the top third of this list reflects the schedule of centres which will be exempt from paying User Fees for Parks and Recreation programmes, this particular error is most grievous in nature.

I insist that the Oakdale Centre be placed at its proper place in the top one-third of the chart and that it be designated as a High Needs Centre. Whether this correction results in the re-alignment of the rest of the centres on the list, or not, remains to be a topic of discussion at Council.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (undated) from Councillor Pam McConnell, Toronto - Don River, submitting proposed amendments respecting the Interim "Welcome Policy" for Users of Recreation Programs - All Wards.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (July 7, 1999) from the City-Wide Recreation Network, urging Council to support a motion respecting the allocation of funds to exempt "high needs" areas of the City from Recreation User Fees.)

The Policy and Finance Committee also submits the following communication (July 8, 1999) from Mayor Mel Lastman:

At the City Council meeting of July 8, 1999, Council requested that a report be provided on funding options concerning the City of Toronto's Parks and Recreation Welcome Policy. Council also requested that all respective Council motions be referred to the July 20, 1999, Policy and Finance Committee. To facilitate the consideration of this matter by the Policy and Finance Committee and Council, I would appreciate the assistance of the Budget Advisory Committee in reviewing budget options for funding the Welcome Policy within the time frames established by Council.

Thank you for your assistance and I look forward to receiving the views of the Budget Advisory Committee.

(A copy of the communication dated July 9, 1999, addressed to the Policy and Finance Committee from the City Clerk, forwarding Clause No. 6 contained in Report No. 1 of the Economic Development and Parks Committee, headed "Interim 'Welcome Policy' for Users of Recreation Program - All Wards", was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

The Policy and Finance Committee reports, for the information of Council, having also had before it during the consideration of the foregoing matter, the following communications:

(i) (July 19, 1999) from Councillor Pam McConnell, Don River, requesting free access to recreation programs be provided to all high-needs communities;

(ii) (July 19, 1999) from Ms. Liz Bonanno, Executive Director, Syme-Woolner Neighbourhood and Family Centre, in support of Councillor McConnell's motion to expand services to high needs communities;

(iii) (July 19, 1999) from Mr. Toni Panzuto, ETAS Member, Etobicoke Takes A Stand, in support of Councillor McConnell's motion to expand services to high needs communities;

(iv) (July 16, 1999) from Lorna Weigand, on behalf of the Network of Community Based Organizations, urging the Committee to support a motion to allocate funds to exempt "high needs" areas of the City from recreation user fees; and

(v) (July 16, 1999) from Anne Golden, President, United Way of Greater Toronto, addressed to Mayor Lastman, advising that the United Way supports the City's commitment to offer free recreation services in neighbourhoods where a large proportion of the population is living in poverty; that they have considered the City's proposed approach and suggest that it would be beneficial to the social and economic health of the City to extend this benefit to neighbourhoods with poverty rates of roughly 30 per cent or more; and stating that they believe that access to recreation services represent an important and progressive investment in the City's human capital and communities.

The following persons appeared before the Policy and Finance Committee in connection with the foregoing matter:

- Ms. Gloria Holmes-Perkin;

- Mr. Paris Gardos and filed a written submission;

- Mr. Loren Grabanier, For Youth Project, and filed a written submission;

- Mr. Doug Hum, The Children's Aid Society of Toronto; and filed a written submission;

- Mr. David Rew, East Scarborough Boys and Girls Club;

- Mr. Anver Saloojee; and filed a written submission;

- Ms. Myra Lewis, S. H. Armstrong Centre Advisory Council;

- Ms. Datejie Green;

- Ms. Doreen Lalor; and filed a written submission;

- Ms. Monica Plant;

- Councillor Sandra Bussin, East Toronto; and

- Councillor Chris Korwin-Kuczynski, High Park.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following communications:

(i) (July 27, 1999) from Paris Gardos, Youth Advocate, For Youth Project, respecting the "Interim Access and Interim Welcome Policies", and advising that these policy proposals should be made more accessible to at-risk youth in the York community; and

(ii) (July 27, 1999) from Mr. Kurt Zubatiuk, on behalf of concerned individuals, in opposition to the levying of fees on community centres, public pools and associated programs.)

4

Staffing Requirements - Toronto Fire Services

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause:

(1) by adding to Recommendation No. (2) of the Policy and Finance Committee, the words "and subject to a report from the Fire Chief and the Executive Director of Human Resources on the status of collective bargaining with the Toronto firefighters", so that such recommendation shall now read as follows:

"(2) that hiring of the remaining 55 firefighters be contingent on the Fire Chief reporting back by the beginning of December on a viable strategy to reduce absenteeism with its implementation to take effect in the year 2000; and subject to a report from the Fire Chief and the Executive Director of Human Resources on the status of collective bargaining with the Toronto firefighters;";

(2) by adding to Recommendation No. (4) of the Policy and Finance Committee, the words "in the fall", so that such recommendation shall now read as follows:

"(4) that the Commissioner of Works and Emergency Services, in consultation with the Fire Chief, the Chief of Police and the General Manager of Ambulance Services, be requested to submit a report to the appropriate Committee on the efficiencies and related savings on a better co-ordinated tiered response in the fall;";

(3) to provide that the hiring of the remaining 55 firefighters be considered after the Commissioner of Works and Emergency Services has submitted the report on a better co-ordinated tiered response;

(4) by adding thereto the following:

"It is further recommended that:

(a) the report dated July 26, 1999, from the Chief Financial Officer and Treasurer, embodying the following recommendation, be adopted:

'It is recommended that the additional funding required for 1999 in the amount of $.340 million be absorbed within the current Fire Services 1999 Operating Estimate of $219.9 million net (approximate full year impact of the 62 hires in November 1999, would be $2.6 million of the $5.1 million projected for the year 2000) and that the additional funding for 2000 be considered during the 2000 budget process';

(b) the Fire Chief be requested to:

(i) investigate the possibility of implementing the International Fire Services Fitness and Wellness Initiative in the Toronto Fire Service, as is currently being practised in Calgary, Alberta, and many American Cities; and the Commissioner of Works and Emergency Services, in consultation with the Fire Chief, be requested to submit a joint report thereon to the Community Services Committee; and

(ii) enquire and investigate with the City of Toronto's Twin City, Phoenix, Arizona, the organization of the First 'Relationships by Objective' Conference for Union and Management staff, which has proven successful in Phoenix and other Fire Services, and report thereon to the Community Services Committee;

(c) the Executive Director of Human Resources be requested to submit a report, in writing, to the Administration Committee, providing:

(i) a detailed strategy for increasing representation from the target groups in the staffing of the Toronto Fire Services; and

(ii) a breakdown of the target groups, as it relates to new recruits and the incumbent firefighters, as well as the other concerns raised at the meeting of Council held on July 27, 28, 29 and 30, 1999;

(d) the Executive Director of Human Resources and the Fire Chief be requested to discuss with the Toronto Firefighters Association, the implementation of a physical fitness program to prevent injury on the job, and to ensure reliable performance for suppression duty firefighters;

(e) any fitness program for Toronto Fire Services incorporate means to ensure fairness for firefighters who do not meet the required fitness levels;

(f) the Toronto Police Services Board be requested to urge the Chief of Police to facilitate the Commissioner of Works and Emergency Services' review on the tiered response; and

(g) the following motion be referred to the Administration Committee, and the Executive Director of Human Resources, in consultation with the appropriate officials and the Firefighters Association, be requested to report thereon to the Committee:

Moved by Councillor Davis:

'That the Clause be amended:

(1) to provide that a minimum of 50 percent of all fire suppression and fire prevention vacancies be filled by qualified candidates from equity target groups (women, visible/racial minorities, the disabled and aboriginal people), where possible, until such time as Toronto Fire Services is representative of the population of the City of Toronto; and

(2) by adding thereto the following:

"It is further recommended that the Fire Chief be requested to provide an annual report to Council, through the Administration Committee, on the results of the recruitment process as it relates to equity and diversity; the first of such reports to be completed by December 1999." ' ")

The Policy and Finance Committee recommends:

(1) the adoption of the recommendations of the Community Services Committee embodied in the communication (July 14, 1999) from the City Clerk;

(2) that hiring of the remaining 55 firefighters be contingent on the Fire Chief reporting back by the beginning of December on a viable strategy to reduce absenteeism with its implementation to take effect in the year 2000;

(3) that a method of centrally monitored absenteeism for all former municipal departments be done on a daily basis;

(4) that the Commissioner of Works and Emergency Services, in consultation with the Fire Chief, the Chief of Police and the General Manager of Ambulance Services, be requested to report to the appropriate Committee on the efficiencies and related savings on a better co-ordinated tiered response;

(5) that the Chief Administrative Officer and the Chief Financial Officer and Treasurer be requested to report to the Policy and Finance Committee on the feasibility of a phase II review of Fire Service's business processes, operations, and practices in an effort to streamline services supporting front line firefighters and thereby permitting redeployment of resources;

(6) that the Fire Chief be requested to report to the appropriate Committee on the scheduling of the recruitment classes, and on the issues identified by Councillor Pitfield in the following Committee Recommendation No. (8);

(7) that the Chairs of the Administration Committee, the Community Services Committee and the Budget Advisory Committee and Councillor Norman Kelly, member of the Policy and Finance Committee, be requested to meet with the Fire Chief and the Toronto Professional Fire Fighters Association to discuss mutual areas of concern to ensure that the appropriate Committees are dealing with the concerns raised by the Policy and Finance Committee; and

(8) that the Fire Chief be requested to submit a report to the appropriate Committee on:

(i) a staff vacation management plan which may improve staffing throughout the summer;

(ii) the implementation of some form of mandatory physical fitness;

(iii) sick leave usage throughout the year, and if there is any type of pattern, how this can be addressed in the fire service; and

(iv) the issue of doctors certificates being required after three days of absence.

The Policy and Finance Committee reports having requested the Fire Chief to submit a report directly to Council for its meeting scheduled to be held on July 27, 1999, on the 25 per cent of firefighters time not spent on firefighting and that this time be broken down into various categories including short-term and long-term absenteeism.

The Policy and Finance Committee submits the following communication (July 14, 1999) from the City Clerk:

Recommendations:

The Community Services Committee on July 14, 1999, recommended to the Policy and Finance Committee, and Council:

(i) the adoption of the joint report dated July 12, 1999, from the Commissioner of Works and Emergency Services and the Fire Chief respecting staffing requirements - Toronto Fire Services; and

(ii) that the City of Toronto request the Province of Ontario to fund the transition costs of Fire Services and the impact of the extra responsibility pertaining to inspection services caused by the downloading legislation.

The Community Services Committee reports, for the information of the Policy and Finance Committee, having further:

(1) directed that the Chief Administrative Officer and the Chief Financial Officer and Treasurer be requested to review the recommendations contained in the aforementioned joint report, and report on a funding mechanism directly to either the Policy and Finance Committee for its meeting on July 20, 1999, or Council for its meeting on July 27, 1999;

(2) directed that the Commissioner of Works and Emergency Services and the Fire Chief be requested to report to the Policy and Finance Committee for its meeting on July 20, 1999, or Council for its meeting on July 27, 1999:

(a) providing justification for an increase in staffing levels in contrast to the recommendations of the recent KPMG Fire and Ambulance Facilities Study and the Ernst and Young report from the former Metropolitan Council;

(b) on the issue of absenteeism and on a strategy to reduce the numbers;

(c) on the process to be used in the hiring of fire fighters, particularly with respect to equity and diversity;

(d) on the progress of the co-ordination of the tiered response of emergency services (Police, Ambulance and Fire Services);

(e) if possible, on the implementation of the KPMG Fire and Ambulance Facilities Study;

(3) directed that the City Solicitor, in consultation with the Fire Chief, submit a legal report to the Policy and Finance Committee for its meeting on July 20, 1999, or Council for its meeting on July 27, 1999, outlining Council's potential exposure to liability with regard to staffing level decisions;

(4) directed that the Commissioner of Works and Emergency Services and the Fire Chief, in consultation with the Executive Director of Human Resources and the Toronto Professional Fire Fighters Association, report to the Community Services Committee on options, if any, to more effectively manage vacation time to reduce the frequency of vehicles being out of service;

(5) directed that the Executive Director of Human Resources be requested to report to the next meeting of the Community Services Committee to be held on September 9, 1999, on the timetable for the Collective Agreement with the Toronto Fire Fighters; and

(6) supported the Fire Chief's efforts to consult with the Medical Advisor, Human Resources staff, the Commissioner of Works and Emergency Services, and the Toronto Professional Fire Fighters Association in developing a common attendance management policy; and directed that the Commissioner of Works and Emergency Services and the Fire Chief be requested to provide a progress report to the meeting of the Community Services Committee to be held on October 7, 1999, including an analysis of vacation time and sick leave impacts on service levels.

Background:

The Community Services Committee had before it a joint report (July 12, 1999) from the Commissioner of Work and Emergency Services and the Fire Chief providing the historical data and statistics on the levels of vehicle staffing and fire protection services presently provided to the citizens of Toronto; and recommending that:

(1) City Council authorize the Fire Chief to hire an additional 117 fire fighters, with 62 starting in November 1999 and the remaining 55 to start in March 2000; and

(2) this report be forwarded to the Policy and Finance Committee for consideration of the budgetary implications.

The Committee also had before it a communication (July 14, 1999) from Councillor Brian Ashton, Scarborough Bluffs, expressing concern with respect to a notice that had been circulated within his community from the Toronto Professional Fire Fighters' Association; and suggesting that the Community Services Committee consider conducting a series of random personnel audits over select time periods, including the weekend in question.

Mr. Jim Lee, President, Toronto Professional Fire Fighters Association, appeared before the Community Services Committee in connection with the foregoing matter.

The following Members of Council appeared before the Community Services Committee and asked questions of the Fire Chief in connection with the foregoing matter:

- Councillor Doug Holyday; and

- Councillor Frances Nunziata.

--------

(Joint Report dated July 12, 1999, addressed to the

Community Services Committee from the

Commissioner of Works and Emergency Services and

the Fire Chief)

Purpose:

To provide Committee and Council members with historical data and statistics on the levels of vehicle staffing and fire protection services presently provided to the citizens of Toronto, and to request approval to hire additional fire fighters.

Funding Sources, Financial Implications and Impact Statement:

This report proposes the hiring of an additional 117 fire fighters; 62 to start in November, 1999, with the remaining 55 to start in March, 2000. The estimated increases to the Fire Services' operating budget are: $340,000.00 for 1999, and $5.1 million for 2000, staff benefits included at 23 percent.

Recommendations:

It is recommended that:

(1) City Council authorize the Fire Chief to hire an additional 117 fire fighters, with 62 starting in November, 1999, and the remaining 55 to start in March, 2000; and

(2) this report be forwarded to the Policy and Finance Committee for consideration of the budgetary implications.

Council Reference/Background/History:

N/A

Comments:

In order to meet budgetary constraints, Fire Services eliminated 136 positions in 1998. Of this total, 17 were management positions, 69 reflected positions listed as complement but were, in fact, unfunded, and 50 represented positions to be eliminated through attrition. Fire Services has operated through 1998 and into 1999 with a total established level of 3,016. This level of staffing includes 2,703 positions assigned for fire fighting operations staff.

A number of factors have combined to make effective deployment of fire suppression staff difficult:

(1) the need for integrated support infrastructure and revised equipment;

(2) the need to deploy and reallocate equipment across the 80 fire stations;

(3) attrition and turnover rates which necessitate the hiring and training of new fire fighters; and

(4) an absenteeism rate which exceeds the average for other jurisdictions.

The first three issues have been actively addressed through:

(1) obtaining capital budget approvals for infrastructure and equipment, and then proceeding to implement projects for a new radio system and computer-aided dispatch, and a single type of self-contained breathing apparatus for Fire Services;

(2) the KPMG Facilities Study with recommendations on the present and future needs for fire stations and the appropriate deployment of vehicles and equipment; and

(3) recruitment and training programs which will bring new fire fighters into service in 1999.

The issue of absenteeism has recently been high-lighted by the increasing need to take vehicles out of service due to unavailability of staff. It has become clear that due to the timeframe necessary to address the issue of infrastructure, facilities and collective agreements, that there is a need to review whether current staffing levels can be sustained. The following eight attachments illustrate a number of the factors affecting staffing.

Attachment No. 1 is a graph which shows the reduction in total fire fighting staff since 1993. As the graph notes, the new Fire Services is presently operating with 227 fire fighters less (2,930-2,703) than the six former fire departments had in 1993. This reflects service decisions made by the former municipalities.

Attachment No. 2 is a chart which shows all of our present vehicles with both the minimum staffing levels indicated, and in addition the full-time fire fighters needed to meet these minimum vehicle staffing requirements. This chart indicates that actual staffing levels (2,703) exceeds the minimum but are below the preferred (2,930) staffing levels by 227 positions (2,930 - 2,703). The reason for the difference between the minimum staffing and fire fighters needed is noted below.

The Toronto Fire Services operates a four-platoon system that provides continuous emergency protection for the community 24 hours/7 days a week, 365 days a year. Each platoon works 182 shifts/tours per year. There are two shifts/tours per day and four fire fighters assigned to physically staff each vehicle. Throughout the year, fire fighters are absent from duty due to a variety of reasons: vacation entitlements, days off in lieu of statutory holidays, illness, fire college, bereavement, time owing, special (modified) duty, workers' compensation, etc. This results in the average fire fighter actually being on duty for 140 shifts/tours per year of the 182 shifts/tours covered by each platoon. Accordingly, and in order to maintain preferred staffing levels on the vehicles, fire departments typically staff each vehicle with an average of 5.25 fire fighters knowing that only four fire fighters will actually be on duty that day for a variety of the reasons noted earlier.

From Attachments Nos. 1 and 2, it has been identified that a previous and preferred staffing level was 227 fire fighters over and above the current complement. In order to address the number of vehicles out of service, it is recommended that we hire an additional 95 operational fire fighters. The remaining 132 positions (227-95) equate to 33 aerial vehicles each being shorted by one fire fighter multiplied by four platoons (33 x 4). We will work together to address the absenteeism concerns, the vacation policy, and the future implementation of the KPMG Study in order to enhance the staffing of the aerial vehicles.

Attachment No. 3 indicates that we took a total of 2,115 vehicles out of service during the last six months of 1998, and 1,829 vehicles out of service during the first five months of 1999 - all due to staffing constraints. It also shows that we placed 9,352 vehicles into service in 1998, and 6,336 vehicles into service in the first five months of 1999, all of which were each short a fire fighter. When staffing shortages occur, Fire Services' policy is to reduce the number of staff on an aerial vehicle (not a pumper) by one. Beyond this, we proceed to take a vehicle out of service. This shortage of apparatus and staffing constrains the ability to respond to a fire-related emergency.

The practices in the former fire departments for dealing with shortages in the staffing of emergency response vehicles are as follows:

Former Fire Department Provision

Toronto Cancel staff lieu days/take vehicle out of service.

Etobicoke Cancel staff lieu days/take vehicle out of service.

York Pay staff overtime/take vehicle out of service.

East York Pay staff overtime/take vehicle out of service.

North York Take vehicle out of service.

Scarborough Take vehicle out of service.

In the first five and a half months of 1999, in the East York district, in excess of $152,000.00 was paid in overtime to fire fighting staff in order to keep the vehicles staffed. In the Toronto and Etobicoke districts, it has been necessary to cancel lieu days in order to keep vehicles in service. As a result, 5,537 lieu days have been accumulated representing a liability of approximately $1.7 million to the City. Until a new single Collective Agreement is negotiated, we are obligated to honour the unique terms and conditions of each of the Collective Agreements from the six former fire departments.

There is currently a staffing issue in Fire Services as to the appropriateness of fire fighters and apparatus working across the "boundaries" of the former cities to address operational needs and continue to ensure public safety. There are at least eight grievances put forward by the Association challenging the right of the City to utilize its resources across the boundaries of the former cities.

Approximately half of our 80 stations are equipped with only one emergency fire vehicle. We have very few two-pumper stations and these placements have generally occurred in areas which have a very high volume of calls. To date, we have been able to remove vehicles from a two-vehicle station when manpower shortages occur. Fortunately, it has not yet been necessary for Toronto Fire Services to close a fire station due to staffing constraints.

Our communications centres are staffed by highly trained and skilled employees who by necessity must provide the fire fighters on scene with the highest levels of support, backup and advice. In some communications centres, the provisions of the collective agreement require staff on overtime to be paid double time. In addition, when staff of the communications centre call in "sick", then staff from operations (fire suppression) must be reassigned from a vehicle to fill in for them which further reduces the total number of fire fighters on duty that shift.

Attachment No. 4 shows fatalities City-wide. In all of 1998, we had 21 fatalities City-wide due to fire-related reasons. From January 1, 1999, to date, we have had 17 fire-related fatalities. Our public education and fire safety programs need to be effective in reaching the entire community. Fire Services needs to accelerate these community-based programs so that our message of fire safety and emergency preparedness is heard and understood by the public.

Attachment No. 5 illustrates the total emergency calls we responded to over the past five years. This chart shows a slow annual increase in the total number of calls. The total annual property loss per year is averaging $45 million, a figure we would like to reduce. Through maintaining a constant state of preparedness, training and full staffing, we can limit significant property loss in the future.

Attachment No. 6 shows two charts which represent average vehicle response times by former municipality and by time of day/time of season. We are aggressively attempting to lower these response times by - amongst others - introducing leading-edge technology to the call-taking/dispatch function via the acquisition and implementation of our centralized computer-aided dispatch system.

Attachment No. 7 is a table showing fire fighter "sick days" from a sampling of larger fire departments in North America. As the chart shows, the average fire fighter from this North American sampling took 6.86 sick days in 1997 (and 6.28 sick days in 1998). The Toronto Fire Services average for 1997 is 8.23, about 20-25 percent higher than the other fire departments sampled across North America.

Attachment No. 8 shows the average fire fighters sick days from the former six fire departments since 1993. The 1998 and 1999 figures (since amalgamation) have been shown separately as the data is still kept separately by the Payroll Division.

Staff of Fire Services realize that our average fire fighter sick days per annum are higher than the sampled data. Furthermore, we also know that in some areas of the City, the averages are better than they are in other areas. We are working with our Medical Advisor in this regard and attempting to get this situation under control. We anticipate that the Professional Fire Fighters' Association will have a similar goal, and thus be co-operative in this review. Bringing attendance in line with standards would result in having more staffing resources.

We are working together with the staff of the Human Resources Division in developing a common attendance management policy based on other successful models. We will need both short-term and long-term solutions to this problem as the collective bargaining initiatives currently underway may set some parameters for managing attendance.

Fire Prevention:

Through The Fire Protection and Prevention Act, 1997 (Bill 84), the Province has downloaded legislation now requiring municipal governments to inspect a greater percentage of buildings for compliance with the Ontario Fire Code. Heretofore, these buildings were inspected by provincial officials.

Our Fire Prevention staff are also charged with the responsibility of inspecting buildings under the provincial retrofit legislation to ensure older buildings are brought up to present standards for occupant safety. With the present staff complement, it is estimated that an additional ten years are required to complete this retrofit inspection program. We find this to be an unacceptable time frame.

The Hotel Fire Safety Act has now been incorporated into the Fire Code requiring a phased-in transfer of inspection responsibilities to the municipal fire inspector. Part IV of the Ontario Fire Code has recently been effected and addresses Flammable and Combustible Liquids. This brings an additional burden to our fire inspection workload.

On November 1, 1998, a by-law requiring dwelling units to be equipped with carbon monoxide detectors came into effect. Under this by-law, our Fire Prevention Inspectors have been appointed as Property Standards Officers for the purposes of administering and enforcing its provisions. Our administration staff continue to receive numerous telephone calls respecting this by-law.

We are proposing to increase our inspection staff by ten (which is included in the 117) in these mandated inspection areas to comply with provincial legislation.

Training Section Staff:

Our Training Section is charged with the responsibility of adhering to provincial legislation regarding the requirements of the Occupational Health and Safety Act which was introduced to ensure standards of safety in the workplace. The fire ground is a dangerous environment for anyone and, accordingly, we take all measures to ensure the safety of our fire fighters. In addition, our Training staff are presently conducting a massive retraining program as we amalgamate the processes, and standard operating procedures of the six former fire departments into one fire service. Some of these training programs are highly specialized as they address procedures for containing and handling hazardous materials and chemicals.

As a result of under-staffing in the Professional Development and Training Section, many operational training programs have been constrained. Under the Occupational Health and Safety Act, we must provide training for all staff. Specifically, we must meet our contractual obligations to Sunnybrook Base Hospital for the Fire Fighter First Responder Defibrillation Program, the standardization of technical rescue programs across the Fire Services, the implementation of the Ontario Fire Fighter Curriculum/Certification Program, and the provision of officer training to meet the OHSA component supervisor requirement.

To meet these immediate staffing needs, the Training Section requires 12 additional staff which are included in the total request of 117. Of the number of positions previously approved for this section, these 12 remain vacant. We intend to staff them as follows: the Emergency Medical Support unit with one District Chief and three Training Officers, the Health and Safety Unit with four Training Officers, and the Professional Development and Training Section with four Training Officers to implement the OFM Curriculum/Certification and Company Officer Diploma Programs.

Fire Suppression Staff:

Staffing levels not only determine the rate of fire extinguishment and victim rescue but also have a direct relationship to fire fighters' safety. The improved efficiency (the time it takes fire fighters to perform a prescribed menu of tasks) of a four-person crew has been proven in studies across major fire departments in North America, as well as organizations such as the National Fire Protection Association (N.F.P.A.). Ratepayers pay for protection of life and property through their tax dollars and assume that the elected and appointed officials will make informed decisions regarding that protection.

It has been well demonstrated that a minimum of 13 personnel must be assembled on the fire ground at a single family residence in order to accomplish the initial goals of victim rescue, fire control and property conservation. To assemble less staff in a rapid response, an aggressive attack will not be made and the fire fighters must resort to defensive operations or risk their own personal safety.

Fire fighting has always been labour intensive and remains so. Although new technology has improved fire fighting equipment and protective gear, it is still the fire fighters who perform the critical tasks necessary to contain and extinguish fires. When staffing falls below preferred levels, service levels can be impacted.

We advise that due to attrition, we are presently recruiting 40 new fire fighters for an August 9, 1999, start. Earlier in the year, we trained 28 new fire fighters.

Conclusions:

Operating budget pressures continue to have an impact on vehicle staffing which ultimately affects the levels of fire protection service provided to the residents of Toronto.

Over the years, we have had in excess of 227 positions reduced in Fire Services. While we will be reporting further in September 1999 when we provide our response to the KPMG Fire and Ambulance Facilities Study - a report which will undoubtedly have an impact on staffing levels, and the potential to reallocate resources across the City - we are experiencing an immediate need for additional fire fighters.

Accordingly, Council approval is requested for the Fire Chief to receive additional funding so that 117 additional fire fighters may be recruited and started on the 14-week training program. We propose to start 62 fire fighters this November with the other 55 fire fighters to start in March 2000. A detailed evaluation of fire fighter strength will be provided to Council in September 2000.

Under the six Collective Agreements, staff vacations are allocated and selected in accordance with previously negotiated policies. In most cases, the prime summer months see the maximum number of staff on vacation while many of the remaining months have varying amounts of available time. We are seeking to address this through collective bargaining.

By working together with staff of the Human Resources Division to improve upon our attendance management system, it will result in more staff being in duty. We will be addressing this issue with the Fire Fighters' Association as we work diligently to reduce the absenteeism as it currently exists.

The recommendations of the KPMG report, when implemented, will result in additional staff being made available. The total number has yet to be determined. However, it is important to note that full implementation to realize complete staff restructuring will take up to two years depending upon the availability of vehicles, fire station modifications, and the introduction of the communications technology now in progress.

Contact Name:

Alan F. Speed, Fire Chief, Tel: 397-4315

(A copy of each of the attachments referred to in the foregoing report was forwarded to all Members of Council with the Supplementary Agenda of the Community Services Committee for its meeting on July 14, 1999, and a copy thereof is on file in the office of the City Clerk.)

The Policy and Finance Committee also submits the following report (July 15, 1999) from the City Solicitor:

Purpose:

To advise on the status of our legal report outlining Council's potential exposure to liability with regard to staffing level decisions made with respect to Toronto Fire Services.

Funding Sources, Financial Implications and Impact Statement:

Not applicable.

Recommendations:

This Report is for information only.

Council Reference/Background/History:

At its meeting of July 14th, 1999, the Community Services Committee directed that the City Solicitor, in consultation with the Fire Chief, submit a legal report to the Policy and Finance Committee for its meeting on July 20th, 1999, or Council for its meeting on July 27th, 1999, outlining Council's potential exposure to liability with regard to staffing level decisions made with respect to Toronto Fire Services.

Comments and/or Discussion and/or Justification:

Due to the complexities involved in advising on the issues in question (e.g., negligence, occupational health and safety) and the time needed to address those issues properly, our report will be submitted directly to Council for its meeting of July 27th, 1999, which is provided for in the July 14th, 1999 Committee Report.

Conclusions:

Our report will be to Council for its meeting of July 27th, 1999.

Contact Name:

Brian Loreto, Telephone: 392-8530; E-mail address: brian_loreto@mta1.metrodesk.metrotor.on.ca

The Policy and Finance Committee also submits the following joint report (July 19, 1999) from the Commissioner of Works and Emergency Services and the Fire Chief:

Purpose:

To provide additional information to City Council regarding the recent request by Fire Services for 117 additional fire fighters.

Funding Sources, Financial Implications and Impact Statement:

Fire Services has proposed the hiring of an additional 117 fire fighters; 62 to start in November, 1999 with the remaining 55 to start in March, 2000. The estimated increases to the Fire Services' operating budget are: $340,000 for 1999, and $5.1 million for 2000 including staff benefits calculated at 23 percent.

Recommendation:

That this report be received for information.

Council Background:

A report from The Commissioner, Works and Emergency Services and the Fire Chief was presented to the Community Services Committee at its meeting held on July 14, 1999 requesting Council approval to hire an additional 117 fire fighters. These fire fighters are needed as: (a) crew on the various vehicles which are placed out of service on a daily basis due to staffing shortages, (b) training officers, and (c) inspectors and public education officers.

The report noted that the amalgamated Fire Services has 227 less fire fighters now than the pre-amalgamated fire departments had in 1993.

Community Services Committee requested that the Commissioner of Works and Emergency Services and the Fire Chief provide the additional information noted below to either the Policy and Finance Committee for its meeting on July 20, 1999, or Council for its meeting on July 27, 1999:

(a) providing justification for an increase in staffing levels in contrast to the recommendations of the recent KPMG Fire and Ambulance Facilities Study and the Ernst and Young report from the former Metropolitan Council;

(b) on the issue of absenteeism and on a strategy to reduce the numbers;

(1) on the process to be used in the hiring of fire fighters, particularly with respect to equity and diversity;

(2) on the progress of the co-ordination of the tiered response of emergency services (Police, Ambulance and Fire Services); and

(3) if possible, on the implementation of the KPMG Fire and Ambulance Facilities Study.

Discussions:

(a) Justification for an Increase in Staffing Levels in Contrast to the Recommendations of the Recent KPMG Fire and Ambulance Facilities Study and the Ernst and Young Report from the Former Metropolitan Council:

Firstly, both the KPMG Fire and Ambulance Facilities Study and the Ernst and Young studies recommended that the Fire Services maintain all vehicles in service. This is presently not happening.

Secondly, although KPMG felt that certain fire fighter positions could be saved through: (a) the use of the rescue/pumper restructuring program, i.e. using rescue/pumpers instead of pumpers, and (b) the withdrawal from service of two aerial vehicles, this initiative will take many years to implement largely due to the necessity to place 20 rescue pumpers into service - the majority of which will have to be purchased at an approximate cost of $350,000 each. KPMG also recommended the building of six new fire stations across the city - some now, the rest as the need arose.

Thirdly, the Ernst and Young report advocates the use of a factor of 5.0 fire fighters to staff each vehicle (pumper) for each of the four platoons. Using their figures, 20 fire fighters (5 x 4) could conceivably keep a vehicle in operation 24 hours a day, 7 days a week. We have found that the factor of 5.0 is both unrealistic and unattainable. Fire Services uses a factor of 5.25 fire fighters per vehicle per platoon - 21 fire fighters per vehicle. Although the Ernst and Young report was able to theoretically reduce manpower needs by 5 percent, we have found this concept unworkable as noted above.

Furthermore, the Ernst and Young report contains the following caveats:

(1) "We were requested not to, and did not have direct contact with any of the six municipalities' officials. We did not conduct any interviews or working sessions with these municipalities to verify or clarify the public information we used."

(2) "Further analysis, in the form of independent, comprehensive operational reviews, will be needed to confirm these estimates and determine more precisely the full extent of the financial impacts to be realized."

(b) Absenteeism and on a Strategy to Reduce the Numbers:

With the assistance of a steering committee representing the interests and ideas of both corporate and business units, Corporate Human Resources has developed a draft attendance management program intended for review and implementation across the entire Corporation. It should also be noted that currently within the Toronto Fire Services, attendance management programs exist in both former Etobicoke and Scarborough but do not have widespread application. The Toronto Fire Fighters Association have publicly endorsed the concept of attendance management and, in the spirit of co-operation, it is our intention to meet with representatives of both Human Resources and the Association to see how best to capitalize on our experiences with the existing programs and to customize the Corporate program to meet the unique needs of the Division. It is believed that this approach will result in an effective and mutually beneficial program which is also consistent with the corporate initiative.

(c) The Process to Be Used in the Hiring of Fire Fighters, Particularly with Respect to Equity and Diversity:

The inaugural Firefighter Recruitment Process for the City of Toronto commenced in January of 1999. Toronto Fire Services is committed to a workforce that reflects the community we serve and encourages applications from Aboriginal peoples, people with disabilities, racial minorities and women and has engaged in outreach initiatives to maximize the participation of these groups. The recruitment process has been reviewed by the Human Rights Commission and is being conducted consistent with its legislated requirements. As an example, previous recruitments focused on the scored or rank order of candidates. In this process, we developed a system to identify a level, above which all candidates were deemed equally qualified.

The recruitment process conducted included providing the following:

Flyers / Public Service Announcements:

Prior to the commencement of the process, the Recruitment Office stepped up their activities to include an information blitz to community and ethnic groups. This included providing flyers outlining the timing for the upcoming recruitment drive and providing specifics on the process. (See Attachment "A" for a sample flyer.)

Information Sessions and Special Smaller Community Information Sessions:

Fire Services held four large information sessions at the Fire Academy. The sessions were quite popular and process experts provided specific information on the process itself and how to prepare in order to be successful. Specifics were provided on the prerequisites: written test, interviews, York fitness testing, medical testing and the exact steps of the recruitment process as well as a presentation by Toronto EE/Access and Equity.

The Recruitment Office also held smaller Community Information sessions for different groups at community centers (e.g. the Aboriginal Center) to provide the above-noted information on a smaller scale to interested groups

The Recruitment Office is investigating the feasibility of bursary programs to assist any interested community members with the costs associated with proceeding in the recruitment process.

Newspaper Advertisements:

Newspaper advertisements outlining the notice to recruit for Probationary Firefighters were placed in the major daily papers as well as in 53 selected community newspapers - e.g. Caribbean Camera, Chinese World Jrl. (See Attachment "B" and "D" for the entire listing of advertisement placements and the advertisement copy).

Career Guide for Fire Fighting / Web site / Recruitment Hotline:

New Career Guides were prepared and available at various locations throughout the City. The Guide outlines areas on "How to Qualify", "How to Apply", and provide specific information and pictures on what to expect at the York University Occupation Specific Vision, Hearing and Fitness Assessment. The Career Guides were available for pick-up at various locations around the City. (See Attachment "C" for a photocopy of the front page of a 12-page Career Guide).

The Career Guide also notes the phone number for the Recruitment Hotline 416-392-FIRE (3473) which provides information on any current recruitment drives and updates on future activities. The Web site is also available at http://w3.city.toronto.on.ca./index.htm and provides detailed information on the recruitment process.

Written Test Sessions:

Each successful candidate must undergo and pass an aptitude test which, amongst other things, assesses:

(a) memory and understanding oral information;

(b) understanding written firefighting material;

(c) arithmetic reasoning;

(d) mechanical aptitude; and

(e) teamwork/public relations/community living.

The City held 10 Written Test sessions. Over 2,400 people registered to write the test and 2,049 applicants actually wrote the test. There were 873 applicants who passed the test and were invited to proceed to the next stage of the process. The test selected for this process has been widely used and validated to ensure no systemic discrimination.

Application and Resumé Submission:

At this stage, applicants were invited to submit completed application forms and provide resumes. Along with the applications, candidates were to submit an original and valid York Fitness Assessment, Valid Basic Rescuer Cardiopulmonary Resuscitation - Level "C" and "Standard", or higher, First Aid Certificate. The applications submitted were screened by Fire Services and First Interviews were scheduled.

1^st Interviews:

Selected candidates were interviewed by a three-member panel including representation from Fire Services and Human Resources. Recommendations were made on which candidates were to proceed to the next level.

2^nd Interviews:

From the applicants deemed to be qualified from the 1^st Interview, candidates were selected by random draw to attend the 2^nd and final interview stage.

Conditional Offers:

Conditional Offers are extended to candidates who are successful at the 2^nd Interview Stage. Offers are conditional upon the candidate providing:

(a) drivers abstract, showing not more than 5 demerit points and no unpaid fines;

(b) valid Ontario Class "D" Licence, with "Z" air brake endorsement;

(c) satisfactory employment references; and

(d) passing a medical examination.

Final Offers:

Upon completion of this process, final offers are extended to candidates who then commence their new career as Probationary Firefighters by entering an intensive 14-week training program.

Attachments:

Attachment "A" Career Information Flyer

Attachment "B" Newspaper Advertising Invoice

Attachment "C" Career Guide for Fire Fighting

Attachment "D" Newspaper Advertisement

(d) Progress of the Co-ordination of the Tiered Response of Emergency Services

The 9-1-1 system in the City of Toronto provides a timely, efficient response to critical emergency incidents. As part of the tiered response protocol, the Toronto Fire Service responds with Toronto Ambulance Service to all life threatening medical emergencies. Successful emergency medical response requires early intervention. The distribution of fire stations throughout the city often positions firefighters as the first-to-arrive at a medical emergency.

Representatives from all three emergency services are meeting regularly to review the tiered response system and working towards optimizing the allocation of resources to emergency responses. When the new computer-aided dispatch system for the Fire Service is implemented, there will be opportunities for improved coordination and notification amongst the three emergency response agencies through the use of technology.

(e) Implementation of the KPMG Fire and Ambulance Facilities Study

The recommendations contained in the KPMG report are presently being reviewed and analysed by a Fire Services' project team comprised of 15 staff with specific operational and technical expertise. We do not anticipate endorsing all of the KPMG recommendations, but at this time, it is premature to speculate prior to the completion of this review. The Fire Services' response to the KPMG recommendations will not be ready until the end of September, 1999 at which time it will be placed on the agenda of the Community Services Committee.

Conclusions:

With current staffing levels, if fire fighting staff did not take any "sick time" at all, Fire Services would still have to take vehicles out of service on a daily basis. It is anticipated that an acceptable attendance management program can be implemented to reduce the absenteeism rate. Staffing needs can best be addressed through the immediate recruitment of additional firefighters, reduction of absenteeism; and a redeployment of resources subsequent to Council's approval of recommendations arising out of the Facilities Study.

(A copy of Attachments A, B, C and D referred to in the foregoing report was distributed to the Policy and Finance Committee at its meeting held on July 20, 1999, and a copy thereof is on file in the Office of the City Clerk.)

--------

The following persons appeared before the Policy and Finance Committee in connection with the foregoing matter:

- Mr. Jim Lee, President, Toronto Professional Fire Fighters' Association;

- Councillor Michael Walker, North Toronto;

- Councillor Jane Pitfield, East York; and

- Councillor Brad Duguid, Scarborough City Centre.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following joint report (July 26, 1999) from the Commissioner of Works and Emergency Services and the Fire Chief:

Purpose:

To provide City Council with: (a) the a chart of the types of emergency calls responded to by Fire Services in 1999, (b) a detailed breakdown of the various categories of fire fighter absenteeism, and (c) a revised chart showing average fire fighter sick days.

Funding Sources, Financial Implications and Impact Statement:

There are no funding implications associated with this report.

Recommendations:

It is recommended that this report be received for information.

Council Reference/Background/History:

The Policy and Finance Committee at its meeting of July 20, 1999 requested Fire Services to provide a report to City Council on:

(i) an update on the number of emergency calls responded to by Fire Services in 1999, and

(ii) a breakdown of the various categories of fire fighter time not spent on firefighting including both short-term and long-term absenteeism.

Discussion:

In respect of item (i) above, a chart of relevant statistical data for the period 1994 - 1998 was provided to the Community Services Committee at its meeting held on July 14, 1999 in a joint report from the Commissioner of Works/Emergency Services and the Fire Chief dated July 13, 1999 (see attachment #5 of that report) in support of a request for the hiring of additional fire fighters. However the chart did not include data for 1999. An updated chart including 1999 data is attached to this report and labelled Attachment "A".

In respect of item (ii) above, the joint report dated July 13, 1999 also included the following reasons for fire fighter absenteeism: vacation entitlements, days off in lieu of statutory holidays, illness, fire college, bereavement, time owing, special (modified) duty, workers' compensation, etc. Attached to this report and labelled Attachment "B" is a more detailed breakdown of fire fighter absenteeism for 1997. Staff of Fire Services are currently preparing a similar chart for 1998.

The joint report dated July 13, 1999 contained eight attachments (#1 through #8) in support of the request for additional fire fighters. Upon analysis of the raw data used to calculate the averages shown in Attachment #8 of that report, it was determined that not all of the former six fire departments used the same definition for "sick days". Accordingly, a revised chart is submitted herewith, and titled Attachment "C".

Conclusion:

Working together with staff of the Human Resources Division to improve upon our attendance management system will result in more fire fighters being on duty. We will be addressing this issue with the Fire Fighters' Association as we work diligently to reduce the absenteeism as it currently exists.

Contact Names:

Alan F. Speed Norm Gibbons

Fire Chief Senior Policy Advisor and Project Manager

Fire Services Fire Services

Tel: 397-4300 Tel: 397-4315)

(A copy of the attachments, referred to in the foregoing report, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clause, the following report (July 26, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

This report provides City Council with recommended funding for the proposed additional staffing for Fire Services for 1999/2000, as recommended by the Community Services Committee at its meeting of July 14, 1999 and further recommended by the Policy and Finance Committee on July 20, 1999. In addition, the Policy and Finance Committee has recommended additional reports concerning the request for additional staffing for Fire Services, as outlined in Clause 4 of Report No. 4 for consideration by City Council on July 27, 1999.

Financial Implications:

The estimated cost for the additional Toronto Fire Services staffing will be $340,000 for 1999 (62 firefighters starting in November, 1999) and $5.1 million for 2000 (additional 55 firefighters starting in March, 2000).

Recommendations:

It is recommended that the additional funding required for 1999 in the amount of $.340 million be absorbed within the current Fire Services 1999 operating estimate of $219.9 million net (approximate full year impact of the 62 hires in November, 1999, would be $2.6 million of the $5.1 million projected for the year 2000) and that the additional funding required for 2000 be considered during the 2000 budget process.

Overview:

At its meeting of July 14, 1999, the Community Services Committee had before it a report from the Commissioner of Works and Emergency Services and the Fire Chief, reporting on the staffing requirements of the Toronto Fire Services Division. The report outlines the factors which contribute to the difficulty of effective deployment of fire suppression staff, resulting in inappropriate and increasing levels of vehicles out of service. These factors include the need for integrated support infrastructure and revised equipment; the need to deploy and re-allocate equipment across the 80 fire stations; attrition and turnover rates which necessitate the hiring and training of new fire fighters; and an absenteeism rate which exceeds the average for other jurisdictions. As a result, vehicles out of service have increased from a total of 971 days out of service to 1,470 days out of service from January to May, 1999.

Discussion:

The Community Services Committee recommended to the Policy and Finance Committee and Council, the adoption of the report dated July 12, 1999, from the Commissioner of Works and Emergency Services and the Fire Chief respecting staffing requirements. It also requested that a report providing a funding mechanism for the additional staffing be submitted either to the Policy and Finance Committee or directly to City Council on July 27, 1999. The Policy and Finance Committee recommended the adoption of the recommendations of the Community Services Committee.

Conclusion:

It is recommended that the additional funding required for 1999 in the amount of $.340 million be absorbed within the current Fire Services 1999 operating estimate of $219.9 million net (approximate full year impact of the 62 hires in November, 1999, would be $2.6 million of the $5.1 million projected for the year 2000) and that the additional funding required for 2000 be considered during the 2000 budget process.

Contact Name:

Judy Broughton 392-8393

Carmela Romano 392-5053

Josie LaVita 397-4229)

(City Council also had before it, during consideration of the foregoing Clause, a confidential report (July 21, 1999) from the City Solicitor, such report to remain confidential in accordance with the provisions of the Municipal Act.)

5

Request to Increase the Voluntary and Set Fine Provisions

for Parking Meter Violations - City of Toronto By-Laws

(City Council on July 27, 28, 29 and 30, 1999, adopted the following recommendations:

"It is recommended that:

(1) the report dated July 27, 1999, from Mayor Lastman, embodying the following recommendations, be adopted:

'It is recommended that:

(1) the Voluntary Fine and Set Fine Provisions for parking meter violations be increased from the current level of $10.00 and $15.00 (after seven days) to $15.00 and $20.00 (after seven days);

(2) Council request the Toronto Police Services Board to instruct the Parking Enforcement Unit to adjust their tagging policy in the proposed "Zone A", so that in addition to issuing tickets at expired meters, officers also issue tickets when a car remains parked in the same space for over three hours, as defined in the Uniform Traffic By-law;

(3) the Chief Financial Officer and Treasurer, the President of the Toronto Parking Authority and the Commissioner of Works and Emergency Services submit a joint report to the Policy and Finance Committee, in one year, on:

(a) financial implications;

(b) ticket processing implications; and

(c) whether the above changes have achieved the desired effect with regard to parking patterns; and

(4) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.'; and

(2) the report dated July 22, 1999, from the City Solicitor, embodying the following recommendations, be adopted:

'In the event that City Council wishes to increase the voluntary payment and set fine amounts applicable to offences under City of Toronto by-laws respecting parking meters and parking machines, it is recommended that:

(1) the City Solicitor be authorized to prepare and introduce a bill in Council to increase the voluntary payments for offences under City of Toronto by-laws respecting parking meters and parking machines, provided that such increase shall only become effective upon the receipt of approval from the Province of the new set fine amount as proposed;

(2) the City Solicitor, in consultation with the Toronto Parking Authority, be authorized to make the necessary application to the Ministry of the Attorney General for approval of any requested increase in the set fine amount for offences under City of Toronto by-laws respecting parking meters and parking machines; and

(3) the City Solicitor prepare and introduce the necessary bills to repeal the present voluntary payment amounts for offences under City of Toronto by-laws respecting parking meters and parking machines once the set fine application has been approved by the Province.' ")

The Policy and Finance Committee submits, without recommendation, the following report (April 30, 1999) from the President, Toronto Parking Authority:

The Policy and Finance Committee reports, for the information of Council, having:

(1) requested the Mayor to meet with representatives of the Toronto Parking Authority respecting this issue, and submit a report thereon directly to Council for its meeting scheduled to be held on July 27, 1999; and

(2) referred the following motions to Council for consideration:

Moved by Mayor Lastman:

"That the Policy and Finance Committee recommend to Council that Recommendation Nos. (1), (2) and (3) embodied in the report (April 30, 1999) from the President, Toronto Parking Authority be deleted; and insert in lieu thereof the following:

"That Council request the Toronto Police Services Board to instruct the Parking Enforcement Unit to issue tickets at expired meters so that cars parked at expired meters for the whole day will receive two tickets - one in the morning and one in the afternoon - for a total fine of $20.00 in order to deter the public from using meters all day to park."

Moved by Councillor Nunziata:

"That the Policy and Finance Committee recommend to Council the adoption of the Recommendations embodied in the report (April 30, 1999) from the President, Toronto Parking Authority; and further that the areas where the parking rate is less than $1.25, the fine remain at $10.00."

Moved by Councillor Pantalone:

"That the Policy and Finance Committee recommend to Council that the level of parking enforcement on Sundays in residential areas be limited to situations where illegal parking obstructions block fire hydrants or otherwise creates an unsafe situation, and that the appropriate officials be directed to give effect thereto."

The Policy and Finance Committee submits the following communication (April 30, 1999) from the President, Toronto Parking Authority:

The Parking Authority at its meeting of April 6, 1999, approved a report entitled "Proposed Increase to Voluntary and Set Fine Provisions for Parking Meter Violations - City of Toronto By-laws". I am attaching a copy of the report and the official minute.

The report recommends the following:

(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) 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.

I request that this report and the recommendations contained herein be tabled at the next available Council meeting for its consideration and necessary action.

(A copy of the Toronto Parking Authority Official Minute which was approved at its meeting of

April 6, 1999, - 99-058, and the staff memorandum referred to in the foregoing communication were forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and copies thereof are also on file in the office of the City Clerk.)

The Policy and Finance Committee also submits the following communication (July 19, 1999) from Mayor Lastman:

I was very concerned at the June meeting of the Policy and Finance Committee about the proposal to double the parking fines at expired meters. This is just another way of gouging drivers and it will also hurt businesses which don't have parking lots nearby. I would therefore like to move the following amendments:

(1) delete Recommendations Nos. (1), (2) and (3); and

(2) that Toronto City Council request the Toronto Police Services Board to instruct the Parking Enforcement Unit to increase the frequency of ticket issuance at expired meters so that cars parked at expired meters for the whole day will receive two tickets - one in the morning and one in the afternoon - for a total fine of $20.00.

This solution will have the effect of not gouging people who were simply a few minutes late but will also punish people who are abusing the system by monopolizing a prime parking spot all day - therefore, this motion addresses both concerns.

I have run this idea by staff in all of the appropriate departments; transportation, finance, Toronto Parking Authority and the parking enforcement unit of the Toronto Police Services and they have no problem with its implementation.

I hope that this solution will be acceptable to all members of Council.

--------

The Policy and Finance Committee reports, for the information of Council, having also had before it during the consideration of the foregoing matter a communications:

(i) (July 19, 1999) from Councillor Nunziata, York-Humber, forwarding a communication (undated) from Mr. Barry Lowe, Weston Business Improvement Area, advising that the Weston B.I.A. Board of Management reviewed the proposal from the Toronto Parking Authority on July 15, 1999; that the Board is in full support of the three basic rate zones as proposed by the Authority as well as the proposed rates in those zones as but that it has some grave concerns with the proposal to increase set fines, in particular in those areas outside of the inner city zone (zone 1); and requesting that the plight of the small business along main streets be taken into consideration when making a decision on this matter.

(ii) (June 28, 1999) from the City Clerk advising that the Policy and Finance Committee on June 24, 1999 deferred consideration of this matter until its meeting scheduled to be held on July 20, 1999, and requested the Chief Financial Officer and Treasurer, 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.

--------

The following persons appeared before the Policy and Finance Committee in connection with the foregoing matter:

- Mr. A. Milliken Heisey, Q.C., Chair, Toronto Parking Authority;

- Mr. Maurice J. Anderson, President, Toronto Parking Authority; and

- Councillor Mario Giansante, Kingsway Humber.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following report (July 27, 1999) from Mayor Lastman:

Purpose:

The Policy and Finance Committee at its meeting on July 20, 1999 requested the Mayor to meet with representatives of the Toronto Parking Authority to attempt to find a solution to the issue and report directly to Council for its meeting scheduled to be held on July 27, 1999.

Recommendations:

It is recommended that:

(1) the Voluntary Fine and Set Fine Provisions for parking meter violations be increased from the current level of $10 and $15 (after 7 days) to $15 and $20 (after 7 days);

(2) Council request the Police Services Board to instruct the Parking Enforcement Unit to adjust their tagging policy in the proposed "Zone A" so that in addition to issuing tickets at expired meters, officers also issue tickets when a car remains parked in the same space for over three hours as defined in the Uniform Traffic by-law;

(3) the Chief Financial Officer, the President of the Toronto Parking Authority and the Commissioner of Works and Emergency Services submit a joint report to the Policy and Finance committee in one year on:

(a) financial implications;

(b) ticket processing implications; and

(c) whether the above changes have achieved the desired effect with regard to parking patterns; and

(4) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Background:

The Policy and Finance Committee, at its meeting of July 20, 1999 considered the communication (April 30, 1999) from the President of the Toronto Parking Authority recommending an increase in the voluntary payment and set fine amounts to $20 and $30 respectively for all City of Toronto by-laws respecting parking meters. At that meeting, the Committee requested the Mayor to meet with representatives of the Toronto Parking Authority respecting this issue and submit a report thereon directly to Council for its meeting scheduled to be held on July 27, 1999. The meeting took place on July 26, 1999, and included members of the Mayor's office, the Toronto Parking Authority and the Toronto Police Services Parking Enforcement Unit.

Comments and/or Discussion and/or Justification:

The Toronto Parking Authority recently presented a business case analysis indicating that the average maximum daily parking rates at off-street parking facilities far exceeds the current voluntary and set fines for parking meter violations. All relevant City departments agree that a greater deterrent is required to prevent motorists from abusing this situation.

The voluntary and set fine provisions have not been increased since 1988 when they were increased from $5 to $10. This change coincided with the last uniform increase in parking meter rates. Accordingly, the voluntary and set fine provisions should move in tandem with the proposed parking meter rate increases currently before Council in Policy and Finance Committee Report No. 4, Clause No. 6.

There was some concern that an increase in the voluntary and set fine provision to $20 and $30, respectively, would be too punitive when applied across the entire city. In the alternative, it was decided that setting a regional fine structure based on the proposed parking meter rate zones would be too confusing for motorists resulting in increased costs for staffing at first appearance facilities and call centres. It was agreed that the recommendations address all of the concerns described in this report.

It is anticipated that after the City Solicitor introduces the necessary bill in Council there will be a period of approximately six months before these changes come into effect since approval is required by the Senior Regional Judge after application is made to the Ministry of the Attorney General.

Conclusion:

As requested by the Policy and Finance Committee, a meeting was held including members of the Mayor's office, the Toronto Parking Authority and the Toronto Police Services Parking Enforcement Unit. This report presents their recommendations which were agreed to have addressed the concerns expressed by Committee members. Staff from the Finance Department have been consulted and concur with the recommendations.)

(City Council also had before it, during consideration of the foregoing Clause, the following report (July 22, 1999) from the City Solicitor:

Purpose:

To seek authority from City Council, in the event that it wishes to increase the voluntary payment amounts and set fines for parking meter and parking machine violations, to introduce a bill to increase the voluntary payments for all City by-laws presently governing parking meters and parking machines and authorize an application to the Province for an increase in the set fine amounts.

Funding Sources, Financial Implications and Impact Statement:

None.

Recommendations:

In the event that City Council wishes to increase the voluntary payment and set fine amounts applicable to offences under City of Toronto by-laws respecting parking meters and parking machines, it is recommended that:

(1) the City Solicitor be authorized to prepare and introduce a bill in Council to increase the voluntary payments for offences under City of Toronto by-laws respecting parking meters and parking machines, provided that such increase shall only become effective upon the receipt of approval from the Province of the new set fine amount as proposed;

(2) the City Solicitor, in consultation with the Toronto Parking Authority, be authorized to make the necessary application to the Ministry of the Attorney-General for approval of any requested increase in the set fine amount for offences under City of Toronto by-laws respecting parking meters and parking machines; and

(3) the City Solicitor prepare and introduce the necessary bills to repeal the present voluntary payment amounts for offences under City of Toronto by-laws respecting parking meters and parking machines once the set fine application has been approved by the Province.

Background:

The Policy and Finance Committee, at its meeting of July 20, 1999, considered the communication (April 30, 1999) of the President of the Toronto Parking Authority recommending an increase in the voluntary payment and set fine amounts to $20.00 and $30.00, respectively, for all City of Toronto by-laws respecting parking meters. It is my understanding that this recommendation is also intended to relate to by-laws respecting the installation and use of parking machines.

Comments and/or Discussion and/or Justification:

I have prepared this report in order to obtain clear authority to take immediate steps to implement any decision by Council to increase voluntary payments and set fines. The proposed amendments will not take effect until any set fine application is finally approved by the Province so as not to disrupt the present enforcement scheme in existence in the City of Toronto.

Conclusions:

Given the delay (approximately six months) associated with obtaining Provincial approval of set fine applications, the required by-law amendment will be introduced at Council for its July 27, 1999 meeting and the set fine application made as soon as possible thereafter.

Contact Name:

Edward Earle

Legal Services

397-4058)

(City Council also had before it, during consideration of the foregoing Clause, the following joint report (July 19, 1999) from the Chief Financial Officer and Treasurer and the City Solicitor:

Purpose:

To respond to a request from the Policy and Finance Committee to report on the following:

(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.

Recommendation:

It is recommended that this report be received for information.

Council Reference/Background History:

At its meeting on July 6, 1999, City Council received Clause No. 6(j) of Report No. 1 of the Policy and Finance Committee entitled "Request to Increase the Voluntary and Set Fine Provisions for Parking Meter Violations - City of Toronto By-laws". The Committee reported having deferred consideration of the communication from the Toronto Parking Authority until its meeting scheduled to be held on July 20, 1999. The Committee also reported having 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 on the above topics.

Discussion:

1. Level of Enforcement in Residential Areas Especially on Sundays and What Revenues are Generated

The level of enforcement in residential areas does not increase or decrease on Sundays with the exception of the streets around places of worship. The Toronto Police Service relaxes, as much as possible, without affecting public safety, the no parking regulations during the times of religious observances. Tags are issued only when necessary and tows must be authorized by a supervisor. Enforcement staff are encouraged to become familiar with places of worship in their area. The level of revenue generated by parking tags issued in residential areas is not known.

2. The Process Whereby the City Can Repeal the By-law that Prohibits Parking in a Space Where There is a Broken Meter

City Legal advises that By-law No. 22614 of the former City of Scarborough, "being a by-law respecting Parking Meters on Scarborough Roads", By-law No. 197 of the former Borough of East York, being a by-law "to provide for parking meters on roads in the Borough of East York", Chapter 187 of the former City of Etobicoke Municipal Code, By-law No. 107-86 of the former Municipality of Metropolitan Toronto, being a by-law "Respecting Parking Meters on Metropolitan Roads", By-law No. 30742 of the former City of North York, being "a by-law respecting parking meters on the City of North York Roads", By-law No. 1645-89 of the former City of York, being a by-law "Respecting Parking Meters", Chapter 982 of the former City of York's Municipal Code, and Subsection 400-42 of Chapter 400 of the former City of Toronto Municipal Code each regulate parking at parking meters.

Amendments may be made to the parking meter by-laws of each of the former municipalities to expressly provide that parking is permitted in a parking space where the parking meter is broken. Amendments to any other by-laws may be made, as required, to give effect thereto.

3. Change-over Days for Alternate Side Street Parking:

The Operational Policy of the Parking Enforcement Unit of the Toronto Police Service states that in order to accommodate the needs of both early and late risers, permit holders are to be excepted from wrong-side parking enforcement between 9:00 pm on the evening before to 9:00 am on the morning of the changeover date. However, if it is determined that safety is an issue the by-law is enforced.

At its meeting of April 26 and 27, 1999, Council adopted Clause No. 1 of Report No. 8 of The Strategic Policies and Priorities Committee, as amended. Council directed that the parking enforcement protocol be amended to provide that the grace period for change-over days be changed to '8:00 p.m. to 12:00 noon' from '9:00 p.m. to 9:00a.m.' This change has not yet been implemented.

4. Does the enforcement issue address where there may be some grace period allowed so that there is no over-zealous enforcement:

The new electronic parking meters can be programmed to not show the 'expired' until a certain length of time has elapsed after the purchased time expires. With the older meters this is not possible. The Parking Control Officer (PCO) arriving at an expired non-electronic meter cannot provide a grace period unless he or she waits an additional period of time after first seeing the expired meter. However, with the new electronic meters and the pay and display machines, a grace period can be pre-programmed.

The Parking Enforcement Unit of Toronto Police Services advises that PCOs are instructed not to knowingly issue a tag at a broken meter. If the meter is visibly broken, the PCO would chalk and enforce either the three-hour or posted time limit instead.

With respect to enforcement of No Parking/Stopping regulations in Rush Hour Routes, PCOs are instructed to not start ticketing until 5 minutes into the rush hour and not to start towing until 10 minutes into the rush hour. At the end of the rush hour the direction is to stop towing 15 minutes before the end of the rush hour and stop ticketing 10 minutes before the end of the rush hour.

With the exception of the broken meters, enforcement of the three hour time limit is done only at the request of Transportation Services of the Works and Emergency Services Department. However, in the former City of Etobicoke and City of Scarborough, requests for enforcement of the three-hour by-law were also received from Councillors and members of the public. As well, there are no guidelines with respect to how strictly the three-hour parking limit is enforced. This enforcement is totally within the discretion of the PCO. Once enforcement action is commenced, it is commenced for the whole block, not just the vehicle about which the complaint may have been lodged. Since vehicles would have been parked for various lengths of time before their tires are chalked, there inevitably is a grace period though not of a consistent length. This latter point is true in relation to the enforcement of signed time-limited parking restrictions.

5. Enforcement by-laws and procedures of each of the former Area Municipalities:

Apart from the difference noted above as to who may request enforcement of the three hour limit, the Parking Enforcement Unit advises that there are no differences in enforcement procedures in the former area municipalities. There are, however, some minor differences in the various by-laws.

Conclusion:

This information is provided to respond to the request from the Policy and Finance Committee. It is recommended that this report be received for information.

This report was written in consultation with the City Solicitor, the Commissioner of Works and Emergency Services and the Superintendent, Parking Enforcement Unit, Toronto Police Services and their staff.

Contact Name and Telephone Number:

Bryan Kerr, Manager, Provincial and Parking Offences

(416) 392-5880)

6

Increase in Street Meter Rates

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the report (June 24, 1999) from the President, Toronto Parking Authority, embodied in the communication (June 25, 1999) from the President, Toronto Parking Authority, wherein it is recommended that City Council:

(1) establish three basic meter rate zones. The zones will be designated A, B and C. The basic rate in Zone A will be $2.00 per hour; the basic rate in Zone B will be $1.50 per hour and the basic rate in Zone C will be $1.00 per hour;

(2) all meters are to be set to operate from 08:00 to 21:00 from Monday to Saturday and from 13:00 to 21:00 on Sundays and holidays (except where peak period parking restrictions apply); and

(3) the maximum duration of stay will be set at 2 hours at all locations from 08:00 to 18:00 Monday to Saturday and three hours during evenings Monday to Saturday and from 13:00 to 21:00 Sundays and holidays.

The Policy and Finance Committee submits the following communication (June 25, 1999) from Mr. Maurice J. Anderson, President, Toronto Parking Authority:

Earlier in the year we were requested by the Budget Review Committee to report to that Committee regarding on-street parking meter rates and any suggestion that we may have to change them. Parking meter rates were last changed in the former City of Toronto in September, 1988. We feel that the current on-street parking meter rates are not reflective of the market today and should be increased. We are also recommending an increase in the duration of stay from one to two hours throughout the new City. The former Cities of North York, Etobicoke and Scarborough had a two hour duration of stay.

We feel that this increase in rates will discourage longer stay parkers at the meters thereby giving up the space for the shorter term parker, which is the intent of on-street metered parking spaces. Additional revenue will be generated.

If you have any questions or wish to discuss this matter further, please contact me at (416) 393-7276.

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(Report dated June 24, 1999, addressed to the

Budget Review Committee from the

President, Toronto Parking Authority)

Purpose:

This report will deal with the amendment to the rates, duration times and hours of operation of the on-street meter program throughout the City of Toronto. The recommended actions will establish an implementation framework for the city as a whole. At the request of an area Councillor, the Authority will review locations where special conditions may apply to determine if special meter rates or practices are justified.

Funding Sources, Financial Implications and Impact Statement:

At the present time the average hourly rate (excluding residential meters) is $0.83 per hour. When fully implemented at the target rate, the average hourly rate will be $1.41 per hour. At the first interim stage, the average will be $1.36 per hour.

Recommendations:

It is recommended that City Council:

(1) establish three basic meter rate zones. The zones will be designated A, B and C. The basic rate in Zone A will be $2.00 per hour; the basic rate in Zone B will be $1.50 per hour and the basic rate in Zone C will be $1.00 per hour;

(2) all meters are to be set to operate from 08:00 to 21:00 from Monday to Saturday and from 13:00 to 21:00 on Sundays and holidays (except where peak period parking restrictions apply); and

(3) the maximum duration of stay will be set at 2 hours at all locations from 08:00 to 18:00 Monday to Saturday and three hours during evenings Monday to Saturday and from 13:00 to 21:00 Sundays and holidays.

Council Reference/Background History:

The recommended changes are representative of procedures and rates which were in effect in the former municipalities and have been synthesized as the "best practices" from the old cities. With respect to price, the recommended rate changes are within the rate setting framework that City Council delegated to the Authority at its meeting of July 29, 30, and 31, 1998. The rationale for these changes is described in detail below.

Comments and/or Discussion and/or Justification:

Rates:

The table below indicates the number of metered parking spaces and the rates charged within the six former municipalities at the time of amalgamation.

Rate Per Hour	Number of Meters						Total
	East York	Etobicoke	North York	Scarborough	Toronto	York
$2.00					63		63
$1.50	74						74
$1.25			758				758
$1.00	72		489	4	5,429	817	6,811
$0.75			261				261
$0.50	380	1,454		131	4,905		6,870
>$0.50		213	321				534
TOTAL	526	1,667	1,829	135	10,397	817	15,371

The former City of York utilized a single rate at all metered spaces. The former Cities of Scarborough and Etobicoke also essentially employed a single rate with a few high priced meters in Scarborough and some very low priced meters in Etobicoke utilized to control overnight parking. The majority of the metered spaces in the former Borough of East York were at a single rate, however, there were two higher priced areas. The former City of Toronto utilized two price zones with the higher priced zone in the central area. There were a few higher priced meters on Spadina Avenue. The former City of North York had the most highly targeted rates with three rates for three different types of commercial areas and a residential overnight rate. The three rates were applied to areas depending on their proximity to the City Centre, and the intensity of parking demand in the area.

As previously indicated, the rates and operating practices proposed are intended to reflect the best practices of the former municipalities. In selecting best practices to harmonize rates, the following additional principles were adhered to:

(1) Equity: Similar areas should be treated in a similar manner. Each user within an area should receive similar treatment.

(2) Simplicity: The rates should be easily communicated to the customers. The reason a specific rate was selected for an area should be easily understood.

(3) Predictability: Users should be able with some reasonable certainty to predict the rates which will apply in the area they are intending to visit.

(4) Affordability: Rates in an area should reflect the ability of the typical area patrons to pay and the underlying price structure for goods and services in an area. Where the Authority has off-street facilities in an area, the rates should reflect those in effect in the off-street lots.

(5) Turnover: On-street spaces should be utilized for short duration parking activities consistent with providing enough time for the completion of a normal activity by the user.

(6) Revenue: Revenue should be maximized so far as the revenue maximization is consistent with the above principles.

In addition to reviewing the rates within the seven former municipalities, rates at on-street meters in other North American cities were reviewed to ensure that the proposed rates are within the normal practices in other jurisdictions. The following table indicates the maximum rates that were in effect at meters in the various jurisdictions.

City	Maximum Rate
Victoria	$1.25
Vancouver	$2.50
Calgary	$2.00
Edmonton	$1.25
Regina	$0.75
Winnipeg	$1.00
Toronto (former city)	$2.00
Ottawa	$1.50
Montreal	$1.50
San Francisco	$2.00 U.S.
Los Angeles	$2.00 U.S.

As may be seen, the maximum rate in Toronto is at or below those in effect in most other cities of comparable or somewhat smaller size.

The proposed rates and practices are intended to reflect two objectives. Firstly, to have rates which generally reflect the underlying economic activity in the area. Secondly, to be consistent as far as possible with the practices in the former municipalities. It was decided to have a range of rates rather than a single rate across the entire city. This approach was utilized in varying degrees in the former Cities of Toronto and North York, and also in the former Borough of York. Upon reviewing the urban structure of the city's commercial areas, it was determined that there are essentially three types of commercial districts. The first is characterized by high intensity, large scale commercial activity as the underlying land use. These would be areas defined as high density commercial areas or regional commerce centres in the Official Plans of the former municipalities. These areas are defined as Zone A. The remaining groups are in local or neighbourhood commercial areas. These neighbourhood commercial areas may in turn be differentiated into high activity and low activity zones, or Zones B and C respectively. Zone B is characterized by extremely high utilization levels at the on-street meters with all meters being occupied for long periods of the day. Commercial space is characterized by high rents and low vacancy rates. The low activity zone is characterized by lower utilization levels with meter parking generally available at all but the busiest periods. The underlying retail strips or neighbourhoods in Zone C tend to be characterized by lower levels of economic activity often with large format retail space and higher commercial vacancy rates.

The basic hourly meter rates of $2.00, $1.50 and $1.00 were selected for Zones A, B and C respectively. The Zone A price is consistent with the highest rate which was charged in the former City of Toronto and is at or below the highest rates in comparable North American cities. All of the meters recommended for inclusion in Zone A are in the former City of Toronto. The Zone C price of $1.00 per hour was selected based on the rate setting practices from the former City of York which had an effective meter programme with this as the minimum rate. The Zone B rate of $1.50 per hour represents an average of the Zone A and Zone C price, is consistent with the highest rates in effect in the former East York, and is equivalent to an update to the $1.25 rate which was in effect in the former City of North York. The $1.25 rate was last charged approximately three years ago and utilization levels at meters employing this rate have remained very high. Zones A and B are outlined on Maps 1 and 2 of this report. Map 1 indicates the zone boundaries in the Central Area of the City while Map 2 indicates the remainder of the city. Any meters not indicated on Maps 1 and 2 are defined as Zone C.

While these rate changes are seemingly large in some areas, they should be considered with regard to events of the last 10 years. The $2.00 rate will be almost totally restricted to meters in the Central Area of the former City of Toronto. These meters were last subject to a rate change in September of 1988. Due to inflation, the real rate at these meters has been declining since this time. In addition, changes to the Federal and Provincial Sales Tax laws have reduced the city's share of the meter revenue by a further 15 percent from its 1989 level. It should be noted that at time of this last rate change, TTC single ride fares were $1.05 and have, with the recently approved fare increase, risen to $2.10, which represents the same percentage change as is being recommended at the street meters.

Hours of Operation:

The overwhelming majority of on-street metered spaces in the former municipalities had a basic set of operating hours of from either 08:00 or 09:00 to 18:00 from Monday to Saturday with charges not applying in evenings or on Sundays. In addition, at least half of the metered locations had peak period restrictions which applied in either the morning or evening peak period or both. Of the approximately 1500 meters (10 percent of supply) which incorporated evening charges at amalgamation, about 500 were utilized in Etobicoke and North York to provide residential overnight parking. The remaining approximately 1000 were located in scattered location in the Central Area of the former City of Toronto, in the North York City Center and at a few of the busy retail strips in York.

Despite the fact that the practice of charging for the evening at on-street meters was not widespread in the former municipalities, it is being recommended that this become the standard procedure. The exclusion of the evening hours, historically, reflects the fact that meter operations have not evolved at the same pace as commercial business practices. In the past, the city's commercial areas were only active in the daytime. This is no longer the case as many of the city's retail/commercial areas have become strongly oriented towards nighttime activity with the lengthening of retail operating hours, and the expansion of restaurant and entertainment activity. It should be noted that all of the off-street carparks operated by the Authority incorporate evening operating hours and these facilities experience extremely high usage levels in many areas. Council recently agreed to extended operating hours within the Greektown B.I.A. with the support of the local business community.

Duration of Stay:

Maximum allowable duration of stay within the former municipalities varied from allowing a one-hour maximum (Toronto, York) to allowing a two-hour maximum (North York, Etobicoke, Scarborough) or a mix of the two (East York). The table below indicates the regulations which were in effect in the former municipalities.

Toronto	94%	6%	8% (evenings only)
East York	40%	60%
Etobicoke		95%	5%
North York	5%	95%
Scarborough		100%
York	95%	4%	1%

It was determined to implement a two hour maximum duration of stay at all locations. This approach was selected for two reasons. Firstly, the practice is in place at many locations already and has proven to be effective in accommodating slightly longer trips without substantially reducing turnover. Many trips such as medical appointments while short term, cannot usually be accommodated by a one hour duration. Secondly, extending duration and stay resolves the problem of accepting two dollar coins. Given the proposed meter rates, a two hour duration would be equivalent to a $2.00 payment at the least expensive meter. Therefore, the patron would be purchasing time for all of the coin tendered. The practice of accepting $2.00 coins, but only allowing $1.00 of parking has been a particular concern within the former City of York. Shorter duration meters may be installed at particular locations on a case by case basis where warranted.

Staging of Implementation:

In many cases, the proposed rate increases represent very large increases to the rates. For example, in the high activity retail strips in the former City of Toronto such as Bloor West Village and north Yonge Street the existing rates are $0.50 per hour, and the proposed rates are $1.50 per hour. Therefore, it is proposed that in no circumstance a rate increase of more than 100 percent be implemented, and that where rates are changed at this time, no further change be implemented without further review of the impact of the first charge, and that in no event a second rate change be undertaken sooner than one year following the first. Due to boundary issues in some locations, it is being proposed that no rate changes be implemented at this time despite the fact that the 100 percent threshold would not be breached. For example, on Eglinton Avenue West, between Bathurst Street and the Allen Expressway, rates are $1.00 per hour on the south side and $0.50 per hour on the north side. Therefore, it is proposed that the north side be equalized with the south side at this time and that any further increase for the south side be delayed. Where these boundary issues exist, they will be addressed as the detailed changes to the by-law schedules are processed (refer to implementation section below).

Implementation:

The implementation of the proposed amendments will entail three specific actions to be undertaken:

(1) amendments to the by-law schedules. The implementation of changes to hours of operation, rates and durations of stay will require the amendment of hundreds of entries in the schedules to the various by-laws of the seven former municipalities. (These by-laws have not been consolidated at this time). These amendments will be brought forward on the Council Order Paper as they are prepared.

(2) the meter equipment will need to be reprogrammed to calculate the new rates and hours of operation. As this will entail the reprogramming of approximately 15,000 individual mechanisms, the implementation will occur four to six weeks to implement change over a period of several months based on labour force capacities.

(3) in most areas, the signage on the street will need to be changed to reflect the new regulations. The changes to the street signage will need to be co-ordinated with the City's Transportation Department.

The above three tasks will need to be co-ordinated and an implementation schedule developed. It will require approximately two months to prepare the amended schedules to the by-laws once Council approval for the generic rate zones presented in this report has been obtained. Therefore, if this report is adopted at the July 1999 Council meeting, the amended by-law schedules would be available for Council's first fall meeting. Once the by-law amendments have been adopted, it will take approximately six weeks to physically alter the meter mechanisms and adjust the on-street signage. This schedule has been prepared with the assistance of the Transportation Department and the City Solicitor's office. Any delays to the approvals will cause a subsequent delay to the implementation process.

Special Practices:

This report recommends an overall framework for the implementation of meter rates and practices for the City as a whole based on the nature of the underlying land use and commercial activity in the various zones. However, within these overall zones there may be localized conditions that require special practices to be implemented. These would include requirements for short term (15 minute) meters in loading zones, and relaxation of charges in the vicinity of community centres, etc., at off-peak times. These types of practices will be adopted as amendments to the blanket regulations in consultation with the local ward Councillors as the need for these arise.

Financial Implications:

The average hourly rate at existing parking meters is $0.83 per hour. Following the full implementation of the first set of rate changes, the average hourly rate will rise to $1.36 per hour. At full implementation of the target rates for Zones A, B, and C, the average hourly rate will reach $1.41 per hour. Following full implementation of rate changes, the on-street meter operations should generate annual revenues of about $18,000,000.00 annually as compared to the current $12,000,000.00 (estimated). It is felt that this number has the potential of increasing as the Authority continues to improve its operations and maintenance practices, and continues to upgrade the on-street technology. Approximately half of the additional revenue will be due to rate increases and half to the extended operating hours.

Conclusions:

The changes to rates and hours of operation at on-street meters recommended in this report will harmonize meter operations across the seven former municipalities. The rates and practices recommended represent a compendium of best practices from the former municipalities and are consistent with meter operations in other North American cities of comparable size. The rates being recommended for implementation will still result in reasonably priced parking, and represent, in many cases, adjustments that reflect real changes to prices over the past ten years and a pass through of Federal and Provincial tax changes.

Contact Names:

Maurice J. Anderson, President,

Telephone: (416) 393-7276; Facsimile: (416) 393-7352;

Nick Spensieri, Director, On-Street Operations, Telephone: (416) 393-7288;

Facsimile: (416)393-7352;

Ian Maher, Director, Planning & Analysis, Telephone: (416) 393-7291;

Facsimile: (416) 393-7352.

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(Maps 1 and 2 outlining Zones boundaries in the Central area and the remainder of the City referred to in the foregoing report were forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and copies thereof are also on file in the office of the City Clerk.)

The Policy and Finance Committee reports, for the information of Council, having also had before it during the consideration of the foregoing matter a communication (July 19, 1999) from Councillor Nunziata, York-Humber, forwarding a communication (undated) from Mr. Barry Lowe, Weston Business Improvement Area, advising that the Weston B.I.A. Board of Management reviewed the proposal from the Toronto Parking Authority on July 15, 1999; that the Board is in full support of the three basic rate zones as proposed by the Authority as well as the proposed rates in those zones as but that it has some grave concerns with the proposal to increase set fines, in particular in those areas outside of the inner city zone (zone 1); and requesting that the plight of the small business along main streets be taken into consideration when making a decision on this matter.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, a communication (July 27, 1999) from the Chairperson, The Eglinton Way Business Improvement Area, regarding city-wide changes to parking meter rates.)

7

IHL (International Hockey League)

Proposal for the Coliseum Building -

National Trade Centre Complex

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the report (June 26, 1999) from the Interim General Manager, Exhibition Place; and further, that the Chief Financial Officer and Treasurer be requested to review the business plan and financial implications to the City of Toronto and report thereon to the Policy and Finance Committee, if necessary.

The Policy and Finance Committee submits the following report (June 26, 1999) from the Interim General Manager, Exhibition Place:

Attached find report and disk with respect to the above proposal.

This report was considered and approved with some amendments (noted in subject report) by The Board of Governors of Exhibition Place at its meeting of Friday, June 25, 1999.

As outlined in the proposed timetable (page 3), the Board has requested that the Policy and Finance Committee of the City of Toronto consider this proposal at its meeting of July 20, 1999, for subsequent approval by City Council on July 27, 28, and 29, 1999.

If you require any additional information, please do not hesitate to contact me at (416) 263-3611.

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(Report dated June 26, 1999, addressed to the

Policy and Finance Committee from the

Interim General Manager, Exhibition Place)

At its meeting of Friday, June 25, 1999 The Board of Governors of Exhibition Place unanimously approved recommendations 1, 2, 3, 4, 5 and 6 listed below with the following amendments:

(1) that at all times, the upkeep by CRC of the Coliseum and equipment should be to the satisfaction of the Board of Governors;

(2) the Sub-Committee established by the Board pursuant to recommendation 5 below should negotiate with CRC for a minimum guaranteed revenue to the Board from parking fees; and

(3) in the event that construction of the Coliseum costs less than $32 million the Sub-Committee of the Board established pursuant to recommendation 5 below should reconsider the lease terms including increases to the base rent to same proportion as the decrease in construction costs; and if the final cost of construction is substantially less than $32 million, the Board may at its sole option, decide not to proceed with the project.

Recommendations:

It is recommended that subject to the approval of the City of Toronto Council, the Board:

(1) accept a conditional Offer to Lease with Coliseum Renovation Corporation ("CRC") for the Coliseum and Hall E (West Annex) (together referred to herein as "Coliseum") on the terms and conditions set out in the Appendix I attached which is a proposal from Ron Taylor, Managing Director, O&Y/SMG Canada (the "Proposal");

(2) authorize and direct the appropriate Board officials to enter into the conditional Offer to Lease with CRC in the form and substance as set out in Schedule "A" attached to the Proposal and such other terms and conditions satisfactory to the Interim General Manager and the City Solicitor;

(3) request City Council to:

(a) declare surplus the lands and buildings known as the Coliseum located at Exhibition Place;

(b) approve of the intended method of disposal of the Coliseum by way of a 49-year lease to CRC;

(c) authorize and direct that all steps necessary to comply with By-law No. 551-1998 be taken; and

(d) provide authorization for the proposed lessee to take all steps necessary to undertake its due diligence inquiries.

(4) direct the Interim General Manager of Exhibition Place, once notice has been given under By-law No. 551- 1998, to report back to the Policy and Finance Committee and City Council at its meeting of September 28, 1999, seeking the City's acceptance of the Offer to Lease and final approval of a grant of a leasehold interest for 49 years to CRC;

(5) establish a subcommittee of the Board composed of the Chair, Vice-Chair and any members of the Board the Chair deems necessary, to provide guidance to staff in further negotiations with CRC and other related matters; and,

(6) direct O&Y/SMG Canada, as manager of the National Trade Centre Complex and the Interim General Manager of Exhibition Place, in consultation with the subcommittee of the Board referred to in Recommendation 5, to conduct the necessary investigations during the Due Diligence period, negotiate the terms and conditions of lease agreement with CRC and oversee the development of the design, plans and schedule for the renovations of the Coliseum, all subject to the satisfaction of the City Solicitor as required.

Background:

At its meeting of July 3 and 4, 1996, the former Metropolitan Toronto Council approved the Board entering into an agreement with O&Y/SMG Canada for the management of the National Trade Centre Complex which Complex includes the Coliseum.

At its meeting of June 19, 1998, the Board approved and adopted the Exhibition Place Program and Development Plan that identified strategic directions for future development at Exhibition Place and included stimulating year-round activities and reinforcing recreational aspects of the grounds.

Discussion:

Attached as Appendix I to this report is a proposal from Mr. Ron Taylor, Managing Director, O&Y/SMG Canada and Arlene Campbell, Interim General Manager, NTC, O&Y/SMG Canada, outlining in detail the Proposal for the development of the Coliseum space in the NTC by CRC to transform this venue into the new home of the International Hockey League ("IHL") franchise formerly known as the "Phoenix Roadrunners".

Discussions with CRC have been ongoing for several months and CRC has continued to demonstrate its commitment to the project and has moved forward with PCL Constructors Canada Inc. to present initial design concepts for the substantial renovations of the Coliseum. One of the major challenges to be addressed during these discussions has been the requirement that CRC be responsible for the entire capital costs of renovating the Coliseum to allow it to be an adequate venue for the IHL. There are no other precedents within the IHL and no other cities where an IHL team is located that has required the franchise team to be fully responsible for all such costs. Generally, unlike NHL hockey franchises, ones in the IHL do not command the value or financial investment power to construct and own arenas to be used by the teams.

Despite this major challenge, terms of an Offer to Lease have been reached and agreed to by CRC. It is my opinion that the terms and conditions of this Proposal and the total financial benefits received by the Board are in keeping with other lease arrangements on the grounds and represent fair market value. In addition, as detailed in Appendix I, this Proposal meets many of the development objectives for the grounds as established by the Board. However, if the Board approves of this report, I will be consulting with the City of Toronto Real Estate Department to ensure that this Proposal meets any requirements of the City and if necessary, obtain additional information or appraisals necessary for the City purposes. It is also necessary during the Due Diligence period to consult with the City Planning officials with respect to any planning implications of this development. The CRC proposal provides for a deposit of $25,000 from CRC and the payment of any costs incurred by the Board with respect to the project including costs for any consultants or legal and expert advice.

The City Solicitor has been consulted and provided comments with respect to the terms and conditions of this Offer to Lease. However, given CRC's offer is to lease the Coliseum for a period of 49 years, the Municipal Act requires that City Council declare the lands surplus and provide notice of the manner of the sale. For the purposes of the Municipal Act, "sale" includes the lease of land for 21 years or greater. The City Solicitor advises that pursuant to the City of Toronto By-Law No. 551-1998, Disposal of Surplus Property, this matter must be brought forward to City Council first for an initial declaration that the lands are surplus and approval as to the manner of disposal, in this instance by a lease to CRC of 49 years. The timetable proposed below indicates that this initial declaration would take place at the City Council meeting of July 27, 28 and 29, 1999. Once notice of the declaration of surplus lands has been given as required under the Municipal Act and the By-Law, the matter must then be brought back to City Council for approval of the transaction. This final approval could be before City Council at its meeting of September 28, 1999, which is the next meeting after July 27, 1999. The City Solicitor has advised that it would be possible for the Board, subject to the initial approval of Council, to accept this Offer to Lease which is irrevocable until its expiry on October 31, 1999. This would allow the Due Diligence period to commence with the required final approval of City Council in September, 1999, being one of the issues to be resolved during that time.

Insert Table/Map No. 1

target timeframe

Conclusion:

This report recommends approval by the Board of the Proposal put forward by O&Y/SMG Canada with respect to redevelopment of the Coliseum on the terms and conditions set out therein and subject to approval of City of Toronto Council.

(Copies of Appendix 1 and Schedules A and B appended to the foregoing report were forwarded to all Members of Council of with the July 20, 1999, agenda of the Policy and Finance Committee and copies thereof are also on file in the office of the City Clerk.)

The Policy and Finance Committee submits the following report (July 20, 1999) from the Managing Director, Toronto Historical Board:

Purpose:

To request that heritage issues associated with the proposal to relocate an International Hockey League team to Toronto and the Coliseum building at Exhibition Place be examined.

Funding Sources, Financial Implications and Impact Statement:

N/A

Recommendation:

It is recommended that should Council endorse exploring the feasibility of this proposal, the study team be required to engage the services of a conservation architect to examine whether changes for an International Hockey League team could be accommodated without an adverse impact on the heritage character of the Coliseum.

Background:

The Coliseum at Exhibition Place is designated under the Ontario Heritage Act by city by-law 254-96, adopted on May 21, 1996.

Heritage Toronto staff has only recently learned that a proposal to move an International Hockey League team to Toronto is being considered and that the team's relocation could include alterations to the Coliseum.

Comments:

As the Local Architectural Conservation Advisory Committee for the area represented by Toronto Community Council, Heritage Toronto is interested in any proposals affecting the Coliseum. In particular, we would like to ascertain that changes could be made without having an adverse impact on the exterior of the building. We would therefore recommend that, should Council endorse exploring the feasibility of this proposal, the study team be required to engage the services of a conservation architect to examine critically how an ice rink and necessary seating might be accommodated without affecting the heritage character of the Coliseum.

Heritage Toronto also notes that there are questions about the future of Maple Leaf Gardens, another designated site. We understand too that there are also proposals for new arenas at the University of Toronto and for the St. Mike's Majors (at Bathurst and St. Clair). The proponents should be requested to review the use of these other arenas, especially Maple Leaf Gardens, as part of their feasibility study.

Contact Name:

Name: Richard L. Stromberg

Title: Manager, Historic Preservation

Tel: 392-6827, ext. 236

Fax: 392-6834

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The Policy and Finance Committee also had before it a communication dated July 14, 1999, from Councillor Joe Pantalone, Chair, Board of Governors of Exhibition Place, in support of the report (June 26, 1999) from the Interim General Manager, Exhibition Place, which was forwarded to all Members of Council and a copy thereof is also on file in the office of the City Clerk.

(A copy of the background material, entitled "Board of Governors of Exhibition Place, Reference Materials - The Coliseum Renovation Corporation" is on file in the office of the City Clerk.)

8

International City to City Program

All Wards

(City Council on July 27, 28, 29, and 30, 1999, amended this Clause by adding thereto the following:

"It is further recommended that the report dated July 27, 1999, from the Commissioner of Economic Development, Culture and Tourism, embodying the following recommendation, be adopted, and that the necessary funds be provided from the Corporate Contingency Account:

'It is recommended that City Council support the possible participation of the Mayor or Mayor's designate on the Prime Minister's Team Canada mission to Japan and Australia.' ")

The Policy and Finance Committee recommends:

(1) the adoption of the recommendations of the Economic Development and Parks Committee embodied in the communication (July 13, 1999) from the City Clerk;

(2) that the Mayor and the Commissioner of Economic Development, Culture and Tourism be requested to reconsider the timing of the visit to Asia;

(3) that during the European portion of the visit to Amsterdam and Frankfurt harm reduction and prostitution issues be dealt with as well; and

(4) that the Commissioner of Economic Development, Culture and Tourism be requested to submit a report to Council on the Team Canada mission of the Prime Minister and potential participation by the City.

The Policy and Finance Committee submits the following communication (July 13, 1999) from the City Clerk:

The Economic Development and Parks Committee on July 12, 1999, recommended to the Policy and Finance Committee, and Council, the adoption of the report (June 25, 1999) from the Commissioner of Economic Development, Culture and Tourism.

The Economic Development and Parks Committee reports having:

(1) requested the Commissioner of Economic Development, Culture and Tourism to report back to the September 13, 1999 meeting of the Economic Development and Parks Committee on:

(a) the inclusion of Athens in the mission to Europe in November/December, 1999 or prior to the summer of the year 2000, and extending the timeframe of these missions from 5 to 7 days to 14 to 15 days; and

(b) other twinning relationships, i.e., Sagamihara;

(2) referred the concept of establishing a working group to deal with the International City to City program to the Chair of Economic Development and Parks Committee for consideration.

Background:

The Economic Development and Parks Committee on July 12, 1999, had before it the report (June 25, 1999) from the Commissioner of Economic Development, Culture and Tourism Providing a proposed policy and criteria for the support of and participation in inbound and outbound missions to selected world cities for economic development purposes, as directed by City Council; and recommending that:

(1) the policy framework for the International City to City Program and criteria for the support of and participation in, inbound and outbound missions outlined in Appendix "A" be approved; and

(2) the activities and budget for 1999 outlined in Appendix "B" be approved.

The Economic Development and Parks Committee also had before it a communication (July 6, 1999) from Ming Pao (Daily) Newspaper respecting the Engagement of Sisterhood between Beijing and Taipei.

The following Members of Council appeared before the Economic Development and Parks Committee in connection with the foregoing matter:

- Councillor John Filion, North York Centre;

- Councillor Chris Korwin-Kuczynski, High Park; and

- Councillor Norman Kelly, Scarborough Wexford.

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(Report dated June 25, 1999, addressed to the

Economic Development and Parks Committee

and the Policy and Finance Committee)

Purpose:

This report provides, as directed by Council, proposed recommendations on a policy and criteria for the support of and participation in inbound and outbound missions to selected world cities for economic development purposes. It outlines the work plan and activities for 1999 and the first quarter of 2000.

Funding Sources, Financial Implications and Impact Statement:

New funds of $250,000.00 are allocated to the 1999 Operating Budget of the Economic Development Office.

Recommendations:

It is recommended that:

(1) the policy framework for the International City to City Program and criteria for, the support of and participation in, inbound and outbound missions outlined in Appendix A be approved; and

(2) the activities and budget for 1999 outlined in Appendix B be approved.

Background:

During the budget review, the Mayor was requested to provide input and recommendations on the process to undertake relationships with selected cities around the world for economic development purposes. Council adopted the following recommendations:

(1) additional funds in the amount of $250,000.00 be allocated to maintain relationships with selected cities around the world;

(2) the Commissioner of Economic Development, Culture and Tourism report to Economic Development Committee on an annual basis the work plan and activities of the year;

(3) the Commissioner of Economic Development, Culture and Tourism work with Protocol and other City departments to co-ordinate activities of an international city to city program;

(4) the Commissioner of Economic Development, Culture and Tourism establish a policy and criteria for the support of and participation in inbound and outbound missions that contain the following:

(i) identification of a clear economic benefit to the City prior to approval of international city to city program activities;

(ii) strict limits on the numbers of staff and elected officials participating in international city to city program activities;

(iii) requirement for a written follow-up report from participants in international city to city program to the Economic Development Committee; and

(iv) approval by Mayor for international city to city program activities.

(5) That the policy and criteria be approved by the Finance and Policy Committee.

Discussion:

Since amalgamation, the Economic Development, Culture and Tourism Department and the Protocol Office have been discussing the various options of managing an International City to City Program. With the exception of a few inbound visits from our partnership cities, the program activities had been put on hold until Council approved the rationale and program funding.

On April 27, 1999 Council provided the funding and the rationale for initiating an international city to city program. It is crucial, therefore, that a basic work plan for 1999, as well as the policy framework for the International City to City Program, be established and approved expeditiously. As directed by Council, the thrust of the program is to foster relationships with international cities for economic development purposes. The program will be structured to stimulate inward economic investment and export development by focussing on the economic similarities and characteristics between Toronto and its partnership cities. The technical exchange program that the former cities were involved in is not a component of this International City to City work plan but will be strategically linked for economic development purposes.

A critical element of the International City to City Program will be the opportunity to capitalize and foster the tremendous opportunities within our own diverse ethnic communities as entries or 'ports of call' to open the doors to mutually beneficial economic outcomes between Toronto and their home lands. Working with these important communities will assist in raising the City of Toronto's profile for business development purposes and will also benefit the City's Olympic bid efforts.

Section 1: Policy Framework for International City to City Program:

Appendix A outlines in detail the policy framework recommended. The core principles are:

(a) must generate potential business investments to Toronto, facilitate joint venture and partnerships, expansion of export market area for local business, and promoting community, culture and tourism;

(b) to capture the economies of scale, outbound trips will be planned to two or more cities; national and regional gateways, such as London, Tokyo, Hong Kong and Beijing will also be visited as appropriate;

(c) the delegation will include the Mayor or his designate, two Councillors, up to two staff, and local business representatives who will cover their own expenses;

(d) a written follow-up report from participants in outbound missions to be submitted to the Economic Development and Parks Committee; and

(e) an annual business plan will be prepared and submitted to the Economic Development and Parks Committee following the review and input from the Mayor.

Section Two: 1999 Work Plan and Program Activities:

The International City to City program goals are:

(i) to help grow Toronto businesses through international partnerships;

(ii) to attract new business and investment to Toronto; and

(iii) to increase Toronto's profile internationally.

The 1999 program will rely on a pragmatic and critical review of the opportunities presented by the economies of the designated City to City cities and the desire of those cities to focus their attention on economic development in Toronto. This will be done directly with our partner cities and right here with our significant community and business leaders with contacts in the targeted areas.

It is recommended that in 1999 Toronto focus on three major regions: Eastern United States, Central Europe and Asia. The rationale for commencing with these regions is based on the fact that amalgamated Toronto has, over the years, made significant investments in business development in these areas. More importantly, these regions have strong economic potential for the growth of Toronto businesses. Each year the work plan will review the outcomes of the previous year's efforts and will consider new opportunities as conditions change.

Within the three targeted regions, the City has six partnership cities that will serve as 'entry points to the regions'. This will facilitate the exploration of economic activities in cities that may or may not have formal relationships with Toronto. The partner cities identified are: Amsterdam (The Netherlands), Frankfurt (Germany), Chongqing (China), Wuxi (China), Indianapolis (U.S.A.) and Chicago (U.S.A.). The potential for return on investment of this approach will be much higher and the cost to the City more manageable. The economies of these cities correspond most closely with Toronto's key sectors and their interest in economic development matches with our program goals.

The United States is our major trading partner and allows ease of entry for all sectors of Toronto's economy. As such, it is the focus of a majority of the division's investment attraction efforts through attendance at trade shows, investment and sector specific business meetings. These efforts, though separate, will be coordinated with the International City to City Program.

Staff will resume active contact with cities within the targeted regions/countries and work with local business, foreign embassies, consulates and representatives in Toronto to establish or reinitiate a business advisory group for each partnership city. The objective of each advisory group is to provide contacts and leads, facilitate export market development, and assist with client and investment building.

A major component of the program activities for 1999 will be the reestablishment and refocusing relationships on economic development goals. This will take place first at home as described above and then by making contact. Extensive work will also have to be done to build an in depth understanding of the local and regional economies of our city to city partners so that we will know how to take best advantage of our linkages. Finally, Toronto will be receiving inbound and undertaking outgoing missions for the first time. It is recommended that the City receive eight incoming visits and undertake two outgoing visits in 1999.

Overview of 1999 Program:

International City to City Program
Activity	Time frame
Mission to Europe: Amsterdam, Frankfurt	November/December ( 5 to 7 days)
Mission to Asia: Chongqing, Wuxi, Taipei, Seoul and Hong Kong	October/ November (15 to 17 days)
Business Meetings United States: Chicago, Indianapolis	September /October (Chicago - September) ( Indianapolis - October)
Incoming Missions: Limit to 9 existing City to City cities per year determined by invitation from Mayor	Ongoing List developed within yearly work plan. 1999 list to be determined.
Winter 2000 Mission to Europe: Ankara, Haifa, London	January/February (8 to 10 days)

(1) Inbound Missions:

The budget for program costs to support eight inbound missions in 1999 is approximately $35,250.00. A number of partnership cities have written to request an inbound mission including Amsterdam, Volgograd, Chicago, Indianapolis, Chongqing, and Wuxi. These and other partnership cities that have expressed an interest in expanding the economic benefits of the relationship will be contacted to see if a visit can be arranged. The 1999 list will be finalized in consultation with the Mayor and the Protocol Office.

The staff in Economic Development and the Protocol Offices will work with the other city departments to co-ordinate activities and programs such as: a courtesy call on the Mayor, meetings with Council members, and senior staff, and welcome reception. They will organize investment and business meetings with local companies, arrange site and plant tours as well as work with local businesses and community.

The budget will cover official reception, meeting expenses, overhead costs and materials and, in the case of a delegation from the Far East, some hotel rooms, meals and local transportation. This is so because these costs are typically covered by those cities when Toronto is on an outbound mission.

The program for an inbound mission includes a courtesy call on the Mayor and/or members of Council, investment and business meetings, site familiarization tours, meetings with departmental and senior government officials, and a formal welcome such as a luncheon or reception.

As indicated in the proposed policies governing the International City to City Program in Appendix A, the following relate to inbound missions:

(i) funds allocated to the International City to City Program for inbound missions are for the sole purpose of activities related to the designated list of twenty-six partner cities or those specifically indicated in the approved business plan;

(ii) the purpose of inbound missions from the designated list will focus on economic development initiatives;

(iii) an annual business plan will be prepared and submitted to the Economic Development and Parks Committee outlining: the list of cities expected to generate the 6 to 10 inbound missions; and

(iv) an effort will be made to ensure that each of the City to City cities will have the opportunity of one official inbound mission during the term of Council

(2) Outbound Missions:

Rationale:

(i) potential for business and investment attraction;

(ii) joint venture and partnerships opportunities for Toronto business;

(iii) expand Export Market Areas for Toronto manufacturers;

(iv) job creation;

(v) tax generation;

(vi) opportunity to promote Toronto 2008 Olympic Bid;

(vii) raise profile of Toronto; and

(viii) increase tourism, business travel and convention business.

Activities:

(i) prepare economic profile of cities to be visited;

(ii) liaise with local and overseas government officials and business representatives;

(iii) host investment seminars to promote Toronto and answer basic investment questions;

(iv) invite local business representatives to participate in outbound missions and provide leads on who to visit and pursue;

(v) arrange one-on-one and small group investment and business meetings;

(vi) schedule itineraries;

(vii) make travel arrangements; and

(viii) arrange official gifts.

(a) Mission to Europe:

It is suggested that a visit be made to Amsterdam (The Netherlands) and Frankfurt (Germany) in the fall of 1999. The timing would be approximately late November to mid December for five to seven days. The budget for the mission is approximately $35,770.00.

The objectives of visiting Amsterdam (The Netherlands) and Frankfurt (Germany) are to promote Toronto, and to meet with their local companies who have expressed interest in joint venture and partnership with Toronto companies. Specific meetings will be arranged with companies engaged in Toronto's key sectors, namely: tourism, biotech, information technology, telecommunications, food and beverage, and finance.

Program in Amsterdam:

(i) meet with Mayor and Councillors of Amsterdam;

(ii) lunch with Amsterdam Business Association;

(iii) meeting with Canadian Consul and Officials in The Hague; and

(iv) business meetings and corporate calls to targeted companies.

Program in Frankfurt:

(i) meet with Mayor and Councillors of Frankfurt;

(ii) lunch with Frankfurt Business Association;

(iii) meeting with Consular Officials; and

(iv) business meetings and corporate calls to target companies.

(b) Mission to Asia:

It is also suggested that a trip be made to Asia to capture some of the advantages of its growing recovery. The possible itinerary for this outgoing mission will be Taipei (Taiwan), Seoul (Korea), Chongqing (China), Wuxi (China) and Hong Kong and the timing would be early November for 15 to 16 days. The budget for the mission is approximately $75,000.00.

As with the European trip, the objectives of visiting designations in Asia are to promote Toronto, and to meet with their local companies who have expressed interest in joint venture and partnership with Toronto companies. Specific meetings will be arranged with companies engaged in Toronto's key sectors, namely: biotech, information technology telecommunications (semi-conductor fab plants), fashion and textile, food and beverage, and construction related industries. There will also be an opportunity to meet with the Olympic Committees in Taipei and Seoul.

The Taipei Economic and Cultural Office in Toronto, the Consular General of the Republic of Korea, Toronto, the Hong Kong Economic and Trade Office, Toronto, and the Consular General of the Republic of China, Toronto, will assist with and facilitate the delegation's meeting arrangements and itineraries.

The following meetings and activities will be arranged for the Toronto delegation:

Program in Taipei:

(i) meetings with Mayor and Councillors of Taipei;

(ii) Taipei Foreign Affairs Office;

(iii) business luncheon seminar (the seminar will be organized by the Canadian Trade Office in Taipei - over 80 businesses will be expected to attend;

(iv) UNIAIL Corporation - the company bought 25 Dash 8-400 series aircraft from Bombardier facility in Downsview, Toronto; 14 aircraft have been delivered, 6 will be delivered in September 1999, and another 5 next year;

(v) Venture Capital Association - the 48 members association has billions to invest in overseas hi-tech companies in the biotech, information technology and telecommunications sectors;

(vi) Taipei-Taiwan Olympic Committee; and

(vii) site visit and meeting with representatives of the world famous Science Park.

Program in Seoul:

(i) Ministry of Commerce;

(ii) Ministry of Industry; and

(iii) Korean Trade and Investment Agency.

Program in Hong Kong:

(i) Hong Kong Manufacturers' Association;

(ii) Hong Kong Trade Development Council;

(iii) Hong Kong Bank;

(iv) Hong Kong companies who have major investments in Toronto; and

(v) a speaking engagement organized by a local business association.

Program in China: Chongqing

(i) Mayor of Chongqing;

(ii) meet with executives of offices of Northern Telecom, Bank of Nova Scotia and Sun Life; and

(iii) explore the opportunities for more foreign students to come to Toronto.

(c) Winter 2000 - Proposed Mission to Europe:

Currently exploring the opportunity to undertake a business development mission to two additional partner cities in early 2000: Ankara, Turkey and Haifa, Israel.

Conclusions:

As one of the most culturally diverse cities in the world, Toronto has tremendous opportunities to connect with key regions across the world through its local multiethnic and multicultural communities. The Economic Development Office, by using this clear advantage of "ports of entry' through our community and capitalizing on our new international city to city program, can begin to generate business leads and create new investment potential.

It is clear in this report and in the decision made by City Council that the prime purpose of our activities, in particular any outbound missions, is to stimulate the growth and strengthening of Toronto's economy. The policy framework contained in this report places before the Committee an approach which will meet the objectives of Council. The work program provides an outline of the type of activities which will be pursued over the next few months, at the same time as detailed planning, booking of appointments and the connecting to the local community takes place.

The framework and plan is an ambitious one given the late start. The immediate approval by the Policy and Finance Committee is essential in order for us to fully implement the plan. Should there be any significant changes to the plan, the Commissioner will report back.

Contact Name:

Peter Finestone, 392 3376

Brenda Librecz, 397 4700

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Appendix A

International City to City Program - Policies

Purpose of Program:

Must generate potential business investments to Toronto, facilitate joint venture and partnerships, expand the export market area for local business, and promote community, culture and tourism.

Funding:

(1) funds allocated to the International City to City Program are for the sole purpose of activities related to the designated list of twenty-six partner cities, or those specifically indicated in the approved business plan;

(2) the program funding, for both inbound and outbound missions, will be augmented by the contributions of the business and local communities as well as the Canadian government on foreign trips; and

(3) budgets will include the full cost of planning, travel, accommodation, meals, business seminars and meetings, gifts, official receptions and the follow-up.

Annual Business Planning:

(1) an annual business plan will be prepared and submitted to the Economic Development and Parks Committee outlining:

(i) the list of cities expected to generate the 6 to 10 inbound missions to be supported and the tentative timing of those visits; and

(ii) the 2 to 3 outbound missions for the year along with the rationale for the specific destinations, goals, timing and budgets.

(2) a summary report of the trip and an action plan will be produced following each mission.

(3) to capture the economies of scale, outbound trips will be planned to visit two or more cities; national and regional gateways, such as London, Tokyo, Hong Kong and Beijing will also be visited as appropriate; and

(4) program to be approved by Mayor prior to submission of business plan to Economic Development & Parks Committee.

New Alliances:

As the International City to City Program evolves, relationships with cities who currently do not have formal links with Toronto will grow. These relationships will be founded on their ability to generate new business and investment. The City already has twenty-six twin, sister and friendship agreements. Dialogue, missions and business exchanges can be initiated and conducted without a formal link. Were a new partnership to be contemplated, a positive business case would have to be made prior to Council approval and the preparation of the agreement.

Outbound Missions:

(1) Composition of Delegations: The official outbound delegation will be comprised of the Mayor or designate, two Councillors and two senior staff. It is expected that members of the Toronto business community with an interest in the area(s) to be visited will join the mission at their own expense. The delegation will also be augmented by additional members of Council, paying their own way, who are interested and have a connection to the areas to be visited.

(2) Selection of Official Delegation: The Mayor, in consultation with the Chair of the Economic Development and Parks Committee, and the Commissioner of Economic Development, Culture and Tourism will select the official Council delegation.

(3) Potential Activities: Will comprise the following:

(a) Business/investment seminars and corporate calls to individual businesses;

(b) Meetings with business leaders and potential investors;

(c) Meetings with civic and other foreign government officials;

(d) Meetings with Canadian government/trade officials (embassy and consular staff);

(e) Familiarization tours;

(f) Receptions hosted by the local business community and partner City of Toronto Official presentation of gifts;

Budgets:

(a) An average of $19,000.00 will be budgeted for outbound missions to the United States (based on 1 city and 3 days/2 nights);

(b) An average of $45,000.00 will be budgeted for an outbound mission to Europe (based on 3 cities and 10days/9 nights); and

(c) An average of $65,000.00 will be budgeted for an outbound mission to Asia (based on 4 cities and 16 days/15 nights).

Inbound Missions:

(1) Official Hosts: For each inbound delegation, the Mayor designated member of Council will be the official host during the visit and attend most of the functions during the delegation's stay. In each case there will be a formal welcome hosted by the Mayor/Deputy Mayor at which the official gifts will be exchanged.

(2) Selections of Cities:

An annual business plan will be prepared and submitted to the Economic Development and Parks Committee outlining the list of cities expected to be hosted in Toronto (6 to 10 maximum per year) and the tentative timing of those visits. The Economic Development and Protocol Offices will try to respond to the official requests of the City to City cities attending to the rationale for the visit such as An effort will be made to ensure that each of the City to City cities will have the opportunity of one official inbound mission during the term of Council.

The addition of cities not on the designated list will only be considered during the business plan stage and will only be pursued if there is strong potential for economic benefit.

(3) Potential Activities: Will comprise the following:

An official welcome;

A modest reception;

Official gifts for the head of the delegation and the key delegates;

Presentations by City staff as are required;

Some ground transportation;

In the case of a reciprocal visit from a partnership city which has previously paid for all of the accommodation and meals of a City of Toronto delegation, hotel and meals for three official delegates;

Business and community meetings as are appropriate.

(4) Budgets:

The total budget for inbound missions in a year will not exceed twenty percent of the total budget for the International City to City Program;

The average of $3,500.00 will be budgeted for a standard inbound mission;

The average of $7,000.00 will be budgeted for a "reciprocal" inbound mission where there is an obligation to provide hotel and meals and these will be limited to three official delegates.

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Appendix B

International City to City Program - 1999 Activities and Estimated Budget

Program Costs $181,000.00

(a) Mission to Asia (Fall) $75,000.00

(b) Mission to Europe (Fall) $40,000.00

(c) US Business Meetings $15,000.00

(d) Inbound Mission -8 $35,000.00

(e) Business Facilitation and

Mission Preparation $ 7,500.00

(f) Program Overheads $ 8,500.00

(VIII) Program Development / Administration/Research $ 69,000.00

Contracts:

(1) Economic Profile/Background Research:

Europe/Middle East $12,500.00

Asia $ 12,500.00

General Support $ 4,000.00

(30 days)

Local Relationship Building

With Designated communities

and assist with missions

(9 months) $ 40,000.00

Total Costs $250,000.00

(A newspaper clipping from the Ming Pao (Daily) Newspaper appended to the foregoing report was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

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The Committee also had before it the following communications, submitted by Councillor Norman Kelly, in support of the International City to City Program.

- (July 19, 1999) from Mr. Fred Wang, President, Metrosquare Development Corporation;

- (July 18, 1999) from Mr. Donald Y. Chen, President, Chinese Community Centre of Ontario Inc.;

- (July 14, 1999) from Mr. Wan Q. Lim, Lem Kow Mock Benevolent Association;

- (July 18, 1999) from Ms. Nancy Zhang, Director, Mandarin Chinese Association of Toronto;

- (July 18, 1999) from Mr. Willy W.C. Cheng, President, Association of H.K.F.S. Ex-Staff In Toronto;

- (July 16, 1999) from Mr. Eric Wen, Vice President, Chinese Association of Mississauga;

- (July 18, 1999) from Lin Shen, Director, Chinese Cultural Association of Toronto;

- (July 15, 1999) from Mr. Philip Leong, President, Toronto HongKong Fellowship Association of Canada;

- (July 18, 1999) from Mr. Kwong-Huen Choh, President, Chinese Canadian Institute of Arts & Science Inc.;

- (July 18, 1999) from Mr. Willy Cheng, Director-General, Eastern Canada China Reunification Alliance;

- (July 18, 1999) from Mr. Donald Y. Chen, Director, Cathay Cultural Foundation;

- (July 15, 1999) from Mr. Jeffrey Lo, Chairman, Ontario Chinese Artists Association;

- (July 18, 1999) from the Chairman, Ship Toy Yen Benevolent Society;

- (July 15, 1999) from Lo Wan Shu, Chun Wah Chinese Opera Association;

- (July 18, 1999) from Mr. Willy Cheng, Chairman, Liaison Centre of Hong Kong Retired Civil Servants Association in Toronto;

- (July 16, 1999) from Mr. Alfred Yang, President, Taiwan Entrepreneurs Society Taipei/Toronto;

- (July 14, 1999) from Ms. Grace Yu, Vice President, Chinese Economic Times;

- (July 18, 1999) from Sang Yee, Chief Editor, The Shing Wah News;

- (July 18, 1999) from Wai-Chi Cheng, President, Chinese National League, Eastern Canada Division Inc.

- (July 18, 1999) from Mr. David Kei, President, Roc Overseas Students Association, Eastern Canada;

- (July 16, 1999) from Ms. Mina Fung, Executive Administrator, Community Social Services of Peel Region;

- (July 16, 1999) from Mr. Steeve Lee, Chairman of the Board, Ai-Cheng Mandarin Chinese School;

- (July 19, 1999) from Co-Chairman, World Chee-Tak Cultural Centre;

- (July 15, 1999) from J.M. Kung-Fu Club Chinese Art of Self Defence;

- (July 18, 1999) from Wai-Chi Cheng, Director, Toronto Chung Wah Chinese School;

- (July 18, 1999) from Loon Shu Chan, President, The World Kwong Tung Community Organization of Ontario, Canada;

- (July 18, 1999) from Yik Hon Cheong, President, Lung Kong Ten Yee Association;

- (July 16, 1999) from Mr. Edward Lee, Director, Yung Kwang Fellowship Association in Canada;

- (July 19, 1999) from Mr. Tony Liao, President, Taiwanese Hakka Association of Toronto;

- (July 19, 1999) from Moon Lum, Advisor for Canada, Liaison Center of the General Chamber of Commerce of the Republic of China;

- (July 18, 1999) from Mr. James H. C. Lu, Director, Taiwan Benevolent Association of Canada;

- (July 18, 1999) from Wai-Chi Cheng, President, Ontario Pui Ying Alumni Association;

- (July 18, 1999) from Mr. Richard Chang, Director, Chinese Association of Toronto for Heritage Among Youth;

- (July 18, 1999) from Mr. Steeve Lee, Director, Overseas Chinese Student Service Centre;

- (July 18, 1999) from Mr. Alexander S.K. Huang, Secretary, Taiwan Universities Alumni Association of Toronto;

- (July 14, 1999) from Mr. Philip Leong, Vice President, C.C.I. Chinese-Canadian Intercultural Association;

- (July 15, 1999) from Mr. Raymond Chan, President, Chinese Investment Club;

- (July 14, 1999) from Mr. Steve Ang, Chairman, Metro-Toronto Chinese Canada Day Committee;

- (July 18, 1999) from Mr. Donald Y. Chen, Director, The Dove Intercultural Society in Canada;

- (July 18, 1999) from Mr. Sifu James Lore, President, J.M. Kung Fu Club;

- (July 18, 1999) from Mr. Henry Chiang, Director, Chinese Canadian Athletic Association;

- (July 15, 1999) from Wan Q. Lim, President, Chinese United Dramatic Society;

- (July 19, 1999) from Moon Lum, Moon Lum, Order of Ontario;

- (July 18, 1999) from Willy W.C. Cheng, President, Friends of President Lee Teng-Hui Association in Eastern Canada; and

- (July 15, 1999) from Mr. Thomas Tu, President, Taiwan Entrepreneurs and Investors Association of Canada.

Councillor Olivia Chow, Downtown, appeared before the Policy and Finance Committee in connection with the foregoing matter.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following report (July 27, 1999) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

This report places before Council the opportunity to participate in a trade mission which may have long term positive return to the City. It also identifies a synergy between the Team Canada Mission and the goals of the International City-to-City program.

Financial Implications:

The total cost of participation in the proposed Team Canada mission to Japan and Australia is estimated to be approximately $20,000 for the fourteen day trip. A fee of $11,500 is required before August 2, 1999 to be included in the selection process. The fee is fully refundable should the Mayor or his/her designate be unable to attend. This was not budgeted in the International City to City Program.

Recommendation:

It is recommended that City Council support the possible participation of the Mayor or Mayor's designate on the Prime Minister's Team Canada mission to Japan and Australia.

Background:

During the discussion of Clause 22, the International City-to-City Program, at the Finance and Policy Committee meeting of July 20,1999, the Commissioner of Economic Development, Culture and Tourism was asked to:

"... submit a report to Council on the Team Canada mission of the Prime Minister and potential participation by the City."

Comments:

The upcoming Team Canada mission to Japan and Australia from September 11-24, 1999 will for the first time have a specially planned municipal program. The Federation of Canadian Municipalities (FCM) has worked hard with the Federal Government to both have municipalities represented and offer tailored activities to meet our needs. Thirteen seats have been secured for the municipal delegates. Those invited include the Mayors of the larger municipalities in the country and the members of the FCM executive. The selection of participants will be based on three criteria: the size of the private sector delegation from the local area,; the extent of existing links/partnerships in Japan and Australia; and the level of regional representation of the delegation. Participation is restricted to one municipal representative per region unless the province or territory is not represented.

This Team Canada mission in particular provides an unique opportunity to: promote our city; make business contacts with others on the trip and with the foreign business owners; assist local companies sell product and attract investment back to Toronto. It is unique because there will only be limited representation from the region. The primary focus of Team Canada is business, however, it provides a chance to build relationships with Canadian and foreign trade officials as well as to discuss other City objectives with senior government delegates.

The Department of Foreign Affairs and International Trade have targeted nine sectors for the upcoming mission: Electric Power & New Energy; Environment; Information and Communications Technology; Education, Building Technologies and Materials; Food Biotech and Agrifood; Space/Aerospace; Health/Health Care; and Mining and Natural Resources. Two of these (Information Technology and Bio Tech) are sectors specifically targeted by the Economic Development Office as strategic sectors for Toronto. A few others are also significant contributors to the City's economy. Business meetings, networking events and seminars have been arranged for the participants.

Past Successes

Since 1994, trade delegations lead by the Prime Minister, and including provincial leaders and municipal officials, have generated to date $23.8 billion in contracts for the participants. Thirty-five Toronto based firms out of approximately 150 companies participated in missions in 1998. They reported that the trip opened doors, gained acceptance and saved months in time and energy. Connections were also made among participants and strategic alliances and partnerships were born in the air between countries.

The Latin American trip resulted in $3.3 billion in Canadian exports and almost more importantly $20 billion in investment. One Scarborough company signed three memoranda of understanding and one agency agreement valued at about $1.5 million.

Synergy with the International City-to-City Program

The objectives of our International City to City Program and the Team Canada approach are identical in that they both endeavour to build relationships with cities and countries around the globe to secure a higher standard of living through greater business transactions.

Conclusion:

Since the primary goals of a Team Canada mission are trade, investment attraction, relationship building and lead generation and past trips have proven to be a success, it is desirable to support the City's participation.

Joining the Team Canada Trade Mission would solidify our partnership and collaborative working relationship with the Government of Canada and business community to achieve the Toronto's economic development goals.

Contacts:

Peter Finestone

392-3376

Brenda Librecz

397-4700)

9

City Tree Maintenance Backlog

All Wards

(City Council on July 27, 28, 29 and 30, 1999, deferred consideration of this Clause, together with the communication dated July 27, 1999, from the City Clerk, to the next regular meeting of City Council to be held on September 28, 1999.)

The Policy and Finance Committee recommends the adoption of the recommendations of the Economic Development Committee embodied in the following communication (July 13, 1999) from the City Clerk; and reports having forwarded a copy of the aforementioned communication to the Budget Advisory Committee for consideration and report thereon directly to Council for its meeting scheduled to be held on July 27, 1999:

The Economic Development and Parks Committee on July 12, 1999, recommended to the Policy and Finance Committee, and Council, the adoption of the report (June 22, 1999) from the Commissioner of Economic Development, Culture and Tourism, subject to deleting the recommendation embodied therein and inserting in lieu thereof the following:

"(1) that the Economic Development and Parks Committee supports funding in the amount of $1 million to be made available in the 1999 Forestry Operating Budget and $1.7 million in 2000, to assist in reducing the City Tree Maintenance backlog, the said funding being designated as new funding added to the Operating Budget; and

(2) that this report be referred to the Policy and Finance Committee for consideration."

The Economic Development and Parks Committee reports having requested the Commissioner of Economic Development, Culture and Tourism to report back to the Economic Development and Parks Committee, in consultation with the City's Tree Advocate, on the following:

(a) a harmonized service level for all parks for the Year 2000 and methods of implementing a maintenance service level with the hiring of more seasonal staff, hiring of existing seasonal staff, and hiring of contractors and associated equipment;

(b) the feasibility and cost factor of providing a written communication to each new tree owner explaining the homeowners responsibilities with regard to the maintenance of same;

(c) an interim progress report on the tree maintenance program for its meeting of November 29, 1999;

(d) information as to how individual Councillors can apply for free tree planting for homeowners;

(e) options with respect to cost-sharing with homeowners to expedite tree trimming and pruning, etc., upon approval of the tree maintenance backlog program;

(f) options with respect to the tree planting program as a harmonization scenario; and

(g) the status, regarding the Parks Division in particular, of the maintenance of municipal lawns and gardens for its meeting of November 29, 1999;

Background:

The Economic Development and Parks Committee on July 12, 1999, had before it the following report and communications:

(i) (June 22, 1999) from the Commissioner of Economic Development, Culture and Tourism, recommending that $1 million dollars be made available in the 1999 Forestry capital budget and $1.7 million in 2000 for the purpose of hiring more seasonal staff, holding existing seasonal staff on longer and hiring contractors and associated equipment to aggressively reduce the forestry service backlog;

(ii) (July 5, 1999) from Councillor Joe Pantalone, Trinity Niagara, recommending that the report (June 22, 1999) from the Commissioner of Economic Development, Culture and Tourism be adopted; that the Budget Advisory Committee be requested to report directly to City Council, at its meeting scheduled to be held on July 27, 28 and 29, 1999, on the source of the required funds; and requesting that staff contact him in Committee Room 1 when this matter is being considered so that he may speak on the report and recommendations; and

(iii) (July 12, 1999) from Mr. Brian Cochrane, President, Toronto Civic Employees' Union - CUPE Local 416, in support of the request from the Commissioner of Economic Development, Culture and Tourism for additional funds to clear up the forestry service backlog.

The following Members of Council appeared before the Economic Development and Parks Committee in connection with the foregoing matter:

- Councillor Chris Korwin-Kuczynski, High Park;

- Councillor Joe Mihevc, York Eglinton; and

- Councillor Joe Pantalone, Trinity Niagara.

--------

(Report dated June 22, 1999, addressed to the

Economic Development and Parks Committee from the

Commissioner of Economic Development, Culture and Tourism)

Purpose:

At its meeting of November 16, 1998, the Economic Development Committee had before it a tree maintenance backlog report dated November 4, 1998 and requested a report further on:

(1) the best practices in place with respect to tree maintenance in the former municipalities;

(2) any benchmarks which have been, or could have been utilized in this regard; and

(3) the feasibility of the City contracting out these services.

Recommendation:

That $1 million dollars be made available in the 1999 Forestry capital budget and $1.7 million in 2000 for the purpose of hiring more seasonal staff, holding existing seasonal staff on longer and hiring contractors and associated equipment to aggressively reduce the forestry service backlog.

Comments:

Since the November 1998 backlog report, the forestry operations have been shifted from seven to four districts. Within the limits of existing collective agreements and the existing fleet, the crews in all districts work with similar crew configuration and practices on each type of tree work. More work will be done to further integrate forestry crews in this regard after collective bargaining is complete.

The following chart summarizes the backlog of forestry service across Toronto. This is not a straight forward comparison as many operating issues factor in. For example, a service order can be for only one tree or many trees along a street. A tree management information system is currently being implemented to gather information city- wide. Standardized comparisons will be available as the new system is implemented in the year 2000. The numbers represent valid service requests from the public. A small percentage are generated by staff.

Analysis of the data and responses from the public make it clear that service levels are unacceptable. The public is having to wait approximately one year on average for forestry service.

Insert Table/Map No. 1

table 1 outstanding forestry

Best Practices:

Our goal is to implement the best possible methods of delivering forestry services to the public. Among others, we are working on flow of work requests, equipment utilization, type of equipment used and suitability of it for the job, communication systems, crew sizes and structures, interaction with other disciplines in other departments, productivity and more.

Resource Management:

From an urban forest resource management point of view, we are similar to all other municipalities in that we do not have systematic inspection and maintenance of trees along streets, in parks, ravines and other natural areas. We are largely driven by requests and hazards as they arise. Such cyclic programs cannot be achieved in a state of huge backlogs as we currently experience. As we strive to eliminate the service backlog, we would implement more systematic maintenance programs.

Productivity:

The forestry management team is focussing efforts on obtaining the best possible productivity for crews. We have looked at structures of crews in each area and learned from other practices. There are currently many classifications of jobs which we plan to redefine to ensure that qualified staff are capable of doing more service within their own classification, thereby simplifying crew assignments and allowing greater flexibility when assigning daily work schedules. This could possibly reduce crew sizes for certain job assignments to enable higher numbers of crews.

Equipment:

Equipment utilization and purchase of the most effective equipment such as combined aerial tower trucks which include chipper boxes and pull chipper units largely eliminate the need for separate chipper trucks for most street tree pruning. Most of the forestry fleet has been converted to these units with some separate units being retained for specialized jobs.

Crew Structure and Size:

Much of our work involves work on the streets and around Hydro wires and our crew sizes and duties are, therefore, governed by legislation to ensure safety of staff, road traffic and hydro plant. To a large extent, our ability to effect major crew structure and size changes is governed by legislative requirements. A third crew member is often required to "spot" the boom of aerial tower trucks in relation to hydro plant or to guide traffic.

Systematic Maintenance/Block Pruning:

The most efficient (by a factor of two as demonstrated in Table 2) and cost effective delivery of any tree maintenance is systematically achieved. That is, crews of appropriate staff methodically service trees as they progress down streets and through areas. This ensures that all required tree maintenance is achieved on any tree that needs it - no trees are missed due to lack of a call to request maintenance. This method also minimizes travel time, reduces set up and take down time of machinery, maximizes coordination with Toronto Hydro control centres and simplifies supervision of crews.

However, due to significant numbers of valid calls received from the public and the expectations that those calls be serviced, municipalities rarely have the opportunity to systematically maintain trees. Instead, tens of thousands of service requests are received annually in Toronto and become computerized as service orders for crews. These are prioritized in order of severity of the maintenance required and grouped into small work areas so that staff and equipment utilization are maximized.

As requests from the public diminish in winter months, crews would historically catch up on the backlog of requests, sometimes to the point where crews can be dispatched to work systematically. Unfortunately, Toronto's current backlog is such that this was not achieved this past winter and backlogs will grow over the 1999 summer season.

One Information System/One Call Centre:

We currently have a large project well underway to consolidate six existing tree management information systems into one system with connectivity in all work locations which will provide much better opportunity to keep accurate record of our inventory, coordinate work assignments and track crew productivity. It will also create the opportunity to have one call centre for all forestry service requests through one phone number city-wide. This would enable efficiencies of scale in administration, while at the same time, improve information response to the public with potential to better manage storm call situations and after hour emergencies. It would also enable better coordination with other civic departments. Changing over to a call centre approach would be a very significant undertaking which would occur over an extended period of time.

Benchmarks:

Tree maintenance requirements are variable over their life cycle. Similarly, resources required and productivity are affected by, among other things, the size and age of trees. Newly planted trees require frequent watering and training of branches in order to minimize future maintenance requirements. Established trees require infrequent pruning often most dictated by the requirement to shape the tree and maintain necessary clearances from the ground, signs, lights, etc. Mature trees require more frequent pruning as their health and structure start to decline.

Crew productivity is always an issue that we strive to maximize through use of proper machinery and technology to do any given task. Tree pruning requires the highest use of resources. Crew productivity is measured in number or diameter of trees serviced. Productivity is variable since many factors including proximity of trees to parked cars, moving traffic, buildings, hydro wires and other structures have direct bearing on how work is performed. This is extremely variable by area in the city.

The following tables illustrate these points and some standard benchmarks which enable management to evaluate effectiveness of crews and programs.

Insert Table/Map No. 1

tables 2-4

Currently, when urban forestry supervisors measure crew productivity, a concerted effort must be made to manually track statistics as no computerized maintenance management system exists for forestry services at this time. Such systems are on the forefront of the Parks and Recreation Division's agenda. Through the Year 2000 project mentioned above, while making our systems Y2K compatible, steps are being taken to consolidate six existing computerized tree management information systems into one system which will simplify statistical analysis for performance tracking.

Feasibility of Contracting Out:

Forestry continues to use contract crews for specialized work or, as funding permits, for limited contracts to do routine pruning and assist in eliminating the backlog. Presently there is one contract tree removal crew in the former City of Toronto and one pruning contract crew in former Etobicoke and East York.

Based on applying harmonized productivity standards, the current backlog of forestry service requests represents sufficient work for twelve fully equipped forestry crews of three persons per crew to work for one year at an approximate cost of $2.7 million.

Elimination of the current backlog will not be realized in house without extra funding. If funding is made available, contract crews would be used on a one time basis to aggressively reduce the backlog. Use of contract crews for eliminating backlogs is common practice when funds are available. Since the arboriculture industry is relatively small compared to many others, contracting multiple crews can drive prices up. Usually, contract crew prices are lower in the winter months than summer and, therefore, the best time for using contract crews is in the winter months. This is also a time that seasonal City staff are layed off and could be kept on for purposes of eliminating the backlog.

Conclusions:

The significance of the tree maintenance backlog has been identified as a specific target area for improvement. As outlined above, staff are currently working to unify services across the City while implementing best practices and work processes. All ideas which lead to improved work performance and productivity are implemented as soon as practically possible as restructuring takes place.

The current backlog is completely unacceptable to the public as evidenced by many complaint calls to our offices and Councillors. This backlog also eliminates the ability to use our work force on more productive systematic tree maintenance during winter months. It is our desire to take immediate steps to improve service to the public and increase productivity and tree care in the city and we respectively request capital funding to do this.

It is, therefore, recommended that additional funding of $1 million be made available in 1999 and $1.7 million in 2000 for forestry to aggressively pursue backlog reduction.

Contact Name:

Mr. Richard Ubbens, City Forester, 392-1894.

--------

(Communication dated July 5, 1999, addressed to the

the Economic Development and Parks Committee

from Councillor Joe Pantalone)

Recommendation:

That the recommendation contained in Item14 be adopted and further that the Budget Committee report directly to the July 27, 1999 Toronto Council meeting on the source of the required funds.

Background:

As the Commissioner of Economic Development, Culture and Tourism outlines in Item 14, Toronto's ability to adequately maintain our Urban Forest is in need of urgent and immediate attention.

As well as detailing the current backlog in forestry operations for 1999, the report outlines what is needed to lower this staggering backlog and slow the alarming growth in the number of outstanding service calls. To site the example contained in Table 1, the citywide backlog for service and work orders has grown from 665 in 1997 to an incredible 5,018 in 1999. The 5,018 outstanding orders for 1999 represents a completion rate of only 54 per cent. The average wait for routine work in the four districts ranges from 10 to 13 months.

I think we all agree that this is an unacceptable level for a vital municipal service.

Due to the need to move quickly on this, it is imperative that the Budget Committee report to the July 27, 1999 meeting for Council. (Toronto Council's following meeting is not until September 28, 1999, which would be too late for beginning to clear the backlog in 1999). I hope that the Committee will support this friendly amendment.

Unfortunately, I may be unable to attend this Committee meeting, as I am a member of the Planning and Transportation Committee that is meeting at the same time in Committee Room One. However, if the item is held I would appreciate if staff could contact me, so that I may speak on the report and recommendations.

Thank you for your attention to this matter.

(A copy of the communication dated July 12, 1999, from Mr. Brian Cochrane, President, Toronto Civic Employees' Union - CUPE Local 416, appended to the foregoing report was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following communication (July 27, 1999) from the City Clerk:

Recommendations:

The Budget Advisory Committee on July 27, 1999, recommended to City Council the adoption of the recommendations of the Policy and Finance Committee embodied in the communication (July 20, 1999) from the City Clerk, subject to:

(1) the funds being made available in 1999 and 2000 to assist with the City Tree Maintenance Backlog be on a 'one time only' basis;

(2) the $1.7 million in 2000 be deferred for consideration during the year 2000 Operating Budget deliberations;

(3) $650,000.00 of the $1 million in additional funding for 1999 to be from the Corporate Contingency Account; and the Commissioner of Economic Development, Culture and Tourism Department be requested to report to the Policy and Finance Committee for its meeting of October 14, 1999, on where and how the Economic Development, Culture and Tourism Department can absorb the remaining $350,000.00 cost within the Department;

(4) the expenditure of $1 million to address the City tree maintenance backlog be implemented by 'contracted out' services, subject to Collective Agreement obligations; and

(5) the thorough review currently underway by the Commissioner of Economic Development, Culture and Tourism with regard to this matter include efficiencies and progress made so that such a backlog does not reoccur, the said review to be completed prior to the year 2000 Operating Budget deliberations.

The Budget Advisory Committee reports, for the information of Council, having requested the Commissioner of Economic Development, Culture and Tourism to report back:

(a) to the Economic Development and Parks Committee on the feasibility of tree trimming and pruning maintenance being the responsibility of the property owner at times other than the systematic maintenance of trees;

(b) to the Budget Advisory Committee during the 2000 budget deliberations on the number of work orders completed by contractors and the cost comparison to the work carried out by City staff; and

(c) to the Budget Advisory Committee on the options of contracting out the clearing up of all the backlog in the Fall/Winter season within the $1 million in 1999 and the $1.7 million in 2000 funding.

Background:

The Budget Advisory Committee had before it a report (July 20, 1999) from the City Clerk advising that the Policy and Finance Committee on July 20, 1999, recommended to Council the adoption of the recommendations of the Economic Development and Parks Committee embodied in the communication (July 13, 1999) from the City Clerk; and forwarded a copy of the aforementioned communication to the Budget Advisory Committee for consideration and report thereon directly to Council for its meeting scheduled to be held on July 27, 1999.

The following Members of Council appeared before the Budget Advisory Committee in connection with the foregoing matter:

- Councillor Joe Mihevc, York Eglinton; and

- Councillor Joe Pantalone, Tree Advocate.

(Report dated July 20, 1999, addressed to the

Budget Advisory Committee from the City Clerk)

The Policy and Finance Committee at its meeting on July 20, 1999, had before it a communication (July 13, 1999) from the City Clerk advising that the Economic Development and Parks Committee on July 12, 1999, amongst other things, recommended to the Policy and Finance Committee, and Council, the adoption of the report (June 22, 1999) from the Commissioner of Economic Development, Culture and Tourism, subject to deleting the recommendation embodied therein and inserting in lieu thereof the following:

"(1) that the Economic Development and Parks Committee supports funding in the amount of $1 million to be made available in the 1999 Forestry Operating Budget and $1.7 million in 2000, to assist in reducing the City Tree Maintenance backlog, the said funding being designated as new funding added to the Operating Budget; and

(2) that this report be referred to the Policy and Finance Committee for consideration."

The Policy and Finance Committee recommended to Council the adoption of the recommendations of the Economic Development and Parks Committee embodied in the foregoing communication (July 13, 1999) from the City Clerk; and forwarded a copy of the aforementioned communication to the Budget Advisory Committee for consideration and report thereon directly to Council for its meeting scheduled to be held on July 27, 1999. [Clause No. 9 of Report No. 4 of the Policy and Finance Committee.]

10

Toronto District Heating Corporation:

Incorporation Under Ontario Business

Corporations Act

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause:

(1) by amending Recommendation No. (1) of the Policy and Finance Committee by adding thereto the words "and further subject to amending Recommendation No. (6) embodied in such report by inserting, after the words 'Member of Council', the words 'who shall be the Mayor or his designate', so that such recommendation shall now read as follows:

'(1) the adoption of the confidential report (July 16, 1999) from the Chief Administrative Officer, subject to amending Recommendation No. (8) to include the Vice-Chair of Toronto Hydro; that the Mayor, or his designate, be requested to bring these two technologies together; and that the Chief Administrative Officer be requested to attempt to find a resolution by November 30, 1999; and further subject to amending Recommendation No. (6) embodied in such report by inserting, after the words "Member of Council", the words "who shall be the Mayor or his designate", so that Recommendation No. (6) shall now read as follows:

"(6) the City's initial representatives on the Board of Directors consist of one Member of Council, who shall be the Mayor or his designate, and two citizens;" ' ";

(2) to provide that this nomination process for the membership of the Toronto District Heating Corporation be for the initial term only, and that the Chief Administrative Officer be requested to submit a report to the Administration Committee on a future nomination process, through the City's Nominating Committee process, for citizen members of the Toronto District and Heating Corporation; and

(3) by adding thereto the following:

"It is further recommended that the Toronto District Heating Corporation require the approval of Council to enter into an agreement with respect to telecommunications, and that all activities of the Toronto District Heating Corporation respecting telecommunications be reported to the Telecommunications Steering Committee.")

The Policy and Finance Committee recommends the adoption of the recommendations of the Policy and Finance Committee embodied in the confidential communication (July 20, 1999) from the City Clerk, respecting the Toronto District Heating Corporation, which was forwarded to Members of Council under confidential cover.

The Policy and Finance Committee reports, for the information of Council, that the Chief Administrative Officer gave a confidential presentation to the Policy and Finance Committee respecting the foregoing matter.

Councillor Dennis Fotinos, Davenport, appeared before the Policy and Finance Committee in connection with the foregoing matter.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, a confidential communication (July 20, 1999) from the City Clerk, such communication to remain confidential in accordance with the provisions of the Municipal Act, save and except the recommendations embodied therein:

(Extract from the confidential communication

dated July 20, 1999, from the City Clerk

addressed to City Council.)

Recommendations:

The Policy and Finance Committee recommended that:

(1) the adoption of the confidential report (July 16, 1999) from the Chief Administrative Officer, subject to amending Recommendation No. (8) to include the Vice-Chair of Toronto Hydro; and the Mayor, or his designate, be requested to bring these two technologies together; and that the Chief Administrative Officer be requested to attempt to find a resolution by November 30, 1999; and

(2) that the Chief Administrative Officer be requested to negotiate a separate agreement with the Toronto District Heating Corporation which provides for the payment of compensation by TDHC to the City of Toronto for the use of the City's rights of way.)

(City Council also had before it, during consideration of the foregoing Clause, a confidential report (July 16, 1999) from the Chief Administrative Officer, such report to remain confidential in accordance with the provisions of the Municipal Act, save and except the recommendations embodied therein:

(Extract from the confidential report

dated July 16, 1999, from the Chief Administrative Officer

addressed to the Policy and Finance Committee.)

Recommendations:

It is recommended that:

(1) City Council, as a partner in TDHC, authorize the incorporation of TDHC under the Ontario Business Corporations Act as a corporation with share capital and request that the Province of Ontario proclaim the Toronto District Heating Corporation Act, 1998 effective September 30, 1999;

(2) the CAO be authorized to execute the various agreements of purchase and sale resulting in the City receiving $6.58 million from OMERS as follows:

(a) the purchase of shares and rights from the current partners in TDHC in accordance with the terms negotiated with each partner as outlined in this report;

(b) the resale of these purchased shares to OMERS at the same price; and

(c) the sale to OMERS of the number of City-owned shares necessary to create a 50-50 partnership with OMERS in TDHC;

(3) the proceeds from sale of shares be held in a new TDHC capital reserve by the City to meet any future capital calls by TDHC;

(4) the City contribute to TDHC the Pearl Street property, formerly owned by Toronto Hydro and retained by the City, for continued use as a steam production plant for TDHC at a value of $2 million and to be matched by OMERS with a cash contribution to TDHC in the same amount;

(5) the shareholders' agreement between the City of Toronto and OMERS, to be submitted for Council consideration at its meeting of September 28, 1999, include the following terms as negotiated with OMERS:

(a) the Board of Directors for TDHC initially consist of 6 members, 3 appointed by each of the City of Toronto and OMERS and in future years the board representation reflect the balance of share ownership;

(b) the Chair of the Board of Directors be one of the City's citizen appointments so long as the City owns at least 35% of TDHC's shares;

(c) in the event of a tie vote of the Board, the Chair will have a second vote to break the tie;

(d) annual remuneration for the Chair of TDHC's Board of Directors will be $37,500 and the citizen board members will be paid $10,000 per year plus $500 per board meeting attended;

(e) the term of appointment be 3 years;

(f) all major decisions of TDHC will require the approval of at least 70% of the Board members;

(g) each of OMERS and the City will have the right to transfer its shares to affiliates in which it has at least a 51% voting interest;

(h) for any other transfer of shares, the parties will have the right of first refusal to purchase the additional shares;

(i) the Board of Directors will have the right to fund capital through debt, but may also issue capital calls requesting additional capital contributions from shareholders in exchange for shares;

(j) if a shareholder fails to fund its pro rata share of a capital call, the remaining shareholder will have the right to acquire those shares not purchased by the defaulting shareholder at the price fixed by the Board;

(k) the City may default on a capital call, but retains the right to buy back shares from OMERS at fair market value to regain its interest up to 50% within 2 years of each capital call as long as the City's interest does not fall below 25%;

(l) the City's buy-back right set out in (k) above terminates if the City transfers its interest to any corporation which does not require City Council's approval for such investment;

(6) the City's initial representatives on the Board of Directors consist of one member of Council and two citizens;

(7) using a process similar to the selection of the Board of Directors for Toronto Hydro, the City citizen representatives on the Board be nominated by a committee consisting of the Mayor, the Chair of TDHC, and the City CAO for approval by Council at its meeting of September 28, 1999 and that Caldwell Partners be engaged to assist the committee in this selection, with all costs being borne by TDHC;

(8) the Mayor formally communicate Council's decisions to support DLWC to the Board of Directors of Toronto Hydro as well as Council's desire that the Northwinds project and DLWC be developed in a compatible and non-competitive manner; and that no later than October 31, 1999, the Mayor, the new Chair of TDHC, the Chair of Toronto Hydro, the Chief Executive Officer of OMERS and the City CAO meet to consider how these two City corporations can develop a relationship to work cooperatively in delivering district cooling; and

(9) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.)

11

Leasing of Computer Equipment and Software

Information and Technology Products and Services

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the recommendations of the Policy and Finance Committee embodied in the confidential communication (July 20, 1999) from the City Clerk, respecting the leasing of computer equipment and software, which was forwarded to Members of Council under confidential cover.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following confidential communication (July 20, 1999) from the City Clerk:

Recommendation:

The Policy and Finance Committee recommends the adoption of the confidential joint report (July 9, 1999) from the Chief Financial Officer and Treasurer and the Executive Director, Information Technology; and further, that the Chief Financial Officer and Treasurer be requested to ensure that the terms and conditions of the lease be flexible enough to ensure that the life span of the computer equipment is extended beyond three years.

Background:

The Policy and Finance Committee at its in-camera meeting on July 20, 1999, had before it a confidential report (July 9, 1999) from the Chief Financial Officer and Treasurer and Executive Director, Information Technology, recommending that:

(1) the City of Toronto enter into a leasing contract with MFP Financial Services Ltd. (MFP) for leasing computer equipment and related software for three years;

(2) the relevant projects in the 1999-2003 Capital Budget be reduced by the cost of the equipment leased to reflect a conversion in financing strategy from capitalization to an operating lease arrangement and the adjustments be reported through capital variance reporting;

(3) the 1999 operating budget for debt charges be reduced by the estimated amount of operating lease payments of up to $6 million in 1999 while the Information Technology Program's gross operating budget for 1999 be increased by $6 million to provide for the leasing charges;

(4) the Chief Financial Officer and Treasurer and the Executive Director, Information Technology Division, report back to the Policy and Finance Committee periodically on new leasing proposals and financial impact for the balance of the equipment and software; and

(5) the appropriate City officials be authorized to carry out the recommendations.)

(City Council also had before it, during consideration of the foregoing Clause, the following confidential joint report (July 9, 1999) from the Chief Financial Officer and Treasurer and the Executive Director, Information Technology addressed to the Policy and Finance Committee:

Purpose:

This report proposes leasing as a financing mechanism for the City of Toronto for the acquisition of Information and Technology products and services and recommends a successful vendor for the leasing of that equipment.

Funding Sources, Financial Implications and Impact Statement:

In the 1999 Operating Budget, debt charges were budgeted based on 10-year term debentures for the purchase of computer equipment and software. However, the Municipal Act prohibits issuance of debentures for a term longer than the life of the assets. Given that computers have a significantly shorter 3 to 5 years life span, debentures have to be issued for a term not exceeding that period. For 1999, the implementation of the recommended financing strategy of leasing of computer equipment estimated at $ 43 million would result in a charge to the operating budget of approximately $6 million. This charge would be absorbed within the 1999 budgeted debt charges due to the delay in borrowings for other projects with no net impact on expenditures. The recommended financing strategy of leasing for three years will result in an incremental charge in the operating budget for 2000 of approximately $ 8.0 million since the initial plan was to issue 10-year debentures. An amount of approximately $ 43 million being cost of the equipment relating to the proposed lease will be reduced from the various capital projects in the 1999-2003 Capital Program.

Recommendation:

It is recommended that:

(1) the City of Toronto enter into a leasing contract with MFP Financial Services Ltd. (MFP) for leasing computer equipment and related software for three years;

(2) the relevant projects in the 1999-2003 Capital Budget be reduced by the cost of the equipment leased to reflect a conversion in financing strategy from capitalization to an operating lease arrangement and the adjustments be reported through capital variance reporting;

(3) the 1999 operating budget for debt charges be reduced by the estimated amount of operating lease payments of up to $ 6 million in 1999 while the Information Technology Program's gross operating budget for 1999 be increased by $ 6 million to provide for the leasing charges;

(4) the Chief Financial Officer and Treasurer and the Executive Director, Information Technology Division report back to the Policy and Finance Committee periodically on new leasing proposals and financial impact for the balance of the equipment and software; and

(5) the appropriate City officials be authorized to carry out the recommendations.

Background:

The City of Toronto has budgeted for computer equipment and software under the various projects, such as, Year 2000, Urban Planning & Development, Parking Tag, SAP, etc. in the 1999-2003 Capital Program to be funded mainly through debenturing.

The City's Information Technology Division in its efforts to implement computer hardware and software and maintain its technology base at current levels has explored, in conjunction with the Finance Department, alternative methods of financing its purchases. The purchase of computer equipment is now considered as a short-lived commodity purchase. Recognizing that the cost of desktop computers and related equipment and services comprise a significant share of the City's Information and Technology expense, leasing was considered as an option to outright purchasing. Leasing provides the flexibility to adapt quickly to changing business needs. Leasing also provides important value-added services such as asset management, planned replacement and reporting and provides more corporate control in reducing administration and overhead costs associated with managing an Information Technology environment. Leasing is now the most prominent source of financing computer equipment in large public and private sector environments. The Province has moved to leasing as the preferred method of acquiring Information and Technology products and services.

Discussion:

Section 140 (1) of the Municipal Act states as follows:

"A money by-law shall provide that the whole debt and any debentures to be issued for it shall be made payable within a term not to exceed the lifetime of the undertaking up to a maximum of forty years." From the above section, it is clear that debentures for the purchase of computer equipment can only be issued for a term not exceeding the life of the computer equipment. This would mean that the debenture term in this case couldn't exceed three to five years. Therefore, the City has three financing options:

(i) to issue debentures for a term of three to five years;

(ii) to lease equipment for three years, and extend use for another two years if it is cost beneficial to do so; and

(iii) to fund the entire acquisition in cash.

Since the 1999-2003 Capital Budget planned to finance the purchase of computers through the normal term of 10-year debentures, the recommended leasing option for a much shorter term based on the useful life of computer equipment will result in incremental operating charges in 1999 and 2000 of approximately $ 6.0 million and $ 8.0 million respectively. There is sufficient cushion in debt charges as budgeted in the 1999 Operating Budget to absorb the 1999 incremental costs.

Tender Process:

Nineteen firms were invited to submit bids for leasing information technology equipment, servers, desktops, notebooks, software, and associated peripheral devices valued at about $43 million for 36 months to the City. Six quotations were obtained from respondents proposing options to lease. The fixed period of 36 months was chosen as it offers the City competitive leasing rates, maximizes end of term buy-out options and coincides with the extended manufacturer's warranty (3 years) on all equipment. The primary focus of the bid-process was to lease products and services and to provide flexibility in technology upgrades and configuration changes. Respondents were asked to identify the value-added costs as separate from the leasing costs so that both costs could be evaluated separately.

Staff from both the Information and Technology Division and Finance Department conducted an evaluation of the bids. The Respondent that proposed to provide the requested services at the lowest overall cost to the City is recommended for contract award. The financial and commercial information provided in the leasing proposals is subject to mandatory protection from disclosure pursuant to the Municipal Freedom and Protection of Privacy Act and a summary of financial information marked Appendix C is provided to the City Clerk for disclosure to the Council members on their specific request.

Evaluation:

The evaluation of bids, exclusively on financial considerations, shows MFP Financial Services Ltd. (MFP) provides the best option. Based purely on monthly leases, MFP provides the lowest cost for the operating lease. An evaluation discounting the cash flows over the three-year lease period of all the bids using a consistent interest rate also shows that MFP had the lowest cost to the City from the six bids received. The present value calculations involved two scenarios - one if the purchase option was exercised at the end of the term and another if it was not exercised.Another basis for evaluating the quotations received was to calculate the rate of interest implicit in the bids. Even on this count, the MFP bid is a front-runner. MFP's interest rate implicit in the lease is competitive when compared to the estimated rate at which the City can issue debentures.

Leasing vs. Debentures vs. Reserves / Reserve Funds Analysis :

One of the options for financing acquisition of computer equipment estimated to cost $43 million is through use of the City's reserves and reserve funds. The adequacy of the City's reserves and reserve funds is being currently reviewed by Finance staff and a report will be submitted to the Policy and Finance Committee on this subject in September, 1999. Initial analysis indicates severe under-funding based on the projected use of these funds. Accordingly, financing from 'Reserves/Reserve Funds' is not recommended and the following two options are considered for analysis:

(i) Lease computer equipment for three years vs. issuing 3 years 5.25% debentures and purchasing computer equipment. Computers will be used for three years in both cases. (Appendix A); and

(ii) Lease computer equipment for three years, exercise purchase option at the end of three years and use equipment for two more years vs. issuing 5 years 5.25% debentures and purchasing computer equipment and using for five years (Appendix B).

For the sake of analytical simplicity, all scenarios assume that leasing or debenturing will be effective August 1, 1999. Also, for comparative analysis, the interest charges under leasing have been increased by 3% since GST net of MUSH rebate will have to be incurred on the interest element of lease payments. However, if debentures are issued, GST will not be incurred on interest payments. The 'debenture' option involves initial administration and commission charges of about $220,000.

Appendix A compares a lease for three years without exercising the purchase option vs. purchasing computers outright with 3 years debenture financing and contributing to the Sinking Fund to repay debt at end of three years. The Sinking Fund investments are projected to earn 4% annually. Savings are estimated at $ 5.2 million and arise mainly from not exercising the purchase option at the end of three years while only 5% of the original cost is projected to be realized on disposal under the 'debenture' option.

Appendix B compares a lease for three years, exercising the purchase option and using for two more years vs. purchasing computers outright with 5 years debenture financing and contributing to the Sinking Fund to repay debt at end of five years. The Sinking Fund investments are projected to earn 4% annually. It is assumed that computer equipment will have no residual value at the end of five years. Savings are estimated at $ 4.5 million mainly due to interest charges incurred in the last two years of debt whereas the leasing costs have been fully paid in the first three years. Under both the scenarios, leasing is a better option than debenturing. Although the savings from leasing are very significant in absolute terms, they would be lower if the cash-flows were discounted to account for the time value of money. In relative terms, the interest rates for financing are almost equal under both alternatives. However, at this time, our analysis indicate that the option to lease for three years and not to exercise the purchase option (Appendix A) is the preferred alternative. Both the alternatives must be evaluated through cost-benefit analysis just before the lease ends in 2002 and a prudent decision taken at that time as to whether the purchase options for some or all of the equipment should be exercised. Some of the factors which must be considered at that time are market conditions and the necessity for technological upgrades, the cost of upgrades and maintenance as against leasing / debenturing new computers, relative interest rates for debenturing and leasing, etc. One of the major challenges which the City will face if 'debenturing' is opted is the disposal of such a massive quantity of owned equipment and to identify potential buyers. The leasing companies have the necessary expertise to identify potential markets for this equipment which would probably have a market only as spare parts.

Conclusion:

From the above analysis, leasing is a better financial option than borrowing. It allows for the planned replacement of the computer equipment at the end of its useful life and reduces the impact on the operating budget for the foreseeable future. The Information and Technology Division will centrally manage the contract administration. From the quotations received, MFP Financial Services Ltd. is recommended since it is the least costly option. The Manager, Fair Wage and Labour Trades Office, has reported favourably on the firm recommended.

Contact Names:

Nadir Rabadi 392-4317

Don Altman 397-4220

Len Brittain 392-5380

Lana Viinamae 392-4548

Lou Pagano 392-7311)

(A copy of each of Appendices A, B and C, referred to in the foregoing report is on file in the office of the City Clerk, such Appendices to remain confidential in accordance with the provisions of the Municipal Act.)

12

Property Acquisition Request from LACAC

W.J. Morrish Store

Ward 16 (Scarborough-Highland Creek)

(City Council on July 27, 28, 29, and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the recommendations of the Policy and Finance Committee embodied in the confidential communication (July 20, 1999) from the City Clerk, respecting the property Acquisition request from L.A.C.A.C. regarding the W. J. Morrish Store, which was forwarded to Members of Council under confidential cover.

The Policy and Finance Committee submits the following communication (July 15, 1999) from the City Clerk:

City Council, at its meeting held on July 6, 7 and 8, 1999, had before it Clause No. 2 of Report No. 7 of The Corporate Services Committee, headed "Property Acquisition Request from L.A.C.A.C., W. J. Morrish Store, North-West Corner of Meadowvale Road and Kingston Road (Ward 16 - Scarborough Highland Creek)".

Council directed that the aforementioned Clause be struck out and referred to the Policy and Finance Committee for further consideration, and further that:

(1) the Chief Financial Officer and Treasurer submit a report to the Policy and Finance Committee, for consideration therewith, on the funding options for this acquisition; and

(2) the Scarborough Local Architectural Conservation Advisory Committee present a business plan to the Policy and Finance Committee for its consideration when it deals with this matter.

--------

(Clause embodied in Report No. 7 of the

Corporate Services Committee, headed

"Property Acquisition Request from L.A.C.A.C.

W. J. Morrish Store, North-West Corner of

Meadowvale Road and Kingston Road

(Ward 16 - Scarborough Highland Creek)"

which was before the Council of the City of

Toronto at its meeting held on July 6, 7 and 8, 1999)

(City Council on July 6, 7 and 8, 1999, struck out and referred this Clause to the Policy and Finance Committee for further consideration, and further that:

(1) the Chief Financial Officer and Treasurer submit a report to the Policy and Finance Committee, for consideration therewith, on the funding options for this acquisition; and

(2) the Scarborough Local Architectural Conservation Advisory Committee present a business plan to the Policy and Finance Committee for its consideration when it deals with this matter.)

(City Council on June 9, 10 and 11, 1999, deferred consideration of this Clause to the next regular meeting of City Council to be held on July 6, 1999.)

--------

(Clause No. 5 of Report No. 6 of The Corporate Services Committee)

The Corporate Services Committee recommends the adoption of the Recommendations of the Corporate Services Committee embodied in the confidential communication (May 21, 1999) from the City Clerk which was forwarded to Members of Council under confidential cover, such communication to remain confidential in accordance with the provisions of the Municipal Act.

The Corporate Services Committee reports, for the information of Council, having requested the Budget Committee to submit a report directly to Council respecting the foregoing matter.

The Corporate Services Committee submits the following communication (March 2, 1999) from the City Clerk:

Recommendation:

The Scarborough Community Council, at its meeting held on February 17, 1999, referred the request by the Scarborough Local Architectural Conservation Advisory Committee (L.A.C.A.C.) to the Corporate Services Committee for its consideration; and requested that the Commissioner of Corporate Services be directed to submit a further report thereon to the Committee.

Background:

The Scarborough Community Council had before it a report (January 14, 1999) from the Commissioner of Corporate Services, advising that the Local Architectural Conservation Advisory Committee has requested that the City consider the acquisition and preservation of the W. J. Morrish Store because of its historic significance, concluding that no further action should be taken at this time due to the considerable difference of opinion as to the value of this property between the owner and Real Estate Division staff, and recommending that this report be received for information.

--------

The following persons appeared before the Scarborough Community Council in connection with the foregoing matter:

- Mr. Richard Schofield, Chairman, Scarborough L.A.C.A.C.; and

- Mr. William A. Dempsey, Honorary Secretary, Centennial Community and Recreation Association.

The Scarborough Community Council also received a communication in support of the potential acquisition from Mr. Clancy Delbarre, President, Highland Creek Community Association, a copy of which is appended hereto.

--------

(Report dated January 14, 1999, addressed to

the Scarborough Community Council from

the Commissioner of Corporate Services.)

Purpose:

The Local Architectural Conservation Advisory Committee has requested the City consider the acquisition and preservation of the W.J. Morrish store because of its historic significance.

Financial Implications:

Not required at this time.

Recommendations:

It is recommended that this report be received for the information of Scarborough Community Council.

Background:

At the November 10, 1998 meeting of the Local Architectural Conservation Advisory Committee, (LACAC), the Committee directed the President of LACAC to "seek Council's support in asking staff to develop an acquisition strategy in order to preserve this historic site." A copy of the President's letter is attached.

The W.J. Morrish store is located at the northwest corner of Meadowvale Road and Kingston Road in the eastern part of the former City of Scarborough. The main portion of the building was constructed about 1891, with an addition built about 1906. The building contains a hand-operated elevator of historic significance. The building is designated under the Ontario Heritage Act.

The building was operated as a retail store until approximately ten years ago, but has been vacant since. Although the building is structurally sound, considerable renovations and remodelling are required to make it suitable for any use today. In addition, the building needs to be connected to storm and sanitary sewers, which have been made available since the building was vacated. The building is not heated during the winter, and its condition is deteriorating. Vandalism is also a constant concern.

The property owner has listed the property for sale on several occasions over the last few years, and has had discussions with a number of prospective purchasers. Some of these have indicated a desire to renovate the structure and possibly convert it to another purpose. Uses as a residence, bed and breakfast, restaurant, or retail store have been suggested.

Recognizing the historic importance of this building, in 1996 the former City of Scarborough Council directed staff to discuss the acquisition of the property with the owner. For more than two years, staff discussed a variety of options with the owner in an attempt to acquire the building. No agreement was reached.

Comments:

Although the owner willingly entered into discussions with Real Estate staff, no agreement was possible because of the considerable difference of opinion as to the value of the property. A staff report to Scarborough Council in 1996 indicated a $200,000.00 variance in our respective value estimates.

Staff also explored a number of alternatives to an outright purchase, including a land exchange for several building lots in the same neighbourhood as the store, the acquisition of the building only for a nominal sum, with the City providing a tax receipt and being responsible for relocation and a combination of one or more building lots plus cash. No agreement was reached, because of the owner's expectations regarding the property's value.

Staff have remained in regular contact with the owner, in order to renew negotiations should the situation change. As recently as early December of 1998 the owner acknowledged that he was continuing in his efforts to market the property for $550,000.00, the same amount as he was seeking previously, when negotiations with the City of Scarborough broke down.

Given this background, the City's options appear to be limited to the following:

(1) To continue to monitor the situation, and continue to encourage the owner and/or prospective purchasers to convert the property to another use. Unfortunately, as time passes further damage may occur because of vandalism, and the continued deterioration of the structure due to the elements.

(2) The City may agree to pay the owner's purchase price either in cash or as part of a land exchange.

(3) The City may expropriate the property. While this action would obtain the property for the City, it would also require the City to pay the owner's reasonable legal, appraisal and other costs to determine the compensation payable. This may include the costs of a hearing before the Ontario Municipal Board, if necessary. Such costs vary widely, but $50,000.00 to $100,000.00 would not be out of the question.

While it would be desirable for this historic building to be under the control of the City, purchasing it for significantly more than what is considered market value would set a poor precedent for other negotiations. It is therefore considered appropriate for staff to continue to monitor the situation closely and co-operate with the owner should a proposal to convert the building to another use be forthcoming.

Conclusion:

While staff should maintain contact with the owner to ensure that the owner is aware of the City's continuing interest in this property, no further action should be taken at this time.

Contact Name:

Warren Poole, Telephone No. (416) 396-4930, Fax No. (416) 396-4241, poole@city.scarborough.on.ca.

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The Corporate Services Committee reports, for the information of Council, having also had before it:

(1) a confidential report (April 29, 1999) from the Commissioner of Corporate Services respecting the possible acquisition of the W. J. Morrish Store; and

(2) a communication (May 14, 1999) from Mr. Rick Schofield, Chairman, Scarborough Local Architectural Conservation Advisory Committee (L.A.C.A.C.) advising that the Scarborough Historical Society has offered to assume staffing and ongoing operating costs of the W. J. Morrish Store as an Archives for the Scarborough region, if the building is acquired by the City and brought up to minimum property standards; that currently the Society shares facilities with the Toronto District School Board's Archives facilities and while this arrangement is quite satisfactory at present, the Society is looking for more long-term facilities; that the Society is prepared to actively seek partnerships with the School Board, local community associations and the public and private sector which will make this building completely self-sustaining with no annual staffing or operating costs for the City of Toronto; that a similar arrangement currently exists between the City and the Ontario Historical Society (John McKenzie House) in North York and between the City and the Scarborough Arts Council (Harrison Estate) in Scarborough; that fund raising to repair the structure needs to begin as soon as various grant opportunities are available as we approach the new Millennium; and that unless a decision concerning this historic building is made in the very near future, many of these grant opportunities will disappear and funding will go elsewhere.

(City Council on June 9, 10 and 11, 1999, had before it, during consideration of the foregoing Clause, the following confidential communications, such communications to remain confidential in accordance with the provisions of the Municipal Act:

(i) (May 21, 1999) from the City Clerk, forwarding the recommendations of the Corporate Services Committee from its meeting held on May 20, 1999; and

(ii) (May 26, 1999) from the City Clerk, forwarding the recommendations of the Budget Committee from its meeting held on May 25, 1999.)

(City Council on July 6, 7 and 8, 1999, again had before it, during consideration of the foregoing Clause, the following confidential communications, such communications to remain confidential in accordance with the provisions of the Municipal Act:

(a) (May 21, 1999) from the City Clerk forwarding:

(i) a communication (March 2, 1999) from the City Clerk,

(ii) a report (April 29, 1999) from the Commissioner of Corporate Services; and

(iii) a communication (May 14, 1999) from Mr. Rick Schofield, Chairman, Scarborough LACAC; and

(b) (May 26, 1999) from the City Clerk forwarding the recommendations of the Budget Committee from its meeting held on May 25, 1999.)

The Policy and Finance Committee also submits the following report (July 6, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

To identify a funding source for the proposed acquisition of the W. J. Morrish Store in Ward 16, Scarborough Highland Creek.

Financial Implications:

Uncommitted funds are available in the following Scarborough accounts which were previously earmarked for capital related expenditures. These include; (i) civic centre expansion reserve fund, and (ii) parkland acquisition reserve fund. The balances in these funds may be subject to additional commitments to be identified in a further report to Council addressing the Scarborough Hydro Corridor lands, as well as 2000 and future year capital projects identified in this report. Acquisition of the W. J. Morrish Store would require additional capital funding for refurbishment, as well, there would be on-going operating costs yet to be identified.

Recommendations:

It is recommended that:

(1) should the Budget Committee recommendation to use the Scarborough reserve funds be adopted, the Scarborough Community Council be requested to prioritize the W. J. Morrish Store project alongside the Hydro Corridor projects and with the 2000 and future year capital projects identified in the body of this report; and

(2) the Commissioner Economic Development, Culture and Tourism in consultation with the L.A.C.A.C. be requested to develop a business case outlining the estimated capital refurbishment costs and operating budget impact.

Council Reference/Background/History:

The Scarborough Community Council, at its meeting held on February 17, 1999, had before it a report from the Commissioner of Corporate Services (January 14, 1999) advising that the Local Architectural Conservation Advisory Committee (L.A.C.A.C.) has requested that the City consider the acquisition and preservation of the W. J. Morrish Store because of its historic significance.

City Council, on June 9, 10 and 11, 1999 considered the following confidential communications concerning the possible acquisition of the W. J. Morrish Store;

(a) a report dated April 29, 1999 from the Commissioner of Corporate Services;

(b) recommendations of the Corporate Services Committee from its meeting of May 20, 1999, and;

(c) recommendations of the Budget Committee from its meeting of May 29, 1999.

Corporate Services Committee recommended using the city's Land Acquisition Reserve Fund to finance the acquisition. Budget Committee requested that the Chief Financial Officer and Treasurer report back on potential funding sources from Scarborough related reserve funds for the acquisition of the W. J. Morrish Store.

Discussion:

Acquisition of the W. J. Morrish Store would require additional capital funding for refurbishment, as well, there would be on-going operating costs. Funding for the potential acquisition of the Morrish Store has been identified in the following Scarborough reserve funds, which were previously earmarked for capital purposes. The capital levy reserve fund is presently over-committed by $1.2 million. The balances within these funds are shown below, net of previous commitments made by Council:

Insert Table/Map No. 1

uncommitted

Any funds with uncommitted balances in the above table exclude commitments for the following capital projects scheduled for 2000; (i) Heron Park Phase 2 ($3.3 M), (ii) Thompson Park Fieldhouse ($1.0 M), and (iii) Clairlea Park Extension ($1.6 M).

Also not included are the following capital projects scheduled for 2001 and beyond; (i) Scarborough Village Recreation Centre ($2.3 M), (ii) Centennial Recreation Centre Phase 3 ($4.1 M), (iii) Thompson Park Development ($0.6 M), (iv) L'Amoreaux Greenhouse ($1.4 M) and (v) Birchmount Stadium ($5.4 M).

It should also be noted that the Scarborough reserve fund balances shown above may be subject to additional commitments that have yet to be authorized concerning the Scarborough Hydro Corridor lands. The issue of the Hydro Corridor lands will be the subject of a further report to the Policy and Finance Committee at its meeting of July 20, 1999.

Conclusion:

This report identifies funding sources for the potential acquisition of the W. J. Morrish Store. Uncommitted funds are available in two Scarborough reserve funds identified in this report. The balances in these accounts may be the subject to further commitments to be addressed in an upcoming report that deals with the Scarborough Hydro Corridor lands. Also not included, are potential commitments from 2000 and beyond capital projects. The W. J. Morrish Store project needs to be prioritized alongside the Hydro Corridor projects and 2000 and the future year projects.

Contact Name:

Paul Chenery 397-4204

The Policy and Finance Committee, reports for the information of Council, having also had before it confidential material from the July 6, 7 and 8, 1999, meeting of Council; and a diagram and floor plan of the W. J. Morish Store, submitted by Councillor Ron Moeser.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, a confidential communication (July 20, 1999) from the City Clerk, such communication to remain confidential in accordance with the provisions of the Municipal Act.)

(City Council also had before it, during consideration of the foregoing Clause, a confidential communication (May 21, 1999) from the City Clerk, such communication to remain confidential in accordance with the provisions of the Municipal Act.)

13

2000-2004 Capital Program and 10-Year Capital Plan

Proposed Timetable, Process and Guidelines

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause to provide that, provided there are no changes from the previous year's overall program budgetary envelope allocations, the Policy and Finance Committee recommendations to Council pertaining to the Capital and Operating budgets be based on prior recommendations from the Standing Committees responsible for their respective program areas, with the exception of the 2000 Capital Program.)

The Policy and Finance Committee recommends the adoption of the following report (July 6, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

To propose a process, timetable and preliminary guidelines for the 2000 - 2004 Capital Program and 10-Year Capital Plan.

Financial Implications:

The financial implications of the 2000 - 2004 Capital Program will be reported to the Policy and Finance Committee in October 1999.

Recommendations:

It is recommended that:

(1) the proposed process and timetable as described in this report and outlined in Appendix C and Appendix D for the 2000 - 2004 Capital Program be adopted; and

(2) the financial protocol for dealing with in-year capital budget changes as described in this report and outlined in Appendix E be adopted.

Discussion:

The City of Toronto's capital planning process requires a strategic approach to ensure Council's capital program priorities are balanced with the City's ability to finance capital infrastructure over the long-term. This strategic approach involves building upon the success of last year's capital budget process by refining the process and guidelines for the 2000 - 2004 Capital Program.

Upon completion of last year's capital budget process, the Budget Services Division completed a survey of the program areas to determine the issues and develop an action plan to improve the 2000 Capital Budget process. Based on this survey, the following improvement areas were identified:

(i) Need for an overall corporate financial plan and vision of the ultimate capital budget process and document

(ii) Need to reduce paper through each phase of the review process.

(iii) Need for clearer terminology and re-affirm the distinction between operating and capital budget items.

(iv) Need for better systems support to eliminate duplicate systems and increase efficiency.

(v) Need for project prioritization within programs and between programs.

(vi) Need for capital project harmonization relating to maintenance and facilities.

Background:

Upon the conclusion of the 1999 - 2003 Capital budget cycle, Council effectively approved a 1-year capital program, with associated cash flows. All prior year approved projects were re-visited, primarily to determine their active status and incorporate cash flow requirements carried forward. Current year (1999) projects received spending approval for up to a maximum of two years. Future year projects, commencing in 2000 and beyond, were received for information. Feasibility studies and needs assessment initiatives were not complete to support a defensible future year capital program. Prioritization of these projects was also not possible. In essence the future year component of last year's capital program reflected a preliminary outlook of a 5-year capital program.

The Mature Capital Budget

The 2000 - 2004 capital budget cycle proposes an evolution towards a mature capital budget consisting of a fully-justified ("hard") 5-year capital program, with enhanced role and priority-setting responsibilities for the Standing Committees.

The capital program will become integrated with multi-year business planning and linked to Council's strategic priorities. A 10-year planning horizon will provide an enhanced decision-making tool to highlight long-term issues and accommodate the long-term growth related capital projects related to the proposed Development Charges By-Law. The capital program will be re-evaluated in every budget cycle and integrated with the multi-year business plans in each program area, which are in turn linked to Council's Strategic Plan. In the long-term, a mature capital budget will be developed that incorporates an evaluation tool that prioritizes projects across programs. However, this can only occur once a standardised evaluation tool is developed and accepted at the program level.

A mature capital budget involves approval of a full "hard" 5-year capital program based on feasibility studies and justifications for each new construction and maintenance projects. As more rigor is added to the capital planning cycle and the respective Standing Committees conduct comprehensive reviews of the various standards, policies and related studies that have been or will be developed by the program areas as a basis of their capital program, Council will have moved from receiving a "soft" 5-year capital program into approving a "hard" 5-year capital program. If an existing project is recommended for deferral during the capital budget review, it can be deferred beyond the 5-year timeframe and other projects accelerated in its place.

Within the next 3 to 5 years, it is envisaged that Council will approve a complete 5-year plan (a hard capital program). Once a project gets approved within the 5-year plan, it would proceed on the basis that Council has already been assured of the business case for that project. The project justifications will include capital replacement, rehabilitation and maintenance items. Approval of the project will also entail approval of all operating costs associated with the project, including transfers to reserve funds for future capital replacements.

A mature capital budget implies that projects approved within the 5-year program will proceed. If projects outside of the 5-year program need to be accelerated or new projects added, trade-offs (i.e. deferrals, deletions or phasing of projects within the 5-year program) will be required to maintain the capital program within the original funding envelope. As a "hard" 5-year capital program becomes a reality, the future budget cycles would roll forward year 6 of the capital plan into year 5, with the first four years already adopted.

The 2000 Capital Budget Process

The capital budget process proposed in this report incorporates the successful elements of 1999 and builds in new processes and techniques for the 2000 capital budget process in an evolution to the mature capital budget. The 2000 process will form the building blocks for moving to the mature capital budget process by focusing on the following elements:

(1) In 2000, for on-going capital projects of a maintenance nature such as "Pavement and Curb Reconstruction" the intention is to have Council approve a 5-year capital program level with an annual review of the standards, and service levels being delivered. These are high priority projects that address core infrastructure requirements and are basically fixed over the 5-year plan. In 2001, future years new construction projects will receive full approval, conditional upon supporting business cases and feasibility studies being brought forward during the capital budget reviews.

(2) Capital project costs and associated cash flow requirements (i.e., planned expenditure pattern) will again be categorized into prior year approved, new and future year projects. Program areas will be required to analyze the status of previously approved projects to determine which projects can be closed and which projects need carry-forward funding in the current year to provide for completion of the project. Cash flow projections will be used to determine long-term financing requirements and develop a comprehensive debt management policy.

Prior year approved projects will not be re-visited unless the scope of the project has changed significantly. Cash flow from all prior year approved projects will be totalled and reviewed for impact on debenture requirements. The in-year capital variance reporting process will be used as a tool to monitor previously approved projects.

(3) Approval of last year's capital program was primarily based on cash flow requirements (i.e., planned expenditure pattern) for prior year approved and current year projects. Future year commitments arising from approval of the 1999 program were also identified and received approval based on the cash flow projections. However, the spending approval for these projects was limited to two years.

For the 2000 capital budget process, projects will receive total project cost approval and full cash flow approval (not limited to a two-year cash flow).

(4) The 2000 - 2004 Capital Budget process will require program areas to submit new business cases/justifications supporting each project and sub-project (refer to Appendix A for an example). Each business case will provide details of the total project cost and planned expenditure pattern (cash flow forecast).

Where a business case is requesting funding in support of a multi-phased project such as a new park development or a community centre - programs will be required to present the "big picture" in the year that phase 1 funding is requested. For example, a new park development is planned in the year 2000 with a total project cost of $3 million to be spent over 2000/2001. Plans and drawings also include park features such as a playground, ball diamond and a water park (phase 2) at $1 million planned for say 2003. In this situation, the business case must not only provide justification for the current year total project request of $3 million but must also provide support for the park features planned for future years. Assuming adequate support was provided, then the total project cost recommended for 2000 would be $3 million. The additional $1 million for the parks feature would remain in the year 2003 and be revisited / re-evaluated in 2003 relative to the priorities in that year. In the event that sufficient support was not provided for phase 2, then that phase of the project would be deleted or deferred beyond the forecast period. This process would be followed until a "hard" 5-year capital plan is implemented.

Program areas will have the opportunity to justify new projects. To assist in determining priorities, the status of a new project will be reviewed based on whether it is; (i) stand-alone, current year only, (ii) on-going/phased or (iii) new for 2001 and beyond.

The objective here is: (a) to have all the facts when making a decision about a multi-year project (i.e., no surprise add-ons), and (b) to discourage consideration of projects that were not part of the previous year's approved 5-year program, risking displacement of other projects that are scheduled to start.

(5) Capital project harmonization issues related to maintenance and facilities will be addressed. The business cases and justifications for each capital project and/or sub project will focus on harmonization issues related to service standards (maintenance and facilities) and development related issues.

(6) Clear criteria and guidelines will continue to be used for defining capital and operating items. During the 1999 Capital Budget process, Council requested the Chief Financial Officer and Treasurer in consultation with the appropriate program areas to report back on the impacts and a phase-in plan for the capital expenditure definition guidelines. The criteria for defining a capital budget item for the 2000 - 2004 capital budget process have not changed from last year. They are as follows:

(a) Useful Life:

The expenditures must be for items with a useful life that at least matches or exceeds the standard debenture term of 10 years.

(b) Physical Asset:

Only expenditures reasonably related to the acquisition of a physical asset should be considered as capital. The expenditures must relate to the acquisition or betterment of an asset with a multi-year life. Betterment is defined as enhancing the service potential or extending the useful life of the asset. Assets that are consumed during the fiscal year and costs to maintain an asset in its original state are defined as operating items.

(c) Materiality:

Assuming the above two criteria are met, then the final determination of a capital expenditure is the materiality of the expenditure and the ability of an operation to absorb the expenditure within a given year. The suggested level of a capital item would be $250,000.00 however, this would depend on the size of the organization and the grouping of expenditures.

(d) Operating Items:

In general, items that do not meet the above criteria and can be reasonably accommodated within the operating budget should not be capitalized. Large infrequently occurring operating expenditures may be financed through regular contributions to reserves.

Comprehensive policies on defining capital and operating budget items will be developed once feedback from program staff has been received. In the meantime, and, as was the case during 1999, any difficulties which may result from the shifting of capital to operating or operating to capital will be addressed on a program-by-program basis.

(7) Identifying, where possible, ongoing capital maintenance and capital replacement costs for any new facilities proposed. The impact of the capital plan on the operating budgets will be addressed in more detail as the project and sub-project business cases are submitted.

(8) An objective method for prioritizing capital programs and projects based on project categories and affordability criteria will be established. The priorities will focus on "State-of-Good-Repair" and "Legislated/City Policy" project categories. The remaining two categories, "Growth/Expansion" and "Service Improvement" will be used to prioritize new projects.

For the purpose of prioritizing the 2000 - 2004 Capital Program, the capital project categories have been streamlined. The 2000 capital budget aims to provide a comprehensive "State of Good Repair" program for all of the city's infrastructure, balanced with the need to begin capital facility harmonization across the city.

Definitions of the proposed categories are as follows:

State of Good Repair

A capital project that allows for the maintenance, repair or replacement of existing assets. This includes asset rehabilitation required to meet health and safety issues and extending the useful life of the asset by 10 or more years before replacement is necessary. Asset replacement should be considered if rehabilitation is not feasible and delayed replacement could result in potential safety hazards.

Legislated or City Policy

Capital expenditures required by Provincial or Federal legislation or compliance with City Policy (ie. Environmental initiatives). In the capital project justification section of each business case, the specific legislative or City Council reference will be provided as well as the action required to meet the requirements and timeframe.

Growth/Expansion

Any capital project that supports growth and development across the City. Potential development charge revenues will be identified for these projects.

Service Improvement

Any capital project that improves service delivery above the current Council approved standard or provides for the introduction of new services.

(9) Program areas will be provided with an optional ranking tool to assist in prioritizing capital projects within their respective program areas. The 2000 capital program aims to provide a more refined ranking of projects within a program area. The system involves the evaluation of a capital project by assigning a point rating to several pre-defined criteria (i.e. capital project category, service level standards, link to Council's strategic plan etc.). The points for each criterion are then multiplied by a percentage-weighting factor to determine an overall point score for the project. Projects can then be ranked in priority order based on the point rating. Appendix B provides a sample of this evaluation system, which individual program areas can modify to meet specific needs. Plans are to work with the program staff in developing this tool for 2000 and standardizing a tool for 2001 across all programs.

(10) Targets will be developed when all capital budget submissions are received and consolidated, and reviewed on a preliminary basis. The objective is to allow program areas to first specify their needs without imposing financial constraints up-front. In 2001 Standing Committees would be involved in reviewing their priorities and policies before the capital program submission is developed.

(11) The debt management policy based on the 2000 - 2004 capital program will continue to be referred .

(12) A streamlined budget review process to focus on the critical issues and a system for tracking decisions arising from each stage of the administrative and political reviews will be developed.

Capital Project Submission - Example

Appendix A provides a sample Business Case and Financial Summary format to be submitted by the program areas in support of their 5-year capital program. The Business Case will be reviewed by the Budget Services Division and will be made available for review in the capital budget review process.

Proposed Review Process and Timetable

Appendix C and Appendix D outline the capital budget process and the tentative timetable for the 2000 Capital Budget process. Final Council approval is targeted for December 16-17, 1999. To meet this date, the timing of the review process has been accelerated from last year's process.

The Chief Administrative Officer and Chief Financial Officer and Treasurer, in conjunction with Budget Services and program staff, will review the program submissions in early October. The program submissions will again be summarized into a "CAO Recommended Capital Program" for consideration by Committees and Council.

The Policy and Finance Committee review is planned in October 1999 with a high level overview of the capital submissions, the related issues and challenges.

The detailed political review will then commence in late October, with a preliminary program by program review by the Budget Advisory Committee. During this phase, Budget Services will provide a corporate report to outline the issues and financial implications of the recommended Capital Program. In addition, Budget Services will provide a consolidated departmental report to summarize the key recommendations by program area.

After the completion of the preliminary review, the CAO recommended Capital Program and Budget Advisory Committee's comments will again be forwarded to the relevant Standing Committees and Community Councils for consideration. Standing Committees will review the capital program to determine service priorities from a City wide perspective. Community Councils will review specific capital programs related to service needs in their respective communities. The merger of recommendations flowing both from Standing Committees and Community Councils will be considered during the capital budget reviews by Policy and Finance Committee.

At each stage of the political reviews, Budget Services will track both the financial and non-financial recommendations, for presentation to the Policy and Finance Committee in early December. The recommended Capital Program is then submitted to Council for approval in mid-December.

Changes to the meeting dates and any special committee review dates will be communicated as necessary.

Financial Protocol for In-Year Capital Budget Changes:

Until a "hard", completely justified 5-year capital program is developed, there will be in-year changes arising as a result of capital projects with scope changes or new projects of an urgent nature. A process to address these in-year changes is outlined in Appendix E and Appendix F.

Appendix E outlines a process for addressing in-year capital budget changes at Standing Committees. This process is recommended for capital projects that require in-year funding and are not part of the approved capital program and/or reflect a change in scope that requires additional funding. All projects of this nature will be reviewed with the Chief Administrative Officer and the Chief Financial Officer and Treasurer for concurrence in regards to the funding recommendations. Where possible, a project of this nature should be deferred for consideration in the following year's capital budget. However, where the request is deemed to be "urgent", the decision tree outlined in Appendix E should be followed. The objective is to have the financial implications and the funding sources clearly identified prior to consideration by the Policy and Finance Committee.

Appendix F outlines the financial protocol which will be followed by the Finance Department to make recommendations on funding sources for any in-year capital budget changes being considered by the Standing Committees.

Conclusion:

The City of Toronto's capital planning process requires a strategic approach to ensure Council's capital program priorities are balanced with the City's ability to finance capital infrastructure over the long-term. This strategic approach involves building upon the success of the last year's capital budget process by refining the process and guidelines for the 2000 - 2004 Capital Program.

This year, we will; (i) develop comprehensive capital policy guidelines, (ii) move to a total project cost basis for capital project approvals (including spending approvals), (iii) develop a sustainable debt management strategy based on cash flow projections, (iv) develop a methodology for prioritizing capital projects within program areas, and (v) deliver support systems to streamline the review process. The quality of the capital works planning process will evolve over the next few years as programs strive to: (a) rationalize, assess and prioritize the "State of Good Repair" within their envelope of responsibility and (b) assess and standardise the level of major maintenance required for the City's existing inventory of facilities and infrastructure.

With Standing Committee's assistance, programs will align their capital works program with Council's Strategic Plan. The Capital Program will be re-evaluated every budget cycle and integrated with multi-year business plans. As more rigor is added to the capital budget planning cycle, Council will be able to move from receiving a "soft" 5-year capital program into approving a "hard" 5-year capital program, as we move towards a mature capital program.

The Chief Administrative Officer has been consulted on the proposed 2000 capital budget process contained in this report and concurs with the recommendations.

Contact Names:

John Di Lallo 397-4207

Josie La Vita 397-4229

Paul Chenery 397-4204

Appendix A Sample Business Case / Financial Summary

Appendix B Sample Evaluation System for Ranking Projects

Appendix C Proposed Capital Budget Process Overview

Appendix D Proposed Timetable for the 2000 Capital Budget Process

Appendix E Financial Protocol for In-Year Capital Budget Changes at Standing Committees

Appendix F Financial Protocol for In-Year Capital Budget Changes (Finance)

14

Coordination of Telecommunications Matters

First Report from the Council-Established

Telecommunications Steering Committee

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause by deleting the words "with the City of Vancouver" from Recommendation No. (15) embodied in the report dated July 8, 1999, from the Chief Administrative Officer, and inserting in lieu thereof the words "from the City of Vancouver", so that such recommendation shall now read as follows:

"(15) the Steering Committee seek comments on the matter of the correspondence from R.V. Anderson Associates Limited respecting an application from Ledcor Communications Limited, from the City of Vancouver;".)

The Policy and Finance Committee recommends:

(1) the adoption of the report (July 8, 1999) from the Chief Administrative Officer, subject to amending Recommendation No. (3) by inserting after the words "portion of funds", the words "in the amount of $48,804.63 (the source of funds to be provided from the Corporate Contingency Account)" so that Recommendation No. (3) now reads as follows:

"(3) the City of Toronto contribute its fair-share portion of funds in the amount of $48,804.63 (the source of funds to be provided from the Corporate Contingency Account) to the FCM Rights-of-Way Legal Defence Fund and that Council authorize the release of such funds pending confirmation of the appropriate level of contribution with FCM by the Mayor and the Chair of the Steering Committee;"; and

(2) the adoption of the joint report (June 29, 1999) from the City Solicitor, and the Commissioner of Works and Emergency Services.

The Policy and Finance Committee submits the following report (July 8, 1999) from the Chief Administrative Officer:

Purpose:

Council established the Telecommunications Steering Committee in January 1999, to develop a corporate-wide and strategic City approach to telecom issues. In accordance with its mandate, the Telecommunications Steering Committee has identified a number of telecom matters requiring City-wide coordination. This report is recommending a series of inter-related activities necessary to develop comprehensive policy respecting the use of the municipality's rights-of-way and other property.

Funding Sources, Financial Implications and Impact Statement:

There are no immediate or direct expenditures arising from the recommendations of this report. The matters being addressed in this report, however, have significant financial implications for the City since they will effect its ability to develop more comprehensive principles, policy and procedures respecting the use of its property and assets by telecommunications providers.

Recommendations:

It is recommended that:

(1) this report be considered with the report from the City Solicitor and the Commissioner of Works and Emergency Services titled, "Vancouver v. Ledcor: CRTC Hearing - City of Toronto Support of FCM Position";

(2) the aforementioned report be adopted subject to its Recommendation (1) being amended as follows:

"City Council authorize the City Solicitor, the Commissioner of Works and Emergency Services, the Chair of the Telecommunications Steering Committee and the Chief Administrative Officer as required, to participate as members of the Telecommunications Sub-Committee of the Federation of Canadian Municipalities (FCM) in the instruction of its legal counsel with respect to the Public Notice Proceedings expected to be commenced before the CRTC this summer";

(3) the City of Toronto contribute its fair-share portion of funds to the FCM Rights-of-Way Legal Defense Fund and that Council authorize the release of such funds pending confirmation of the appropriate level of contribution with FCM by the Mayor and the Chair of the Steering Committee;

(4) on an interim basis, all departments, agencies, boards, commissions and special purpose bodies of the City submit requests for telecom approvals or agreements not previously approved by the Council, through the CAO and the Steering Committee for coordinated recommendations until such time that the Council adopts a City wide telecom strategy and that the CAO is to so advise all concerned Commissioners, agencies, boards, commissions and special purpose bodies;

(5) Council authorize the Steering Committee to act on its behalf respecting all telecom matters during the summer break of Standing Committee and Council meetings subject to confirmation by Council at its meeting of September 28 to 30, 1999;

(6) all departments, agencies, boards, commissions, and special purpose bodies of the City be requested to provide an inventory of:

(i) duct work, trunk and cable-lines, above and below ground telecom towers, and other installations within their purview to approve for access or placement, or otherwise manage, approve, maintain, or operate;

(ii) ownership (City-owned, externally owned, partnerships, or other arrangements, for example)of all such infrastructure, facilities, or installations;

(iii) the infrastructure, facilities, or installations located within the City's ROW and identification of the street locations;

(iv) the amount of any rental/leasing, permit, percentage of revenue, or other compensation, collected; and

(v) the terms of any existing agreements, access and permit approval conditions and so on;

(7) Council request the Commissioners of Works and Emergency Services and Corporate Services, to request all telecom, cable, telephone and other companies having an agreement with the City to identify the type and location of their above and below ground installations on public rights-of-way and other City property and that the Steering Committee be updated by the Commissioners as replies are forthcoming;

(8) the report from the Region of Ottawa-Carleton respecting a format for negotiating with telecom companies be obtained by CAO staff to inform the work of staff and the Steering Committee;

(9) staff report to the Steering Committee on the merits of a Model Agreement for Multiple Crossings Access;

(10) the Office of the Chief Administrative Officer arrange a minimum half-day Strategy Session as early in September as possible following the summer session break of Council, for the Steering Committee to identify its role and task priorities, review information gathered from Departments and assess all City wide interests and the future directions required;

(11) consideration of the report on a Municipal Access Agreement be deferred until such time as the Steering Committee has held its Strategy Session;

(12) all agreements include the provision to supply the City with technical information on all the applicant's above and below ground telecom installations, cabling, structures, conduits and ducts owned by the applicant, or its third-parties using the systems of the applicants, that cross or use City rights-of-ways or other City property;

(13) all agreements include the requirement that the City be notified of any contemplated third-party use of the public right-of-way or of the system, its installations and infrastructure (including, for example, cable, wire, or conduit ) in the public right-of-way, such that the agreement will be subject to re-negotiation;

(14) all agreements be required to make available for the use of the City, extra fibre optic wires if and when installed, and space inside the installed conduit for the City to use if it chooses to install fibre optic wiring;

(15) the Steering Committee seek comments on the matter of the correspondence from R.V. Anderson Associates Limited respecting an application from Ledcor Communications Limited, with the City of Vancouver;

(16) the City of Toronto also seek comments on the R.V. Anderson Associates Limited correspondence from the FCM Sub-Committee on Telecommunications at their meeting in Calgary during August;

(17) Ledcor Communications Limited be informed that it is the intention of the Steering Committee to work with them to resolve their matter of application for access to the public rights-of-way in a timely fashion;

(18) the representatives of R.V. Anderson Associates Limited and Ledcor Communications Limited be requested to meet with the staff and Chair of the Steering Committee and with the Chairman of the FCM Sub-Committee on Telecommunications at the earliest possible opportunity in September following the summer recess of the Council;

(19) in the interim, Ledcor Communications Limited be requested to provide staff with complete technical details of each proposed crossing including maps and technical drawings for review by staff and presentation to the Steering Committee at their next meeting;

(20) Ledcor Communications Limited be requested to refrain from any installations or activity related to their application to the City until these matters have been reviewed by the Steering Committee as outlined in the preceding recommendations;

(21) the City Clerk provide Secretariat support to the Steering Committee given its significant workload and its requirement to report to Council through the Policy and Finance Committee; and

(22) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference:

In January 1999, Council approved the report from the Chief Administrative Officer (CAO) titled, "Comments on Suggested Amendments to the Report: Feasibility of Establishing a Telecommunications Authority and Related Matters Respecting Rights-of-Way Access and Use".

The report recommended a coordinated inter-departmental approach on telecommunications by the City, a structure to deal with operational matters in the short-term and a strategic approach to future telecom network matters internal to the City and with external organizations. Accordingly, Council directed the CAO to establish an inter-departmental Working Group given the Corporate-wide and strategic nature of telecom issues.

In addition, Council established a five-member Telecommunications Steering Committee to oversee the staff Working Group. Councillor John Adams chairs the Steering Committee with the other members being Councillors Davis, Fotinos, Moscoe and Silva. Reporting of the Steering Committee is through the Policy and Finance Standing Committee to Council.

Comments:

The Steering Committee recognizes that enabling access to municipal rights-of-way by telecom providers for network development/expansion is only one aspect of City responsibility and that the future emphasis must be far more strategic. Specifically, external demand, as well as potential financial gain by the City, must be planned for and dealt with in the context of a City telecommunications plan. Such a plan requires the City to define and integrate its own telecom and other interests and its own possible uses of its rights-of-way, for example.

Issues Considered To-Date:

The Steering Committee has considered a number of legislative, operating and financial matters specific to telecom initiatives. The meetings have been well attended by the Inter-Departmental Working Group with representatives from Legal, Planning, Buildings, Information Technology, Real Estate, Works, Economic Development, Finance, Transportation and the Office of the CAO.

(a) Additional City Representation Respecting FCM Telecommunications Initiatives:

The Steering Committee is closely following the initiatives of the Federation of Canadian Municipalities (FCM) respecting telecommunications matters. The federal Telecommunications Act was enacted in 1993 without consultation with municipalities. Jurisdictional authority for the regulation of telecom providers by a municipality does not exist beyond that already in place to permit access (upon such terms and conditions as may be agreed to) and construction in its rights-of-ways. In response to operating concerns of its members, FCM developed a series of five principles in the mid-nineties respecting the use of public rights-of-way by telecom and other companies. The fifth principle supports the right of municipalities to receive full recovery of administrative and other justifiable costs associated with the access to and use of, public rights-of-way (ROW).

In recent years, provincial legislation appears to restrict the ability of Ontarian municipalities to realize the fifth FCM principle. This is similar to nation-wide occurrences whereby some companies are reluctant to sign agreements with municipalities for the laying of cable or other system-related installations. In this regard, a test case has arisen involving Ledcor and the City of Vancouver applying to the CRTC to resolve their impasse over negotiating a ROW agreement. As explained in the report at the July 20 Policy and Finance Committee from the City Solicitor and the Commissioner of Works and Emergency Services, the CRTC has responded to the applications by opening the hearing to a Public Notice process. This is done when an issue is considered to have national implications that may affect parties other than those immediately involved in the dispute.

The Telecommunications Steering Committee is fully supportive of the approach, role of coordination, representation and actions of FCM on behalf of its members in the pursuit of these matters. To-date, legal staff and Councillor Moscoe who chairs the FCM Sub-Committee on Telecommunications, have carried most of the associated workload on behalf of the City of Toronto. Given the formation and work of the City's Telecom Steering Committee and its Working Group, chaired by staff from the Office of the CAO who provide issues management on matters of corporate-wide interest, the Steering Committee wishes them to have a formal role at FCM.

The Steering Committee, therefore, recommends adoption of the report from the City Solicitor and the Commissioner of Works and Emergency Services titled, "Vancouver v. Ledcor: CRTC Hearing - City of Toronto Support of FCM Position", subject to amending the membership of the FCM Sub-Committee on Telecommunications, as follows:

"that Council authorize the City Solicitor and the Commissioner of Works and Emergency Services, the Chair of the Telecommunications Steering Committee and the Chief Administrative Officer as required, to participate as members of the Telecommunications Sub-Committee of the Federation of Canadian Municipalities (FCM) in the instruction of its legal counsel with respect to the Public Notice Proceedings expected to be commenced before the CRTC this summer."

(b) City Financial Support to the Legal Defense Fund of FCM:

In 1997, the member municipalities of FCM pledged to establish a ROW Legal Defense Fund in anticipation of the need to pursue the rights of municipalities through legal means respecting access to and use of public ROW by companies. A per capita formula was developed to cover regional governments and their constituent municipalities, and other local municipalities. At the time of calculation, East York, Etobicoke, Toronto, North York, Scarborough and York, were the constituent municipalities of the Municipality of Metropolitan Toronto. Based on a $.01 per capita contribution for the regional government, the calculated share of the Municipality of Metropolitan Toronto was $22,758.00 which was issued to FCM in May 1997. The share for the constituent municipalities based on their population at the time and $.02 per capita, was calculated to be approximately $45,000.00.

The City of Toronto is about to receive a letter and invoice from FCM for the portion of contribution remaining from the former constituent municipalities. The CAO and Finance departments are confirming that no cheques were issued for the FCM ROW Legal Defense Fund apart from that of the former Municipality of Metropolitan Toronto.

Given the imminent CRTC Hearing process and the amount of legal counsel being engaged by FCM, the Steering Committee is recommending that the City of Toronto contribute its fair-share portion of funds to the FCM Rights-of-Way Legal Defense Fund. Given the current population of the City of Toronto and the change in government structure as at 1998, the Steering Committee is also recommending that Council authorize the release of such funds pending confirmation of the appropriate level of contribution. The Chair of the Steering Committee and the Mayor will work with FCM in this regard.

(c) Formal Steering Committee Authority to Coordinate Telecom Agreements and Applications for the Use of City ROW:

The Telecommunications Steering Committee has considered a number of matters related to the form of Agreements appropriate between the City and external organizations applying for consent to use public ROW for the installation of telecom and related equipment, infrastructure, pipes, ducts, conduit, cable and so on. Current Agreements in place with the City contain conditions that protect its interests including provisions allowing for City access to and use of the space and infrastructure if determined necessary by the City. The Steering Committee is strengthening the terms and conditions of all types of Agreements ranging from comprehensive Municipal Access Agreements for telecom carriers, to the more straightforward encroachment type of agreement involving the City's ROW.

In this regard, a Corporate-wide approach is required to coordinate and consider all applications for the use of public ROW and related matters. The Steering Committee is, therefore, recommending that on an interim basis, all departments, agencies, boards, commissions and special purpose bodies of the City submit requests for telecom approvals or agreements not previously approved by the Council, through the CAO and the Steering Committee for coordinated recommendations. It is also recommending that this be until such time that the Council adopts a City wide telecom strategy and that the CAO is to so advise all concerned Commissioners, agencies, boards, commissions and special purpose bodies.

Similarly, the Steering Committee is aware that demands for the use of public ROW by telecom and other organizations wishing to establish or enhance systems are increasing. In addition, the activities of FCM and the CRTC with regard to the access and use of ROW is better-known within the private sector companies than within certain affected City areas of operations. The Steering Committee is, therefore, recommending that Council authorize the Steering Committee to act on its behalf respecting all telecom matters during the summer break of Standing Committee and Council meetings subject to confirmation by Council at its meeting of September 28 to 30, 1999.

(d) Operational and Policy Considerations:

The Steering Committee has had before it for consideration application requests from Ledcor and from Ryerson Polytechnic University for access to and use of the ROW of the City. The Steering Committee has also considered a report from staff proposing a standard Municipal Access Agreement (MAA) for the protection of the City and its rights to be reimbursed for expenses and use of public ROW.

In its considerations, the Steering Committee took into account several of the principles and terms and conditions recommended by staff in its MAA report draft. There are many inter-related and complex issues involved in telecom matters. For example, the provision of telecom project and issue management needs to occur across departmental lines. Second, the matters require consideration in a forum lacking any single operating area bias and/or domination. Third, strategic and objective recommendations must be developed in a timely fashion, but in a manner whereby all the information necessary to do so is available. Fourth, interim policy serving the needs of the City and external organizations wishing to access ROW must be established.

With respect to the priorities involved in telecom matters internal to the City, the Steering Committee is making the following recommendations:

(1) that all departments, agencies, boards, commissions, and special purpose bodies of the City be requested to provide an inventory of:

(i) duct work, trunk and cable-lines, above and below ground telecom towers, and other installations within their purview to approve for access or placement, or otherwise manage, approve, maintain, or operate;

(ii) ownership (City-owned, externally owned, partnerships, or other arrangements, for example)of all such infrastructure, facilities, or installations;

(iii) the infrastructure, facilities, or installations located within the City's ROW and identification of the street locations;

(iv) the amount of any rental/leasing, permit, percentage of revenue, or other compensation, collected; and

(v) the terms of any existing agreements, access and permit approval conditions and so on;

(2) that Council request the Commissioners of Works and Emergency Services and Corporate Services, to request all telecom, cable, telephone and other companies having an agreement with the City to identify the type and location of their above and below ground installations on public rights-of-way and other City property and that the Steering Committee be updated by the Commissioners as replies are forthcoming;

(3) that the report from the Region of Ottawa-Carleton respecting a format for negotiating with telecom companies be obtained by CAO staff to inform the work of staff and the Steering Committee;

(4) that staff report to the Steering Committee on the merits of a Model Agreement for Multiple Crossings Access;

(5) that the Office of the CAO arrange a minimum half-day Strategy Session as early in September as possible following the summer session break of Council, for the Steering Committee to identify its role and task priorities, review information gathered from Departments and assess all City wide interests and the future directions required; and

(6) that consideration of the report on a Municipal Access Agreement be deferred until such time as the Steering Committee has held its Strategy Session.

With respect to the priorities involved with the applications from and relationships with external businesses/parties, the Steering Committee is making the following recommendations:

(i) that all agreements include the provision to supply the City with technical information on all the applicant's above and below ground telecom installations, cabling, structures, conduits and ducts owned by the applicant, or its third-parties using the systems of the applicants, that cross or use City rights-of-ways or other City property;

(ii) that all agreements include the requirement that the City be notified of any contemplated third-party use of the public right-of-way or of the system, its installations and infrastructure (including, for example, cable, wire, or conduit ) in the public right-of-way, such that the agreement will be subject to re-negotiation; and

(iii) that all agreements be required to make available for the use of the City, extra fibre optic wires if and when installed, and space inside the installed conduit for the City to use if it chooses to install fibre optic wiring.

With respect to the application from Ledcor Communications Limited, the Steering Committee has received an alternate proposal to that originally submitted to the Works and Emergency Services Department. Correspondence has been submitted on behalf of Ledcor by R.V. Anderson Associates Limited, for the installation of conduits and dark fibre cable for specified rail corridor installations crossing City lands. In order to obtain the information necessary to form an agreement with Ledcor, the Steering Committee is recommending the following actions be undertaken:

(i) that the Steering Committee seek comments on the matter of the correspondence from R.V. Anderson Associates Limited with the City of Vancouver;

(ii) that the City of Toronto also seek comments on the correspondence from R.V. Anderson Associates Limited from the FCM Sub-Committee on Telecommunications at their meeting in Calgary during August;

(iii) that Ledcor Communications Limited be informed that it is the intention of the Steering Committee to work with them to resolve their matter of application for access to the public rights-of-way in a timely fashion;

(iv) that representatives of R.V. Anderson Associates Limited and Ledcor Communications Limited be requested to meet with the staff and Chair of the Steering Committee and with the Chairman of the FCM Sub-Committee on Telecommunications at the earliest possible opportunity in September following the summer recess of the Council;

(v) that, in the interim, Ledcor Communications Limited be requested to provide staff with complete technical details of each proposed crossing including maps and technical drawings for review by staff and presentation to the Steering Committee at their next meeting; and

(vi) that Ledcor Communications Limited be requested to refrain from any installations or activity related to their application to the City until these matters have been reviewed by the Steering Committee as outlined in the preceding recommendations.

(e) Clerk's Secretariat Support to the Steering Committee:

CAO staff are currently providing roles in each of issues coordination, analysis, direct support to the Chair of the Steering Committee and secretariat support to the Committee (arranging meetings, taking minutes, circulating documents and correspondence and so on). The CAO is also responsible for the Chairing and organizing and follow-through of Steering Committee directives to the staff Inter-Departmental Working Group.

The workload and tasks of the Steering Committee require a significant amount of time and it is felt that staff of the Office of the CAO is best used in the focus on corporate-wide telecom issues management and advising the Steering Committee accordingly.

It is, therefore, recommended that the City Clerk provide Secretariat support to the Steering Committee given its significant workload and its requirement to report to Council through the Policy and Finance Committee.

Staff Contact:

Laurie McQueen, Office of the CAO, 392-8895

Steering Committee:

Councillor John Adams, Chairman

The Policy and Finance Committee also submits the following report (June 29, 1999) from the City Solicitor:

Purpose:

To seek instructions from City Council to authorize the City Solicitor and other staff as necessary to continue to participate in the instruction of the legal counsel of the Telecommunications Subcommittee of the Federation of Canadian Municipalities (FCM) with respect to the Public Notice Proceedings arising from the applications to the Canadian Radio-Television Commission (CRTC) by Ledcor Industries Limited and the City of Vancouver.

Funding Sources, Financial Implications and Impact Statement:

Not applicable.

Recommendations:

It is recommended that:

(1) City Council authorize the City Solicitor, the Commissioner of Works and Emergency Services and other staff as necessary to participate as members of the Telecommunications Subcommittee of the Federation of Canadian Municipalities (FCM) in the instruction of its legal counsel with respect to the Public Notice Proceedings expected to be commenced before the CRTC this summer; and

(2) the City Solicitor be authorized to take whatever action may be necessary prior to Council's next regularly scheduled meeting of September 28, 1999 with respect to protecting the City of Toronto's interests in the CRTC proceedings, including filing notice seeking interested party status for the City of Toronto, if necessary.

Background:

The City of Vancouver is presently engaged in an access dispute before the CRTC with Ledcor Industries Limited, a company engaged in the construction of a national fibre-optics network to be sold to and utilized by telecommunications common carriers such as MetroNet, Bell Canada, BCT.Telus, etc. In the midst of right-of-way negotiations between the Vancouver and Ledcor with respect to an application by Ledcor for consent to cross the City's streets at 18 different locations, it came to light that Ledcor had installed fibre under a city street (in a BCT.Telus duct) and certain infrastructure in the 18 street crossings without the City's permission. When Vancouver threatened to take action if Ledcor did not negotiate an agreement or remove its fibre immediately, Ledcor filed an application against Vancouver at the CRTC on March 19, 1999. Ledcor is disputing the terms for access requested by Vancouver and asking the CRTC to grant it permission to access street crossings and other municipal property in Vancouver.

In response, Vancouver notified the CRTC that, as well as responding to Ledcor's application, it intended to file its own application against BCT.Telus, Call-Net and Bell Canada, seeking a determination from the CRTC of the municipality's rights with respect to the terms and conditions which may be imposed by the municipality when allowing telecommunications providers to access its streets, including the requirement for the payment of compensation. On May 18, 1999, this application was filed.

Copies of both applications have been filed with the City Clerk for the information of Council.

The CRTC has indicated that once all submissions are received concerning the Ledcor and Vancouver applications, it intends to issue a Public Notice initiating a public proceeding with respect to the issues raised in the applications. This process is typically used when issues raised by a particular application are seen as being of national importance, given the implications for other parties (e.g. municipalities, telecom providers and others across Canada). In this type of proceeding, persons are invited to apply for interested party status to comment on the issues raised in the two applications. Interested parties would be entitled to put forward evidence, including expert evidence, and argument (typically in written form) and could be subject to "interrogatories" from other parties relating to documents and information in their possession.

The FCM has, through legal counsel hired for the purposes of this proceeding, requested that a Public Notice Proceeding be initiated and has indicated its intention to make a comprehensive submission with respect to the general terms and conditions, including compensation, of access to municipal property.

The issue of compensation will likely be the most contentious issue and parties are expected to provide the CRTC with a number of methodologies or approaches for determining what is fair compensation to be paid to municipalities for the rights granted. The municipal position will be that full compensation with regard to costs and the value of the rights granted should be payable by telecommunications providers.

It is expected that the earliest that public notice process would likely be initiated would be late July. Parties would then have thirty days to apply for status as interested parties. There would then be a further thirty day period for the filing of submissions and evidence, possibly taking the process into October. A final decision from the CRTC would not be expected until sometime in 2000.

Comments and/or Discussion and/or Justification:

Legal Division staff have been involved in previous meetings of the FCM Telecommunications Subcommittee, which is chaired by Councillor Howard Moscoe. This Subcommittee has for some time been involved in attempting to address the issues of telecom access to City streets and the right of municipalities to efficiently administer the use of public highways and ensure that municipal taxpayers are not subsidizing this type of commercial activity.

The CRTC proceeding described above is expected to have a major impact on the future terms and conditions upon which telecom providers will be permitted access to municipal property, including property within the City of Toronto. It is therefore recommended that City staff continue to be involved by participating in the FCM Subcommittee in instructing its legal counsel in the preparation of its submissions.

As it is expected that the FCM will be putting forward a position which will represent the interests of the City of Toronto, as well as other Canadian municipalities, it is not recommended that the City of Toronto commit further staff resources to this matter by seeking leave to intervene directly in the proceeding. However, given that one or more legal deadlines may occur prior to Council's next scheduled meeting of September 28, 1999, it was considered prudent to obtain instructions to deal with any unforseen circumstances which might arise during that period.

Conclusions:

The outcome of the Public Notice Proceeding in the Vancouver/Ledcor applications before the CRTC will likely have a significant impact on the form or nature of the terms and conditions, including the payment of compensation, upon which telecom providers may obtain access to City streets. In the circumstances, it is recommended that City Council support the FCM in its submissions to the CRTC.

Contact Names:

Edward Earle, Legal Services, 397-4058;

Andrew Koropeski, Director, Infrastructure Planning and Transportation Division, 392-7714

(A copy of the access dispute application between the City of Vancouver and BCT.Telus Communications Inc., Call-Net Enterprises Inc., and Bell Canada was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

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The Policy and Finance Committee also had before it a communication dated July 19, 1999, from James W. Knight, Executive Director, Federation of Canadian Municipalities respecting the foregoing matter, which was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.

Councillor John Adams, Midtown, appeared before the Policy and Finance Committee in connection with the foregoing matter.

15

Request for Quotations for Self Contained

Breathing Apparatus (SCBA)

(City Council on July 27, 28, 29 and 30, 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 (July 14, 1999) from the City Clerk:

Recommendation:

The Community Services Committee on July 14, 1999, recommended to the Policy and Finance Committee the adoption of the joint report dated June 24, 1999, from the Commissioner of Works and Emergency Services and the Chief Financial Officer and Treasurer respecting the Request for Quotations for Self-Contained Breathing Apparatus.

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(Joint Report dated June 24, 1999, addressed to the

Community Services Committee from the

Commissioner of Works and Emergency Services and

Chief Financial Officer and Treasurer)

Purpose:

The purpose of this report is to advise the results of the Request for Quotations issued for the supply and delivery of Self Contained Breathing Apparatus (SCBA) accessories, cylinder assemblies, records management system and dynamic test equipment to Toronto Fire Services, Equipment Services, 895 Eastern Avenue, and to request authority to award a contract to the recommended bidder.

Source of Funds:

Funds in the amount of $2,000,000.00 are available in the 1999 Capital Transition Account. A minor increase ($22,474.59) in budgetary approval will be required.

Recommendation:

It is recommended that the bid submitted by MSA Canada Inc. for the supply and delivery of Self-Contained Breathing Apparatus, accessories, cylinder assemblies, records management system and dynamic test equipment be accepted at the total bid price of $2,865,683.59 including taxes less the trade-in amount offered for existing equipment of $843,209.00 for a total expenditure of $2,022,474.59 including all taxes and charges, being the lowest bid received.

Council Reference/Background/History:

In August 1998, the Fire Chief established a task force to develop evaluation criteria and to conduct tests of the various SCBA product lines on the market to identify SCBA products suitable for acquisition by the Fire Services.

The objectives of the task force were:

(a) to notify and invite manufacturers and/or agents to participate in extensive product testing;

(b) to test and evaluate each product presented; and

(c) to recommend the purchase of those models of self-contained breathing apparatus meeting the established testing and evaluation criteria.

The SCBA task force members included a cross section of staff including members of management, operations, professional development/training, mechanical, technical service, and health and safety representatives.

Following the completion of the testing and evaluation phases of the selection process, the task force members found that both the Scott 50 model and the MSA Custom 4500 MMR model met the needs and safety requirements of Toronto Fire Services.

Purchasing and Materials Management Division (PMMD) issued Request for Quotation documents to Scott Aviation division of Scott Technologies Company and MSA Canada Inc. requesting pricing on the product approved in the evaluation process along with trade-in pricing for existing equipment presently in use by the Toronto Fire Services.

Comments and/or Discussion and/or Justification:

MSA Canada Inc. and Scott Aviation both submitted bids as summarized below:

With Trade-In Without Trade-In

MSA Scott MSA Scott

Base Price $2,601,882.56 $3,276,455.78 Base Price $2,601,882.56 $3,276,455.78

Less Trade-In $ 843,209.00 $ 0.00 Taxes $ 390,282.38 $ 491,468.37

Net Price $1,758,673.56 $3,276,455.78 Total Price $2,992,164.94 $3,767,924.15

Taxes $ 263,801.03 $ 491,468.37

Total Price $2,022,474.59 $3,767,924.15

In order to determine that the trade-in offered by MSA Canada Inc. was of fair market value, a separate Sales Quotation was issued by PMMD to firms that had expressed interest in purchasing the used equipment. The sales quotation resulted with the highest offer to the City being $129,100.00 which is substantially lower than the $843,209.00 trade-in offered by MSA Canada Inc. Scott Aviation division of Scott Technologies Company declined to offer a trade-in on the used equipment.

The bid submitted by the recommended bidder has been reviewed by the Commissioner of Works and Emergency Services and was found to be in conformance with the Quotation requirements.

The Manager, Fair Wage and Labour Trades Office has reported favourably on the firm recommended.

Conclusion:

This report requests authority to award the contract for the supply and delivery of Self-Contained Breathing Apparatus, including the trade-in of existing equipment presently in use, as required by Toronto Fire Services to MSA Canada Inc., being the lowest bid received.

Contact Name and Telephone Number:

Deputy Chief William Stewart, Toronto Fire Services, Tel: 397-4304

L.A. Pagano, P. Eng., Director, Purchasing and Materials Management, Tel: 392-7312.

16

Redirection of Emergency Hostel Funding

(City Council on July 27, 28, 29 and 30, 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 (July 14, 1999) from the City Clerk:

Recommendation:

The Community Services Committee on July 14, 1999, recommended to the Policy and Finance Committee the adoption of the report dated June 28, 1999, from the Commissioner of Community and Neighbourhood Services respecting the Redirection of Emergency Hostel Funding.

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(Report dated June 28, 1999, addressed to the

Community Services Committee from the

Commissioner of Community and Neighbourhood Services)

Purpose:

This report provides information on the Provincial Redirection of Emergency Hostel Funding Initiative (REHF) which was announced in March. The report seeks approval for gross expenditures of up to $2.5 million during the last half of 1999 for a cost to the City of $500,000.00 representing the 20 percent cost-sharing required for this program.

Funding Sources, Financial Implications and Impact Statement:

The Redirection of Emergency Hostel Funding Initiative will allow municipalities, during their 1999 operating year, to spend an amount up to 15 percent of 1998 actual emergency hostel costs for innovative prevention programs that will reduce emergency hostel use. Eligible 1998 operating expenses in Toronto, as calculated by the Ministry of Community and Social Services, total $50.28 million for a maximum of $7.54 million allowable for the redirection initiative. The funding is to be cost-shared 80/20 provincial/municipal. The annualized City share of the total fund would be $1.51 million.

The announcement of this program was made on March 23 of this year. City staff have only recently finalized administrative and funding details with the Province. Given these time frames, and the Province's requirement to receive detailed business plans prior to releasing the money, staff estimate expenditures of $2.5 million gross for a 1999 cost to the City of $500,000.00. This money is not currently included in the 1999 budget and will be covered through Departmental underspending. This initiative is funded with "new" money and the funding envelope for emergency shelter beds will not be reduced by the Province in 1999.

It is anticipated that new programs funded through this initiative will eventually be successful in slowing growth in or reducing expenditures on shelters. Due to a time lag between program expenditures and savings realized, staff are projecting savings from emergency hostel funding of $100,000.00 in 1999. Provincial requirements are that once the program is fully operational, funded projects must result in dollar for dollar savings from the emergency shelter funding envelope. Thus in the year 2000 and beyond savings will, at a minimum, equal expenditures and there will be zero net cost to the City.

Recommendations:

It is recommended that:

(1) Council approve the expenditure of up to $2.5 million gross on the Redirection of Emergency Hostel Funding Initiative during last six months of 1999 which represents a cost to the City of $500,000.00 which will be partially offset by projected savings of $100,000.00 for a final net cost of $400,000.00 to be funded through Departmental underspending;

(2) the City seek provincial approval for funding of Project Going Home and the expansion of the Housing Contacts program through the Redirection Initiative;

(3) based on consultation with emergency shelter operators and other community agencies, the Commissioner of Community and Neighbourhood Services be authorized to select the other programs which meet program criteria and the needs of the City of Toronto, and within the funding limits established submit the necessary business plans to the Ministry of Community and Social Services seeking approval;

(4) this report be referred to the Policy and Finance Committee for their consideration; and

(5) the appropriate City officials be authorized to take the necessary action to give effect thereto.

Council Reference/Background/History:

On June 17, 1999, the Community Services Committee approved a report on the City of Toronto Homeless Initiatives Fund. This report briefly described the Hostel Redirection Initiative and indicated that a further report would be brought forward detailing this initiative.

Comments and/or Discussion and/or Justification:

REHF Program Overview:

On March 23, 1999, the Province announced a number of funding initiatives related to homelessness. One of these was the Redirection of Emergency Hostel Funding (REHF). The objectives of this program, as described by the Province are to:

(1) change the culture and practice of service delivery to the homeless from short-term emergency use to more effective responses of prevention and early identification, which will help people find and keep stable living situations; and

(2) to develop an opportunity for creative and innovative approaches to service delivery.

This initiative will allow municipalities currently providing emergency shelter services to spend up to 15 percent of their hostel funding on innovative prevention programs with the goal of reducing emergency hostel use.

The objectives of this program are to move people from emergency to permanent accommodation, or to help people maintain or obtain permanent accommodation without having to use emergency shelters. Only new programs are eligible for funding under this envelope; however, the Province has made it clear that the intention is not to create a new layer of service, but to expand existing resources or facilitate connections with programs already in the community.

Municipalities will be expected to submit detailed business plans for each program that they wish to fund. These business plans will need to demonstrate that the redirection of funding will reduce current or anticipated emergency hostel use and costs. In the business plans, municipalities will have to set service target outcomes/measures that will demonstrate that objectives and savings have been achieved. Suggested outcomes include:

(1) a reduction in the rate of growth, no growth or a reduction in the number of emergency shelter beds;

(2) a reduction in the average length of stay; and

(3) a reduction in the cost per unit of service.

Provincial expectations are that there will be at least dollar for dollar cost savings in current or anticipated emergency hostel use.

Municipalities will be expected to report to the Province six months after the start of the program. The Province will review targets and expenditures at this time. After this initial review, reporting and monitoring will be done on a quarterly basis. If, at any of these reviews, anticipated outcomes have not been achieved, municipalities will be expected to redesign their strategy and business plan. It is also possible that funding for this particular initiative could be withdrawn. It is acknowledged at both the provincial and the City level that this is a new method of funding and monitoring a program. Staff from both governments will be working in partnership to ensure that the program is successful.

It is clear that this initiative will make it possible to fund projects which have not previously fit within the funding and program guidelines of the City or the Province. However, City staff have already met with provincial staff to indicate their concern that the lack of affordable, adequate housing stock in the City of Toronto may make it a challenge to meet the program objective of assisting people in moving into permanent housing.

Funding:

In Toronto, the annualized funding envelope eligible for redirection is $7.54 million. This represents 15 percent of $50.28 million, which is the Ministry calculated figure of eligible 1998 expenses. This does not represent the entire budget expenditure for Hostel Services in 1998 as the provincial calculation allows only for the maximum $34.50 expenditure per night of bed care as opposed to the actual per-diem in the City of Toronto of $40.99. Additionally, the City of Toronto funds other programs through Hostel Services, such as Habitat Services, that would not be considered as eligible expenses.

The expectation of the Province is that the city would provide 20 percent cost-sharing in this program. On an annualized basis, the City's share would be $1.51 million. Due to the timing of the Province's announcement and administrative requirements, the City would not be able to expend the full amount available this year. Staff are projecting that gross expenditures on the project in 1999 would be $2.5 million, with the City's cost-sharing being $500,000.00.

These funds are not currently included in the 1999 Shelter, Housing and Support budget and will be funded through Departmental underspending. The intent of the program, however, is to reduce or slow the increase of expenditures on emergency shelter beds. Staff are anticipating that some projects, if approved by the Province, will result in a $100,000.00 reduction in expenditures on emergency shelter beds during 1999. As noted before, provincial program guidelines require that dollar for dollar savings be realized in order for funding to continue. As such, in the year 2000 and beyond expenditures through the REHF must produce equal savings in expenditures on emergency shelter beds resulting in a zero net cost to the City.

Funds from this initiative cannot be used to replace existing municipal expenditures. However, neither does the creation of this fund reduce the Provincial emergency shelter funding envelope available to Toronto during the 1999 .

Selecting Program for the REHF:

New Programs - On June 24, 1999, City staff met with the managers of hostels funded or directly operated by the City of Toronto. Staff briefed managers on the REHF and sought input from the providers regarding initiatives they feel would assist them in helping people move out of hostels or avoid hostel use. Many ideas were generated through this meeting with shelter operators consistently indicating that they need staff resources who are dedicated to assisting people in their housing search and to providing support and follow-up to residents once they have reestablished in the community. The ideas generated through this process will form the basis for the City's proposal to the Ministry. Staff will be following up with a reference group of shelter operators to refine the proposals and will also follow up with individual agencies to establish targets and develop business plans.

Existing programs - There are two programs already in operation in the City that staff feel should be eligible for funding. The first is Project Going Home. This project assists hostel residents in returning to their home community outside of Toronto if they so wish and it is clearly in their best interest. The program is entirely voluntary and individuals are only assisted if staff are able to confirm a permanent address in the home community. During the first year, approximately 113 people were assisted to return home. As of April of this year, the City contracted with a community agency to operate this service. Staff are projecting that up to 1,000 people may be helped by the end of 1999.

The second project for which staff will be seeking funding is Housing Contacts. This program, directly operated by City staff, assists families in finding permanent accommodation outside of the City of Toronto. Seven-hundred and forty people were assisted during 1998. This response to this project is significant and staff are hoping to expand operations to be able to serve an additional 260 people in 1999. Staff will be seeking funding through the REHF for the expansion of this program. An approach will also be made to the Province to make the existing program expenditures eligible for funding. It does not seem reasonable that a project that clearly meets the criteria of the redirect initiative would be ineligible simply because the City was proactive and initiated the project in 1998.

Conclusions:

The Redirection of Emergency Hostel Funding Initiative presents an opportunity for the City and its community partners to develop new programs that will assist individuals and families to leave the emergency shelter system for permanent housing. While the method of funding and monitoring this program is new, both City and Provincial staff are committed to making the project work. The City will be expected to cost-share 20 percent in the funding of this project, however the intent of the program is to reduce or slow the growth of expenditures on emergency shelter beds and staff are expecting savings of $100,000.00 to be generated through this program. Thus the total net expenditure would be $400,000.00 for the last half of 1999 that will be funded through Departmental underspending.

Contact Name:

Joanne Campbell, General Manager of Shelter, Housing and Support Division, Tel: 392-7885.

17

Capital Funding Support for Playhouse

Child Care Centre in Ward 11

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends:

(1) the adoption of the report (July 7, 1999) from the Commissioner of Community and Neighbourhood Services; and

(2) that the Commissioner of Community and Neighbourhood Services be requested to:

(a) reach an agreement with the Toronto District School Board respecting tenancy security on this site;

(b) submit a report to the meeting of the Policy and Finance Committee scheduled to be held on September 16, 1999:

(i) on the status of the overall negotiations with the Toronto District School Board respecting day care and parks and recreation use; and

(ii) with an update on the Capital reserve funds for Child Care Centres; and

(c) to include in the 2000-2004 Capital Budget any future anticipated projects.

The Policy and Finance Committee submits the following report (July 7, 1999) from the Commissioner of Community and Neighbourhood Services:

Purpose:

The purpose of this report is to seek approval to adjust the funding allocated to Playhouse Child Care Centre from the Child Care Capital Reserve to reflect its 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 costs being encountered by Playhouse 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 $800,000.00 be allocated to Playhouse Child Care Centre from the Child Care Capital Reserve to support the renovation associated with its move to Greenland School; 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 is 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 renovation 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. Initial plans for Playhouse Child Care were based on preliminary estimates to build onto Greenland Public School and approval for $500,000.00 was given to Playhouse Child Care Centre for this purpose.

Comments and/or Discussion and/or Justification:

Playhouse Child Care Centre was expected to leave its location in September 1998. Because of uncertainty associated with potential school closures the Toronto District School Board was unable to give final approval to the proposed move to Greenland Public School until June 1999. A review of the options available to relocate Playhouse Child Care Centre has indicated that Greenland Public School is the most viable location for both the Child Care Centre and the Toronto District School Board.

The Toronto District School Board has costed the actual requirements to relocate Playhouse Child Care Centre by adding onto Greenland School. The total costs of construction will require up to $800,000.00 in capital funding. This is $300,000.00 more than originally approved by Council. Playhouse Child Care Centre does not have funds to pay for the renovation costs. Without capital funding support for the renovation the centre would 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.

Playhouse Child Care Centre has successfully provided subsidized child service in Ward 11 for over twelve years. It provides much needed care to ten infants, ten toddlers, twenty four preschoolers and ten kindergarten aged children. Thirty-five more children (thirteen infants, nine toddlers, eleven preschoolers and 2 kindergarten aged) are currently on the subsidy waiting list awaiting placement in this centre. Without the capital support requested, this valued community resource will be lost and over fifty children will lose their current child care placement.

Conclusions:

The Department supports the centre's revised renovation plan and recommends that Council approve support for the revised construction estimate of up to $800,000.00. There are adequate funds remaining within the Child Care Capital Reserve to accommodate the increased construction costs associated with the relocation of Playhouse Child Care Centre to Greenland Public School.

Contact Name:

Brenda Patterson, Director, Contract and Quality Compliance, Children's Services Division;

Tel.: 392-3319; patterso@csis.csis.csd.metrotor.on.ca

18

New Multi-Residential Property Class

Additional Issues

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of:

(1) the recommendations of the Assessment and Tax Policy Task Force embodied in the following communication (June 28, 1999) from the City Clerk; and

(2) the report (July 8, 1999) from the Commissioner of Community and Neighbourhood Services:

Recommendations:

The Assessment and Tax Policy Task Force recommends that:

(1) the following recommendation 4 in the report (February 24, 1999) from the Chief Financial Officer and Treasurer relating to the inclusion of low-income units in any new development in the new multi-residential class be referred to the Business Reference Group as part of the comprehensive tax policy review;

"That, if there have been no building permits issued for this new property class, the province be requested to amend Ontario Regulation No. 282/98 to include in the description of the new multi-residential property class that the municipality can, by by-law, set an appropriate number of low-rental units within properties eligible for inclusion in this new class."

(2) the Ministry of Finance and OPAC be requested to amend O Reg 282/68 (subsection 10) to clarify that any newly constructed units that are new construction or conversion from a non-residential use other than "common area" space in a building that would otherwise be included in the multi-residential class, be included in the new multi-residential property class; and that such amendment allow for a retroactive application for all of 1999.

The Task Force reports, for the information of the Policy and Finance Committee, having requested the Commissioner of Community and Neighbourhood Services to report to the Policy and Finance Committee, at its meeting to be held on July 20, 1999, on the definition of "common area" and the impact of Recommendation No. 2 above on potential loss of services and facilities for tenants, including outdoor amenity space and facilities, as a result of additions.

Background:

The Assessment and Tax Policy Task Force, on June 28, 1999, had before it a joint report (June 16, 1999 from the Chief Financial Officer and Treasurer and Commissioner of Community and Neighbourhood Services respecting New Multi-Residential Property Class: Additional Issues, and recommending that:

"(1) Recommendation 4 in the report (February 24, 1999) from the Chief Financial Officer and Treasurer relating to the inclusion of low-income units in any new development in the new multi-residential class be referred to the Business Reference Group as part of the comprehensive tax policy review; and

(2) City Council request that the Ministry of Finance and Ontario Property Assessment Corporation jointly commit that the newly created multi-residential property class will be applied to all new rental units created in the City of Toronto which would otherwise have been classed as multi-residential."

The Task Force's recommendations are noted above.

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(Joint Report dated June 16, 1999, addressed to the

Assessment and Tax Policy Task Force from the

Chief Financial Officer and Treasurer and the

Commissioner of Community and Neighbourhood Services)

Purpose:

To provide information relating to assessment issues and property eligibility for inclusion in the New Multi-Residential Property Tax Class for new multi-residential rental properties.

Financial Implications:

None.

Recommendations:

It is recommended that:

(1) Recommendation No. (4) in the report (February 24, 1999) from the Chief Financial Officer and Treasurer relating to the inclusion of low-income units in any new development in the new multi-residential class be referred to the Business Reference Group as part of the comprehensive tax policy review; and

(2) City Council request that the Ministry of Finance and Ontario Property Assessment Corporation jointly commit that the newly created multi-residential property class will be applied to all new rental units created in the City of Toronto which would otherwise have been classed as multi-residential.

Background:

At its meeting of March 2 - 4, 1999, City Council considered a report from the Assessment and Task Policy Task Force (February 24, 1999) and adopted a recommendation, among others, that the Chief Financial Officer and Treasurer, in consultation with appropriate officials, review Recommendation No. 4 in the report (February 24, 1999) from the Chief Financial Officer and Treasurer and report back in time for consideration in the year 2000, such report to clarify that any benefit be passed on to the residential tenant:

"(4). That, if there have been no building permits issued for this new property class, the province be requested to amend Ontario Regulation No. 282/98 to include in the description of the new multi-residential property class that the municipality can, by by-law, set an appropriate number of low-rental units within properties eligible for inclusion in this new class"

Council also referred the briefing note from the General Manager, Shelter Housing and Support Division (dated March 3, 1999), be referred back to the Assessment and Tax Task Force for further consideration.

Comments:

(1) Recommendation No.(4) - Low-income Unit Option in New Multi-Residential Class:

This recommendation was included in the February 24, 1999 report in which tax ratios were established by Council for the new multi-residential property class. It was included for Council to consider whether it would be an appropriate tool to be used with the creation of the new multi-residential class to encourage new rental construction that would allow municipalities the option of requiring a specified number of low-income units in any new development in this new class. The result would be that Council could, if it wished, require the inclusion of a minimum number of low-income units in any new or converted apartment building placed in the new multi-residential class.

The recommendation included a provision that the authority for the new multi-residential class (Ontario Regulation 282/98) only be amended if no building permits have been issued and therefore, no properties included in the new multi-residential class. Consequently, if the Province amended the regulation to require low-income housing units as part of any new development, there would be no impact on existing properties since no new properties exist in the class yet. It should be noted that we do not anticipate much rental housing construction, even with the new class, because the applicability of the new class is limited to just eight years by provincial regulation, after which the building is assessed as multi-residential. This means that the benefit of the reduced rate does not have a significant impact on the economics of development for new development. Developers can instead register new construction as condominium (even if units are intended for rental) and thereby attain the residential/farm rate over the life of the building. However, as discussed below, even with the eight year limitation, the class may be of use to landlords adding new units to existing multi-residential buildings.

There are a number of issues that relate to the provision of low-income units in any new development, including government funding, permanency, subsidization either directly to the tenant or to the developer, ensuring affordable rents and impact to the developer (in particular, whether the developer would nl;ot proceed with the development if restrictions are imposed).

Given the scope of this issue, it is recommended that it be considered by the multi-residential panel of the Business Reference Group that will be completing a comprehensive review of tax related impacts and options prior to the next re-assessment.

(3) Briefing Note - General Manager, Shelter Housing and Support Division (March 3, 1999):

Council referred the briefing note from the General Manager, Shelter Housing and Support Division (dated March 3, 1999), back to the Assessment and Tax Task Force for further consideration.

The Assessment Act allows the Minister of Finance to prescribe property classes, some of which may provide a municipality the option of having the property class apply within that municipality. Ontario Regulation No. 282/98 created a new multi-residential property class. City Council passed a by-law October 31, 1998, that created the class and have it apply to the 1999 tax year, as part of several initiatives aimed at improving the supply of rental housing.

Ontario Regulation 282/98 (Section 10) provides that the new multi-residential property class consists of property that would otherwise have been in the multi-residential property class (i.e. rental residential buildings with seven or more units) but which units have been built or converted from a non-residential use pursuant to a building permit issued after the by-law was passed, and which units were ready for occupation on or before the day as of which the land is classified for the taxation year.

The City has the right to establish the class; however, it is the province which assigns each property its class through the Ontario Property Assessment Corporation (OPAC). OPAC and Ministry of Finance staff have had discussions with City staff and have indicated that the new multi-residential class applies only to new construction or conversion of entire buildings. It would not be applicable to newly created units or previously common space that may be converted to new apartments. The regulation is interpreted as referring to buildings as a whole although it is not unusual for one property to have more than one assessment portion which may have different tax classes. With respect to conversion of common area space to rental units, the Province has noted that common areas are considered to have already been used as a part of the rental building by tenants and is therefore not new space.

The Provincial interpretation eliminates the possibility of converting portions of buildings and placing them in the new class to be taxed at a lower rate compared to the remainder of existing units in the same building. Taxing similar apartments in the same building at different rates creates inequities within the building. The intent of the Provincial initiative would appear to both encourage new rental construction while ensuring tax equity is maintained. Construction or conversion of entire buildings achieves both goals. Placing five units in a building of 100 units in the new multi-residential class creates tax inequities within that building.

However, while taxing similar units at different rates creates inequities within the building and is, therefore, at odds with Provincial policies, it can make it feasible for units to be created which is in line with City of Toronto goals for increasing the supply of rental housing. A recent report by Greg Lampert for the province (Responding to the Challenge: The Economics of Investment in New Rental Housing in 1999, Feb.1999) points out that rental housing development can generally be more financially feasible for owners wishing to intensify the use of existing properties. By permitting the new class to apply to newly created units within or attached to an existing multi-residential rental property, the cost of creating the unit becomes more feasible.

Given Council's objective of improving the supply of affordable housing, this report recommends that Council request the Ministry of Finance and Ontario Property Assessment Corporation jointly commit that the newly created multi-residential property class will be applied to all new rental units created in the City of Toronto which would otherwise have been classed as multi-residential. Staff of the Shelter, Housing and Support Division and Finance Department should be requested to communicate with Ministry of Finance staff and Ontario Property Assessment Corporation in this regard.

Conclusion:

Recommendation 4 in the report (February 24, 1999) from the Chief Financial Officer and Treasurer relating to the inclusion of low-income units in any new development in the new multi-residential class should be addressed as part of the comprehensive tax policy review to be undertaken by the Business Reference Group.

The multi-residential property class for new rental housing will reduce the gap between the economic rent and market rent of new rental construction -- whether a new building or new units within an existing building -- and should positively impact on additional rental housing supply. Council established the new class as one measure to help stimulate supply of rental housing. This report recommends that Council request the Ministry of Finance and Ontario Property Assessment Corporation jointly commit that the newly created multi-residential property class will be applied to all new rental units created in the City of Toronto which would otherwise have been classed as multi-residential.

Contact Names:

Paul Wealleans Joanne Campbell

Phone: 397-4208 Phone: 392-7885

(Minute No. 2.77 of the Council of the City of Toronto, appended to the foregoing report was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

The Policy and Finance Committee also submits the following report (July 8, 1999) from the Commissioner of Community and Neighbourhood Services:

Purpose:

To provide supplementary information requested about implications for tenants should the province and Ontario Property Assessment Corporation agree to apply the new multi-residential tax class to newly create units within existing rental residential properties.

Funding Sources, Financial Implications and Impact Statement:

None.

Recommendation:

It is recommended that Council support the application of the new multi-residential tax to new units within existing rental buildings, and request that the Ontario Property Assessment Corporation only apply the class to units where the landlord has provided evidence that the space was previously non-residential.

Council Reference/Background/History:

In July 1998, Council approved a strategy in support of improving the supply of affordable housing. Since that time, a number of initiatives have been approved which are intended to spur rental housing construction by reducing the gap between the cost of development and the rents that could be charged given the market. The approach has been to remove or minimize many of the barriers to rental housing construction which currently exist.

Property taxes are a major barrier to new construction because they are approximately four times higher for rental housing than property taxes of paid by condominiums and other residential properties. On October 31, 1998, City Council passed a by-law to establish a new tax class for new rental residential housing beginning January 1, 1999. Earlier this year, the tax rate for this new class was set at the same rate as other residential properties.

Every unit counts:

While the City's initiative to establish a new tax class is acknowledged to be one of the most important steps it could take to encourage rental housing constructions, its usefulness has been negated by the Province's decision to limit applicability of the class to just eight years. Eight years is much less than the usual 25 to 35 year time horizon used by financial institutions when assessing the viability of a project.

However, the new class can contribute to development of new units within existing rental buildings because the economics are different. We are aware of apartment owners who are interested in adding floors and units to existing building. These units are much more likely to be created if the new tax class and reduced tax rate are applied.

Unfortunately, the Ontario Property Assessment Corporation (OPAC) and Ministry of Finance staff have advised that the new multi-residential class applies only to new construction of entire buildings or conversion of prior industrial or commercial space within the existing building and would, therefore, not be applicable to units newly created from unused space. At its meeting June 24, 1999, the Assessment and Tax Policy Task Force discussed the issue of using the new class as a means of supporting development of additional rental units within/on existing rental residential properties, and recommended the following:

"the Ministry of Finance and OPAC be requested to amend O Reg 282/68 (subsection 10) to clarify that any newly constructed units that are new construction or conversion from a non-residential use other than "common area" space in a building that would otherwise be included in the multi-residential class, be included in the new multi-residential property class; and that such amendment allow for a retroactive application for all of 1999."

The Task Force supported applying the new class to new units within existing buildings, provided that existing tenants do not lose access to common-area space, services or facilities. The Commissioner of Community and Neighbourhood Services was requested to report to the July 20, 1999 meeting of the Policy and Finance Committee on the definition of "common area" and the impact of the recommendation above on potential loss of services and facilities for tenants, including outdoor amenity space and facilities, as a result of additions. This report has been prepared in response to that request.

Definitions:

The Ministry of Finance advises that there is no formal written definition of non-residential space. In a verbal legal opinion, they confirmed that for the purposes of the new multi-residential tax class, non-residential space within an existing property classed as multi-residential would include space which was previously classed as commercial or industrial. The opinion given made reference to the example of a lobby area being converted to residential. These units would not be eligible for the new class as the lobby was space previously used by the tenants.

This opinion of what constitutes non-residential space may not always be consistent with the Tenant Protection Act (TPA). The TPA defines a "residential complex" as including all common areas and services and facilities available for the use of its residents. Space which is not available for the use of its residents, and is subsequently converted to a rental unit, should be considered eligible for the new class as existing tenants would not in that instance lose any common area, service or facility as a result of the conversion.

Implications:

It is likely that additional units will be created if the regulation be amended as recommended by the Task Force. It is the concern of the Task Force that a tax advantage not be given where a common area, service or facility has been lost or reduced because of the creation of the unit.

In practical terms, determining whether or not the newly created rental unit was created in space not previously available to tenants in the building can be difficult. Typically assessors will look only to the number of units in the building when considering whether the unit is residential or multi-residential, not to the history of the space used to create the unit. If the Ministry of Finance and OPAC should agree to amend the regulation to permit newly created units to be eligible for the new tax class, a process will be required to ensure the class is applied only in situations where existing tenants have not lost common area due to the creation of the unit.

This report recommends that as part of requesting an amendment to the regulation, OPAC require the landlord to provide evidence that the space was not previously part of the "residential complex" (as defined by the Tenant Protection Act) before making a determination on whether the class applies. Evidence may include an order of the Ontario Rental Housing Tribunal (Tribunal) pursuant to a landlord application under s.7 of the Tenant Protection Act. This application is made to determine whether or not the space used to create the new unit falls under the definition of "residential complex". If the order of the Tribunal concluded the space was not part of the "residential complex", then the newly created unit would be eligible for the new class. In some situations, such as adding stories to an existing building, building drawings may be sufficient evidence.

If creation of the unit causes a reduction or loss of common area space, or a service or facility (such as locker space), the landlord is required to reduce rents. Should the rent not be reduced, tenants can file an application under the Tenant Protection Act with the Tribunal for a reduction in rent. If a unit is incorrectly classed as new multi-residential, tenants may file an appeal with OPAC, and file an application for rent reduction with the Tribunal. The resultant order by the Tribunal should be sufficient evidence for the assessor to overturn the original incorrect classification.

A specific example raised by the Task Force is the case where new units are created by adding onto an existing building, thereby removing outdoor amenity space. Consistent with the principles noted earlier, the landlord would be required to provide evidence that the space was not previously available for use by tenants in order for the unit to be eligible for the new class. It is appropriate that this determination be made through an application to the Tribunal since it is not always clear whether or not exterior space is intended for the use of tenants by virtue of their tenancy, particularly where there are no facilities located on the space. The Tribunal can undertake a more detailed review of the matter than a property assessor, and can order adjustments to rents charged if indeed amenity space has been lost.

Conclusion:

The new class would only apply to non-residential space which is converted to a rental property. Common areas are residential space and, therefore, units created from common area space would not be eligible for the new class. It is recommended that assessors be requested to apply the new class only when the landlord provides evidence that the space used to create the unit was not previously residential. Evidence may include, for example, an order from the Ontario Rental Housing Tribunal which outlines what space, services and facilities are included in the definition of the "residential complex", and by extension, what space is non-residential.

Contact Name:

Joanne Campbell, Tel: (416) 392-7885, Fax: (416) 392-0548.

19

Impact of Taxes on New Construction -

Capped Property Classes

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause by adding thereto the following:

"It is further recommended that:

'WHEREAS City Council has before it a report recommending that the Province of Ontario be requested to amend legislation so that taxes for new construction on vacant or excess land be calculated based on frozen assessment determined using the methodology used under the provincial assessment policy prior to Current Value Assessment (CVA) implementation; and

WHEREAS there are a number of properties that have changed property classes, and for those that changed, especially from an uncapped class to a capped class (e.g. Residential to Multi-residential, Commercial, or Industrial) the properties are taxed essentially at full CVA;

NOW THEREFORE BE IT RESOLVED THAT the Chief Financial Officer and Treasurer be requested to submit a report to the next meeting of the Assessment and Tax Policy Task Force to be held in September 1999 on the financial implications of these class changes.' ")

The Policy and Finance Committee recommends the adoption of the recommendations of the Assessment and Tax Policy Task Force embodied in the following communication (June 28, 1999) from the City Clerk:

Recommendations:

The Assessment and Tax Policy Task Force recommends that:

(1) the Province of Ontario be requested to amend the legislation so that taxes for new construction on vacant or excess land are calculated based on frozen assessments determined using the methodology used under Provincial assessment policy prior to CVA implementation;

(2) where new construction occurs, OPAC provide both the frozen realty assessment and current value assessment on the assessment roll returned to the municipality; and

(3) Council request the Province of Ontario to move quickly on its commitment, made in the 1999 provincial budget, to bring fairness to property taxes on new businesses, before property tax bills drive new businesses out of business.

Background:

The Assessment and Tax Policy Task Force, on June 28, 1999, had before it a supplementary report (June 14, 1999) from the Chief Financial Officer and Treasurer respecting Impact of Taxes on New Construction - Capped Property Classes, and recommending that:

"1. The Province of Ontario be requested to amend the legislation so that taxes for new construction on vacant or excess land are calculated based on frozen assessments determined using the methodology used under Provincial assessment policy prior to CVA implementation; and

2. Where new construction occurs, OPAC provide both the frozen realty assessment and current value assessment on the assessment roll returned to the municipality."

The Task Force also had before it the following report/communications:

- (April 26, 1999) from the Chief Financial Officer and Treasurer;

- (April 30, 1999) from Mr. Ian Cameron, Etobicoke Civic Centre, Economic Development Office addressed to Mr. Robert Mantella; and

- (June 28, 1999) from Councillor McConnell.

The Task Force's recommendations are noted above.

--------

(Report dated June 14, 1999, addressed to the

Assessment and Tax Policy Task Force from the

Chief Financial Officer and Treasurer)

Purpose:

This report provides the additional information requested by the Assessment and Tax Policy Task Force regarding the impact of taxes on new construction for the commercial and industrial property classes.

Financial Implications:

The total tax increase due to new construction for the 50 properties identified in this category for 1999 is $19.22 million, of which the City's share is $8.60 million. It is estimated that the recommended change in the new construction methodology would result in a total tax savings for the 50 properties analyzed of $4.3 million in 1999, of which the City's share is $1.94 million.

Recommendations:

It is recommended that:

(1) The Province of Ontario be requested to amend the legislation so that taxes for new construction on vacant or excess land are calculated based on frozen assessments determined using the methodology used under Provincial assessment policy prior to CVA implementation; and

(2) Where new construction occurs, OPAC provide both the frozen realty assessment and current value assessment on the assessment roll returned to the municipality.

Background:

At its meeting on May 3, 1999, the Assessment and Tax Policy Task Force had before it the report entitled "Impact of Taxes on New Construction - Capped Properties (Commercial, Industrial and Multi-Residential)" dated April 26, 1999. The Task Force referred the matter back to the Chief Financial Officer and Treasurer and requested her to:

(1) analyse the (April 26, 1999) report again taking into account the different classes viz-a-viz industrial, commercial, multi-residential, and to report back to the next meeting of the Task Force, in consultation with the Commissioner of Economic Development, Culture and Tourism, specifically looking at whether there are any benefits to either the frozen assessment or to the non-frozen assessment depending on which of the classes they are in with a view to spurring development or redevelopment;

(2) analyse and recap the analysis which lead up to the request to the Province for capping provisions; and

(3) clarify as to how the rules work with improvements and whether the City has any discretion under improvements.

Comments:

CVA Impact - Capped Property Classes:

The Task Force requested that a recap of the analysis which lead up to the request to the Province for capping provisions be provided. Table 1 below summarizes the CVA impact analysis for the capped property classes, which was undertaken during the summer of 1998. The analysis formed the basis upon which Council recommended that tax increases for the multi-residential, commercial and industrial property classes should be capped at 2.5 percent per year for 1998, 1999 and 2000.

Table 1

Summary of CVA Impact - Capped Property Classes

Decreases Increases Increase > 100%

Property # of % of Avg. Tax # of % of Avg. Tax # of % of

Class Portions Total Decrease Portions Total Increase Portions Total

Multi- 1,463 36.20% -13.02% 2,579 63.80% 190.35% 257 6.36%

residential

Commercial 10,082 24.97% -31.73% 30,287 75.03% 251.60% 17,351 42.98%

Industrial 1,742 29.61% -18.92% 4,141 70.39% 3309.42% 1,212 20.60%

** Impact of full CVA without the use of tax policy tools such as separate classes and graduated tax rates.

As can be seen, full implementation of CVA on the above-mentioned property classes would have negatively impacted a large proportion of properties in each of the classes. Due to the short time frame in which Council had to decide on all of the tax policy options available, and due to concerns regarding the valuation of commercial and industrial properties and for the need to provide protection to business tenants and to charities and similar organizations, and in order to limit the tax changes created by CVA, capping tax increases at 2.5 percent per year for three years was recommended. The capping period (i.e., 1998 to 2000) was viewed as an interim step so that comprehensive work could be undertaken to address all of the tax policy issues that need to be considered prior to the next reassessment scheduled for the 2001 taxation year.

Additional Analysis re New Construction:

The Municipal Act sets out how the frozen assessment is to be recalculated where the CVA of a property increases due to new construction. The calculation involves the use of the municipal factor, which is prescribed by Provincial regulation and represents the City-wide ratio of old realty assessment to Current Value Assessment for that property class.

The municipal factor calculation moves the effective tax rate for new construction to the municipal average for that property class. The average effective tax rate for all property in the commercial property class is 7.5 percent. Therefore, under the calculation for new construction using the municipal factor, properties where the existing effective tax rate is less than 7.5 percent are severely impacted while those with effective tax rates of more than 7.5 percent benefit from the municipal factor calculation for new construction. The current legislated new construction calculation mirrors the impact of full CVA as it results in the new taxes being nearly equivalent to full CVA in most cases.

In the report dated April 26, 1999, it was recommended that the Province be requested to amend the legislation so that taxes for new construction on vacant land or excess land are calculated based on frozen assessments determined using the methodology used under the Provincial assessment policy prior to CVA implementation. This calculation would involve having the frozen assessment determined based on similar properties in the vicinity. Frozen assessments determined in this manner would re-create what the realty taxes would have been on the property under the old assessment system and would extend capping protection to newly constructed properties where CVA results in large tax increases. However, existing inequities between neighbourhoods would be maintained and little movement would be made toward full CVA taxes. In addition, the report noted that any change in the new construction calculation would not encourage the construction of certain property types (office buildings, department stores) that would have benefitted under full CVA.

During discussion of the report at the May 3, 1999 Task Force meeting, concerns were raised regarding whether a change to the new construction calculation would be detrimental for certain property owners in certain parts of the City that would have received tax decreases if CVA had been fully implemented. The Task Force requested further analysis of the impact of a legislated change to the new construction calculation, taking into account the different classes viz-a-viz industrial, commercial, multi-residential, and specifically looking at whether there are any benefits to either the frozen assessment or to the non-frozen assessment depending on which of the classes they are in with a view to spurring development or redevelopment.

As noted in the April 23, 1999, report, the recommended change to the new construction calculation would negatively affect the new construction of office buildings and department stores, which under full CVA would have received tax decreases.

Appendices 1 and 2 show, by ward, the existing effective tax rates for certain commercial and industrial property types, respectively. Ward boundaries provide clear geographic distinctions but a comparison of "similar properties in the vicinity" in practice, would be obtained from a narrower geographic area. However, the appendices do provide a comparative analysis of the effective tax rates based on ward averages for various commercial and industrial property types.

From Appendix 1, it can be seen that there are certain areas in the City where the construction of a certain type of new commercial property would result in a tax benefit from the legislated calculation for new construction. These areas are highlighted in the appendix. For example, a new auto dealership constructed in Ward 11 (Don Parkway), where the average effective tax rate for this type of commercial property is higher than the class average, would benefit from the new construction calculation. However, a new auto dealership in Ward 20 (Trinity-Niagara) would likely face a significant tax increase due to the legislated new construction calculation.

Overall, there are a limited number of commercial property types City-wide that would benefit from the new construction calculation as currently set out in the legislation. In general, these property types include office buildings, department stores and commercial condominiums. There are, in total, 10,082 properties or 24.9 percent in the commercial property class which have existing effective tax rates lower than the class average.

Appendix 2 shows similar information for the industrial property class. As can be seen, there are three types of industrial properties which currently have existing effective tax rates lower than the class average of 10.29 percent. These include distilleries, heavy industrial properties and industrial malls. In total, there are 1,742 properties or 29.6 percent in the industrial property class which have existing effective tax rates lower than the class average.

Appendix 3 shows the 50 properties in Toronto that are currently impacted by the legislated calculation. The report dated April 26, 1999 identified 54 properties based on preliminary analysis. However, four of the properties originally identified as new construction have been subsequently classified as improvements. The appendix shows that, in total, the 50 newly constructed properties will generate an additional $19.22 million, of which the City's share is $8.6 million.

Appendix 3 also shows the estimated tax changes that may occur if the methodology for calculating the frozen assessment for new construction is changed so that the frozen assessment is based on similar properties in the vicinity. Using the average effective tax rate for each property type constructed in its respective ward, the recommended change in the new construction methodology would result in a total tax savings for the 50 properties analyzed of $4.3 million in 1999, of which the City's share is $1.94 million. However, two of the newly constructed properties would likely be negatively impacted by a change to the legislated calculation due to the fact that the property types constructed (an office building and a department store) would have benefited under full CVA as the current existing effective tax rates are higher than the class average.

There was discussion at the Task Force meeting on May 3, 1999, that the Province should be requested to ensure that both methodologies (either the legislated calculation using the municipal factor or a reversion to the pre-CVA methodology) could be used by municipalities to calculate new CVA taxes for new construction. This would result in a "win-win" situation for every new development completed during the capping period, where taxes would be calculated using both methodologies, and the calculation that results in a lower tax impact for the taxpayer would be the method used.

While the objective of this approach would be to encourage new development, there would seem to be an issue with respect to equity for other existing properties and a change from an established policy of applying the same taxation rules to all properties in the same property class. For example, using the sample auto dealerships, if both methodologies were used to calculate the taxes for new construction, the auto dealership in Ward 11 would have taxes calculated using the current legislated municipal factor. A similar auto dealership in Ward 20 would have taxes calculated based on similar properties in the vicinity. An inequity is created between similar new properties in the same property class, due to the different tax calculations that would be used under a "win-win" scenario.

The best alternative to the legislated new construction calculation would be to calculate taxes in the same manner as that used prior to the reassessment and apply capping protection to that value. This method maintains historical levels of assessment while extending capping protection to the majority of commercial and industrial property types. In the short term, taxpayers considering new construction in the City will be able to estimate what the taxes will be on a new building, based on the historical tax levels in that area. From an economic development perspective, a "win-win" scenario would be the optimum result, but the Commissioner of Economic Development, Culture and Tourism advises that a change as is recommended in this report to pre-CVA methodologies is better than the current legislated situation.

As noted above, capping protection was recommended for 1998 through 2000 for the business property classes as an interim measure until full analysis of all the tax policy tools could be undertaken prior to the next reassessment. In addition, there were concerns regarding the valuation of commercial and industrial properties using 1996 as a base year for CVA.

The Province is currently in the process of updating the 1996 CVA values to a 1999 base. Prior to the 2001 taxation year, City Council will be considering various tax policy options with respect to the business property classes, and the decisions made on the use of these tools could dramatically affect the property taxes of all commercial and industrial properties in the City. It is therefore recommended that a "win-win" scenario not be used, as certain properties that may have benefited from a CVA on a 1996 base, may not see the same benefit when assessments are updated to a 1999 base.

In order to provide protection to most newly constructed properties for the time period remaining to the next reassessment, it is therefore recommended that the Province be requested to amend the legislation so that taxes for new construction on vacant or excess land are calculated based on frozen assessments determined using the methodology used under Provincial assessment policy prior to CVA implementation. This methodology is most defensible in that it maintains existing assessment levels for and results in the same tax treatment for all properties within the same class, regardless of when they were constructed.

New Construction - Multi-Residential Property Class:

It should be noted a municipal factor has also been prescribed for the multi-residential property class, and that the new construction calculation noted above for commercial and industrial properties would have also applied to newly constructed multi-residential properties had Council not opted for the new multi-residential property class. However, in October 1998, City Council passed a by-law opting to have the new multi-residential property class apply in the City of Toronto and in March 1999, established the tax ratio for the new multi-residential property class at 1.00 (i.e., properties in the new class would be taxed at the residential tax rate). Any newly constructed multi-residential properties will be included in the new multi-residential class. The new multi-residential property class is not subject to capping (or phase-in), and properties in this class are taxed at full CVA and benefit from being taxed at the residential tax rate. Therefore, the new construction calculation as it relates to the frozen assessment listing does not apply to newly construction multi-residential properties in Toronto.

Clarification re Tax Changes due to Improvements:

Section 447.10 of the Municipal Act also sets out how the frozen assessment is to be calculated where an increase in the CVA has occurred due to improvements, additions or renovations. Under this section, where the increase in CVA due to an improvement is less than 50 percent of the existing CVA, or a new building is added to the property and the increase in CVA is less than 50 percent of the existing CVA, the corresponding increase in the frozen realty assessment is calculated based on the existing ratio of old assessment to CVA for the property (i.e., using the property factor). Business assessment, if applicable, is calculated using the average business factor for the class.

The calculation of the frozen assessment using the property factor maintains the existing effective tax rate for the property. Where the existing effective tax rate for the property is higher than the class average, the property owner must pay higher taxes on the improvement than would have otherwise been the case under full CVA. Alternatively, where the existing effective tax rate for the property is lower than the class average, which is the case with the majority of properties in the commercial and industrial property classes, the calculation of the frozen assessment using the property factor continues the capping protection extended to the existing portion of the property.

As noted above, the property factor calculation does not benefit a property where the existing effective tax rate is higher than the class average. For example, the industrial portion of the Kodak plant on Eglinton Avenue West has a CVA of $28.73 million and an existing effective tax rate of 12.09 percent, while the average tax rate for the industrial class is 10.29 percent. If Kodak undertakes a major addition or improvement to the property, and the improvement adds less than 50 percent to the existing CVA, the legislated calculation would result in the improvement being be taxed at the existing effective tax rate for the property. However, if Kodak were to add a new building to the property, resulting in a CVA increase of more than $14.4 million or 50 percent, the entire property would subject to the new construction calculation using the municipal factor. From a property tax perspective, for this particular property, it would be more advantageous when contemplating expansion of existing facilities, that the construction of an additional structure be undertaken as opposed to adding to or improving the existing buildings on the site.

As noted above, the calculation for improvements is also legislated under the Municipal Act. Therefore, any change to the calculation of the frozen assessment with respect to improvements would require a change to the legislation. However, as 75 percent of the properties in the commercial and industrial property classes benefit from the current legislated calculation for improvements, no change to the calculation is recommended.

The Commissioner of Economic Development, Culture and Tourism has been consulted in the preparation of this report.

Conclusion:

The best alternative to the legislated new construction calculation would be to calculate taxes in the same manner as that used prior to the reassessment and apply capping protection to that value. This method maintains historical levels of assessment while extending capping protection to the majority of commercial and industrial property types, and in the short term, taxpayers considering new construction in the City will more easily be able to estimate what the taxes will be on a new building, based on the historical tax levels in that area.

Capping protection was recommended in 1998 for the business property classes as a short-term, interim measure due to concerns regarding the valuation of commercial and industrial properties and to provide time for comprehensive analysis of all the tax policy tools available. Prior to 2001, City Council will be making decisions on the use of these tools. These decisions, as well as the updating of CVA values to a 1999 base, could dramatically affect the property taxes for commercial and industrial properties in the City. It is therefore recommended that, for the short term, the Province be requested to amend the legislation so that taxes for new construction on vacant or excess land are calculated based on frozen assessments determined using the methodology used under Provincial assessment policy prior to CVA implementation.

The calculation of the frozen assessment for improvements uses the property factor and maintains the existing effective tax rate for the property. For the majority of properties in the commercial and industrial property classes, this calculation extends the capping protection to the improvement as is applied to the existing portion of the property. However, for 25 percent of commercial properties and 30 percent of industrial properties where the existing effective tax rate for the property is higher than the class average, the property owner will pay higher taxes on the improvement than would have otherwise been the case under full CVA. As a result, no change is recommended to the methodology for calculating improvements as the majority of the properties in the commercial and industrial property classes benefit from the current legislated calculation. The entire issue of taxation of commercial and industrial properties will be included as part of the Business Reference Group's comprehensive review.

Contact Names:

Lynne Ashton, 397-4203

Paul Wealleans, 397-4208

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appendix 3 cont'd....

(Report dated April 26, 1999, addressed to the

Assessment and Tax Policy Task Force from the

Chief Financial Officer and Treasurer)

Purpose:

This report provides options to ameliorate the impact of tax increases due to new construction on businesses in Toronto.

Financial Implications:

The total tax increase due to new construction for the 54 properties identified is $19.45 million in 1999, of which the City's share is $8.70 million. Any change to the methodology used for the calculation of taxes for new construction will result in the City not realizing the full amount of this potential additional revenue. This potential revenue loss is included in the report "Non-Program Expenditures - Tax Deficiencies" (dated April 24, 1999) which recommends an increase to the tax deficiencies budget for 1999.

Recommendations:

It is recommended that:

(1) the Province of Ontario be requested to amend the legislation so that taxes for new construction on vacant or excess land are calculated based on frozen assessments determined using the methodology used under Provincial assessment policy prior to CVA implementation; and

(2) where new construction occurs, OPAC provide both the frozen realty assessment and current value assessment on the assessment roll returned to the municipality.

Background:

At its meeting held on April 1, 1999, the Assessment and Tax Policy Task Force gave consideration to a report dated April 1, 1999 from the Chief Financial Officer and Treasurer (attached) regarding changes to be made to the frozen assessment listing, and how Current Value Assessment will impact on the calculation of taxes for properties in the capped property classes. The Task Force requested the Chief Financial Officer and Treasurer to submit a report on methods to ameliorate the impact of unfair taxes on new businesses in Toronto. This report also addresses the same request contained in a motion from Councillor McConnell and Councillor Adams adopted by Council at its meeting of March 4, 1999.

Comments:

Impact of New Construction under the "Old" Assessment System (i.e. Pre-CVA):

Prior to the implementation of Current Value Assessment, new construction and/or additions have always impacted a property's assessment and corresponding property taxes. Where new construction occurred, or when an addition was added to a property, the value of the new construction or addition would be added to the assessment roll.

The market value of the new construction or addition was determined by the Regional Assessment Office (now the Ontario Property Assessment Corporation, or "OPAC"), using standard appraisal methodologies. Since Metro Toronto was not on a full market value base, the market value was then factored back to reflect an equivalent 1940's based assessment. Partial assessments for large commercial and industrial construction projects which took several years to complete were provided at various stages of project completion through the supplementary assessment process and on year end assessment rolls. Supplementary assessments can be made for the current tax year, and the two preceding years. Municipalities normally issue supplementary tax bills payable in one instalment, upon receipt of a supplementary assessment roll. Due to the retroactivity of the supplementary assessment provisions in the Assessment Act, some taxpayers may have to pay up to three years worth of supplementary taxes at one time.

Impact of New Construction under Current Value Assessment:

Section 447(5) of the Municipal Act requires any municipality that implemented a cap for the business property classes to maintain a Frozen Assessment Listing (the Listing). The Listing for 1998 was based on the "assessment roll as most recently revised" and was received from the Province in May 1998.

The 1998 Listing reflected assessment information as of December 1997 for each property in the business property classes. The information included on the Listing for each property was the total 1997 assessment, commercial assessment, business assessment, vacant commercial assessment and non-business assessment. For the 1999 and 2000 tax years, the Act requires that the Frozen Assessment Listing to be maintained and updated to reflect changes in CVA assessment as shown on the annual assessment roll.

In general, the Municipal Act requires changes to the frozen listing under four major categories: (1) new construction; (2) improvements; (3) property class changes; and (4) year end changes due to vacancies. The different methodologies and calculations that are required for these scenarios are set out in my report dated April 1, 1999 (attached). This report provides options for changes to the frozen listing for new construction only.

The Municipal Act sets out how the frozen assessment is to be recalculated where the CVA of a property increases due to new construction. The legislated calculation for new construction, using the municipal factor to calculate the new frozen realty assessment, results in the new taxes being nearly equivalent to full CVA.

Using the municipal factor to calculate the new frozen assessment moves the effective tax rate for new construction to the municipal average for that property class. The average effective tax rate for the all properties in the commercial property class is 7.5 percent. Therefore, properties where the existing effective tax rate is less than 7.5 percent are severely impacted, while those with effective tax rates of more than 7.5 percent benefit from the municipal factor calculation for new construction. The CVA impact study showed that the existing effective tax rates for office buildings, medical/dental, department stores were higher than the 7.5 percent commercial average. These properties would benefit from the new construction calculation. However, the impact study also showed that the effective tax rate on vacant land was 1.58 percent, significantly less than the 7.5 percent average. Therefore, new construction on vacant land is heavily impacted by the municipal factor calculation.

It is important to note that, even without the implementation of CVA, the construction of a new building on previously on vacant land would, and should, result in a significant increase in tax burden. The difference is that using the municipal factor to calculate the taxes for new construction results in the taxes being almost equivalent to full CVA. In the City of Toronto, full CVA would have resulted in large increases for the majority of properties in the commercial and industrial property classes had capping not been adopted. However, there are some property types that would actually benefit from the new construction calculation. These properties include office buildings, which a group, would have experienced large tax decreases under full CVA.

Alternative Calculations for New Construction:

The Municipal Act sets out how the frozen assessment is to be recalculated where the CVA of a property increases due to new construction. The legislated calculation for new construction requires municipalities to use the municipal factor to calculate the new frozen realty assessment, resulting in the new taxes being nearly equivalent to the full CVA. Any changes to the calculation for new construction would require a change in provincial legislation.

Alternative calculations for the frozen realty and business assessment for new construction could include:

(1) New Frozen Realty Assessment:

(a) Neighbourhood Factor: An alternative to the current legislated calculation would be to use the "neighbourhood factor" to calculate the new frozen realty assessment. The neighbourhood factor would represent the average ratio of old assessment to Current Value for all commercial or industrial properties in the area. Neighbourhoods would need to be defined by OPAC.

(b) Property Type Factor: Another factor that could be used to calculate the new frozen realty assessment for new construction is the "property type factor". The property type factor would represent the average ratio of old assessment to Current Value for similar commercial or industrial properties across the municipality. Property types would be defined based on the predominant categories of commercial/industrial uses and could include property types such as office buildings, hotels, retail with residential, etc.

(c) Maintain Existing Cap on Vacant Land: The majority of the tax increase for new construction relates to the minimal assessed value previously assigned to vacant land. Another alternative to recalculating the frozen realty assessment for the entire property would be to maintain the capped taxes relating to the vacant land value and use the municipal factor to calculate the new frozen realty assessment on the new building/construction.

(d) Pre-CVA Method: This calculation blends the use of both the neighbourhood factor and property type factor described above. The frozen realty assessment for new construction would be based on similar properties in the vicinity and parallels how the realty assessment would have been calculated on the property if reassessment had not occurred.

The pros and cons of using the above alternatives to calculate the new frozen realty assessment for new construction are summarized below:

Alternative Calculation	Pros	Cons
Neighbourhood Factor	- May result in less severe impact if current neighbourhood factor is less than municipal factor	- Neighbourhood needs to be defined by OPAC - May result in more severe impact for some properties - Maintains existing inequities between neighbourhoods post-amalgamation - Limits additional tax revenues resulting from assessment growth due to new construction
Property Type Factor	- May result in less severe impact if property type factor is less than municipal factor	- Property types not currently defined - May result in more severe impact if located in neighbourhood where similar properties were previously under-assessed. - May result in inequities between similar properties in the same neighbourhood as frozen assessment would be calculated based on municipal average for that property type. - Limits additional tax revenues resulting from assessment growth due to new construction
Maintain existing cap on vacant land (i.e. pre-construction CVA) and use "Municipal Factor" to calculate the new frozen realty assessment due to new construction	- Maintains cap originally started in 1998 on vacant land - Results in partial CVA taxation on new construction (less vacant land portion)	- Separate entries required for land and building (not currently available) - New CVA attributable to new structure would have to include increase to the land value due to improvement - May result in minor savings for taxpayer
Pre-CVA method - Calculate revised frozen assessment based on similar properties in the vicinity	- Re-creates what the realty taxes would have been on the property under the old (pre-CVA) assessment system - May result in less severe impact if vicinity factor used is less than municipal factor - Tax burden of pre-CVA value retained - Extends capping protection to newly constructed properties where CVA results in large tax increases (most commercial properties other than office, medical/dental and dept. stores)	- Maintains existing inequities between neighbourhoods - Limits additional tax revenues resulting from assessment growth due to new construction - Detrimental to new construction of properties that benefit from CVA (office buildings, medical/dental offices, department stores) - No movement toward CVA

(2) New Frozen Business Assessment:

The legislated calculation for the new construction includes, where the property is occupied, a calculation of an equivalent frozen business assessment using the average business rate factor. For the City of Toronto, the average business rate factors are 42.6654 percent for the commercial property class and 56.008 percent for the industrial property class. These factors represent the average ratio of business assessment to commercial realty assessment in that property class.

An alternative to using the average business rate factor, would be to create a new frozen business assessment based on the historical business percentages that existed prior to reassessment. These business percentages ranged from 25 percent (for parking lots) to 30 percent for most small retailers to 75 percent for banks. These business percentages were established in the early 1900's and over time, became arbitrary and not directly related to the income potential or ability to pay by an individual business. In addition, reference to these percentages has been deleted from the Assessment Act, and re-use of these percentages would require amendments to the legislation as well as business occupancy tracking to be done by OPAC.

It is recommended that the equivalent frozen business assessment for newly constructed commercial and industrial properties be calculated using the average business rate factor for that property class. This calculation is consistent with the calculation used for other new commercial/industrial occupancies. One drawback to using the average business rate factor is that some retailers who prior to the reassessment may have had their business assessment calculated using the 30 percent business percentage, are negatively impacted by use of an average business rate factor of 42.6654 percent.

The Province would be required to change the legislation to allow municipalities to change the calculation used for new construction. In addition, in every case, the alternative factor would extend inequities that existed within the commercial and/or industrial property class to the properties post CVA implementation and may result in a more severe impact for these properties when the capping provisions expire. While the long term goal of the Province is full implementation of CVA, it is our understanding the Province is contemplating changes to the new construction calculation.

Set out below are the estimated taxes that would result from using any of the alternative calculations described above for a sample property where new construction has occurred. The example is based on a newly constructed property valued at $600,000.

Maintain Cap Pre-CVA

on Existing Method -

Municipal Vacant Land - Similar

Factor Use Municipal Properties

(Legislated Neighbour- Property Type Factor on in the Vicinity

Method) hood Factor Factor CVA Increase (Recommended)

Factor 9.82% 10.22% 6.76% 9.82% 7.00%

1997 Adjusted Taxes -

Vacant Land $4,030 $4,030 $4,030 $4,030 $4,033

1997 Revised Taxes -

New Construction $46,800 $48,716 $32,223 $46,810 $33,367

Increase due to New

Construction $42,770 $45,465 $28,676 $38,220 $29, 334

Cap on Pre-CVA Taxes

(1999 = 4.8%) $2,246 $2,338 $1,547 $2,247 $1,602

1999 Taxes (with cap) $49,046 $51,055 $33,770 $49,057 $34,969

* Factor used to calculate taxes prior to reassessment based on similar properties in the vicinity (estimated).

** Post CVA calculations assume new frozen business assessment calculated using average business rate of 42.6654 percent.

The above table shows that new construction results in higher taxation under the current legislated requirements. The alternatives presented show that, if the intent is to try to reduce the tax burden on new construction to a level comparable to pre-CVA, the best alternative would be to calculate the taxes in a manner similar to that used prior to 1998 and apply the cap to that value. This method may be the most defensible in that it relates the tax calculation to historical assessment levels and extends capping protection to most newly constructed properties based on that value. It could also be defended in that tax burden increases for the taxpayer would be similar to those resulting under the old assessment system. It would therefore not be CVA that is causing the tax increase. However, under this calculation, constuction of certain properties, such as office buildings or other properties that benefit under CVA, would be negatively impacted. In addition, there would be little movement towards full CVA and potential new tax revenue resulting from new assessment growth would be limited.

Conclusion:

The amendments to the Municpal Act legislation relating to the maintenance of the Frozen Listing and capped property classes has resulted in a significant tax impact for new construction on vacant land. Although other changes such as improvements, property class changes and year end changes are impacted under the new CVA tax calculations, none are impacted to the degree of new construction.

If the intent is to assist taxpayers who have or are building new construction during the capping period, an alternative to the existing legislated tax calculation for new construction is needed.

The best alternative would be to calculate the taxes in a manner similar to that used prior to 1998 and apply the cap to that value. This method may be the most defensible in that it relates the tax calculation to historical assessed levels while extending capping protection to most newly constructed properties. However, construction of certain property types, such as office buildings that would benefit under CVA, would be negatively impacted by a change in the new construction calculation.

The Province should be requested to amend legislation to base the tax calculation for new construction on vacant land on the methodology that existed prior to January 1, 1998 (i.e., the date CVA was implemented).

Contact Names:

Lynne Ashton, 397-4203

Paul Wealleans, 397-4208

Giuliana Carbone, 392-8025

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(Report dated April 1, 1999, addressed to the

Assessment and Tax Policy Task Force from the

Chief Financial Officer and Treasurer.)

Purpose:

This report provides information regarding the changes to be made to the frozen assessment listing as required by the Municipal Act. Changes in Current Value Assessment between 1998 and 1999 or between 1999 and 2000, will impact on how taxes will be calculated for some individual properties in the capped property classes.

Financial Implications:

There are no financial implications associated with this report.

Recommendation:

It is recommended that, if the Province/OPAC is not prepared to provide the City of Toronto with a "fresh" updated frozen assessment listing by May 15, 1999, that the Province commit to financial reimbursement to the City of all costs incurred in maintaining the listing.

Background:

At its meeting of July 21 and 23, 1998, City Council adopted a capping program for the multi-residential, commercial and industrial property classes. As a result, for 1998, 1999 and 2000, the City must maintain a Frozen Assessment Listing.

Section 447(5) of the Municipal Act requires any municipality that implemented a cap for the business property classes to maintain a Frozen Assessment Listing (the Listing). The Listing for 1998 was based on the "assessment roll as most recently revised" and was received from the Province in May 1998.

The 1998 Listing reflected assessment information as of December 1997 for each property in the business property classes. The information included on the Listing for each property was the total 1997 assessment, commercial assessment, business assessment, vacant commercial assessment and non-business assessment. For the 1999 and 2000 tax years, the Act requires that the Frozen Assessment Listing to be maintained and updated to reflect changes in CVA assessment as shown on the annual assessment roll.

In general, the Municipal Act requires changes to the frozen listing under four major categories: (1) new construction; (2) improvements; (3) property class changes; and (4) year end changes due to vacancies. The different methodologies and calculations that are required for the various scenarios noted above are set out in this report.

Key Terms:

There are four key factors used to calculate changes to the frozen assessment listing. They are:

(1) Municipal Factor: Prescribed by Provincial regulation, the municipal factor is used to determine the equivalent 1997 realty assessment for new construction on vacant land. The municipal factor is also used in the calculation for newly constructed buildings on previously improved land where the increase in CVA assessment attributable to the new building is greater than 50 percent of the total CVA assessment of the property prior to construction. The municipal factors for Toronto are:

Property Class Factor

Multi-residential 0.100059

Commercial 0.098179

Industrial 0.140327

The municipal factor represents the City-wide ratio of old realty assessment to Current Value Assessment for that property class.

(2) Property Factor: Where the CVA assessment has increased due to the alteration, enlargement or improvement of an existing building, the frozen assessment is increased using the property factor. The calculation is property-specific, with the factor being the ratio of old realty assessment for that property to its Current Value, which is calculated by dividing the frozen realty assessment by the property's CVA.

(3) Average Business Factor: The average business factor is used to calculate the equivalent 1997 business assessment that would be applicable to occupied commercial or industrial property. The average business factors for Toronto are 42.6654 percent for the commercial property class and 56.008 percent for the industrial property class. The average business factors represent the average ratio of business assessment to commercial realty assessment in that property class.

(4) Property Business Factor: The property business factor is to calculate the equivalent 1997 business assessment that should be removed from the frozen assessment listing where an increase in vacancies occurs. The property business factor represents the ratio of business assessment to commercial realty assessment for an individual property.

Changes in Assessment - Pre CVA:

The changes to the frozen assessment listing due to new construction, additions, and changes in vacancies are similar to the methodologies used to calculate assessment changes prior to the implementation of Current Value Assessment.

For example, where new construction occurred, or when an addition was added to a property, the value of the new construction or addition would be added to the assessment roll. The market value of the new construction or addition was determined by the Regional Assessment Office (now the Ontario Property Assessment Corporation, or "OPAC") using standard appraisal methodologies. Since Metro Toronto was not on a full market value base, the market value was then factored back to reflect an equivalent 1940's based assessment.

The calculation for changes in vacancy on the frozen listing is also similar to the calculation that would have occurred prior to CVA. In 1997 and prior years, the Regional Assessment Office would assess a new commercial tenant and returning the new occupancy on the following year's assessment roll. Where the unit was previously vacant, the realty assessment would be changed to commercial and the appropriate business assessment would be added.

Prior to 1998, the Regional Assessment Office would track business occupancy changes and issue supplementary assessments for new commercial occupancies, retroactive to the day they moved in. Municipalities would calculate the taxes based on the effective date of the supplementary assessment, and tax the new commercial tenant directly for business taxes. The property owner would also receive a supplementary tax bill, for the change in taxes due to the change in realty assessment, from commercial to residential.

There are three differences in the calculation for post CVA changes in vacancies. First, instead of using the applicable business percentages as previously set out in the Assessment Act, the equivalent business assessment is determined using the average business rate of 42.6654 percent for commercial and 56.008 percent for industrial.

Second, individual business occupancies are no longer tracked. Under Ontario Regulation No. 282/98 made under Section 22 of the Assessment Act, the property owner must apply to the Assessment Office by November 1st of each year to have their property, or a portion of their property, included in the vacant units/excess land subclass. If no application is received, the property is returned on the assessment roll as fully occupied for taxation in the following year.

Third, new commercial tenants that move in part way through the year are no longer assessed through the supplementary assessment process. A property is assessed as occupied or vacant for the entire tax year with no in-year changes due to supplementary assessments or tax adjustments relating to vacancies. This process provides a benefit to property owners that have tenants move in through the year to occupy previously vacant space. Conversely, property owners that have commercial tenants move out mid-way through the year are at a disadvantage as they will have been assessed and taxed as occupied for the full year.

Property Change Categories:

Changes to the frozen assessment listing are done in situations where a property's physical attributes, character or use has changed, and this change has resulted in a change in property's CVA assessment. These changes include construction of new buildings, or the addition or renovation to an existing building. The purpose of the changes to the frozen assessment listing are to create a "new" or notional 1997 assessment from which to calculate "new" 1997 taxes that reflect the changes made to the property. The "new" 1997 taxes are not the actual taxes levied, but are calculated to reflect what the taxes would have been if the new building or addition had been there in 1997.

A description of the frozen assessment calculations and the types of changes included in the four general categories are set out below. Examples of specific calculations are attached as Appendices 2 through 6 of this report.

Category 1: New Construction

(See Appendix 2 for sample calculation)

(1) New construction relates to the erection of a new separate structure on a property.

(2) For new construction on vacant land, the municipal factor is used to calculate the frozen realty assessment.

(3) If the new construction is on a property with an existing building and the CVA of new construction is less than 50 percent of the existing CVA, the property factor is used to calculate the frozen realty assessment.

(4) If the new construction is on a property with an existing building and the CVA of new construction greater than 50 percent of the existing CVA, the municipal factor is used and the frozen assessment for the entire property is recalculated.

(5) Under each new construction scenario, the average business factor is used to calculate the applicable frozen business assessment.

Category 2: Improvements/Additions/Renovations

(See Appendix 3 for sample calculation)

(1) Improvements or additions must be attached to an existing building on the property.

(2) The property factor is used to calculate the frozen realty assessment. The applicable business assessment is calculated using the average business factor for the class.

Category 3: Property Class Changes

(See Appendix 4 for sample calculation)

(1) The municipal factor is used to calculate frozen assessment for a change from an uncapped property class to a capped property class (i.e., property class changed from residential to multi-residentil, commercial or industrial). The applicable business assessment is calculated using the average business factor for the class.

(2) If a property changes from the commercial to the industrial class, no adjustment is made to the assessment on the frozen listing. However, the CVA tax change, and resulting cap or clawback must be recalculated based on the tax rate in the new class.

(3) Changes in property class, from a capped class to an uncapped class (i.e., commercial to residential) results in the property being taxed at full CVA with no phase-in.

Category 4: Vacancy Changes

(See Appendix 5 and 6 for sample calculation)

(1) Section 447.12 of the Municipal Act directs the recalculation of vacancy changes.

(2) For a decrease in vacancies, change frozen realty assessment from residential to commercial. The applicable frozen business assessment is added using the average business factor.

(3) For an increase in vacancies, change frozen realty assessment from commercial to residential. Delete business assessment using property business factor.

Number of Properties Affected:

Based on preliminary analysis of the 1999 assessment tape, the estimated the number of properties in the four categories of assessment changes noted above are:

Estimated Number

Category of Properties

New Construction 54

Improvements not known

Class Changes

- Capped to uncapped 91

- Capped to capped 212

Vacancy Changes

- Vacancy Decreases 3,752

- Vacancy Increase 233

Assessment Increases - Reason not known 9,323

(may include improvements or other

categories)

Total Number of Properties Affected; 13,665

As noted under "Issues", there is currently insufficient information on the assessment roll to accurately identify why an assessment has changed from the previous year.

Impact of New Construction Calculation:

The Municipal Act sets out how the frozen assessment is to be recalculated where the CVA of a property increases due to new construction. The legislated calculation for new construction, using the municipal factor to calculate the new frozen realty assessment, results in the new taxes being nearly equivalent to the full CVA.

Using the municipal factor to calculate the new frozen assessment moves the effective tax rate for new construction to the municipal average for that property class. The average effective tax rate for the all properties in the commercial property class is 7.5 percent. Therefore, properties where the existing effective tax rate is less than 7.5 percent are severely impacted, while those with effective tax rates of more than 7.5 percent benefit from the municipal factor calculation for new construction. The CVA impact study showed that the existing effective tax rates for office buildings, medical/dental, department stores were higher than the 7.5 percent commercial average. These properties would benefit from the new construction calculation. However, the impact study also showed that the effective tax rate on vacant land was 1.58 percent, significantly less than the 7.5 percent average. Therefore, new construction on vacant land is severely impacted by the municipal factor calculation. Preliminary analysis of the 1999 assessment tape shows there are 54 properties City-wide that can be identified as new construction. The average existing effective tax rate for these properties is 1.596 percent.

As noted above, prior to the reassessment, the market value of the new construction or addition was determined by the Regional Assessment Office and then factored back to reflect an equivalent 1940's based assessment before it was added to the assessment roll. Set out below are the estimated taxes that would have resulted from new construction for a sample property. The table shows the estimated taxes that would have been levied if there had been no reassessment, compared to the estimated taxes due to new construction using the legislated calculation.

The table shows for the sample property, that the calculation for new construction under the capping legislation results in a higher tax burden than may have occurred under the old assessment system. However, a significant tax increase would have been experienced due to the new construction, whether there had been a reassessment or not. It demonstrates that under the "old" system, taxes would have increased by $31,696 while CVA causes the increase to be $43,528, a difference of $11,832 or 33.12 percent.

Issues:

The information contained on the year-end assessment tape is not sufficient for municipalities to identify the reasons why a CVA assessment has changed for a property. In particular, where a CVA assessment has increased, no data is available on the tape to identify whether the CVA increase is due to new construction, or due to an addition or alteration. The calculations as set out in the Municipal Act require different factors to be used in calculating the equivalent frozen assessment. The use of municipal factor versus the property factor can dramatically affect the resulting tax impact for an individual property.

It should be noted that changes to the frozen assessment listing are only done in situations where a property's physical attributes, character or use has changed, and this change has resulted in a change in CVA assessment. However, in some circumstances, the CVA assessment may also be changed by OPAC to correct an error in the CVA value shown on the previous year's assessment roll. In these circumstances, where no physical change has occurred to the property, no change is to be made to the frozen assessment. However, as noted above, municipalities do not currently have sufficient information on the assessment roll to identify these properties, and must rely on OPAC for information on which properties should have their frozen assessment changed, and which should not.

One solution to this problem would be for OPAC to identify on the assessment tape, the reason for the change to the property's CVA. Better coding on the assessment tape is needed to identify the application of specific section of the capping legislation (improvement, new construction, etc) and how the frozen assessment should be calculated. While this data is not available on the assessment roll for 1999, staff have had discussions with OPAC in Toronto and have requested that these codes be defined in conjunction with municipal staff, for inclusion on the assessment tape for taxation in 2000.

As noted above, O. Reg 282/98 requires landlords to apply annually to OPAC to ensure their property, or a portion of their property, is included in the vacant units/excess land subclass. If no application is received, the property is returned on the assessment roll as fully occupied for taxation in the following year.

The original deadline for vacancy applications was November 1, 1998 for changes relating to the 1999 tax year. However, on January 14, 1999, the Minister of Finance extended the deadline for vacancy applications to February 28, 1999. As a result, municipalities do not currently have accurate CVA totals that reflect the results of these applications. For 1999, the amount of decreases that will be allowed in the commercial and industrial property classes cannot be calculated without having these changes reflected. Initial discussions with OPAC have indicated that they will treat vacancy changes as "one offs" under the appeal process, which may delay the claw back calculation and/or cause individual property owners a delay in obtaining correct records and a correct tax bill.

The lack of business occupancy updates presents another problem for municipalities when it comes to maintaining an accurate frozen assessment listing. Any changes due to successful assessment or tax appeals that affect the 1997 tax year, must also be reflected on the frozen listing and all taxes levied subsequent to 1997 must be recalculated. Situations will occur where a tax appeal reduces the 1997 taxes due to a business vacancy and an omitted assessment adds a new business tenant. For many properties, it will be difficult, without the assistance of OPAC, to determine whether the tax adjustment (vacancy) or the omitted assessment (new occupancy) should be reflected on the Listing. A similar situation arises when an assessment appeal reduces the 1997 business percentage and/or business assessment.

Due to the issues noted above, it is clear that significant input is required from OPAC records to accurately reflect assessment changes and maintain the Frozen Assessment Listing. It is therefore recommended that the Province/OPAC be requested to provide the City of Toronto with a "new" updated frozen assessment listing for 1999 and 2000. Since the City of Toronto currently pays almost $25 million for assessment services provided by OPAC, if the Province/OPAC is not prepared to provide the City with an updated frozen listing in time to issue the 1999 final tax bills (i.e., by May 15th), the Province should reimburse all of the costs incurred by the City in maintaining the listing.

Conclusion:

Since Bill 79 requires all other Ontario municipalities to implement some sort of tax relief mechanism (capping at 10 percent, 5 percent and 5 percent for 1998 - 2000), the ability for most municipalities to maintain a Frozen Assessment Listing, except for the very large ones, is limited and requires Provincial assistance in the form of either the Province or OPAC maintaining the Listing.

Since the frozen listing maintenance requires access to the reasons why a CVA assessment has changed or updated, OPAC is in a better position to maintain the Listing as they have the individual property data necessary to ensure an accurate Listing. This transfer of responsibility is particularly important in light of the fact that all other Ontario municipalities are required to maintain the Listing, likely without proper resourcing and access to information regarding assessment updates.

In his letter of March 23, 1999, to all municipalities, the Minister of Finance indicated that the Province will support the centralized management of the frozen assessment listing for 1998, 1999 and 2000. Due to serious concerns of municipalities across Ontario regarding the issues surrounding the maintenance of the frozen listing, a municipal liaison group has been established, with representation from the Ministry of Finance, Municipal Affairs and Housing, AMO, MFOA, AMCTO, AMTCO, OPAC, as well as staff from the City of Toronto. An initial meeting took place on March 29, 1999, and additional meetings are scheduled over the next two weeks in order to clarify the Province's plans to assist municipalities in the frozen listing maintenance.

A further report will be submitted to the next meeting of the Task Force, to update the Task Force on any further developments with respect to the centralized management of the frozen listing.

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Copies of the following Appendices and a Sample Calculation Table were forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and copies thereof are also on file in the office of the City Clerk:

- Appendix 1 - Summary of Year-End Changes by Type;

- Appendix 2 - Sample Calculation - New Construction on Vacant Land (CVA for new construction is greater than 50 percent of existing CVA);

- Appendix 3 - Sample Calculation - New Construction on Excess Land (CVA for new construction is less than 50 percent of existing CVA);

- Appendix 4 - Sample Calculation - Change in Property Class from Commercial to Industrial

- Appendix 5 - Sample Calculation - Vacancy Increase;

- Appendix 6 - Sample Calculation - Vacancy Decrease; and

- Table titled Sample Calculation: Taxes for New Construction - Recommended Method.

(Copies of the written submissions appended to the foregoing report were forwarded to all Members of Council with the July 20, 1999 of the Policy and Finance Committee and copies thereof are also on file in the office of the City Clerk.)

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following communication (July 26, 1999) from Councillor Jack Layton:

Recommendation:

That Policy and Finance Committee Report No. 4, Clause No. 9 be amended by adding the following:

The Chief Financial Officer and Treasurer be requested to report to the next meeting of the Assessment and Tax Policy Task Force in September on the financial implications of a property class change from an uncapped class to a capped class, such as Residential to multi-residential, commercial or industrial.

Background:

City Council has before it a report recommending that the Province be requested to amend legislation so that taxes for new construction on vacant or excess land be calculated based on frozen assessments determined using the methodology used under the provincial assessment policy prior to CVA implementation.

There are a number of properties that have changed property classes, and for those that changed, especially from an uncapped class to a capped class (eg. Residential to multi-residential, commercial, or industrial) the properties are taxed essentially at full CVA.

This recommendation, which has the concurrence of the Treasurer, asks the CFO to report to the next meeting of the Assessment and Tax Policy Task Force in September on the financial implications of these property class changes.)

20

Commercial Establishments in Hospitals

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the recommendation of the Assessment and Tax Policy Task Force embodied in the following communication (June 28, 1999) from the City Clerk:

Recommendation:

The Assessment and Tax Policy Task Force recommends the adoption of the report (June 24, 1999) from the Chief Financial Officer and Treasurer.

Background:

The Assessment and Tax Policy Task Force, on June 28, 1999, had before it a report (June 24, 1999) from the Chief Financial Officer and Treasurer, respecting Commercial Establishments in Hospitals and recommending that:

"(1) OPAC be requested to review the assessment files of all public hospitals to ensure that any ratable business operating on the property of these public institutions is being assessed for taxation; and

(2) the Province be requested to amend paragraph 6 of subsection 3(1) of the Assessment Act to clarify that all businesses, regardless of ownership, carried on within a public hospital which has no connection to patient care, are assessed as taxable."

The Task Force's recommendation is noted above.

(Report dated June 24, 1999, addressed to the

Assessment and Tax Policy Task Force from

the Chief Financial Officer and Treasurer)

Purpose:

To provide information to the Task Force regarding the tax liabilities of commercial establishments operating in hospitals.

Financial Implications:

There are no financial implications as long as these establishments are assessed by the Ontario Property Assessment Corporation (OPAC) as taxable commercial operations rather than as part of a hospital that pays a "heads and beds" levy instead of a property tax.

Recommendations:

It is recommended:

(1) That OPAC be requested to review the assessment files of all public hospitals to ensure that any ratable business operating on the property of these public institutions is being assessed for taxation; and

(2) That the Province be requested to amend paragraph 6 of subsection 3 (1) of the Assessment Act to clarify that all businesses, regardless of ownership, carried on within a public hospital which have no connection to patient care, are assessed as taxable.

Background:

At its meeting of May 3, 1999, the Assessment and Tax Policy Task Force adopted the request contained in the April 6, 1999 communication from Councillor Rae regarding commercial establishments in hospitals. The communication further stated that the City may be losing money in property taxes on these businesses.

Comments:

Paragraph 6 of subsection 3 (1) of the Assessment Act exempts land used and occupied by a public hospital that receives provincial aid under the Public Hospital Act but not any portion of the land occupied by a tenant of the hospital. The council of a municipality may levy an annual amount upon public hospitals not exceeding the amount of $75 for each provincially rated bed in the public hospitals as determined by the Minister of Health. The $75 rate is set by Ontario Regulation 384/98. Under the above paragraph, stores owned by the hospital and operated by a woman's auxiliary would also be exempted from taxation.

According to OPAC and within the interpretation of this subsection, commercial establishments such as Star City, Starbucks, Shoppers Drug Mart, etc. who are tenants of a hospital would not be exempted. They would be classified and assessed as commercial with tax bills being issued to the hospitals where these establishments are located and there would be no loss in property taxes.

A review of the assessment file for Sick Children's Hospital, as described in the communication from Councillor Rae, does show that the retail facilities in the hospital are taxable, and therefore, there is tax revenue generated.

Appendix A lists all public hospitals in the City including those containing ratable businesses. As shown by the highlighted entries, currently there are three institutions which have businesses operating on their property that are on the assessment roll. There may be other hospitals that have taxable commercial operations functioning from within their premises that are not on the assessment roll. As it is the responsibility of OPAC to ensure that such retail facilities in hospitals are assessed and liable for taxation, it is recommended that OPAC review each public hospital to ensure that any businesses that should be liable for taxation are included on the assessment roll.

The area of contention would be those franchises wholly owned and managed by the hospital. Within the meaning of the above subsection, these wholly owned and operated franchises by a public hospital may qualify to be exempted as land used and occupied by a public hospital. This would grant a tax advantage to the hospital franchises that would be in direct competition with similar franchises located in a taxable environment or similar franchises located as tenants of a public hospital. It is unlikely that when this paragraph was amended, the Provincial policy makers had envisioned such a business arrangement that would handicap franchise businesses not owned and operated by a public hospital.

Conclusion:

There are businesses operating in a public hospital that are assessed as taxable entities. To ensure that franchises owned and operated by a public hospital do not qualify for tax exemption, the Province should be requested to amend paragraph 6 of subsection 3(1) of the Assessment Act to ensure that any businesses being carried on within a public hospital, not necessary in the provision of health care, be taxable no matter of the ownership or operations.

OPAC should be requested to review the assessment files of these institutions to ensure that all ratable businesses are being appropriately taxed.

Contact:

P. Wealleans 397-4208

B. Wong 392-9148

Insert Table/Map No. 1

appendix a

21

Amalgamation of Reportable Diseases

Information System (RDIS)

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the following report (July 7, 1999) from the Medical Officer of Health:

Purpose:

To secure one-time funds in 1999 to amalgamate Reportable Diseases Information System (RDIS) databases.

Source of Funds:

The amalgamation of RDIS Database Project will cost approximately $250,000.00 to implement. These funds can be made available from the balance remaining in the Vaccine Preventable Diseases (VPD) Program Redesign Project. All the essential components of the VPD Project will be completed in 1999. Provincial cost-sharing will be sought for this initiative.

Recommendations:

It is recommended that:

(1) the six existing Reportable Diseases Information System (RDIS) databases be amalgamated; and

(2) the funding for this project amounting to $250,000.00 be reallocated from the VPD Redesign Project which was approved as part of the 1998 Capital Budget - Transitions Projects.

Background:

The Reportable Diseases Information System (RDIS) is a provincially-mandated system which supports the delivery of the Communicable Disease Control Program. Under the Health Protection and Promotion Act each health unit is required to investigate all reports of over 65 designated diseases from physicians, laboratories, hospitals and other institutions. This must be done in a timely manner in order to prevent and control morbidity and mortality. Toronto Public Health responds to approximately 25,000 disease reports each year. These include such high risk diseases as bacterial meningitis, Group A Strep (flesh-eating disease), Tuberculosis and AIDS as well as outbreaks in schools and other settings.

The RDIS program is used to:

(i) support the case management process;

(ii) enable analysis of disease incidence to identify trends and emerging issues; and

(iii) electronically transmit information to the Ministry of Health as legally required.

Comments:

Currently the Communicable Disease Control Program is offered in multiple offices across the city, using six separate RDIS databases - one for each of the former local municipalities. These systems are unable to communicate with each other, posing severe operational issues and inefficiencies in program delivery. These include:

(1) it is difficult to have a city-wide picture of communicable diseases to enable early identification of trends and potential outbreaks;

(2) with a highly transient population there are likely duplicate or multiple records for an individual on different RDIS databases. High-risk individuals with multiple infections or ongoing reinfections are difficult to identify and track;

(3) unnecessary delay in response to a disease notification due to manual transfer of information from the office receiving the notification to the office where the client resides;

(4) for clients with sexually transmitted diseases (comprising about half of all reports), there is significant duplication of data entry. This occurs when the physician and client addresses are in different databases;

(5) it is difficult to do effective program planning and evaluation on a city-wide basis;

(6) six RDIS databases must be maintained, containing duplicate information on physicians, institutions, etc. This is inefficient and costly over the long term;

(7) cumbersome and time consuming to implement and maintain standardized forms and letters on six separate systems;

(8) inability to access information across the city, which hampers efficient workload distribution; and

(9) response to Freedom of Information requests requires checking six databases.

The capital investment required to amalgamate the six RDIS databases is approximately $250,000.00 This is primarily salaries for technical support assistance to standardize RDIS tables and supporting databases, merge the client databases, eliminate duplicate records and provide staff training and support. The database amalgamation will be done in conjunction with Y2K work, in order to maximize the efficient use of the existing infrastructure and skilled staff. The Ministry of Health has covered approximately $150,000.00 of the cost to date (including one server and replacement of PC's) and will provide limited in-kind programming and technical support in the amalgamation. Given that the VPD project funds are 100 percent municipal and that the Ministry of Health has agreed to cost-share Public Health programs on a 50/50 basis, the Medical Officer of Health will seek Ministry cost-sharing for this project.

In the meantime it is critical that the amalgamation of RDIS databases proceed. The required funds are available in the VPD Redesign Project. As the VPD project completes its first year of redesign, savings have been achieved through:

(a) utilization of existing technology for the Call Centre;

(b) the Ministry of Health undertaking development of a provincial Physician Vaccine Monitoring & Inspection System; and

(c) deferral of development of a Vaccine & Drug Ordering System (this will be considered in conjunction with redesign of the Communicable Disease Surveillance Unit in future).

Conclusion:

Capital investment in the amalgamation of the six RDIS databases is critical to the delivery of the Communicable Disease Control Program. Since significant savings have been achieved in the implementation of the VPD Redesign Project, the required funds should be transferred to enable implementation of RDIS amalgamation in the year 1999.

Due to time constraints this report will be routed in parallel to the Budget Sub-committee of the Board of Health for consideration prior to the meeting of the Policy & Finance Committee on July 20, 1999.

Contact Name:

Dr. Barbara Yaffe, Director, Communicable Disease Control & Associate Medical Officer of Health,

Tel: 392-7405; Fax: 392-0713.

22

Toronto Transit Commission (TTC) - Provincial/Municipal

Funding Trends and Longer Term Funding Strategies

(City Council on July 27, 28, 29 and 30, 1999, struck out and referred this Clause back to the Toronto Transit Commission for further consideration.)

The Policy and Finance Committee recommends the adoption of the following joint report (July 7, 1999) from the Chief Administrative Officer and the Chief Financial Officer and Treasurer:

Purpose:

This report provides an overview of the provincial and municipal funding trends with respect to the TTC and highlights the various initiatives underway to develop a stable funding base for the TTC. This report also provides a recommendation on the allocation of any proceeds (between operating and capital requirements) from gasoline taxes presently collected by the federal and provincial governments, if and when such taxes become available for public transit.

Funding Sources, Financial Implications and Impact Statement:

The City's 1999 approved operating budget for the TTC is $760.720 million gross and $188.128 million net, and consists of the following services:

Service Gross Budget Net Budget

($million) ($million)

TTC Conventional 719.545 148.888

Wheel Trans 41.175 39.240

Total Operating Budget 760.720 188.128

The 1999 approved capital budget is $644.727 million, funded by the City through a combination of reserve funds, capital from current contributions and debt.

Over the last five years, TTC's base capital program expenditures averaged $240 million a year, while capital expansion added another $140 million a year. As a result of provincial downloading of transit costs, the front-end loading nature of TTC's capital requirement in the next five years and the Sheppard Subway construction, the City is facing significant fiscal pressure relating to TTC's capital program, estimated to be more than $1.7 billion for 1999 to 2003. On the operating cost side, although TTC has been managing within operating budgets, the financing requirements of the capital program over the next 5 to 10 years will have a significant impact on future operating budgets. The annual incremental increase in operating budget for the next 5 years due to capital financing for TTC purposes is estimated to be $30 million a year, totaling almost $150 million over and above the 1998 level.

The economics of the TTC operation depends on a number of factors, including maintaining and improving its ridership, operating productivity, cost efficiency and effectiveness, maximizing existing revenue sources and finding new sources of funding from the provincial and/or the federal governments.

The TTC is facing an operating budget shortfall in 1999 and 2000 (due partly to a wage rate increase effective April 1, 1999, Y2K expenses and provision for foreign exchange, offset partially by a fare increase on May 3, 1999) estimated at approximately $4 million for 1999. Short term financial implications for 2000 include an increase in capital from current and debt levels as scheduled and/or another potential TTC fare increase to fund operations, and potential new municipal revenues such as parking levy and development charges to fund capital requirements. A fare increase, if required, may have potential negative impacts on ridership which is one of the main factors affecting TTC's viability. Mid to long term financial implications to meet capital needs include dependence on property assessment growth and an increase in property tax base, and potentially securing assistance from provincial and federal governments through grants or revenue-sharing agreements.

Recommendations:

It is recommended that:

(1) the City of Toronto continue to support and take an active role in implementing the previously approved Council recommendations of the Task Force on Transportation Funding, in co-operation with the Greater Toronto Services Board, to work with the Association of Municipalities of Ontario and the Federation of Canadian Municipalities to pursue provincial and federal revenue-sharing for transportation;

(2) the City of Toronto develop and propose, in the context of the broader regional transportation issues, a revenue sharing formula for any proceeds that may materialize as a result of the recommendations of the Task Force on Transportation Funding, if and when such revenues become available for public transportation in the City; and

(3) any new revenues received by the City for the TTC from the forgoing be applied to reduce the City's annual borrowing requirements on account of the TTC capital program, i.e. 100 percent of the revenues be applied to offset new debt for TTC's capital purposes for both maintenance and expansion.

Council Reference:

At its meeting held on March 2, 3, and 4, 1999, Council adopted Clause No. 1 of the Report No. 3 of the Strategic Policies and Priorities Committee, titled "1999 - 2003 Capital Budget and Five-Year Capital Program", which recommended that the Chief Administrative Officer, in consultation with the Mayor, the Chief General Manager of the TTC and other appropriate City Officials, be requested to submit a report to the Strategic Policies and Priorities Committee, for its meeting to be held in May 1999, on:

(1) the Provincial/Municipal funding trends with respect to the TTC; and

(2) a strategy for safeguarding the viability of the TTC.

Further, at its meeting on April 26, 27 and 28, 1999 Council adopted the following motion:

"It is further recommended that the TTC and the Chief Administrative Officer be requested to report to Council, through the Planning and Transportation Committee, no later than June 1999 on how the TTC would divide (between operational requirements and transit expansion) any proceeds from gasoline taxes presently collected by the federal and provincial governments, if and when such taxes become available for public transit".

This current report prepared by the Chief Financial Officer and Treasurer in consultation with the Chief Administrative Officer is addressing this issue and is reporting back to Council through Policy and Finance Committee.

In addition, at its meeting on May 11, 1999, Council adopted the following recommendations contained in Clause No. 8 of Report No. 7 titled "Report of the Task Force on Transportation Funding":

"1. It is recommended that Council:

(i) support and promote the establishment of a Transportation Funding Partnership consisting of the City of Toronto, Regions of York, Peel, Durham, Halton and H-W, the Provincial and Federal governments, to reduce congestion levels, ensure a competitive economy, assist in meeting air quality targets, reduce dependency on the private automobile and to provide a better quality of life;

(ii) support that the proposed Transportation Funding Partnership meet 66 percent of road and transit infrastructure needs in the GTA and H-W through a sustainable revenue sharing agreement with the Provincial government encompassing existing gasoline taxes, driver licensing and vehicle registration fees, the Provincial Sales Tax (PST) generated through vehicle sales and leases, and strategic investments by the Federal Government;

(iii) request the Premier of Ontario to authorize the Provincial Minister of Finance to initiate a review and consider, negotiate and recommend by November 1999, a sustainable Transportation Funding Partnership for the GTA and H-W;

(iv) request the Prime Minister of Canada to authorize the Federal Minister of Finance to initiate a review and consider, negotiate and recommend by November 1999, a sustainable Transportation Funding Partnership for the GTA and H-W;

(v) refer the report entitled "Funding Transportation in the Greater Toronto Area and Hamilton-Wentworth Study Report" to the Greater Toronto Services Board for a presentation;

(vi) request the Chairman and the Transportation Committee of the Greater Toronto Services Board to organize and host a presentation of the "Funding Transportation in the Greater Toronto Area and Hamilton-Wentworth Study Report" to key stakeholders as the earliest possible date;

(vii) request the Chairman and the Transportation Committee of the Greater Toronto Services Board to arrange meetings with the Ontario Minister of Finance and the Federal Minister responsible for the GTA to present the "Funding Transportation in the Greater Toronto Area and Hamilton-Wentworth Study Report".

(2) It is also recommended that Council:

(i) request the Task Force on GTA and H-W Transportation Funding to present their findings at the upcoming meeting of the Federation of Canadian Municipalities; and

(ii) request the Chairman and Transportation Committee of the Greater Toronto Services Board to meet with representatives of the Greater Vancouver Transit Authority (GVTA) and the Montreal Agence Metropolitaine de Transport (AMT) regarding establishing a partnership to pursue federal revenue sharing for urban transit."

Discussion:

(1) Provincial/Municipal Funding Trends with respect to the TTC:

Capital:

Provincial Downloading:

From 1972 until 1996, the Province subsidized 75 percent of the TTC's capital expenditures for subway, light rail additions and improvements, and other capital asset maintenance and additions. In June 1996 the Province announced that the funding formula for capital projects would be reduced, first from 75 percent to 50 percent and then from 50 percent to 0. As well, the Province excluded property purchases from the funding formula and excluded various overheads associated with capital programs. On October 4, 1996 a TTC Capital Subsidy Agreement was executed between the Province, Metro and the TTC, which established the subsidy rates and rules governing the provincial share of capital contributions for the period January 1, 1996 to December 31, 2000. In general, projects committed at the time of the agreement continued to receive a 75 percent provincial subsidy, while new projects received a reduced provincial subsidy of 50 percent. Thus, Metro's share of the average annual TTC capital program of $240 million increased from $60 million (25 percent) to $120 million (50 percent), and finally to $240 million (100 percent) over the life of the agreement. The full impact of the capital subsidy loss is estimated to be approximately $180 million annually.

On January 1, 1998 the Province implemented a second reduction to eliminate the TTC operating subsidy of $78 million, terminate all capital subsidy upon expiry of the Capital Subsidy Agreement, and implement the other "Who Does What" downloading (or Local Services Realignment as it is known today). The Province used the subsidy reductions to calculate allocations from the Community Reinvestment Fund for all municipalities, except Toronto. In contrast, Toronto had arranged a five-year phase-out of capital subsidy under the "Capital Subsidy Agreement" which was based on expenditures levels identified in the 1996 capital program.

On March 31, 1998 the Province advised the City and the TTC that it planned to settle in 1998 its long-term obligation under the TTC Capital Subsidy Agreement. On June 17, 1998 the TTC and the City entered into an agreement with the Province that released its commitments in return for a lumpsum payment to the City of $829.2 million. The TTC also entered into an agreement with the City, which established two reserve funds, one for the purpose of funding the Sheppard Subway and the other for the purpose the TTC's base capital program, also called "State of Good Repair". The City assumed full responsibility for managing the funds and guaranteed the total amount of funding that would be available from the reserve funds. The two reserves funds will be expended by 2000.

Capital Program Expenditure Needs :

The TTC's gross expenditures for capital maintenance increased from $125 million in 1992 to $427 million in 1998. Capital expansion increased from $29 million to $186 million in the same period. Please see Appendix A for details.

On March 2, 3 and 4, 1999, City Council approved the City's 1999 Capital Budget that consists of a gross expenditure in excess of $1.5 billion. While the 1999 capital expenditure request is comparable to the 1998 approved capital program for most program areas, the financing requirements of the capital program over the next five to 10 years will have a significant impact on future operating budgets. This impact is primarily caused by the downloaded costs for transit and transportation, the costs of funding extraordinary items such as amalgamation related projects, Y2K projects and the Sheppard Subway, the significant backlog of ongoing capital maintenance projects ands other new initiatives to be adopted by Council. The majority (60 percent) of the City's 1999 - 2003 capital funding pressures is related to TTC capital expenditures and capital subsidy elimination.

The TTC's capital program projected for the five years 1999 to 2003 is dominated by high expenditures in the first 3 years and significantly lower levels in years 4 and 5.

TTC's Major Capital Categories 1999 2000 2001 2002 2003 1999-2003

Approved Capital Program

Total

($million) ($million) ($million) ($million) ($million) ($million)

Sheppard Subway 199 197 100 22 0 519

Revenue Vehicles & Base Program 446 221 214 111 204 1,194

Gross Expenditure 645 418 314 133 204 1,713

The relatively high capital expenditures coupled with the loss of the provincial capital subsidy result in a severe capital funding shortfall through the period. The report titled "1999 Capital Financing Plan -- Tax Support Program", adopted as per Clause No. 1 of Report No. 8 of the April 26,27and 28, 1999 Council meeting, detailed TTC's capital requirements for the period 1999 to 2003 and outlined a financing plan. In 1999 the Sheppard Subway project is budgeted at $199 million, while the balance of $446 million in the capital program will be applied towards capital maintenance under the "State of Good Repair" program. The Sheppard Subway project will be financed 100 percent by accelerating the withdrawal of the Sheppard Subway Reserve Fund. The State of Good Repair program will be financed by a combination of an increase in operating contributions through capital from current, Capital Subsidy Reserve Fund, as well as new debt issuance. Appendix B details TTC's capital program and how it is financed in the next 5 years.

Insert Table/Map No. 1

ttc cap. prog expend & financg plan'99-2003

Operating:

Provincial Downloading Impact on Operating Budget:

As discussed earlier, the provincial operating subsidy was completely withdrawn on January 1, 1998, in the "Who Does What" initiative. Appendix A and the following chart show the provincial and municipal subsidies for operations of the conventional transit system for the years 1992 to 1999. In 1999 the total municipal subsidy excluding capital financing costs of just under $150 million was approved as part of the 1999 Operating Budget.

Insert Table/Map No. 1

prov/mun. op sub for the ttc '92-'99

The following chart depicts TTC's operating revenues and other revenues, such as financing from retained earnings and Transit Improvement Fund. (The Transit Improvement Fund was set up in 1991 using the $36.9 million net proceeds of sale of specific assets of the Metro Toronto Coach Terminal Inc., for the purpose of financing future transit-related initiatives. The fund was used over the next few years to balance the operating budgets during Social Contract and in a period of declining ridership. This fund was depleted in 1995.) The same chart also displays the basic adult ticket fares over the eight-year period from 1992 to 1999. The rate of increase in the adult fare has kept pace with the operating expenditure growth, and has increased at a faster pace when provincial subsidies have decreased. Passenger fares and municipal revenue have become the only sources of revenue to offset the loss in provincial operating subsidy. The revenue/cost ratio (R/C ratio), which effectively measures the proportion of passenger ("Fare Box") revenues to operating expenses, increased from 66 percent in 1992 to 81 percent in 1999 along with the fare increases. Please see Appendix A for details.

Insert Table/Map No. 1

op rev totl exp adult fare

Operating Impact of Capital Financing:

The City's capital program has an impact on its operating budget funded by property taxes through interest on debt, sinking fund contributions to repay debt principal, and capital from current contributions to fund expenditures directly from the operating budget. The magnitude of these expenditures and the potential variances from year to year present the most significant fiscal challenge to the City. According to the 1999 Capital Financing Plan, the operating impact for the TTC capital program budget will be an annual increase of about $30 million per year in the next 5 years, for a total of just under $150 million. (The second $100 million interest-free provincial loan will be used to fund the City's amalgamation and related capital costs and does not impact directly the TTC). Therefore, without intervention from new revenue sources, the City would need to find operating savings or property tax increases totaling $150 million over the next 5 years to offset the TTC capital funding pressures.

Insert Table/Map No. 1

ttc annual op bud inc

In 1998, Council approved an increase in capital from current (CFC) contribution of $15 million to address TTC's financial pressure. In 1999, an additional increase of $25 million in CFC, plus debt charges of existing and new debt issued for the TTC capital programs totaling $43 million, coupled with the City's operating subsidy for the TTC of $150 million mentioned earlier, bring the total City's operating contribution for the TTC in excess of $230 million. Using the same concept of full cost accounting, the chart below shows the total City's operating contribution by 2003 will escalate to more than $330 million based on the 1999 Capital Financing Plan. Whereas the City's contribution before financing costs is estimated to be 19 percent of the total operating cost (excluding financing costs) in 1999, once capital financing costs are included, City's contribution becomes 32 percent. This percentage will escalate to 46 percent by 2003, assuming no change to either operating expenditures or revenues, i.e. increase is due solely to increased capital financing costs. Industry practice rarely includes capital financing costs in the consideration of total municipal operating subsidies (and therefore does not employ full cost accounting) since most other jurisdictions do not have such substantial capital financing costs borne by the municipal government.

Insert Table/Map No. 1

city's contb.to ttc's tot op cost

(2) Longer Term Funding Strategies:

In order to safeguard the viability of the TTC, alternate long-term and sustainable sources of revenue must be found for both capital and operating purposes. Currently, the operations of the TTC are mainly financed by passenger revenues and a municipal subsidy raised through property taxes - approximately in the ratio 80:20. Both of the operating revenue sources are significantly strained. On the capital side, the funding shortfall is most acute in 1999 - 2001. Without new revenue sources a combination of fare increases and/or property tax increases will be necessary. It is not possible to support the capital program through the fare box. The increase in fares would reduce ridership such that the TTC would function as a peak service (rush hour) operation only. From TTC's past experience, a moderate increase in fares would lead to a reduction in ridership estimated in the ratio of 4 (or 5) to 1. In other words, a 4 percent to 5 percent increase in fare levels would reduce ridership by 1 percent, assuming all other factors stay the same. Appendix C shows a comparison of bulk adult fares amongst major North American transit systems. It indicates that TTC's fares are currently higher than the counterparts in the Greater Toronto Area and many other cities. This will bring forth significant resistance towards another TTC fare increase in 2000, given that there has just been a 6.3 percent fare increase in May 1999. Fortunately, the current strong economic environment and the improving employment growth provide a favourable environment for ridership growth.

The following outlines the TTC's current performance, compares it with other jurisdictions, discusses how other jurisdictions are funded, and proposes alternate long-term and sustainable sources of revenue in order to maintain TTC's economic viability.

Operating -- Longer Term Funding Strategies:

TTC's Operating Performance and Comparisons with Other Jurisdictions:

It has been widely publicized that the TTC is the most efficient transit system and has the highest revenue/cost ratio (R/C ratio) amongst major North American Transit Systems. The following chart displays the 1997 R/C ratio for some of the peer group comparators in North America. (Note that all Canadian jurisdictions follow reporting requirements by the Canadian Urban Transit Association (CUTA). Similarly all US jurisdictions comply with the National Transit Database (NTA) administered by the Federal Transit Administration.)

TTC had the highest R/C ratio amongst the comparators in 1997. In 1998 the ratio has improved to 81 percent. In 1997, TTC also has the lowest municipal subsidy per capita as well as the lowest subsidy per passenger trip/boarding. At its April 26, 27 and 28, 1999 meeting, Council adopted the recommendation that City of Toronto strive to ensure that the TTC operating budget cost of 80 percent supported by its ridership will not be exceeded, as recommended by the then Chief General Manager of the TTC.

Source: 1997 data from Canadian Urban Transit Association and US Federal Transit Administration's National Transit Database, except for TTC.

Note: -TTC's data revised and reported by TTC.

$ - are in Canadian Funds at the exchange rate of 1 USD = 1.3844 CAD per Bank of Canada's 1997 average;

# - Both local and commuter rails are included in Vancouver's figures

* - US transit properties report "boardings", or unlinked trips, while Canadian properties report "trips" which may be linked.

‡ - R/C ratio is defined as Passenger Revenues/ Total Operating Costs. According to common industry practice, certain costs, such as, depreciation, debt charges, rental and lease charges, inter-city charters, and cross-boundary services to adjacent municipalities are excluded.

Although the TTC runs an efficient and comprehensive grid system of buses, street cars, subway and light rapid transit with a total of over 2,500 vehicles, and carries over one million Ontario commuters on a daily basis from all over the Toronto area, it is the only system amongst the peer comparators of urban transit systems which does not receive any form of operating subsidy from senior levels of government.

Many similar jurisdictions in North America and Europe receive operating as well as capital assistance through dedicated revenue sources, such as gasoline taxes, vehicle charges, sales taxes and road tolls. Funding is generated through a combination of local municipal power to institute dedicated taxes, and through channelling of taxes collected at the federal or provincial/state levels to local municipalities.

Insert Table/Map No. 1

comp of major northern am transit

A good illustration of an innovative revenue source can be found in British Columbia's Translink, the regional transportation network for the Vancouver region created April 1, 1999 through provincial legislation (previously known as the Greater Vancouver Transportation Authority (GVTA)). It has broad powers including raising revenues, establishing subsidiaries and contracting out. Its sources of operating funding include a fuel tax of 8 cents/litre, a hydro levy of $1.90/residential account, PST on parking as well as non-residential property tax. These tax revenues will account for 61 percent of the 1999 Translink operating budget. Please see Appendix D for details.

Montreal's Agence Metropolitaine de Transport (AMT) was created by the Province of Quebec on January 1, 1996 for the Greater Montreal Region. The AMT has metropolitan-wide powers for transportation planning. It has a mandate to achieve a wide range of provincial objectives, including provision of stable long-term financing of public transportation by establishing dedicated sources of funding within the region; allocation of shared cost of regional facilities and infrastructure amongst all municipalities of the region; participation of users, property owners and non-user beneficiaries in financing public transit operating expenses; fare integration and harmonization among transit systems in the region.

AMT's revenue sources include:

(i) a new, dedicated 1.5 cent/litre gasoline tax in the Montreal region, starting January 1, 1996;

(ii) dedicated vehicle licence surcharges of $30/vehicle in the region;

(iii) property levies on municipalities that receive commuter train service; and

(iv) property levies on municipalities for a capital asset fund.

AMT's remaining funds come from regional transit passes, commuter rail revenue, and a provincial commuter rail infrastructure subsidy. Please see Appendix D.

In the United States, the majority of operating funding for urban transit comes from dedicated sources, as evident in their low R/C ratios. The federal government provides both capital and operating subsidies for transit, but operating subsidies are available only for systems serving populations of under 200,000. Dedicated taxes include Income Tax, Sales Tax, Gasoline Tax, Motor Vehicle Excise Tax, Payroll Tax, Property Tax, Lottery Tax, Beer Tax, etc., levied by all levels of Government to differing extents. Please see Appendix E.

The concept of using federal fuel tax revenue for state and municipal transportation purposes has been in place in the US for many years in the form of Federal Highway Trust Fund. Until this year, the subsidy rate from federal fuel tax was 2 cents/gallon. With the introduction of the new Transportation Equity Act for the 21st Century (TEA-21) in June 1998, the allocation for transit was increased to 2.86 cents/gallon (CAD 0.75 cent/litre) out of a total gas tax rate of 18.3 cents/gallon (CAD 4.83 cents/litre). In other words, 16 percent of the federal fuel tax is allocated to transit for municipalities. TEA-21 will provide almost US$41 billion in 1998 to 2003 for transit, with $US 36 billion (all gasoline taxes and part of general fund subsidies) basically guaranteed.

Insert Table/Map No. 1

us national transit profile

TTC Stabilization Reserve Fund for Operating Purposes:

At its meeting held on April 26, 27 and 28, 1999, Council adopted the recommendation, among other things, that the City of Toronto establish a reserve fund for the TTC in order to stabilize funding over time, such fund to be operated on the basis that any TTC operating surplus shall be paid in, and any operating deficit shall, to the limit of the fund's balance, be funded therefrom. This reserve fund has now been set up with the 1998 surplus of $1.203 million.

To the extent that discussions relating to alternate sources of operating revenues e.g. dedicated taxes may take a period of time, the TTC Stabilization Reserve Fund provides a short-term relief to stabilize operating funding.

Capital -- Long term Funding Strategies

TTC's Capital Funding and Comparison with Other Jurisdictions

Capital requirements for transit systems are typically funded through sources other than passenger revenues. As explained in an earlier discussion, municipal revenues currently appears to be the sole source of capital funding for the TTC. The capital requirement of over $1.7 billion over the next 5 years will be funded through increases in operating contributions through capital from current, accelerating withdrawals from the Sheppard Subway Capital Subsidy Reserve Fund and new debt issuance. The Capital Subsidy Reserve Fund will be used up in 1999 while the Sheppard Subway Reserve Fund will be depleted in 2000.

In Canada, the Federal government does not provide funding for local transit services for either operating or capital purposes. The provinces of Ontario, Saskatchewan, Newfoundland, Nova Scotia, and New Brunswick do not fund local (non-specialized) transit. The provinces of Alberta, British Columbia, Manitoba, and Quebec provide funding in different ways. Included are per-capita operating and capital grants to municipalities, special project grants, operating and capital cost-sharing agreements, and contributions from gas taxes, parking fees, hydro levies, property levies and licence fees.

In the United States, Federal capital assistance is the single largest source of funds for capital investment in transit infrastructure. Of the nearly US$7.6 billion used in 1997 for capital investment in transit infrastructure expansion and rehabilitation, Federal assistance accounted for 54 percent. Local funds represented 33 percent and State funding contributed 13 percent.

Insert Table/Map No. 1

us national transit prof '97 (54%)

Although each US state has its own funding policies and mechanisms, national aggregate data shows that the amount of dedicated funding for transit capital expenses exceeds that of general revenue at all levels. Appendix E shows the breakdown of sources of dedicated revenues in the form of income taxes, sales taxes, property taxes, gasoline taxes, etc. from the States, local municipalities and transit agencies themselves. Property tax revenues at all levels make up only a negligible amount (less than 8 percent) of the total funding source from any of the levels. In Toronto, property tax revenues currently are the sole funding source for local transit capital.

Gasoline Tax and Vehicle Registration Fee:

The Canadian Provincial and Federal Governments raise almost $2 billion annually from the GTA/H-W region through transportation-related taxes and fees as follows:

Significant Funds Raised via Transportation-related Taxes and Fees in the GTA/H-W regions (1997/98 Actual in $Millions)
Gasoline Taxes (Provincial - includes PST)	$911
Gasoline Taxes (Federal - includes GST)	830
Vehicle/Driver Registration Fees (Provincial)	206
Total Government Revenues (Prov.$1.1 B, Fed.$0.8 B)	$1,947

Source: Funding Transportation in the GTA and Hamilton-Wentworth April 1999

Petro Canada reported that in the Toronto area in 1998, the total taxes included in the price of one litre of regular unleaded gasoline sold made up more than 50 percent of the average price -- of the average price of 52.5¢ per litre, 14.7¢ (27 percent) are provincial taxes, and 13.4¢ (26 percent) are federal taxes. Preliminary estimates based on 1996 Census data ( vehicle registration and population) indicated that if the Province was to institute a gas tax dedicated to transit, a rate of one-cent-per-litre gas tax would generate annual revenues of: approximately $62 million for GTA/Hamilton-Wentworth, $47 to $53 million for the GTA, and $19 to 28 million for Toronto.

The Province of Ontario currently charges residents of southern Ontario $74 per year to license each vehicle. Vehicle registration fees, like the gasoline tax, is an attractive source of revenue because of its relationship with transportation and ease of collection.

User pricing for transportation -- whether it be through gasoline taxes, or vehicle registration fees - is an extremely powerful tool for addressing urban transportation challenges, since it:

(a) provides a revenue stream which rises in proportion to use (and therefore costs) of the transportation system and which can be dedicated to provide capital and operating funding to maintain, optimize and improve the system; and

(b) has a moderating effect on transportation demand levels, provides an incentive for travelers to "double-up" in their trip making, decrease pollution, and use more sustainable and less expensive modes such as transit, walking and cycling.

A strong case can be made that it would only be fair to return some portion of the transportation-related taxes and fees back to the contributing area to improve transportation. The two senior levels of government must be strongly encouraged to provide alternate sources of funding for the TTC in order to maintain viable operations in the next few years amidst significant budget pressures. Other jurisdictions in Canada, specifically Vancouver and Montreal, have successfully negotiated revenue sharing of provincial gasoline tax for public transit. As well, US transit systems receive substantial assistance from the Federal and State governments. It is important that the City of Toronto not only follow suit, but also become the driving force to encourage the governments to provide new revenue-sharing programs.

Should the Province make such revenues available to the City, it will need to have a formula and a mechanism to allocate a share of the revenues to the TTC. The full amount (100 percent) of the TTC's share should be allocated to capital to reduce borrowing requirements for TTC's capital programs, as the funding pressure of the capital programs far exceeds that of the operating requirements.

Report on Funding Transportation in the GTA and Hamilton-Wentworth by the Transportation Funding Opportunities Task Force

On May 11, 1999, Council adopted the report to the Urban Environment and Development Committee from the Commissioner of Urban Planning and Development Services, titled Report of the Task Force on Transportation Funding. This report communicates the findings of the Task Force on Transportation Funding presented to the GO Transit Board on April 9, 1999 and recommends actions to improve transportation in the Greater Toronto Area (GTA) and Hamilton-Wentworth (H-W). The City of Toronto is a member of the Task Force.

The report includes findings that investment in roads and transits, even with Provincial subsidy before 1998, has not kept pace with the growth of transportation demand. The lack of expansion over the past 10 to 15 years has resulted in a decline in the quality and efficiency of overall transportation services. In addition to the limited expansion funds for the TTC, GO Transit has been unable to provide sufficient services to meet existing demand because of the lack of capital to increase the capacity particularly at Union Station. Over 70 percent of the GTA/H-W arterial road system is congested in peak periods. The GTA/H-W municipalities currently spend $570 million annually on capital investment for TTC, GO, regional roads and local transit. To improve transit services and road congestion as well as accommodate growth $1.37 billion in capital investment is required annually for expansion as well as maintenance. This leaves $800 million in funding gap for the GTA/H-W region. The City's share of the $800 million funding gap is estimated to be $400 million to $500 million annually.

In brief, the report recommended that Council support the establishment of a Transportation Funding Partnership (to be made up of all GTA cities and regions, the Provincial and Federal Governments) to reduce congestion levels, ensure a competitive economy, assist in meeting air quality targets, reduce dependency on the private automobile and to provide a better quality of life. It also recommended Council support that the proposed Transportation Funding Partnership meet 66 percent of road and transit infrastructure needs in the GTA and H-W through a sustainable revenue sharing agreement with the Provincial government encompassing existing gasoline taxes, driver licensing and vehicle registration fees, the Provincial Sales Tax (PST) generated through vehicle sales and leases, and strategic investments by the Federal Government. The report recommended that the Partnership complete the negotiation and have recommendations by November 1999.

In order for these proposed discussions to be fruitful, the City of Toronto should develop and propose, in the context of the broader regional transportation issues, a revenue sharing formula for any proceeds that may materialize as a result of the recommendations of the Task Force on Transportation Funding, if and when such revenues become available for public transit capital.

Kyoto Commitments:

In December 1997, Canada and over 150 countries reached an agreement, the Kyoto Protocol, which commits the nations to specified greenhouse gas reduction targets for the post-2000 period. The Protocol will commit Canada to reduce its emissions of greenhouse gases by 6 percent below the 1990 levels, during the period 1998 to 2012. The Canadian Urban Transit Association and other organizations have been working over the last several years to identify, quantify and publicize the environmental benefits of public transit and what it would take to bring about a major modal shift from auto use to transit in urban areas. The following have been recommended to date:

(i) tax exemptions for employer-provided transit passes;

(ii) alternate funding sources for transit;

(iii) car disincentives (road pricing, fuel tax, management of parking supply and pricing);

(iv) cross boundary fare and service integration in large urban areas;

(v) inter-modal integration; and

(vi) adoption of transit-supportive land use planning policies.

Although these recommendations are still in the early stages of discussion, implementation of one or more of these in the GTA area will bring about longer-term behaviourial changes of travelers, which will likely increase the utilization rate of public transit. It may not provide immediate solutions to TTC's financial pressures, but will have an indirect impact on future policies relating to the TTC.

Meeting of the Federation of Canadian Municipalities:

At the April 30, 1999. meeting of the Big City Mayors' Caucus of the Federation of Canadian Municipalities (FCM) held in Saskatoon, the mayors endorsed a proposal, as part of the on-going Kyoto commitment, that the Federal Government redirect at least 3 cents per liter of the fuel tax to support sustainable transportation, including urban transit. Preliminary estimates based on 1996 Census data indicate that over $900 million a year can potentially be raised across Canada. This potential revenue in GTA alone is approximately $130 million annually. For the City of Toronto, the corresponding revenue would be approximately $55 million.

Association of Municipalities of Ontario's Resolution:

At the January 29, 1999 board meeting of the Association of Municipalities of Ontario (AMO), a resolution was adopted regarding gasoline and fuel taxes, as follows:

"WHEREAS there has been a realignment of responsibility for the maintenance and up-keep of highways from the Province to the municipal governments; and

WHEREAS the Provincial and Federal governments receive a gasoline and fuel tax on each liter of gasoline and fuel sold in Ontario; and

WHEREAS the gasoline tax in Ontario was originally designated for the maintenance and up-keep of highways; and

WHEREAS some of the highways transferred from the Province to municipalities are in very poor condition and the one time only funding for these newly acquired roads is very inadequate; and

WHEREAS local and regional transit systems plan a significant role in the economic sustainability of our urban centres and the Province has abandoned these systems, letting the property tax base and the fare box be the primary revenue source;

THEREFORE BE IT RESOLVED THAT the Association of Municipalities of Ontario hereby petitions the Province of Ontario and the Government of Canada to share the gasoline and fuel tax with the municipalities, and that this is done in a fair and equitable manner that supports the immediate and long term capital and operating requirements of Ontario's municipal roads and transit systems."

City staff will report back to Council with an update on the discussions of the Greater Toronto Services Board and the Task Force on Transportation Funding with FCM, AMO and the senior levels of government once a resolution is reached.

Development Charges:

Under the Development Charges Act, 1997 (DCA), all existing development charge by-laws in Ontario, including all former municipalities of the City of Toronto, expire on August 31, 1999. At its May 11, 1999, meeting Council adopted the Clause No. 1 of the Report No. 9 of the Strategic Policies and Priorities Committee, titled New Development Charges By-Law. The purpose of the report was to table with Council the City's development charge background study and to seek authorization to hold a public meeting pursuant to the provisions of the Development Charges Act, 1997, in order to consider public input before the passage of a new development charge by-law.

The existing development charge policy has been inherited from the seven former municipalities and consists of a patchwork of schedules and coverage areas with a wide disparity. The proposed new schedule recommends a city-wide schedule of charges for all residential development and non-residential development.

According to the report, the TTC is one of the services which require a statutory percentage reduction. For the TTC, development-related capital projects for the next 10 years include the Sheppard Subway, Union Station Platform Expansion, LRT Harbourfront, bus fleet replacement and purchase and associated garage facilities. This report identified a total gross capital cost of $390.4 million as approved in the 1999 - 2003 Capital Budget and another $102.6 million for 2004 to 2008. Potential Development Charge Recoverable Costs are estimated to be up to $56.2 million for 1999 - 2003 and up to $14.8 million for 2004 to 2008, totaling $70.9 million for the next 10 years. This is equivalent to maximum annual average revenue of over $7 million.

A separate report will be presented to Policy and Finance Committee on the outcomes of public consultation held on June 24, 1999. Certain policy issues must be resolved before the actual revenues can be realized, including phasing in of the schedule of charges and possible exemptions.

Parking Levy:

At its meeting on April 26, 27 and 28, 1999, the Council adopted Clause 1 contained in the Report No. 8 of the Strategic Policies and Priorities Committee, titled 1999 Operating Budget. That clause recommended that the Chief Administrative Officer and the Chief Financial Officer and Treasurer be requested to submit a joint report to the Planning and Transportation Committee on a recommended comprehensive parking levy, as part of a long-term strategy to sustain public transit in the City of Toronto, including the feasibility of dedicating a portion of revenue generated from permit parking, front yard parking, parking meters, and municipal parking lots, such report to also assess the anticipated economic impact of such a parking levy on business in the City of Toronto, as well as any correlation which might be expected based on past experience with the Commercial Concentration Tax. This report will be submitted to Council separately.

One-Time Measures:

As part of the City's 1999 Capital Financing Plan - Tax Supported Program (adopted by Council at its meeting on April 26, 27 and 28, 1999) there are two potential one-time revenue sources related to the TTC.

The first one is the proceeds of sale of TTC properties, which can be used to offset against capital. With the exception of the Downsview station surplus lands, TTC related property sales are not expected to produce significant revenues in the next two years. Those properties that have been identified as surplus are pledged against the bus garage replacement project. Properties at the current Danforth and Eglinton bus garage sites may become surplus when the new garage is operational and can ultimately yield up to $5 million. The Downsview station surplus lands are subject to negotiations with the Federal Government, which holds covenants against the property preventing future development. These discussions have been protracted but are expected to be resolved in 1999. The proceeds will be applied against the cost of the Sheppard Subway to reduce the forecasted debt requirements per previous Metro Council resolution. The Facilities and Real Estate Division, in consultation with the TTC, will report to the Budget Advisory Committee on the estimated revenues from sales of surplus property of the TTC, including possible sale-lease options of the properties at the current Danforth and Eglinton bus garage sites prior to July 31, 1999.

As a means to reduce financing costs, consideration is also being given to alternate capital financing such as cross border sale-leaseback of rolling stock of subway cars. A Request for Proposal is under way and results will be reported back to Council.

Conclusion:

The impacts of provincial downloading and TTC's capital requirements have clearly created significant hardship to the City especially in its ability to fund its capital programs. The TTC has estimated that the capital program costs from 1999 to 2003 are in excess of $1.7 billion, at $645 million in 1999 decreasing to just over $200 million by 2003.

The City of Toronto is now responsible for all urban transit funding, yet it is under a great deal of financial pressure as a result of municipal restructuring, the new property tax system and public tolerance of increased taxation. Neither the property tax system nor current development charges is capable of generating sufficient revenues to offset the increased cost pressures.

New revenue sources and innovative financing approaches must be found for capital maintenance as well as transit expansion. Operating cost increases resulting from capital financing must also be funded through alternative sources of revenue. They include:

(a) channeling a share of existing or new transportation-related revenues. These could include federal and provincial gasoline taxes, vehicle registration fees and sales taxes. The only way to achieve this end is to actively petition the two senior levels of government;

(b) enabling the City of Toronto to collect transportation user fees directly, e.g. parking levy;

(c) applying one-time proceeds against capital borrowing requirements, such as the unencumbered proceeds of sale of surplus TTC properties; and

(d) expanding and enhancing the existing municipal funding sources, e.g. on-going review of property tax base and the Development Charge By-law.

The TTC has recently initiated a campaign for gas tax revenue dedicated to public transit. It is imperative for the City to continue the momentum and aim to secure the co-operation of cities such as Vancouver and Montreal, the Association of Municipalities of Ontario, the Federation of Canadian Municipalities and the Greater Toronto Services Board to successfully approach the Provincial and the Federal Government for funding assistance in order to safeguard the viability of the TTC.

If, and when such funding assistance is available to the City of Toronto, an allocation formula and mechanism will need to be in place to provide a share of the revenues to the TTC. The full amount (100 percent) of the TTC's share should be applied to support the TTC capital program to reduce the City's annual borrowing requirement for TTC's new capital programs.

Contact Name:

Ruby Chui, Senior Financial Analyst, Financial Planning, Phone No.: 397-4117,

Fax No. 392-3649, E-Mail: rchui@mta1.metrodesk.metrotor.on.ca

Don Altman, Manager, Financial Planning, Len Brittain, Director, Treasury & Financial Services.

Insert Table/Map No. 1

appendix a

Insert Table/Map No. 2

appendix b

Insert Table/Map No. 3

appendix c

Insert Table/Map No. 1

appendix e

23

Radio Communications System -

Toronto Police Services and Toronto Fire Services

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause by adding thereto the following:

"It is further recommended that the implementation of the Radio Communications System be adequately planned and properly managed; that all required testing be performed and documented; and that the necessary signoffs and approvals be obtained before implementation, including the signoff and approval of the City Auditor.")

The Policy and Finance Committee:

(1) recommends the adoption of the recommendation of the Audit Committee embodied in the following communication (June 3, 1999) from the City Clerk; and

(2) reports having concurred with the recommendation embodied in the joint report (July 7, 1999) from the Commissioner of Works and Emergency Services and the Fire Chief:

Recommendation:

The Audit Committee recommends the adoption of the following report (May 4, 1999) from the City Auditor.

Background:

The Audit Committee, on May 25, 1999, had before it the report (May 4, 1999) from the City Auditor respecting the Radio Communications System - Toronto Police Services and Toronto Fire Services.

The Committee's recommendation is noted above.

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(Report dated May 4, 1999, addressed to the

Audit Committee from the City Auditor)

Recommendations:

It is recommended that:

(1) the Commissioner of Works and Emergency Services report to the Policies and Finance Committee every six months on the status of the Integrated Police and Fire Radio Communications System;

(2) the first of such progress reports be submitted by June 30, 1999 and include information on any changes to the final contract price for the system, scheduled completion date, the progress of the implementation, the meeting of prescribed milestones and payments to Motorola, any problems or delays encountered or anticipated, and whether the project will be completed on time and within the contract price; and

(3) this report be forwarded to the Budget Committee, as well as the Policies and Finance Committee, for consideration.

Background:

At its meeting on February 25, 1999, the Budget Committee requested that, "prior to the City embarking on the purchase implementation of the new radio system", the City Auditor provide a review of same and report back to the Budget Committee.

Comments:

At its meeting on December 16 and 17, 1998, City Council adopted Clause No. 33 of Report No. 26 of the Strategic Policies and Priorities Committee, which authorized the entering into an agreement with Motorola Canada Limited (Motorola) for the purchase of an integrated Police and Fire radio communications system at an estimated cost of $34.5 million. On December 22, 1998, a contract was executed with Motorola. The total contract price for the system was $29,999,918, exclusive of all taxes. In accordance with the contract, a payment of $2,345,000 plus applicable taxes was made upon the execution of the contract. A payment schedule, based on various prescribed milestones, forms the basis of future payments to Motorola.

Work on this project has started and Police and Fire Services staff have advised that the final cost of the system could be lower than the contract price once the system design and equipment requirements are finalized. Phase 1 of the project is expected to be completed by the end of May 1999. The whole system is expected to be completed and fully functional by August 2001.

At the time of the request from the Budget Committee the purchase of the new radio system had already been approved by Council and the contract with Motorola executed. Consequently, it is not possible to review the system prior to its purchase.

It is, however, important that a project of this magnitude be properly managed to ensure the specified deliverables are received within the contract price and that the radio communication requirements of both the Police and Fire Services are effectively satisfied. Staff have advised that monthly reports are currently provided to the Deputy Chief, Police Services, the Deputy Chief, Fire Services and theExecutive Director, Technical Services Division, Works and Emergency Services. It would be appropriate that regular progress reports also be provided to the Policies and Finance Committee. These reports would keep the Committee abreast of the implementation and financial status of the project and allow staff to make the Committee aware of any problems or issues relating to the installation of the system. It would be appropriate for the first of these reports to be submitted by June 30, 1999, and then every six months thereafter, until the project is completed.

The contract with Motorola only covers emergency services. Staff have advised that a consultant has been engaged to evaluate the current radio communications systems of non-emergency divisions such as Parks and Recreation, Transportation, Water and Wastewater and Solid Waste Management. The consultant has completed a draft report resulting from the evaluation and the Commissioner of Works and Emergency Services will report to the Works Committee by the summer of this year on this matter. The Commissioner's report will address the consultant's recommendations, provide the department's plan to deal with the non-emergency communications systems requirements in the short and long-term and associated costs, and outline the process to be followed to meet any additional system needs identified.

Staff have advised that while the current systems generally support the operational requirements of non-emergency staff, there is a need to realign the systems to match the communications capabilities with the new service districts resulting from the amalgamation. The ramifications of the integrated Police/Fire radio system on the non-emergency component will also be addressed.

Conclusions:

The contract for an integrated Police and Fire radio communications system has been executed and work on developing and installing the system has commenced. A project of this magnitude must be properly managed to ensure that all the specifications in the contract are delivered on time and within the contract price. Regular progress reports to the Policies and Finance Committee would keep members of the Committee informed on the status of the implementation and aware of any significant problems or issues relating to the project. With regards to the radio communication requirements of non-emergency divisions in the City, the present radio communication systems have been evaluated and a report will be submitted to the Works Committee shortly.

Contact Name and Telephone Number:

Tony Veneziano, Senior Audit Manager, 392-8353.

The Policy and Finance Committee also submits the following joint report (July 7, 1999) from the Commissioner of Works and Emergency Services and the Fire Chief:

Purpose:

To respond to the direction given staff by the Audit Committee at their meeting on May 25, 1999, to provide a bi-annual status report on the Integrated Police and Fire Radio Communications System.

Funding Sources, Financial Implications and Impact Statement:

Funding of $29.2 Million was included for the Integrated Police and Fire Radio Communications System in Council's approved 1999 capital budget for the Fire Service. Police Services received approval for $5.3 Million within its capital budget for the project. There are no funding implications associated with the presentation of this report.

Recommendations:

It is recommended that this report be received for information, and forwarded to Community Services Committee for information.

Council Reference & Background:

The Audit Committee in their Tuesday May 25, 1999, meeting requested that the Commissioner, Works and Emergency Services report to the Policies and Finance Committee and Budget Committee every six months starting June 30, 1999 on the status of the Integrated Police and Fire Radio Communications System. Progress reports are to include information on changes to the final contract price for the system, scheduled completion date, progress of implementation, meeting of prescribed milestones and payments to Motorola Canada Inc. These reports will also identify any problems or delays encountered or anticipated.

In December 1998, a contract was signed with Motorola Canada Inc., the supplier of the Police/Fire integrated radio infrastructure, for $34.5 Million including taxes. This contract is performance based for payment and consists of a number of milestones. An initial payment of $2.7 Million was made upon contract signing and a final payment of $2.7 Million will be made at the end of the radio communications project following final acceptance of the system. Following the completion of the critical design review scheduled for July 15, 1999, the final equipment list and subsequent price will be established. Milestone percentage payments will then be made as outlined below.

Phase one of the project is the implementation of the radio communications system is the Central Zone. Toronto Fire Services will upgrade and combine the previous municipalities of Toronto, York and East York to an 800 MHZ radio communications system and consolidate three existing communications centres into the new Fire communications centre at 4330 Dufferin Street. Toronto Police Services will convert District 2 and District 5 to 800 MHZ trunking systems. The result of a technical radio coverage analysis for the central zone is a possible reduction of the number of sites required. The final number of sites and subsequent savings will be verified during installation.

A 30 percent payment will be made at factory acceptance in October 1999 and a further 10 percent payment will be made following system acceptance of Phase one in June 2000. Factory acceptance is the operational staging of the system components in the factory and a thorough review by Toronto Fire and Police personnel to assure contract compliance and proper operation.

Phase two of the implementation of the radio communications system establishes a West, North and East Zone and networks the four zones together. Toronto Fire Services will upgrade the existing systems in Etobicoke, North York and Scarborough and consolidate the remaining three communications centres into the new main Fire communications centre at 4330 Dufferin Street.

Toronto Police Services will convert District 1, 3 and 4 to 800 MHZ trunking systems.

A 50 percent payment will be made after factory acceptance of the final three zones in March of 2000. A 10 percent payment will be made following provisional acceptance of Phase two in July 2001. Provisional acceptance is given after the successful transition and acceptance of the majority of users to the system and the general day to day operation of the same.

Comments and Discussion:

The project kickoff was January 29, 1999. A comprehensive system audit was begun in February to compile a complete inventory of existing equipment. The system audit has been completed and will be tabled prior to the completion of the Critical Design Review.

The Radio Communications System Steering Committee held their first meeting in February 1999 and has met a total of three times. The Steering Committee's purpose is to provide executive leadership throughout all stages of the project and is Chaired by Tom Powell, Toronto Fire Services with Steven Reesor, Toronto Police Service, John Lock, Toronto Ambulance Service, and Tom Denes Works and Emergency Services as members. A recent addition to the committee is Mr. Tony Veneziano, representing the City Audit Department. The committee has identified primary and backup locations for the Fire/Police communications centres as 4330 Dufferin Street and 703 Don Mills Road. The Dufferin location will house the primary Fire dispatch with backup provided at the Don Mills Rd. facility. The Don Mills location will continue to be the primary Police dispatch location but the backup will move from 40 College St. to the Dufferin St. facility.

Project working teams utilizing both Fire and Police personnel were identified and assigned specific tasks that included:

(i) Radio coverage analysis for the central zone;

(ii) Design review of the Fire hall alerting system;

(iii) Design review of the vehicular repeater system for Fire;

(iv) Console design and CAD (Computer Aided Dispatch) interfaces;

(v) Analyzes and identification of existing user equipment upgrades;

(vii) New user equipment selection.

Toronto Police Services and Toronto Fire Services technical staff are reviewing the design of the radio communications system infrastructure to optimize performance. In-building coverage has been identified as a requirement for both the Fire and Police Services as well as coverage in the subway and underground path. A proposal for coverage in the subway and underground path has been forwarded to the Police Services Board for funding from the Police capital allocation for this project.

Project managers from Fire and Police travelled to Dallas/Fort Worth in March as a due diligence measure to review an existing Motorola Fire and Police smartzone system currently in operation. The visit afforded an opportunity to visit first hand, a recently installed similar Motorola system and to better understand the technologies being proposed. Meetings with users and project managers also proved to be a valuable and worthwhile exercise.

Fire Services have completed the hiring process of a manager who, reporting to the Deputy Fire Chief, will manage all aspects of the Fire Service radio communications system project. The new manager, Mr. Mark Thompson commenced work with Fire Services June 14^th 1999. One key component of the Manager's job will be to manage the contract with Motorola, monitor their performance and ensure that payments are made only when the milestones have been totally met and we are receiving proper value for the monies expended.

The project schedule for the critical design review for Phase one was extended by eight weeks to review and optimize coverage, design fire station alerting and mobile repeaters, and finalize user requirements. The critical design review for Phase one will be complete by the second week of July 1999.

Factory acceptance is on schedule for October 1999, followed by system installation, testing for coverage, functionality and audio quality, and staff training. System acceptance of Phase one is currently scheduled for June 2000. Phase two will be done concurrently, and will be completed as scheduled in July 2001.

Appended to this report is a portion of a Gantt chart and attached narrative that illustrates the progress of the project up to this time.

Conclusions:

There are currently no changes to the final contract price for the radio communications system although tower site changes being anticipated could provide a significant saving. Implementation is progressing satisfactorily and completion dates remain on schedule. The "Critical Design Review" milestone has slipped 8 weeks to July 15^th, 1999 but remaining milestones and payments to Motorola still remain as presently stated in the contract. The most critical item at this time is the renovation work that has to be completed at the 4330 Dufferin St. location before dispatch equipment can be installed.

Contact Names:

Tom Powell, Deputy Fire Chief, Staff Services and Communications, Tel: (416) 397-4306.

Mark Thompson, Manager, Radio Communications Services, Tel: (416) 397-4389.

Vera Maute, Division Chief, Communications, Tel: (416) 397-4390.

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Appendix to Policies and Finance Committee and Budget Committee report of June 30, 1999

Fire/police Radio Communications

System Implementation - to August 1999

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toronto fire/police phase 1

24

Review of Commissioner Street Transfer Station

Project Expenditures

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the recommendation of the Audit Committee embodied in the following communication (June 1, 1999) from the City Clerk:

Recommendation:

The Audit Committee recommends the adoption of the following report (April 24, 1999) from the City Auditor.

Background:

The Audit Committee, on May 25, 1999 had before it the report (April 24, 1999) from the City Auditor respecting the Review of Commissioner Street Transfer Station Project Expenditures.

The Committee's recommendation is noted above.

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(Report dated April 24, 1999, addressed to the

Audit Committee from theCity Auditor)

Recommendations:

It is recommended that:

(1) the Chief Administrative Officer advise all department heads that the selection and engagement of all consulting services be made in accordance with the City's purchasing policies;

(2) the Chief Administrative Officer advise all department heads of the importance of providing accurate and complete cost estimates when submitting projects to Council for approval, ensuring that necessary due diligence and care is exercised when preparing these estimates, and that if changes in the scope of work are necessary, the details and implications of the changes, as well as additional funding requirements, be clearly communicated to Council for approval;

(3) as part of the 2000 to 2004 Capital Budget Process, the Budget Division, Finance Department advise all departments and local boards that all funds relating to a particular capital project be provided for in one capital account, so that the full funding requirements and expenditures for each project are more readily available and known; and

(4) this report be forwarded to the Works Committee and Budget Committee for consideration.

Background:

At its meeting on November 13, 1998, the Budget Committee, in reviewing the preliminary Capital Budget for Works and Emergency Services, requested that an independent review be conducted on expenditures to date for the Commissioner Street Transfer Station.

The objective of this review was to determine whether costs, beyond the original estimates approved, were within the scope of the project and properly authorized by Council.

Comments:

At its meeting on June 21, 1988, the former Metro Council authorized the firm of Planmac Consulting Engineers and Planners (Planmac) to carry out a feasibility study of converting the Commissioner Street Incinerator to a refuse transfer station.

The rationale for a new transfer station was that there had been no waste transfer or disposal locations within the City of Toronto since 1988 when the Commissioner Street Incinerator was shut down. Establishing a transfer station on Commissioner Street would make the waste disposal operation in the City of Toronto more efficient by reducing the travel distance for each load of garbage and would also allow for some streamlining of operations.

On June 7, 1989, the former Metro Council approved the conversion of the Commissioner Street Incinerator to a transfer station at a cost not to exceed $3,925,000.00, and authorized that the firm of Planmac Consultants be engaged to design and provide supervision of construction of the work.

The preferred option presented by Planmac allowed for incineration equipment in the facility to remain intact, so that if it was necessary to restart the incinerator in future, it could be done with relative ease and at a low cost. However, shortly after Council approved the project, the Province placed a moratorium on the incineration of refuse. As a result, the decision was made to dismantle and remove the incineration equipment and redesign the facility to meet the requirements of a more modern operation. Following a competitive process, the construction contract was awarded and work on the transfer station commenced in December 1993.

Metro Council authorized additional funding for the project, beyond the original $3,925,000.00 it approved in 1989. Details of the additional funding approvals are provided below:

(a) August 15, 1991, Management Committee Report No. 24, Clause No. 20:

$1,500,000.00 was approved for the demolition of three existing furnaces (previously used for incineration) and related pollution control equipment.

(b) October 13, 1993, Management Committee Report No. 39, Clause No. 17:

$442,000.00 was approved to cover the difference between the lowest tendered price and approved funds remaining in the project at that time, in order to award the construction contract (SWM -1- 93) to Dineen Construction Limited, for the conversion of the Commissioner of the Commissioner Street Incinerator to a transfer station.

(c) March 8, 1994, Works Committee Report No. 6, clause 1:

$450,000.00 was approved for the construction of a building extension which would reduce the potential for litter outside the building by allowing operations to be conducted in an enclosed environment and also provide additional plant storage space.

(d) February 22, 1995, Environment and Public Space Committee Report No. 3, Clause No. 1:

$1,484,000.00 was approved for additional construction and consulting services required for column removal and reconstruction, construction of buttress walls, tipping floor demolition and reconstruction, repairs to ramps and additional contract administration.

(e) April 29, 1998, Capital Budget Approval by Council:

$107,000.00 was approved for additional consulting services relating to extra work orders and review of the contractor's claim.

This approved additional funding raised the overall funding for this project from the original approval of $3,925,000.00 to $7,908,000.00. Actual expenditures as at December 31, 1998 were $7,603,148.00.

During the course of our review we were also advised by Works staff that an additional $815,000.00 was spent on the construction of an emission and odour control system at the Commissioner Street Transfer Station prior to the facility becoming operational. Funds for this additional work were provided for in another capital account (Improvements to Transfer Stations) and raised the total cost to date for the Commissioner Street Transfer Station to over $8.4 million.

Conclusions:

All funding requirements relating to the construction of the Commissioner Street Transfer Station were approved by Metro Council. The reports to Council contained full details and justifications for funding approvals and related expenditures. A review of expenditures, conducted on a sample basis, found that the costs incurred were within the scope of this project and that construction contracts were awarded in accordance with the then Metro purchasing policies. It should be noted, however, that while the engagement of the design and construction supervision consultant, Planmac, was approved by Metro Council, a competitive process for these services was not conducted. This deviated from the former Metro policy with respect to the selection of consulting services. Works staff indicate that Planmac was awarded the contract, without a competitive process, because of its involvement in the preliminary engineering study to determine the feasibility of converting the incinerator to a transfer station. In addition, Planmac had been involved in the construction of the Ingram Transfer Station. It is still our opinion, however, that a competitive process should have been conducted for the services in accordance with good business practice and the former Metro policies at that time. To date over $900 thousand has been paid to Planmac for consulting services relating to the Commissioner Street Transfer Station project.

The cost to date of the Commissioner Street Transfer Station is more than double the original estimate approved by Metro Council in 1989. Staff indicate the higher cost can be partially explained by changes in the scope of the work that included removal of the furnaces and related pollution control equipment and the redesign of the transfer station to meet the requirements of a modern operation. Advanced building deterioration as a result of age as well as moisture and salt damage, and the addition of an emission and odour control system (as requested by the then Toronto City Council and adopted by Metro) which was beyond the standard system included in the original design, further increased the cost.

Council's decision on a particular project is premised, to a large extent, on the cost and benefits to be derived. Once the decision is made and construction is started, it is difficult for staff and Council to halt or defer a project since significant time and costs may have already been invested. It is therefore important that complete and accurate cost estimates are prepared when the project is first submitted to Council for approval. Changes to the original scope of work should be kept to an absolute minimum and should really only occur as a result of unforeseen circumstances which could not have been reasonably anticipated. If changes are necessary, then the specific reasons for the changes, implications and additional funding required should be promptly communicated to Council for approval.

The installation of an emission and odour control system was directly related to the Commissioner Street Transfer Station, yet the costs were captured in a separate capital account (Improvements to Transfer Stations). Since the transfer station was still under construction and not yet operational, the additional costs and approved funding for the emission control system should have been reflected in the Commissioner Street Transfer Station capital account. This would have ensured the full cost to construct the transfer station was known. It is agreed that any expenditures incurred after construction is completed and or a facility becomes operational are more appropriately charged to a general capital account established for a specific purpose, for example, energy efficiency improvements.

This project was substantially completed on May 26, 1996, and the transfer station became operational January 2, 1997. There is, however, an outstanding delay/impact claim submitted by the contractor, Dineen Construction Limited, as well as project design and administration charges submitted by the consultant, Planmac, which are being reviewed by staff. Resolution of these matters could further increase the cost of this project. Staff will be seeking Council approval once any further amounts owing have been determined.

Contact Name:

Tony Veneziano, Senior Audit Manager, 392-8353

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following communication (July 14, 1999) from the City Clerk, forwarding the action by the Works Committee at its meeting on July 14, 1999:

The Works Committee reports, for the information of Council, having received the communication dated June 1, 1999, from the City Clerk respecting the review of Commissioners Street Transfer Station Project Expenditures.

Background:

The Works Committee on July 14, 1999, had before it, a communication (June 1, 1999) from the City Clerk, advising that the Audit Committee on May 25, 1999, recommended the adoption of the report dated April 24, 1999, from the City Auditor respecting the review of Commissioners Street Transfer Station Project Expenditure, wherein it is recommended that:

(1) the Chief Administrative Officer advise all department heads that the selection and engagement of all consulting services be made in accordance with the City's purchasing policies:

(2) the Chief Administrative Officer advise all department heads of the importance of providing accurate and complete cost estimates when submitting projects to Council for approval, ensuring that necessary due diligence and care is exercised when preparing these estimates, and that if changes in the scope of work are necessary, the details and implications of the changes, as well as additional funding requirements, be clearly communicated to Council for approval;

(3) as part of the 2000 and 2004 Capital Budget Process, the Budget Division, Finance Department advise all departments and local boards that all funds relating to a particular capital project be provided for in one capital account, so that the full funding requirements and expenditures for each project are more readily available and known; and

(4) this report be forwarded to the Works Committee and Budget Committee for consideration.)

25

Edenbridge Yard, West District

(Kingsway-Humber)

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the report (June 2, 1999) from the Commissioner of Economic Development, Culture and Tourism, embodied in the following communication (July 5, 1999) from the City Clerk:

The Etobicoke Community Council at its meeting held on June 23, 1999:

(1) adopted the following report; and

(2) referred the recommendations to the Policy and Finance Committee, as directed in Clause No. 2 of Report No. 9 of the Strategic Policies and Priorities Committee entitled "Parks Yard Revitalization Study", adopted by Council at its meeting held on May 11, 12 and 13, 1999:

(June 2, 1999) from the Commissioner, Economic Development, Culture and Tourism, responding to Etobicoke Community Council's request for a report on the Edenbridge Yard, with specific reference to the possibility of retaining the property in the City park system; and recommending that:

(i) the Edenbridge property be retained as parkland and the service building therein be retained by the Department pending completion of further studies; and

(ii) the appropriate City officials be authorized and directed to take the necessary actions to give effect thereto.

Background:

At its meeting of April 28, 1999, The Etobicoke Community Council adopted the following Motion by Councillor Bruce Sinclair, Rexdale-Thistletown, respecting the Edenbridge Yard, West District:

"WHEREAS the Edenbridge Yard is an area of open space in proximity to James Gardens, the associated tennis club, and other park and trail amenities comprising the Humber Valley Parks system, and

WHEREAS there is increasing demand for open space and recreational facilities, particularly in light of changing demographics, and

WHEREAS any redevelopment, apart from parkland, is a remote possibility considering the fact that the area in question was a former disposal site,

THEREFORE BE IT RESOLVED THAT the Director of Parks and Recreation, West District, be requested to submit a report to the Etobicoke Community Council on the possibility of retaining the property in the City park system as an integral part of the Humber Valley Park system, and

THAT the Strategic Policies and Priorities Committee be requested to defer consideration of Recommendation No. (1) contained in Agenda Item No. 2, headed "Parks Yard Revitalization Study", on the agenda for the meeting of the Committee on May 4, 1999, pending receipt of the aforementioned report by the Etobicoke Community Council."

--------

(Report dated June 2, 1999, addressed to the

Etobicoke Community Council from the

Commissioner of Economic Development, Culture and Tourism)

Purpose:

To respond to Etobicoke Community Council's request for a report on the Edenbridge Yard, with specific reference to the possibility of retaining the property in the City park system.

Source of Funds:

There is no impact on the capital or operating budgets at this time.

Recommendations:

It is recommended that:

(1) the Edenbridge property be retained as parkland and the service building therein be retained by the Department pending completion of further studies.

(2) the appropriate City officials be authorized and directed to take the necessary actions to give effect thereto.

Council Reference:

At its meeting of April 28, 1999, Etobicoke Community Council requested a report from the Director of Parks and Recreation, West District, on the possibility of retaining the Edenbridge property in the City parks system, as an integral part of the Humber Valley Park System.

Comments and/or Discussion:

As a result of a recent study on the rationalization of parks yards, it was determined that the Edenbridge Yard, located in West District, was to be closed and staff relocated to other yard facilities. While the service yard use of the lands can be accommodated at other sites, we would note that the existing structure and the fenced site may serve other viable parks and recreation purposes.

Specifically, there is a district-wide analysis of indoor bocce court requirements in Etobicoke now underway. The Edenbridge Yard site and building is being reviewed in the context of this study.

Other community parks and recreation applications may also be possible further to more detailed studies and community consultations. The property in question, comprising some 1 hectare, is also strategically located next to a busy picnic and community tennis facility. Even if it is not feasible to retain the building, the land in question is valuable greenspace along Edenbridge Drive and an area that could easily be landscaped to provide enhanced opportunities for picnics and other recreational activities.

It should also be noted that the site is owned by the Toronto and Region Conservation Authority and any change in its status would be subject to their approval and process for land disposal. This site is a former waste disposal site and consequently, the opportunity for redevelopment into anything other than parkland would be limited.

Conclusions:

Although declaring Edenbridge Yard as a surplus parks facility will improve operational effectiveness in the West District, retaining the property and building as part of the Humber Valley Park System will add value to the system and assist staff in addressing the increasing demand for open space and indoor recreation.

Contact Name:

Don Boyle, Director, Parks and Recreation, West District, 394-5723

26

Child Care Capital Needs and Future

Funding Strategies

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends:

(1) the adoption of the joint report (July 14, 1999) from the Commissioner of Community and Neighbourhood Services and the Commissioner of Urban Planning and Development Services;

(2) that the Mayor, together with the City's Children Advocate and other interested Councillors, request a meeting with the Provincial Government (Minister of Community and Social Services and/or the Premier's office) to discuss the urgency of Provincial Government funding for child care capital needs;

(3) that a copy of the Commissioner's report be sent to the Children and Youth Action Committee for its information and comment; and

(4) the Commissioner of Community and Neighbourhood Services be requested to submit a report in the fall of 1999, on the development of a five to ten year childcare Capital Program and its funding sources.

The Policy and Finance Committee also submits the following joint report (July 14, 1999) from the Commissioner of Community and Neighbourhood Services and Commissioner of Urban Planning and Development Services:

Purpose:

This report identifies the need for major and minor capital funding support to preserve the existing stock of licensed child care and to expand child care services to meet the growing unmet demand. In addition, the historic roles and funding strategies of the Province of Ontario, and the seven former municipalities will be described. This will provide the context for Council's future consideration of optional capital funding strategies.

Funding Sources, Financial Implications and Impact Statement:

No additional City funds are being requested at this point in time. Details of the approved capital support for licensed care facilities are outlined in this report.

Recommendations:

It is recommended that:

(1) the Commissioner of Community and Neighbourhood Services provide more detail on the capital development costs of child care programs impacted by school site closures in the year 2000 following the current public consultation and imminent School Board decisions on specific sites to be closed;

(2) City Officials undertake a more comprehensive review of capital financing strategies employed in other municipal jurisdictions across Ontario and the rest of Canada to support major and minor capital needs in child care and report further to Council;

(3) City Officials seek provincial approval to use any unspent child care fee subsidy allocation on the minor capital needs of child care programs serving subsidized families and develop criteria to guide the distribution of funds approved for this purpose;

(4) approval be given for the ongoing contribution of any surplus user revenue raised from families using subsidized child care to the Child Care Capital Reserve; and

(5) the Children's Services Division be directed to reflect child care development needs in its multi-year business plan.

Council Reference/Background/History:

The Children and Youth Action Committee, at its May 28, 1999 meeting discussed the impending child care capital needs and possible funding strategies to support them. A joint report from the Commissioner of Community and Neighbourhood Services and the Commissioner of Urban Planning and Development Services was requested to outline child care capital needs and to propose possible mechanisms which could be used to fund these needs. Specifically, that motion requested details concerning the immediate funding needs of child care centres that will have to be relocated because of impending school closings; ongoing major and minor capital dollars needed; funding options including property tax contribution, section 37 provisions and development charges. This report provides the information requested.

While work on this report was underway, pressures continued to mount within certain sectors of the child care community. Two related reports, both dated June 1, 1999 entitled "Capital Funding Support for Pelmo Park Child Care Centre" and "Capital Loan Guarantee for Earl Haig Community Day Care Centre to Develop a Child Care Centre" were considered at Community Services Committee on June 17, 1999 and at Policy and Finance Committee on June 23, 1999. The Pelmo Park report requests a revision to the revised relocation and renovation costs being encountered moving the program from its school location to its new service site. The Earl Haig report contains a request for another loan guarantee by the City to allow the development of a new child care centre. Ultimately, the continued use of the Child Care Capital Reserve and the loan guarantee approach must be rationalized in an overall City policy with respect to child care capital development.

Comments and/or Discussion and/or Justification:

(1) Existing City Capital Funding Sources for Licensed Child Care

There is approximately $900 thousand in unallocated funds currently in the child care capital reserve established to finance the relocation and renovation costs associated with child care centres forced to vacate school premises. Twelve capital projects, for a total of $4.275 million are in various stages of completion. In addition, the City has outstanding liabilities of approximately $1.740 million associated with five loan guarantees for child care centres. As a result of development agreements secured through Section 37 of the Planning Act with Sam-Sor Enterprises and Imperial Oil Ltd., $2 million plus land have been secured toward a new child care centre in the North York Centre. Finally, within the City's five-year capital forecast, there is a child care component within a multi-service community centre planned for 495 Sherbourne Street. At this time, the capital funds associated with the child care component are contained within the $10 million recreation complex plans.

(2) Factors Contributing to Growing Child Care Capital Need

(a) Unmet Service Demand

Historically, the availability of licensed child care services and the fee subsidies needed to assure access to them by low income families has not kept pace with the need or demand. The current licensed stock of service, which currently has only 2,000 vacancies, clearly is insufficient to meet this need.

Similarly, there is a demonstrated need for additional fee subsidies to assist families who are unable to pay full fee. While the City currently has sufficient fee subsidy to provide subsidized child care service to 24, 216 children, this is not enough to meet the demand. There are approximately 12,000 children on the waiting list for regular fee subsidies.

The unmet service demand is particularly worrisome in the mandatory Ontario Works Program. Child care is acknowledged to be critical for clients with a mandatory participation requirement; and meeting negotiated Ontario Works participation targets is critical to the outcome based provincial funding associated with this initiative. Currently, there are over 3,300 Ontario Works families on the Ontario Works child care subsidy waiting list. At maturity, the Community and Neighbourhood Services Department estimates that 21,000 additional child care fee subsidies will be needed to support the Ontario Works program.

The Provincial Operational Review of Ontario Works and Subsidized Child Care considered strategies required to expand the stock of child care service options for participating families. Even assuming that there will be a continued mix of informal and formal forms of care chosen by Ontario Works families, the future Ontario Works child care needs can not be met without some level of child care capital development. An estimate of the capital costs associated with even a modest level of licensed group care growth to meet Ontario Works program demands is $150 million. This estimate assumes that in future, the child care needs of about half of the Ontario Works families could be met through non-licensed care options. Meeting the licensed care needs of the remainder would require the building of an additional 10,000 spaces at an average cost of up to $15,000.00 per space.

Another problem is that the access to both licensed and subsidized child care is not equitably spread across the geography of the city nor across the age groups of the children requiring the care. The City's Service Plan for Child Care, originally approved by the former Metropolitan Toronto Council in 1993, clearly shows that there are a number of wards (17, 10, 2, 19 and 20) that are at least 15 per cent below their service equity targets. The age equity data within the Service Plan shows that the availability of licensed care options for infants and toddlers is also below its equity target.

A very modest capital development plan which would ensure that no City ward is more than 10 per cent underserved according to the current Service Plan for child care would require the strategically placed construction of at least 10-11 new child care centres adding a total of approximately 700 new licensed spaces. The cost of even such a modest development plan would be minimally $10.3 million.

The pressure for more infant and toddler spaces in particular, can be expected to increase with the implementation of the Learning, Earning and Parenting Program (LEAP) component of Ontario Works, by year-end. There are insufficient licensed spaces for the youngest aged children to meet the mandatory child care service requirements associated with LEAP, a program that requires teen parents, aged 16 and 17 to stay in school to remain eligible for their benefits under Ontario Works. A service demand for up to 2,000 additional infant and toddler spaces may be expected at program maturity. The capital development costs associated with building these spaces would be as high as $33 million.

The pressure to expand the current licensed stock of child care services to meet unmet service demands will increase as a result of provincial initiatives such as Ontario Works, LEAP, Health Babies/Healthy Children, and the Speech and Language Initiative. All of these provincial initiatives include the expectation of child care support as a mandatory or preferred aspect of their program design.

(b) School Closures

As a result of the new provincial education funding formula, school boards in Toronto were required to review their accommodation needs in the year 2000 and beyond. The Toronto District School Board has identified the need to close up to thirty of its schools over the next three years to reduce its surplus capacity. Phase 1 of its plan calls for the closure of a maximum of ten schools by September 2000. Five of these ten schools contain child care centres. The Board is currently engaged in an Area Review Committee process to study the community impact of the closure of the first ten schools. The results of this review process were reported at the end of June but final decisions have been deferred. The Toronto Catholic School Board had identified the need to close up to five schools containing child care programs by the year 2000 but the Board has also deferred this decision.

Not only will child care service to families using the centres located in the closing schools be affected, but also there will be a domino effect. Students displaced from the closed schools will be enrolled in adjacent schools which also contain child care programs. To make room for the swelling enrolment, these child care centres will also face displacement. There are eleven additional child care centres which are likely to be displaced in this way.

If the twenty-one child care centres being displaced as a direct or indirect result of school closures were not relocated elsewhere, licensed care for approximately 1,000 children would be lost. More than half of the child care children being displaced are younger than school age. While it may be possible to negotiate shared use of school space to serve some of the school aged children being displaced, this is not a service option for infants, toddlers and preschoolers; and increasingly schools are reluctant to allow the shared use of their classroom space with child care programs. A conservative estimate of the capital costs associated with relocating care for the youngest children expected to be displaced by school closures in year 2000 is $6.2 million. This estimate assumes a per space relocation and renovation cost of $12.3 thousand To meet the child care need created by the full three-year phased closure of schools, a total of $36.9 million in child care capital support would be needed.

School closures are not the only reason that existing child care space in schools may be lost. Each year, because of changing school enrolment patterns, a number of child care centres are forced to relocate. Already this year, with sometimes as little as a few weeks notice, a number of child care centres including Graydon Hall, Mason Road, McCauley and Braeburn Woods have been asked to leave portions or all of school premises.

The current Child Care Capital Reserve is insufficient to address the combined impact of forced relocations of child care centres as a result of school closures and changing school enrolment patterns. The Child Care Capital Reserve which was originally established as an emergency response to a handful of child care centres whose future was threatened first by school renovations and later by school closures now has approximately $900.0 thousand unallocated funds. Based on experience to date individual centres have received anywhere from $25.0 thousand to $650.0 thousand worth of assistance from this reserve. Unless additional funds are added to the Child Care Capital Reserve, it will cease to be a useful tool to assist centres in crisis. This report recommends investing any surplus user revenue from the fee subsidy program in the Child Care Capital Reserve.

(c) Physical Accessibility

Increasingly, child care programs are seeking to be more inclusive in their admission practices striving to integrate to the fullest degree possible children and families facing a variety of special challenges. In some cases, the special needs of the children or families served require a barrier free service environment to accommodate wheelchairs and other prosthetic devices and equipment. Ideally, all child care facilities should be barrier free. But a 1990 assessment of a structured sample of child care settings in what was then Metropolitan Toronto found that no centre in the sample was barrier free. The majority of centres lacked accessible parking and drop-off areas. Centres located above ground level frequently did not have ramps or elevators to facilitate access. Washrooms were the primary area found in need of adaptation. Playrooms were generally found to be the most accessible while playground redesign offered the greatest challenge. Estimates (in 1990 dollars) for retrofitting the centres assessed as part of the sample reflected the wide variety of barriers encountered and ranged from low of $2.8 thousand in a centre with few barriers to $140.8 thousand where the physical layout of the building significantly limits access. While the range of estimated costs was wide, the median estimated cost was approximately $30.0 thousand per centre.

Even a conservative estimate of the capital costs associated with retrofitting the child care centres serving subsidized clients could be as high as $15 million. Currently, there is no provision in the Children's Services budget or business plan to undertake this important work even on an incremental basis.

(d) Relicensing to Serve Younger-aged children

To address the unmet need for licensed care for younger aged children and to improve their centre's own financial viability, some operators have undertaken on site renovations to include or expand infant care within their licensed capacity. Based on the City's directly operated child care centres' renovation experience, it is estimated that the renovation cost to existing licensed space to serve infants is likely to be approximately $7,500.00 per infant space created. Without some publicly funded capital program, most existing child care operators would not be able to undertake the renovations required to serve younger aged children in their programs.

(e) New Commercial, Residential or Social Housing

New commercial, residential or social housing initiatives will also to generate a need for child care services. This will add further pressure on the already unmet need for licensed and subsidized child care service. While larger scale developments may provide opportunities to secure new facilities, such as the Railway Lands, smaller incremental developments may prove more difficult to service. The Official Plan will address the need for social infrastructure within new communities to ensure balanced growth.

(f) Minor Capital Needs

In addition to funding required to develop new child care programs or relocate existing child care programs, many child care operations require funding assistance with their minor capital needs. (Minor capital is defined as capital and equipment expenditures of $40.0 thousand and less.) Toronto's long history of encouraging the development of licensed child care centres has resulted in comparatively older facilities than newer communities throughout the Province. As a result, costs associated with maintenance and repair tend to be higher.

Many of the City's older centres require capital upgrades to comply with provincial regulatory statutes. Operators are facing unanticipated expenses associated with health and safety related work that is required to preserve their clear license to operate. Most recently, operators have been faced with the need to refurbish or replace playground structures to meet "the general policy directive" of the Ministry of Community and Social Services to incrementally bring all child care playgrounds into conformity with the new Canadian Standards Association standards. No special funds have been identified or approved for this purpose.

Constraints on operating funding preclude operators from incorporating their minor capital needs in their annual operating budgets. Per diems paid on behalf of needs tested families have not been increased since 1993 and no longer reflect the real cost of providing the service on a day to day basis. They are clearly insufficient to allow operators to finance preventative maintenance programs.

Historically, the Province distributed any unspent fee subsidy to assist operators with minor capital expenses, particularly those related to licensing concerns or health and safety requirements. The amounts available for redistribution as minor capital varied year to year with individual child care sites receiving varying allocations ($10.0 thousand - $25.0 thousand) depending upon the problem being addressed. Since the City is assuming the full role of service system manager for child care as part of the July 1, 1999 download of new programs, it will be important to continue a minor capital program. At least $1 million in minor capital should be made available to address ongoing health, safety and licensing concerns in child care programs under service contract with the City. This report recommends seeking provincial approval to use any unspent fee subsidy dollars for this purpose.

(g) Cancellation of Provincial Capital Grant Program

While there is clear pressure and need to grow the stock of licensed child care available, this is difficult to do without a comprehensive secure capital funding program. Between 1971 and 1995 the provincial government played a major role in capital funding. Originally, the capital program administered by the Ministry of Community and Social Service funded 100 per cent of the capital costs for municipal and non-profit child care programs. Many community-based non-profit child care centres, as well as some of the City's own directly operated facilities (e.g. Albion, Birchmount and Danforth) were funded as part of "Project Day Care" which operated during 1971 and 1972. Thereafter, capital cost sharing was instituted with maximum provincial contribution not exceeding 80 per cent of actual costs. As an example, the municipally operated child care program, Capri was funded with an 80 per cent provincial capital grant in 1986. Later directly operated child care centres at Centenary and Lakeshore Homes for the Aged were developed with 50 per cent provincial capital financing. Most recently, renovations to Jesse Ketchum Child Care Centre and the development of Malvern Child Care Centre were completed in 1997 with 100 per cent provincial capital money from the jobsOntario capital program.

In addition to the capital program operated under the Ministry of Community and Social Services, there was also a "Child Care in New Schools" capital program operated out of the Ministry of Education and Training. All child care capital grant funding for child care was frozen in June of 1995 and subsequently eliminated in 1996 with the release of a child care reform discussion paper. The 1998 provincial budget contained expectations that capital development of child care in the future would be financed by the corporate sector.

While the Province has not had a major capital funding role since 1996 up until July 1, 1999 it has continued to provide minor capital funding to licensed child care programs by redistributing any unspent fee subsidy allocation at the end of each fiscal year. With the transfer of service system management responsibility to the City effective July 1, 1999, the future of this minor capital funding strategy remains uncertain. With provincial permission, the City would like to continue the past provincial practice of redistributing any unspent fee subsidy allocation as a minor capital program.

(3) Existing City Capital Programs

The City has a number of mechanisms which have been used to address child care capital development needs. Even taken collectively, they are insufficient to maintain the current stock of licensed service facing dislocation from school settings or to address the continuing need for expansion of both licensed stock and subsidized care. The mechanisms that have been used or are still in use to address capital development needs include the following: the build to lease program, the loan guarantee program, the child care capital reserve and Section 37 of the Planning Act. Each are described briefly below.

(a) Build to Lease

With the exception of the past two years, the Children's Services Division has historically always had a capital program. For the most part, it pertained to the expansion of the municipally operated program. Over the years, 14 directly operated child care centres were built under a variety of capital cost sharing arrangements with the Province has been described above. The Metro Hall Child Care Centre was the only purpose built directly operated centre developed without a capital funding grant from the Province. In addition to the municipal centres that comprised the Division's capital plan, for a number of years that capital plan also included a "build to lease" provision. The concept, which had been approved by the former Metropolitan Toronto Council as part of the 1990 Comprehensive Review of Child Care, entailed the development of turnkey child care centres by the City in under resourced wards for operation by community operators. Regrettably, provincial cost sharing approval for this concept was never achieved and the plan for a cost shared development was abandoned. The current City agreement with Sam-Sor Enterprises to fund the development of a child care centre allows this concept to be resurrected. The Children's Services Division will work with Corporate Services to develop a child care centre which meets the City's Service Plan and Operating Criteria for Child Care. The finished product will then be turned over to a community-based operator to run.

(b) Loan Guarantee

In 1994, the former Municipality of Metropolitan Toronto approved criteria governing loan guarantees by the municipality for child care centres wanting to undertake renovations or reconstructions. Loan guarantee approvals for Allenby Child Care Centre, John Wanless Child Care Centre, Charlotte Child Care Centre and Growing Tykes Child Care Centre were sought in 1993, 1994 and 1997 respectively. The size of the loans varied from $280.0 thousand to $1 million. As mentioned earlier in this report, a loan guarantee for the construction of Earl Haig Child Care Centre is presently being sought.

The loan guarantee approach has been used as a strategy of last resort when other capital grants have not been available and when the centre in question can demonstrate through a business plan that it can carry the cost of the loan required to finance the development but needs a guarantor to secure the loan in the first place. Loan guarantees typically have proven a viable approach for programs that enjoy a mix of full fee and subsidized clientele and whose board is willing to assume the financial liability associated with the multi-year repayment of a substantial construction loan.

(c) Child Care Capital Reserve

The Child Care Capital Reserve was established in 1997 by the former municipality of Metropolitan Toronto in response to a summer crisis faced by child care centres in nine schools facing capital renovations Without capital financing for the child care centres located in the schools with renovation plans, these programs were facing the risk of closure. As a result of an unexpected provincial regulation change governing the treatment of subsidized child care user revenue, the municipality was allowed to retain significantly more user revenue than had been forecast. The Children's Services Division secured Council's permission to invest $1.3 million of this unanticipated revenue surplus in a Child Care Capital Reserve and to use it to lever contributions from both the federal government ($1 million) and two of the area municipalities ($700.0) towards the capital costs of 9 child care centres located in schools undergoing renovation. In this way, the capital costs of the following child care centres were financed: Central Eglinton($654.0 thousand), Gibraltar ($173.0 thousand), Lord Dufferin ($149.0 thousand), Parkdale ($308.0 thousand), Dalemount ($350.0 thousand), Dublin Heights ($350.0 thousand), Rockford ($350.0 thousand), Scarborough Village ($350.0 thousand) and Alderwood Action ($350.0 thousand).

In the summer of 1998, when three child care centres unexpectedly faced eviction as a result of changing school enrolment patterns, the criteria governing the use of the Child Care Capital Reserve was expanded, with Council approval, to include the payment of the relocation and renovation costs of child care centres evicted from school premises. To help finance the costs associated with the three centres being evicted, Council also approved the transfer of $1.9 million in surplus subsidized child care user revenue into the reserve account. The three centres assisted through this program were Pelmo Park (whose original renovation costs have increased from the $25.0 thousand originally approved to $150.0 thousand), Playhouse Child Care ($800.0 thousand) and Silverthorne Child Care ($125.0 thousand).

The Child Care Capital Reserve currently contains approximately $900.0 thousand of unallocated funds. However, this amount is insufficient to deal with the relocation and renovation costs associated with the twenty-one child care centres at risk of displacement as a direct or indirect result of year 2000 school closures in the City. The continued use of surplus subsidized child care user revenue to finance the capital costs of centres serving full fee as well as subsidized clients also requires reconsideration.

(d) Section 37 of The Planning Act

Section 37 of the Planning Act permits municipalities to pass zoning by-laws which authorize increases in the height and/or density of new development in exchange for the provision of public benefits. In the past, Section 37 has been used by the City's former local municipalities to secure the provision of affordable housing, heritage preservation, streetscape improvements, public art, licensed child care facilities and community service space, amongst other matters.

To date, the application of this planning mechanism has resulted in the construction of some of the few purpose-built child care centres within the City. Six such facilities, serving 329 children, are presently operational. Several others have been secured but have not yet been constructed. Section 37 can only be employed in instances where the developer has requested increases in height and/or density. The voluntary and site-specific nature of this tool does not lend itself to the need to provide capital funding for new child care facilities City-wide.

The current use of Section 37 is governed by the existing Official Plans for each of the former municipalities, which are still in force until the adoption of an Official Plan for the new City. The new Official Plan will need to harmonize the use of Section 37 across the City. A report on Section 37 will before the Planning and Transportation meeting scheduled for July 20, 1999. The report will recommend the development of interim guidelines for the City-wide application of this planning tool.

(e) Development Charges

In 1998, the Chief Financial Officer and Treasurer was authorized to undertake the research necessary to implement a new development charges by-law consistent with the requirements of the new provincial Development Charges Act and to harmonize the different development charges of the former area municipalities. The public meeting to review the consultant's background study and the proposed charges was held at the Policy and Finance Committee meeting on June 24, 1999. Development charges are charges imposed against the development or redevelopment of land to pay for growth-related infrastructure, and are based on historical municipal capital expenditures for "hard services" such as roads, sewers and watercourses and "soft services" such as directly operated recreational facilities, parks and libraries. Due to the limited capital expenditures by the former municipalities for child care facilities, related charges are currently not included in the development charge calculation as proposed in the new City Development Charges By-law.

The Chief Financial Officer will have a report on the results of the June 24, 1999 Public Consultation process at the meeting of the Policy and Finance Committee meeting scheduled for July 20, 1999. This report brings forward the recommendation made by the Children and Youth Action Committee at its meeting on May 28, 1999 that amendments to the Provincial Development Charges Act, 1997 be made "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 expenditures in providing a service if the cost of providing the service has been transferred from the Province to the municipality". The intent of this recommendation is to enable the City to give full consideration to the inclusion of child care in the development charge calculation of the City's new Development Charges By-law.

(f) Unavailability of Operating Dollars

While there is a clear need to expand the stock of licensed care service options for families, many families within the City will require fee subsidy assistance to be able to access licensed care even if it were available. Recent City efforts to secure matching provincial subsidy to fund even the 2,000 licensed space vacancies that currently exist within the City have not been successful. To date, the Province has also not agreed to further enhance the level of child care funding available to support the Ontario Works initiative and the level of funding support associated with the implementation of the mandatory LEAP program ($4.5 thousand per teen family) is also seen as being inadequate. This will be the subject of a future report to Council describing the program design and implementation plan in more detail.

Any new licensed child care programs created through a capital development strategy will not be eligible for wage subsidy assistance. Wage subsidy is a program established by the Province to help increase the wages of staff working in licensed child care programs. While it was originally financed 100 per cent by the Province, it is now cost shared 80:20 with the City and effective July 1, 1999, it will be managed by the City as part of downloading. The wage subsidy program is at its ceiling and is unlikely to receive any additional funds to support corresponding capital growth and development.

The lack of additional fee subsidies and wage subsidies will create financial challenges for any new child care programs developed under any capital financing strategy the City may wish to consider.

Conclusions:

The need for a child care capital plan to maintain existing service levels and to address unmet service needs has been summarized in this report. There is insufficient information at the moment to propose a specific five-year plan. Recommending a comprehensive capital financing strategy for child care development is also premature at this time. Public consultation on the City's proposed new Development Charges By-law has just been completed. The Official Plan is still under development and harmonization of the future use of Section 37 of the Planning Act has not yet been accomplished. The use of Section 37 of the Planning Act is still governed by existing Official Plans, until interim guidelines have been adopted by Council. Ultimately, harmonization will occur in the context of the new Plan.

While there are some opportunities to preserve existing strategies used to support major and minor capital needs in child care (e.g. child care capital reserve, loan guarantee program, reallocation of unspent fee subsidies to minor capital) these strategies alone are insufficient to meet the anticipated future capital funding requirements. In the interim, the City will also continue to research and review strategies used by other municipal jurisdictions to meet child care capital development needs.

A further report on the financing of child care capital development is recommended when decisions respecting the City's new Development Charges By-law and Official Plan are being considered. It is also recommended that the five-year capital development plan for child care be developed and incorporated into the multi-year business plan of the Children's Services Division while work continues on a more comprehensive capital funding strategy for child care within the City.

Contact Names:

Marna Ramsden-Urbanski, General Manager, Children's Services, Community and Neighbourhood Services; Tel.: 392-8128.

Ann-Marie Nasr, Manager, City-wide Policy and Programs, Urban Planning and Development Services; Tel.: 392-0402.

The Policy and Finance Committee submits the following communication (July 20, 1999) from Councillor Olivia Chow:

Whereas there is a growing need for childcare capital funds:

(a) unmet Service Demand of $33 million;

(b) cost of relocating centres due to school closures: $36.9 million;

(c) cost to provide barrier free services: $15 million;

(d) minor capital needs (annually): $1 million Total: $85.9 million, (pages 4-8 of Clause No. 42, report from the Commissioners on Child Care Capital Needs and Future Funding Strategies)

Whereas all provincial capital grant funding for child care was frozen in June 1995, and subsequently eliminated in 1996;

Whereas under the provincial Development Charges Act 1997, childcare facilities are ineligible for development charge funding due to a lack of a municipally funded capital program over the previous ten year period and the absence of a five to ten-year capital program (page 20 of Clause No. 1 i, report from the Chief Financial Officer and Treasurer on City-wide Development Charge By-Law)

Therefore be it resolved:

(1) that the Mayor, together with the City's Children Advocate and other interested councillors, requests a meeting with the provincial government (Minister of Community and Social Services and/or the Premier's office) to discuss the urgency of provincial government funding for child care capital needs;

(2) that a copy of the Commissioner's report be sent to the Children and Youth Action Committee for its information and comment; and

(3) that the Commissioner report in the fall of 1999 on the development of a five to ten years childcare capital program and its funding sources.

Councillor Olivia Chow appeared before the Policy and Finance Committee in connection with the foregoing matter.

(Councillor Pantalone declared his interest in this matter in that his children are registered in a child care centre which has a purchase of service agreement with the City of Toronto.)

(Councillor Pantalone, at the meeting of Council on July 27, 28, 29 and 30, 1999, declared his interest in the foregoing Clause, in that his children are registered in a child-care centre which has a purchase of service agreement with the City of Toronto.)

(Councillor Fotinos, at the meeting of Council on July 27, 28, 29 and 30, 1999, declared his interest in the foregoing Clause, in that his mother provides private home child care.)

27

Youth Employment Program - Two Wheel Drive

Grant from Human Resources Development Canada

(City Council on July 27, 28, 29 and 30, 1999, Council adopted the following recommendation:

"It is recommended that the report dated July 22, 1999, from the Commissioner of Community and Neighbourhood Services, embodying the following recommendations, be adopted:

'It is recommended that:

(1) Council adopt the report dated July 12, 1999, from the Chief Administrative Officer, regarding the receipt of funds from Human Resources Development Canada for the implementation of the 1999 Two Wheel Drive - Youth Employment Program;

(2) staff from Community and Neighbourhood Services work with staff from the Access and Equity Unit on the evaluation and organizational placement of this project; and

(3) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.' ")

The Policy and Finance Committee submits, without recommendation, the following report (July 12, 1999) from the Chief Administrative Officer; and reports having requested the Commissioner of Community and Neighbourhood Services to submit comments thereon directly to Council for its meeting scheduled to be held on July 27, 1999:

Purpose:

To request approval to receive grants from Human Resources Development Canada to provide training opportunities for high risk youth and to adjust the gross expenditure of the Access and Equity Unit accordingly.

Financial Implications:

Human Resources Development Canada is providing 100 percent of the funding for this project. There is no direct cost to the City. The Access and Equity Unit provides overall co-ordination for the project.

Recommendations:

It is recommended that:

(1) authority be granted to receive project funds from HRDC Canada to provide training opportunities for youth and that the approved budget of $1,501,000.00 gross expenditure ($1,471,000 net expenditure) for the Access and Equity Unit be changed to $1,800,998.00 gross expenditure ($1,471,00.00 net expenditure); and,

(2) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference:

On March 4, 5 and 6, 1998, (Special Committee to Review the Final Report of the Toronto Transition Team Report 3(6)), Council approved the Mandate of the Task Force on Community Access and Equity which authorized the continuation of the existing municipal advisory committees on access and equity pending receipt of the Report of the Task Force on Community Access and Equity. On June 9, 10 and 11, 1999 (Strategic Policies and Priorities Committee Report No.10, Clause No. 2) Council approved the Report of the Chief Administrative Officer transferring the resources and functions of the Corporate Access and Equity Unit to the Strategic and Corporate Policy Division in the Chief Administrator's Office. The report noted that the 1999 approved budget was $1,501,000.00 total gross expenditures ($1,471,000.00 net expenditure).

Comments:

The Committee on Community, Race and Ethnic Relations established by the former North York Council has implemented a variety of youth oriented programs since the Committee's establishment. The Committee submitted applications to Human Resources Development Canada to implement a training program for 15 high risk youth.

In an effort to give high needs youth and new Canadians the opportunity to ride and own their own bicycle, a program was developed to reuse and refurbish old bikes. A bicycle drive was organized by the Committee in conjunction with the Breakfast Club in October last year. Approximately 3,000 unwanted, used bicycles were donated by the City residents with the knowledge that these bicycles would be repaired and refurbished by youth so that the children associated with the Breakfast Clubs would receive a free bicycle in the spring.

This program is also geared toward decreasing bicycle-related injuries among children. According to The Hospital for Sick Children, statistics in Ontario show that more than 1,500 children are injured and 12 are killed each year in cycling mishaps. In addition, 75 percent of cycling deaths are the result of head injuries, injuries that helmet use can reduce by 85 percent. To address this concern, the participating youth will also receive bicycle safety training, bicycle repair and maintenance training and a free bicycle helmet, in addition to life skills and literacy training.

The project is being carried out in conjunction with several organizations including the Hospital for Sick Children, the Toronto Children's Breakfast Club, the Canadian Tire Corporation, Seneca College, Hispanic Development Council, African Canadian Entrepreneurs, the Carpenters Union and the Community Unity Alliance. These organizations are assisting with various elements of the project such as the provision of literature and training on safety, outreach and promotions.

The first demonstration project initiated by the Committee has been successful and HRDC has approved a second project. The project budget provides for a weekly stipend for each student for 24 weeks and the salaries of a repair co-ordinator and a project co-ordinator. The funding for these projects was not reflected in the 1999 approved budget for the Access and Equity unit, therefore the approved gross expenditure needs to reflect the two grants of $149,999.00 each for a total of $299,998.00. This project supports the City's overall access and equity objectives to increase opportunities for persons facing disadvantage, especially youth. The project is consistent with the City's commitment to youth focused initiatives including the Job Corps program administered through the Community Services Department.

Conclusions:

The implementation of this training program advances the City's access and equity objectives to improve opportunities for disadvantaged persons with a specific focus on youth.

Contact:

Ceta Ramkhalawansingh: 392-6824

Rick Gosling: 395-6475

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following report (July 22, 1999) from the Commissioner of Community Services:

Purpose:

This report provides comments on the technical amendment to the budget of the Access and Equity Unit to receive grants for the youth employment program developed by the Committee on Race and Ethnic Relations established by the former North York Council.

Funding Sources, Financial Implications and Impact Statement:

The technical amendment to the budget of the Access and Equity Unit provides for the receipt of grants for the youth employment program.

Recommendations:

It is recommended that:

(1) Council adopt the report (July 12, 1999) from the Chief Administrative Officer regarding the receipt of grant funds from Human Resources Development Canada for the implementation of the 1999 Two Wheel Drive - Youth Employment Program;

(2) staff from Community and Neighbourhood Services work with staff from the Access and Equity Unit on the evaluation and organizational placement of this project: and

(3) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference:

At its meeting of July 20, 1999, the Policy and Finance Committee had before it a report (July 12, 1999) from the Chief Administrative Officer regarding the receipt of funds from Human Resources Development Canada for a youth employment program being carried out by the Committee on Race and Ethnic Relations established by the former North York Council. The report sought approval to receive grant funds and to make the necessary adjustment to the budget of the Access and Equity Unit, which is part of the establishment of the Chief Administrative Officer.

Comments:

The youth employment program being implemented by the former North York Committee on Community Race and Ethnic Relations is consistent with other youth focussed initiatives including the Job Corps program being administered by the Community Services Department and other programs being implemented through Parks and Recreation. Discussions are underway to implement a co-ordinated approach for the delivery of youth oriented employment programs. Staff from my department will work with Access and Equity Unit staff on the evaluation of the 1999 project and to determine the organizational placement of this particular program.

Conclusions:

The implementation of this training program is consistent with the City's overall objectives regarding youth employment.)

(Councillor Prue, at the meeting of Council on July 27, 28, 29 and 30, 1999, declared his interest in the foregoing Clause, in that his wife is an employee of Human Resources Development Canada (HRDC) and is involved in determining grants that may be awarded to various groups, including the City of Toronto.)

28

Funding Request for the Inner-City

Games in Los Angeles (All Wards)

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee reports having concurred with the recommendation embodied in the following joint report (July 14, 1999) from Councillor Olivia Chow and Councillor Joe Pantalone:

Purpose:

This is to request that the Commissioner Economic Development, Culture and Tourism to consider the emergency funding request in the amount of $10,000.00 to sponsor two basketball teams of high risk youth participating in the Inner-City Games in Los Angeles.

Source of Funds:

There is no funding source.

Recommendation:

It is recommended that the Commissioner Economic Development, Culture and Tourism consider the merit of this emergency funding request and report directly to Council with his recommendation.

Background:

The Inner-City Games in Los Angeles, referred to as the "Olympics" of the inner-city, is an annual event which hosts 150,000 high risk youth while competing in various athletic events. An estimated 1 million youth have participated from 13 American cities since its debut in 1991. The Inner-City Games are a response to the growing number of problems facing inner-city youth and are geared toward children who might not have the opportunity to participate in traditional athletic activities because of limited resources or other circumstances. The program emphasizes physical fitness, education and fair play through sports activities and encourages the development of self-esteem, camaraderie and discipline in all endeavours. Since 1991, the Inner City Games have also become an annual event in other American cities such as Orlando, Chicago, Washington, Miami and Atlanta. Urban Alliance and Race Relations, a non-profit charitable advocacy organization that promotes a stable and healthy ethno-racial community, approached the City to sponsor the Toronto athletes from August 12 - 16, 1999 at the Inner-City Games in Los Angeles. They have assembled a group of 36 youth to form one female and one male basketball team, who will become the first international contingent in the Games history. The youth are from high risk communities across Toronto and are between the ages of 13 and 18. The sponsorship they have requested is in the amount of $10,000.00 for transportation, accommodations and meals. Urban Alliance and Race Relations are partnering with the Toronto Police, and to date have fundraised $4,700.00. The Toronto Raptors have agreed to match this amount dollar for dollar which leaves a balance of $7,500.00 which will be achieved through continued fundraising efforts.

Total funding required: $26,900.00

Total raised: $ 4,700.00

Raptors will match: $ 4,700.00

Requested from City of Toronto: $10,000.00

Balance: $ 7,500.00

Comments:

Urban Alliance and Race Relations are participating in the Inner-City Games as an initial effort to understand the organization of these games and look to the potential of Toronto becoming involved in holding our own games on a city wide basis.

By becoming the sponsor of the Toronto teams, the City of Toronto will have the rights to display the City logo on team jerseys, programs, brochures and other paraphernalia. This will provide the opportunity for international exposure during a major athletic event in a foreign venue. As well, the City has the opportunity to show its support for our inner city youth.

Conclusions:

The invitation for Toronto athletes to participate in the Inner-City Games in Los Angeles this summer is an important first step to becoming a future host. Not only will the participants become Inner-City Games Ambassadors, but they will also be able to share their positive experiences with Toronto's youth.

(A copy of the attachment to the foregoing report titled "Youth for Diversity Program - The Inner-City Games, Toronto Project", was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following report (July 22, 1999) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

The Policy and Finance Committee, at its meeting of July 20, 1999, reports having concurred with the recommendation embodied in the attached joint report (July 14, 1999) from Councillor Olivia Chow and Councillor Joe Pantalone.

Source of Funds:

The Commissioner of Economic Development, Culture and Tourism will ensure that the two basketball teams receive funding in the amount of $10,000.00.

Recommendation:

It is recommended that this report be received for information.

Background:

Councillor Olivia Chow and Councillor Joe Pantalone forwarded a report to the Policy and Finance Committee Meeting of July 20, 1999 and requested emergency funding in the amount of $10,000.00 to sponsor two basketball teams of high risk youth participating in the Inner-City Games in Los Angeles.)

29

Winter Maintenance on Toronto Roads, Salting and

Snow Ploughing, for the Period October 1999 to

April 2003 - Contract Nos. T-11-99 to T-17-99,

Tender Call Nos. 99-1999 to 105-1999

(City Council on July 27, 28, 29 and 30, 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 (July 14, 1999) from the City Clerk:

Recommendation:

The Works Committee on July 14, 1999, recommended to the Policy and Finance Committee the adoption of the joint report dated June 28, 1999, from the Chief Financial Officer and Treasurer and the Commissioner of Works and Emergency Services respecting winter maintenance on Toronto roads, salting and snow ploughing, for the period October 1999 to April 2003 - Contract Nos. T-11-99 to T-17-99, Tender Call Nos. 99-1999 to 105-1999.

--------

(Joint Report dated June 28, 1999, addressed to the

Works Committee from the

Chief Financial Officer and Treasurer and the

Commissioner of Works and Emergency Services)

Purpose:

The purpose of this report is to advise of the results of the Tenders issued for the winter maintenance on Toronto roads, salting and snow ploughing, for the period October 1999 to April 2003, in accordance with specifications as required by the Works and Emergency Services Department and to request authority to issue contracts to the recommended bidders.

Source of Funds:

Funds are available in Transportation Services 1999 Operating Budget for the current year's requirements (approximately $7-8 million). Funds will be included in the subsequent years' submissions for each required portion of the contract period.

Recommendation:

It is recommended that the following contracts for winter maintenance on Toronto roads, salting and snow ploughing, for the period October 1999 to April 2003, be awarded to the following Tenderers in the total amount of $54,682,639.57 including all taxes and charges, being the lowest Tenders received:

Contract/Tender Call No. Tenderer Tender Price

T-11-99, 99-1999 Gazzola Paving Limited $ 7,683,177.80

T-12-99, 100-1999 Cruickshank Construction Limited $ 7,622,187.40

T-13-99, 101-1999 D. Crupi & Sons Limited $ 5,655,442.20

T-14-99, 102-1999 Fowler Construction Company Limited $11,205,304.29

T-15-99, 103-1999 Steed and Evans Limited $ 8,466,995.60

T-16-99, 104-1999 K.J. Beamish Construction Co. Limited $ 7,004,712.20

T-17-99, 105-1999 Steed and Evans Limited $ 7,044,820.08

Council Reference:

The Bid Committee at its meeting held on June 2, 1999, opened the following Tenders for winter maintenance on Toronto roads, salting and snow ploughing, for the period October 1999 to April 2003:

Contract No. T-11-99, Tender Call No. 99-1999, Winter Maintenance on Toronto Roads

District One, Camp No. 1:

Tenderer Tender Price

Gazzola Paving Limited $7,683,177.80

Miller Paving Limited $7,744,531.60

K.J. Beamish Holdings Limited $7,834,796.80

MSO Construction Limited & T.J. Pounder $8,397,488.40

(Ontario) Limited

Contract No. T-12-99, Tender Call No. 100-1999, Winter Maintenance on Toronto Roads

District Three, Camp No. 2:

Tenderer Tender Price

Cruickshank Construction Limited $7,622,187.40

Fowler Construction Company Limited $7,715,054.04

Steed and Evans Limited $7,993,777.40

K.J. Beamish Construction Co. Limited $8,103,944.60

Miller Paving Ltd. $8,628,013.48

Gazzola Paving Limited $8,659,167.60 *

Contract No. T-13-99, Tender Call No. 101-1999, Winter Maintenance on Toronto Roads

District Three, Camp No. 3:

Tenderer Tender Price

D. Crupi & Sons Limited $5,655,442.20

Miller Paving Limited $6,133,635.92

K.J. Beamish Construction Co. Limited $6,662,633.20

Cruickshank Construction Limited $6,728,085.28

Gazzola Paving Limited $6,838,498.40

MSO Construction Limited &

T.J. Pounder (Ontario) Limited $7,310,539.60

Contract No. T-14-99, Tender Call No. 102-1999, Winter Maintenance on Toronto Roads

District Four, Camp No. 4:

Tenderer Tender Price

Fowler Construction Company Limited $11,205,304.29

K.J. Beamish Holding Limited $12,806,744.40

Gazzola Paving Limited $13,094,060.80

Contract No. T-15-99, Tender Call No. 103-1999, Winter Maintenance on Toronto Roads

District Two, Camp No. 5:

Tenderer Tender Price

Steed and Evans Limited $ 8,466,995.60

Cruickshank Construction Limited $ 8,862,260.84

K.J. Beamish Holdings Limited $ 9,007,688.00

Gazzola Paving Limited $ 9,371,403.00

MSO ConstructionLimited &

T.J. Pounder (Ontario) Limited $10,353,277.20

Contract No. T-16-99, Tender Call No. 104-1999, Winter Maintenance on Toronto Roads

District One, Camp No. 6:

Tenderer Tender Price

K.J. Beamish Construction Co. Limited $7,004,712.20

Miller Paving Ltd. $7,218,883.40

Gazzola Paving Limited $7,279,916.20

MSO Construction Limited &

T.J. Pounder (Ontario) Limited $7,652,939.60

Contract No. T-17-99, Tender Call No. 105-1999, Winter Maintenance on Toronto Roads

District One, Camp No. 7:

Tenderer Tender Price

Steed and Evans Limited $7,044,820.08

K.J. Beamish Holdings Limited $7,898,675.80

Cruickshank Construction Limited. $8,059,924.52

Gazzola Paving Limited $8,263,995.20 *

* Tender prices corrected for mathematical errors. Purchasing and Materials Management has verified that the mathematical errors were corrected.

Comments:

The Tender documents submitted by the recommended bidders have been reviewed by the Commissioner of Works and Emergency Services, and were found to be in conformance with the Tender requirements.

The Manager, Fair Wage and Labour Trades Office, has reported favourably on the firms recommended.

Conclusion:

This report requests authority to issue contracts for winter maintenance on Toronto roads, salting and snow ploughing, from October 1999 to April 2003, in accordance with specifications, to the recommended Contractors, being the lowest Tenders received.

Contact Name and Telephone Number:

Gary Welsh L. Pagano, P. Eng.,

Director, District 4 Director of Purchasing and Materials

Transportation Services Management Division

Telephone: 396-7842 Telephone: 392-7311

30

Response to the Provincial Request for

Proposal for Additional Long-Term Care

Beds for a New City Home for the Aged

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause by adding thereto the following:

"It is further recommended that the Commissioner of Community and Neighbourhood Services be requested to include, in the further report to be submitted in this regard, opportunities for future submissions.")

The Policy and Finance Committee recommends that this matter be received.

The Policy and Finance Committee submits the following communication (June 17, 1999) from the City Clerk:

Recommendations:

The Community Services Committee on June 17, 1999, 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.

The Community Services Committee reports, for the information of the Policy and Finance Committee, having 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.

Background:

The Community Services Committee had before it a communication (May 28, 1999) from the City Clerk advising that the Advisory Committee on Homes for the Aged on May 28, 1999, had before it a report (May 20, 1999) from the Commissioner of Community and Neighbourhood Services respecting an increase to the Homes for the Aged 1999 Operating Budget, which was adopted by City Council at its meeting on June 9, 10 and 11, 1999, and wherein it recommended that such report be referred to the Community Services Committee for discussion of the policy issues and options outlined therein.

Ms. Anne Dubas, President, Canadian Union of Public Employees, Local 79, appeared before the Community Services Committee in connection with the foregoing matter and submitted a communication (June 11, 1999) in regard thereto.

(Communication dated May 28, 1999, addressed to the

Community Services Committee from the City Clerk).

Recommendations:

The Advisory Committee on Homes for the Aged on May 28, 1999:

(1) directed that its support of the recommendations contained in the attached report (May 20, 1999) from the Commissioner of Community and Neighbourhood Services respecting the increase to the Homes for the Aged 1999 Operating Budget be conveyed to the Community Services Committee; and

(2) received the attached communication dated May 26, 1999, from Ms. Anne Dubas, President, Canadian Union of Public Employees, Local 79.

(Report dated May 20, 1999, addressed to the

Budget Committee which was

contained in Clause No. 20 of Report No. 10 of The

Strategic Policies and Priorities Committee, adopted by

City Council on June 9, 10 and 11, 1999).

Purpose:

The purpose of this report is to provide an analysis of the impact and an exploration of the options that a reinvestment of provincial funding would have on the Homes for the Aged.

Funding Sources, Financial Implications and Impact Statement:

The Ministry of Health has confirmed additional funding for long-term care facilities provided that the funding is used to create professional nursing jobs. The Homes for the Aged Division is seeking City Council approval to increase the 1999 operating budget by $697,000.00 (gross). There is a requirement for these new funds to be used specifically for the purpose of enhancing professional nursing services. The funding represents a permanent adjustment to long-term care facility funding from the Ministry of Health and does not result in an increase in municipal net contribution.

Recommendations:

It is recommended that:

(1) the 1999 operating budget of the Homes for the Aged be increased by $697,000.00 to enable the Division to access additional provincial funding, which is available to enhance nursing services;

(2) this report be referred to the Community Services Committee for discussion of the policy issues and options outlined herein; and

(3) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

During the Budget Committee's review of the Homes for the Aged Division's 1999 Operating Budget, it was requested that the Division report to the Community and Neighbourhood Services Committee and the Budget Committee on the significant loss of provincial funding since 1996. The request was made in light of the federal government's February 16, 1999 announcement that stated that transfers to the provinces and territories were to increase over the next five years by $11.5 billion through the Canada Health and Social Transfer (CHST).

In the federal government's announcement, Finance Minister Paul Martin stated that a further $1.4 billion will be invested over the next three years to strengthen Canada's health system through research and innovation, health information, improved health services for First Nations, and prevention. The announced increases effectively restore federal transfer payments for health care to levels that were in effect when the present government came to power.

Accordingly, the Budget Committee directed staff to study and report back at a subsequent meeting the impact that a restoration of provincial subsidy would have on the Division if funding were to be restored to the 1996 subsidy level. The report was to include options of expanding the number of available beds, improving the personal care level, as well as other service restructuring restorations.

Comments and/or Discussion and/or Justification:

Long-Term Care Reform:

For many years, the long-term care (LTC) system in Ontario has been under tremendous pressure to reform. In the early 1990s, the provincial government brought together long-term care facility and community programs under one new administrative structure. These programs had previously been the responsibility of separate Ministries, even though the programs served essentially the same client base. In the past, homes for the aged were the responsibility of the Ministry of Community and Social Services and nursing homes were the responsibility of the Ministry of Health. The Ministry of Health is now fully responsible for the funding and administration of all long-term care programs.

During the years that homes for the aged were under the Ministry of Community and Social Services, they were encouraged to design large facilities and dramatically expand and enrich the programs and services provided to their residents. Many municipalities and some charitable boards took advantage of this support and the cost sharing arrangements with the province to enhance their operations, resulting in higher per diems than other sectors of LTC facility care. To achieve some control of these costs, capping on provincial contributions was introduced in 1989 in cases where the extended care per diem exceeded the provincial average.

When the Long-Term Care Statute Law Amendment Act, 1993 (Bill 101), an Act to amend the three long-term care facility Acts, came into effect on July 1, 1993, the Province introduced a red-circling provision. Homes for the Aged were guaranteed to have their current level of care and staffing protected during the transition to a funding system that was to be based on resident care needs. Because of provincial funding constraints, the long-term care system was able to fund only facilities with an extremely modest per diem of $79.61 in 1993. For the Toronto Homes for the Aged, this created a significant shortfall because the Division's operating per diem was $147.58 at that time. This represented approximately $25.0 million in red-circle funding for the Toronto Homes for the Aged.

When the Province determined it would take too many years for the LTC system to be equalized, the Ministry of Health decided to eliminate red-circling by phasing it out over a two to four-year period. The elimination of red-circle funding commenced on June 1, 1996. Of Toronto's 10 Homes for the Aged, five Homes continue to receive a moderate amount of red-circle funding. Red-circle funding accounts for only $1.6 million of the Division's 1999 operating budget revenue. However, the final reduction in red-circle funding has been effectively offset as a result of the recently announced increase in level of care funding.

Toronto Homes for the Aged:

Historically, Toronto's Homes for the Aged have cared for residents who other facilities and service providers find difficult to manage. The average resident in a Toronto Home has three to five chronic diseases, including heart disease, chronic obstructed lung disease, kidney/liver organ failure and other debilitating diseases. Seventy percent of the Homes' residents are cognitively impaired with dementia diseases such as Alzheimer's Disease.

Toronto's Homes for the Aged Division has a recognized history of and commitment to client-centred, interdisciplinary care and quality of life issues. In response to this commitment, the Division historically staffed at a fairly high level, particularly in the nursing, recreation, rehabilitation, and social work areas. Prior to 1993, both the Province and Council supported the enhancement of staffing levels, based on a commitment to providing vulnerable seniors with quality care and quality of life. In more recent years, affordability has become an issue, and the level of care and service has been substantially reduced.

The Homes for the Aged Division has been proactive over the past six years in adjusting to the new provincial funding system. The Division needed to realize significant budget savings during that time in order to respond to the continuing financial pressures of reduced funding. In addition to reduced provincial funding, the Division's municipal contribution has been decreased by $9.7 million or 29.6 percent since 1993. Expenditure reductions primarily focused on cost-controls and improved resource utilization. Net savings were realized through program restructuring and staff downsizing.

A comprehensive management plan that restructured the organization, streamlined operations, delayered management, identified numerous operational efficiencies, maximized revenue and formed strong community partnerships was implemented. The plan responded to the need for affordability and spending restraint, but did not abandon the concepts of quality, public service, and public accountability, concepts that the community clearly expects from the municipality.

Management identified numerous innovative and creative approaches to maintaining quality services for our clients during a time in which the Division experienced a significant loss of funding. The ways in which the Homes' services are delivered and resources are allocated have been reviewed and improved. The Division's long term plan contained the expectation that level of care facility funding would be adjusted to more accurately reflect the true cost of providing care and services to seniors.

New management levels and staffing standards were introduced across the Division and new sources of revenue identified. A client-centred approach to care and service was maintained as efficiencies were implemented in all areas of the Homes' operations. As the Division restructured, the focus on customer service remained. The Division continues to plan strategically and improve operationally in order to maintain effectiveness in a more diverse, competitive, and changing long-term care environment.

As part of the Division's strategic planning process, the following options are offered for consideration:

Option 1 - Expanding the Number of Beds:

On April 29, 1998, Ontario's Premier and Minister of Health jointly announced the Province's Multi-year Investment Plan for Long-Term Care. The investment plan involves the commitment of $1.2 billion annually to expand and improve long-term care services across Ontario. This infusion of redirected monies from hospital services adds 20,000 new beds into homes for the aged and nursing homes. The Province also targeted money for rebuilding and renovating more than 100 older facilities to comply with the new long-term care facility design standards which were released at the beginning of May 1998.

On May 1, 1998, the Ministry of Health released the allocated figures for facility and community reinvestments. For facility-based care, 5,837 new beds (out of the 20,000 provincial figure) have been allocated for the Toronto region over the next six years. This amounts to a $190.9 million reinvestment. A request for proposal process was conducted by the province in mid-1998 for 2,200 beds in Toronto (6,700 beds across Ontario). The call was open to both the non-profit and for-profit sectors. Although the City of Toronto did not bid on any new beds, the Toronto Homes for the Aged Division provided consulting services to Doctors' Hospital in the development and presentation of their proposal. The Doctors' Hospital bid was strengthened by the Division's offer to provide consulting services for a multi-year period while Doctors' Hospital developed their own expertise in long-term care. Doctors' Hospital was awarded 200 long-term care beds.

The recently announced second phase of the Ontario government's six-year expansion plan will increase the long-term care system by a further 5,790 beds throughout various regions across the province, including the City of Toronto, where there are 744 beds available. A further 2,893 beds will be offered within Toronto in future phases of the expansion plan. Proposals during this phase must be submitted by 12:00 noon on July 30, 1999.

Level of care funding has been enhanced in recent years. A Home for the Aged with a provincial average case mix index of 100 will receive per diem funding of $95.64. If the City's 1996 funding level were to be restored by means of the City of Toronto pursuing new long-term care beds, the City could consider submitting a bid to acquire 200 new long-term care beds, and thereby open a new Home for the Aged. This option would require the City to make a capital investment of approximately $12.0 million and also to restore a portion of the Division's previously achieved net operating savings in order to sustain quality and service levels consistent with the City's other 10 Homes for the Aged.

Option 2 - Improving the Personal Care Level:

Following the Federal Budget, the Ontario Government announced new investments in health nursing services. On March 17, 1999, Long-Term Care Minister Cam Jackson and Health Minister Elizabeth Witmer announced $20.0 million in annual funding to increase the number of frontline nurses available in long-term care facilities.

The additional funding available to long-term care facilities is being provided to enhance support for professional nursing staff and must be used to create professional nursing jobs. This represents a permanent adjustment to long-term care facility funding and will not result in a municipal contribution. For the Toronto Homes, the annualized funding enhancement is approximately $1.0 million. However, in order to access these funds the Homes for the Aged Division requires City Council's approval to increase the 1999 operating budget by $697,000.00 for nursing and personal care. The Ministry of Health has implemented stringent reporting requirements to ensure that these new funds are directed solely towards enhancing the nursing and personal care of residents.

Staff are very pleased regarding the newly announced funding for nursing services, as it provides the first opportunity for a significant number of years to marginally enhance the level of nursing care provided to residents, rather than to continue another year of nursing reductions. Senior management have not yet determined the best allocation of the available funding, and will utilize data from the various Homes (including information related to the classification of resident need, feedback from satisfaction surveys, etc.) to make final decisions. However, senior management's initial opinion is that the best value would be realized by utilizing the funding to increase both registered nurse and registered practical nurse hours (up to 10 percent of the available funding can be used for other nursing expenses, such as the nursing supplies required to deliver more complex care). The exact number of registered nurse versus registered practical nurse hours would vary on an individual Home basis, according to the needs assessment of that Home. Initial estimate is that the funding would allow for the increase of approximately 15 nursing FTEs across the 10 Homes.

It is hoped that the recent nursing announcement is the first of a series of reinvestments in long-term care. As long-term care facilities are expected to deal with more and more residents with serious health conditions and complex continuing care requirements, it will be imperative for the Ministry of Health to reinvest health savings into the long-term care system. Other minor increases in base funding are currently being planned by the Ministry of Health. Moving into the year 2000, the opportunity will exist for the Division to begin receiving provincial funding increases rather than reductions in subsidy since the final phase of red-circle funding elimination will have been implemented.

Senior management has been actively involved in on-going discussions with the Ministry of Health to secure additional permanent funding for the Home' program. As a result, it is anticipated that new monies will be made available to the City within the next year. This will possibly enable the Division to restore some of the previously eroded care levels.

Option 3 - Other Service Restructuring Restorations:

In response to the funding pressures in recent years, the Division has been required to reduce the service level of certain programs that serve to enhance the quality of life of residents. These services, although not all considered mandatory by the Ministry of Health, are considered by the Division to be essential for residents' health and sense of general well-being. The services that fall into this category are typically those funded in the "programs and support services envelope", and include services such as recreation, rehabilitation, complementary care, social work, spiritual and religious care, volunteer services, etc. If funding was restored to the Division, management would target some of the restored funding to expand service in these areas.

For example, the value of rehabilitation services (i.e., rehabilitation workers, occupational therapists, physiotherapists) to residents in the Homes is unquestionable, as it relates to the achievement of the Division's goal of promoting residents' independence, maintaining/improving residents' functional abilities (including behaviours), and preventing/delaying deterioration due to the natural aging process or chronic disease. An increase in rehabilitation service would add value to the Division's overall care and service delivery, particularly as the acuity of residents' care needs continues to increase.

Second, over 137,000 hours of volunteer services were contributed amongst the 10 Homes in 1998. This level of volunteerism far exceeds the average rate of volunteer participation amongst most other providers. The Division believes that additional staff support in the area of volunteer recruitment and coordination would help the homes to realize increased volunteer involvement and volunteer satisfaction, which directly impacts on resident satisfaction. Without question, volunteerism provides residents with an important linkage to the community. In return, community volunteers augment residents' quality of life and contribute substantial dollars through their fundraising initiatives.

Quality of life issues are also addressed by the provision of recreational programs and complementary care services (e.g., massage therapy, music therapy, art therapy, aromatherapy). Both of these services focus on residents as individuals and contribute to their psychosocial and physical wellbeing. In the past academic year, the Division has been able to offer student placement to a number of complementary care students, and these services have been exceptionally well received by residents and their families. Senior management is currently exploring the feasibility of adding complementary care services, on a more regular basis, if increased funding becomes available to cover the costs of same. Likewise, resident and family feedback provides evidence that both of these groups would like to see an expansion of recreation services, particularly in the evening hours and on weekends.

Next, an ever-increasing emphasis for the Division is the critical need to support staff by ensuring that they have access to both on-site and off-site educational offerings, in order to assist them gain and maintain the skills required to competently provide care and service to the Homes' residents and families. Individuals admitted to the Homes are frailer, and have more complex care requirements than several years ago. The Homes are becoming the "new" chronic care facilities, and the Division believes that it should take a proactive role in providing ways and means for staff to upgrade their skills.

Senior management is in the process of confirming a plan, identifying which programs and service areas should be expanded, as a priority, in order to add the most value to residents' lives, if some of the past funding is restored. The cost associated with restoring a portion of the residents' programs and support services would be minimal with substantial returns being measured in the provision of quality care to our residents.

Conclusion:

Over the past six years, the Division has been extremely successful in reducing costs and maintaining quality, in response to the funding reductions imposed. However, senior management has the philosophical belief that seniors residing in long-term care facilities deserve a higher level of care and service, particularly in the nursing and programs and services areas, than is supported through current provincial funding and/or policy. Staff have done a laudable job over the past number of years; however, they have become increasingly more frustrated with their inability to provide the high level of attentive, individualized care that they believe the elderly are entitled to.

For this reason, if there is a potential to achieve further restoration of funding, it would be management's preferred direction to expand the level of care and service provided to the residents currently cared for in the Division's 10 Homes. Prior to the introduction of any resource expansion, it would be management's intention to implement new performance measures, in order to track, manage, and measure efficiencies, effectiveness, and satisfaction.

On the other hand, if City Council made a decision to direct staff to explore the possibility of adding beds to the Homes for the Aged Division's system, immediate action would be required, as the Ministry of Health's current Request for Proposals (RFP) for new long-term care beds closes on July 30, 1999 at 12:00 noon. Based on current information, there is reason to believe that there will not be another RFP released until at least 2001.

Contact Name:

Reg Paul, Director, Financial and Administrative Services, Tel: 392-8896; Fax: 392-4180; E-mail: reg_paul@toronto.ca.

The Policy and Finance Committee submits the following report (June 22, 1999) from the Commissioner of Community and Neighbourhood Services:

Purpose:

The purpose of this report is to provide additional information and a five-year forecast that further explores the cost implications should City Council decide to adopt the recommendation of the Community Services Committee, to respond to the Ministry of Health's current Request for Proposals (RFP) for new long term care beds.

Funding Sources/Financial Implications/and Impact Statement:

This report details the policy and financial implications of securing Ministry of Health approval, through the current Request for Proposals (RFP) process, to build a new 200-bed Home for the Aged. Proposals are required to be submitted to the Ministry of Health by July 30, 1999. Based on the timelines experienced for approvals in the RFP process of 1998, it is anticipated that the Ministry of Health would notify successful bidders by late 1999.

Therefore, if the City submitted a successful bid, it is anticipated that capital costs would be incurred in 2000 and 2001. The forecasted 2000 capital budget would be $9 million (net) and the 2001 budget would be $11 million (net). The Ministry of Health no longer provides upfront capital grants, but rather provides construction funding through a per diem payment system of $10.35 per resident day, for a period of 20 years, with the payment starting after the first admission to the new facility. The anticipated total net capital cost to the City is therefore $12 million.

With respect to the operating budget, there would be no impact on the operating budget until 2002. However, in order to operate the new facility at the same level and scope of service as currently exists in the City's 10 other Homes for the Aged, there would be need for an annual net contribution of approximately $1.25 million, effective 2002.

Recommendations:

It is recommended 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.

Council Reference/Background/History:

The Community Services Committee, at its meeting on June 17, 1999, had before it a report entitled "Homes for the Aged - 1999 Operating Budget", which set out a number of options for City Council's consideration, and responded to a prior request from the Budget Committee for staff to provide advice with respect to their preferred direction, should provincial funding levels be restored/increased within the long term care sector.

By way of background, prior to the recent election, the Ontario government announced its plan to continue to expand and improve long term care services across the province, and released its second RFP for new long term care beds. This is the second phase of a six-year expansion plan, and upon completion will have increased the number of beds by a further 5,790 across the province. Of these second phase expansion beds, there are to be 744 new beds within the City of Toronto. This commitment does create an opportunity for the City of Toronto to apply for new beds, should City Council endorse this expansion as the preferred direction.

In addition, the Ministry of Health's long range plan is also intended to address the enhancement of facility and community funding, by reinvesting health restructuring dollars into the long term care system. Although the Ministry has not yet released any specific details regarding how enhanced funding might be phased in, the staff report provided background on staff's opinion and a rationale for supporting the restoration of a portion of the level and scope of service lost within the Homes over the past several years due to multi-year budget reductions and the resultant cost restraint exercises.

Therefore, the report "Homes for the Aged - 1999 Operating Budget" detailed a number of options available to City Council, including: (i) the potential to expand the number of long term care beds owned and operated by the City of Toronto, (ii) to improve the nursing and personal care levels within the current 10 Homes, and/or (iii) to restore certain other resident program or service areas, when enhanced funding becomes available.

The Community Services Committee concluded that they were not restricted to recommending only one of the options presented, but rather could select and recommend components from each of the options presented.

The Committee:

(1) recommended to the Policy and Finance Committee that:

(a) City Council be requested to direct the Commissioner of Community and Neighbourhood Services to respond to the Province of Ontario's Request for Proposals for additional long term care beds for a new City Home for the Aged prior to the July 30, 1999 deadline; and

(b) 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

(2) directed that the Commissioner of Community and Neighbourhood Services be requested 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.

As a result of the direction received from the Community Services Committee, staff prepared an initial analysis with respect to the financial impact of adding a new 200-bed Home for the Aged to the Homes' portfolio, for the consideration of the Policy and Finance Committee. The analysis is detailed in this report, and includes a five-year capital and operating forecast on both the gross and net costs associated with a new 200-bed Home for the Aged. For the purpose of this exercise, a 200-bed Home was chosen as the most feasible, due to efficiencies of scale and the past preference of the Ministry of Health for homes of 200 beds, as demonstrated in the results of the 1998 RFP process.

It is important to note that the current RFP process closes on July 30, 1999, and no proposals will be accepted that are received after that date. Therefore, a timely decision by City Council is required to allow ample time for staff to prepare the submission, should City Council decide to apply to expand the number of long term care beds in its current Homes for the Aged system.

The cost analysis included in this report is based on the Homes for the Aged Division's current service standards and staffing levels.

Comments and/or Discussion and/or Justification:

The recently announced second phase of the Ontario government's six-year expansion plan has made available 744 long term care beds within the City of Toronto through a Request for Proposals process. The call is open to both the non-profit and for-profit sectors. Proposals responding to this second phase must be submitted by 12:00 noon on July 30, 1999. It is expected that a further 2,893 beds will be offered within Toronto in future phases of the multi-year expansion plan. However, based on current information, there is reason to believe that there will not be another RFP released until at least 2001.

In staff's opinion, there is value to having a "healthy balance" of non-profit and for-profit providers in the long term care system, in order to offer competition from various perspectives, including cost, quality, and scope of service. Currently, 63 percent of all of the long term care beds in Ontario are operated by the for-profit sector. If the non-profit sector does not respond to the current RFP, and secure a portion of the newly tendered beds, there is a potential that the non-profit share of the system will erode, and that the "healthy balance" will become less effective in offering Ontario citizens a long term care system with equal weight on cost, quality, and scope of service.

The City's Homes for the Aged are known and respected for providing very good, client-centred care and service to their residents. Although it is acknowledged that the level and scope of service have been reduced in recent years, on an annual basis, in order to respond to a diminishing budget, the level of service is still above that often found in other long term care facilities, and client satisfaction remains high. The public accountability associated with the City's Homes, and the responsiveness of staff in responding to any concerns on a timely basis, are reasons often cited by residents' families as to why they selected a City-owned home for their family member.

For those reasons, there may be merit in the City of Toronto responding to the current RFP. However, staff did not directly recommend this approach in the report entitled "Homes for the Aged - 1999 Operating Budget" for one specific reason: namely, the belief that the current Ministry of Health funded per diem is insufficient to provide the level, quality, and scope of service that we philosophically believe residents are entitled to. Therefore, any expansion of beds in the City's portfolio would have a direct impact on the operating budget and would require a corresponding increase in net contribution.

The balance of this report attempts to explain and quantify the impact on both the capital and operating budgets of adding a 200-bed Home for the Aged to the current portfolio, should City Council decide to direct staff to respond to the current RFP.

Capital Budget:

All new construction projects must meet compliance with structural standards set out in the "Long Term Care Facility Design Manual" which was released in May 1998. The development of new homes and the redevelopment of existing homes must comply with these standards in order to be eligible for provincial funding assistance. Staff estimate the Ministry's financial commitment to be equivalent to approximately one-half the expected capital construction costs of a long term care facility, as the requirements in the design guidelines describe a facility built to the minimum space and accommodation standards. It is anticipated that any facility considered by the City would exceed the minimum space requirements per resident, in order to add to quality of life.

The Ministry of Health does not provide upfront capital grants. Rather, for every project approved by the Ministry of Health through the RFP process, the Ministry will pay a per diem rate of up to $10.35 per resident following construction of a new facility, up to a maximum of $75,000.00 per bed, towards a facility's total capital costs. That is, any costs above those which can be accommodated through the provincial construction funding are the responsibility of the facility. The provincial funds must be directed to the payment of construction costs and cannot be used to purchase land. The funds begin to flow immediately following admission of the first residents to the new facility, for a period of 20 years.

Staff estimate that the provincial construction funding provides just enough dollars to meet the payments of a 20-year mortgage for half of the cost of the building. Factored into this per diem payment is an implicit interest rate of seven percent. In financial terms, this funding model is much the same for building a new building as implementing the traditional matching grants formula, applied to non-profit facilities in the past, across the whole long term care sector. The difference is that payments will be spread over 20 years rather than provided by way of an upfront capital grant.

In order to provide a reasonable budget forecast for construction, the cost of building the proposed 200-bed long term care facility is roughly estimated at $20 million. Therefore, the total net capital cost to the City is estimated at $12 million.

Private and semi-private accommodation would be included in the design of the new building to improve the individual living areas. General amenity space would also be provided over the province's minimum standards. Preferred accommodation rooms and the additional amenity space will ensure the optimal dignity of residents by recognizing the need for privacy and opportunities for meaningful social interaction. Preferred accommodation may be charged to 60 percent of the Home's total population, amongst residents who have the ability to pay and/or who request either a semi-private or private room (currently $8.00 per day and $18.00 per day respectively). The Ministry of Health currently claws back 50 percent of any revenue a facility collects for preferred accommodation. It is estimated that the proposed facility will realize approximately $600,000.00 annually in preferred accommodation revenue, which may be used as a minor offset to construction costs.

Construction of a new long term care facility would take approximately 18 to 24 months to complete. The entire project would need to be initially financed by the City, since the Ministry's construction funding does not begin until the facility is officially opened. Funding will then be provided on a per diem basis over a 20-year period. Construction could begin in late-2000, with the new facility opening in early 2002.

For the sake of this example, it is assumed that all construction costs would be incurred in 2000 and 2001, with the facility opening in 2002. The financial impact is outlined in Appendix 1 of this report.

Operating Budget:

As directed by the Community Services Committee, the five-year forecast does not reflect any care level increases nor does it include any program or service enrichments. The forecast has been developed using the same quality standards and staffing levels as those previously established by Council. In addition, the forecast does not make any assumptions related to the current collective bargaining process, the future roll-out of the Corporate Services delivery model, or to a possible funding increase which might result from the continuing provincial health restructuring initiative. For purposes of this exercise, there has been a one percent escalation factor applied to both expenditures and revenue.

A proposed organization chart, based on the Division's management plan which restructured and downsized all areas of the Homes' operation has been developed, and is attached as Appendix 2. Since 1993, the Division has reduced its gross expenditure budget by $38.0 million, while caring for the same number of residents whose health needs demonstrate an increasing acuity. This represents a 23.3 percent decrease. This budget reduction was planned and implemented to deal with reduced provincial funding. In addition to the reduced provincial funding, the Division's municipal contribution has decreased by $9.7 million (29.6 percent) over the same period of time.

Notwithstanding these decreases, the Division is committed to providing residents with a level and scope of service that exceeds the minimum provincial standard, with the belief that seniors are entitled to and require a higher level of service, to meet their personal needs and to achieve a reasonable level of family satisfaction.

Appendix 1 estimates the ongoing net contribution to be approximately $1.25 million per year. This net contribution would be directed at maintaining a higher level of service at the actual cost of providing the service, with a recognition that the City pays a higher wage to its employees than the average for-profit facility.

Conclusion:

In the report "Homes for the Aged - 1999 Operating Budget", staff proposed two things. First, they proposed an increase in the 1999 Operating Budget in the amount of $697,000.00, to enable the Division to access additional provincial funding which is available to enhance nursing services; the increase was approved by City Council at its meeting on June 9 and 10, 1999. Second, they proposed that the policy issues related to bed expansion and/or service enhancement be referred to the Community Services Committee for further discussion and consideration.

At their meeting on June 17, 1999, the Community Services Committee recommended that City Council direct staff to respond to the current Request for Proposals issued by the Ministry of Health. Although staff did not suggest a bed expansion strategy in their report, due to the Division's current cost constraint requirements, staff would be able to respond and prepare a Proposal within the requisite timeframe, if so directed by City Council.

The Homes for the Aged Division is committed to providing vulnerable seniors with a client-centred approach to care and service. To maintain care levels and quality of life programs, the City would need to restore a portion of the Division's previously achieved net operating savings, should the Division be directed to develop and operate a new long term care facility.

It is acknowledged that there would be benefit to the community if the City elected to respond to the RFP and was successful in its bid. However, this community benefit would have an associated net cost. The gross expenditure level necessary to operate a 200-bed facility is estimated to be $8.8 million, with an annual net contribution of $1.25 million. This expenditure level would enable the Division to sustain quality and service levels consistent with the City's other 10 Homes for the Aged.

Contact Name:

Reg Paul, Director, Financial and Administrative Services

Tel: 392-8896; Fax: 392-4180; E-mail: reg_paul@toronto.ca

The Policy and Finance Committee also submits the following communication (June 28, 1999) from the City Clerk:

The Policy and Finance Committee on June 24, 1999, had before it the following communication and report:

(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.

The Policy and Finance Committee:

(1) deferred consideration of the aforementioned 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:

The Policy and Finance Committee also submits the following report (July 12, 1999) from the Commissioner of Community and Neighbourhood Services:

Purpose:

The purpose of this report is to provide an update on the status of the Department's request to the Ministry of Health for an extension to the submission deadline with respect to the current Request for Proposals (RFP) for new long term care beds.

Funding Sources/Financial Implications/Impact Statement:

There are no financial implications related to this report.

Recommendation:

It is recommended that this report be received by the Policy and Finance Committee for information purposes.

Council Reference/Background/History:

At its meeting on June 24, 1999, the Policy and Finance Committee had before it a communication from the City Clerk respecting recommendations from the Community Services Committee (June 17, 1999) that:

(1) City Council be requested to direct the Commissioner of Community and Neighbourhood Services to respond to the Province of Ontario's Request for Proposals for additional long term care beds for a new City Home for the Aged prior to the July 30, 1999 deadline; and

(2) City Council be requested to endorse maintaining the same level of operating service for both the existing and expanding Homes for the Aged portfolio.

The Policy and Finance Committee deferred consideration of the communication from the City Clerk and the report (June 22, 1999) from the Commissioner of Community and Neighbourhood Services. The Committee requested that the Commissioner of Community and Neighbourhood Services ask the Minister of Health to extend the Request for Proposals deadline in order to afford Council the time needed for a thorough review of the options available to the City of Toronto. In addition, the Committee requested that the Commissioner of Community and Neighbourhood Services, in consultation with the Chief Financial Officer and Treasurer, submit a report to the July 20, 1999, meeting of the Policy and Finance Committee, exploring further the options available to City Council with respect to expanding the Homes for the Aged portfolio.

The report was to consider how the City's exposure could be reduced; to advise on a policy of projecting what the City's future role should be respecting long term care; to indicate what the City's participation within the ratio of a balanced service delivery system should be; what number of beds should be provided in the future; and, on whether there is an opportunity to submit a cooperative bid with the private sector.

Comments:

On April 29, 1998, Ontario's Minister of Health announced that the Province would invest $1.2 billion annually to expand and improve long term care services across Ontario. This infusion of redirected monies from hospital services adds 20,000 new beds into homes for the aged and nursing homes. Twenty thousand beds are said to be the equivalent of adding 175 new facilities into the long term care system.

On May 1, 1998, the Minister of Health released the allocated figures for facility and community reinvestments. For facility-based care, 5,837 new beds (out of the 20,000 provincial figure) were allocated for the Toronto region over a six- to eight-year period. This amounts to a $190.9 million reinvestment. An initial call for requests for proposals for 2,200 beds for Toronto (6,700 beds across Ontario) was issued in 1998.

The second phase of the Ontario government's six-year expansion plan released this spring will increase the long term care system by a further 5,790 beds throughout various regions across the province, including the City of Toronto, where there are 744 beds available. A further 2,893 beds will be offered within Toronto in future phases of the expansion plan. Proposals during this phase must be submitted by 12:00 noon local (Toronto) time on August 4, 1999. The original submission deadline was 12:00 noon on July 30, 1999.

City of Toronto staff submitted a formal request to the Minister of Health asking that the RFP submission deadline for long term care beds be extended by one month. The Ministry of Health responded by communicating that no such extension would be granted. A subsequent communication was issued by the Ministry of Health shortly thereafter, advising that due to unanticipated difficulties experienced by the company responsible for transmitting facsimile copies of an Addendum to the RFP, the province had revised their timetable to grant an extension to the submission deadline for proposals to 12:00 noon local (Toronto) time on August 4, 1999.

The new submission deadline extends the timeframe for completing the RFP by only three business days, which does not allow staff sufficient time to prepare and submit a proposal to the Ministry of Health should City Council decide to proceed with a bid following its review of the options. It is acknowledged that there will be additional opportunities for the City of Toronto to respond to Requests for Proposals during future phases of the province's multi-year long term care expansion plan. It is staff's belief, however, that the next RFP will not be released until at least 2001.

Conclusion:

The Ministry of Health did not approve the City of Toronto's request for an extension to the RFP submission deadline, thus making it impossible for Council to consider its options and provide staff with the necessary direction in time for the City to prepare and submit a proposal for new beds.

Staff will proceed with developing an option paper as directed by the Policy and Finance Committee for consideration at future meeting. The Advisory Committee on Homes for the Aged will be given an opportunity to provide input into the responding to the questions raised by the Policy and Finance Committee, especially concerning what the City's future role should be respecting long term care.

Contact Name:

Reg Paul, Director, Financial and Administrative Services

Tel: 392-8896; Fax: 392-4180; E-mail: reg_paul@toronto.ca.

(A copy of Appendices 1 and 2 attached to the foregoing report was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

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Councillor Jack Layton, Don River, appeared before the Policy and Finance Committee in connection with the foregoing matter.

31

Adjustment to the 1999 Approved Budget

of the Environmental Task Force

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the following report (June 29, 1999) from the Chair of the Environmental Task Force:

Purpose:

The purpose of this report is to request City Council to adjust the 1999 operating estimates of the Environmental Task Force to reflect additional revenues received from external organizations supporting Task Force activities, specifically Toronto Hydro, Toronto District Heating Corporation and Enbridge Consumers Gas.

Financial Implications:

There are no net financial implications arising from this report.

Recommendations:

It is recommended that City Council increase the Environmental Task Force 1999 operating estimates to $150,000.00 gross from $65,000.00 gross to reflect additional funds committed by other organizations, subject to the receipt of such funds.

Council Reference/Background/History:

At its meeting on April 29, 1999, City Council approved a 1999 operating estimate of $65,000.00 for the Environmental Task Force through the adoption of Clause 1 of Report 8 of the Strategic Policies and Priorities Committee.

Comments:

In addition to the $65,000.00 operating budget approved by City Council, the Environmental Task Force has been able to arrange for firm commitments of $65,000.00 in additional funding to assist with carrying out the Task Force work program. A further $20,000.00 in funding is anticipated. This report requests Council to adjust the 1999 approved operating estimates of the Task Force to up to $150,000.00 gross and $65,000.00 net to reflect these additional funding commitments, provided the funds are received.

Contact Name and Telephone Number:

Carol Mee, Project Manager, Environmental Task Force, Phone (416) 396- 7450.

(City Council on July 27, 28, 29 and 30, 1999, had before it, during consideration of the foregoing Clause, the following communication (July 28, 1999) from Councillor Jack Layton:

At the request of Councillor Shiner I forward to you the attached information regarding the Environmental Task Force Budget.

The Task Force has been successful in raising an additional $65,000 from Enbridge Consumers Gas, Human Resources and Development Canada, Toronto Hydro, the Toronto Atmospheric Fund, and the Toronto District Heating Corporation.

The Task Force is very grateful to these organizations for providing funds to help the Environmental Task Force promote sustainable energy use, sustainable transportation, and green economic development activities in the City of Toronto.

The first attached document is the Council approved budget for $65,000. The second document is a proposed breakdown of how the additional money raised will be spent.

I have a binder of material at my desk that provides documents and details regarding the ETF Budget. Please come by and see me if you have any questions.

Finally, the Clause before you only allows for the spending of funds that have been received.

ENVIRONMENTAL TASK FORCE

1999 BUDGET (revised downwards from initial request of $93,000 to coincide with budget of $65,000 that was approved by City Council)

Budget Encumbered

Communication Activities $35,000

Graphic Design 2,000

Printing Vision report (1,000 copies) 2,000 2,000

Printing Work Group Fact Sheets (4) (1,000 copies) 1,000

Printing draft Work Group reports (4) (1,000 copies) 5,000

Printing draft Environmental Plan (10,000 copies) 10,5000

Printing draft Environmental summary (10,000 copies) 1,000

Printing Newsletter (1 issue - 8500 copies) 3,000 2,000

Printing Newsletter (11 issues - 2500 copies) 10,000 2,000

Postage 1,000 ??

Meeting Activities $2,500

Workgroup meeting expenses 500

Task Force meeting expenses 2,000 1,000

Research/Policy Development/Report Preparation $27,000

Task Force/Workgroup Research 17,000 3,000

(production of 4 directories (1 for each workgroup);

hiring coordinator for Green Economic Development

workgroup? research by U of T graduates/

undergraduates; expert research as needed)

Writing/Editing Environmental Plan 10,000 2,000

1999 TOTAL BUDGET $65,000

In order to reduce budget request from the original amount requested, the following expenses were deferred to 2000 or will need to be paid for in another way if incurred in 1999

Photocopying (e.g., workgroup materials) 1,000

Printing final Env. Plan report and summary

(10,000 copies) 25,000

Printing Newsletter (1 issue - 8500 copies) 2,000

Total Deferred 28,000

Insert Table/Map No. 1

ETF Budget Allocation Notes

32

Process for Adopting a New Governance Structure

for Advanced Environmental Decision Making

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the following report (July 6, 1999) from the Chair of the Environmental Task Force:

Recommendations:

It is recommended that:

(1) City Council direct the Chief Administrative Officer, in consultation with the Environmental Task Force, to report back in October 1999 to the Policy and Finance Committee on:

(a) the future of the environmental advisory groups, ensuring the adherence to the principles outlined in Section IX of the Environmental Task Force's July 6 report "The Proposed Governance Model for Advanced Environmental Decision Making for the City of Toronto" as part of the forthcoming report on "Existing Environmental Committees and the Environmental Task Force;" and

(b) the resource reallocation, staff reassignment and any additional resource implications of the political and administrative governance model outlined in the Environmental Task Force report.

and that the Policy and Finance Committee consider the report but defer a decision until the November 1999 meeting;

(2) any additional comments made by Standing Committees, Community Councils, staff and the community on the model below be submitted to the Environmental Task Force for information by October 1, 1999.

(3) the Environmental Task Force consider the Chief Administrative Officer report in Recommendation 1 and the comments that may arise from Recommendation 2 and submit a final report on the administrative and governance model to the Policy and Finance Committee meeting in November 1999.

(4) that the Policy and Finance Committee and City Council in November 1999 consider, with such amendments as Council considers appropriate, the reports requested in Recommendations 1 and 3 and target the implementation of the new governance structure by June 2000.

Background:

These recommendations establish a process which would result in the Policy and Finance Committee considering a new governance structure for advanced environmental decision making at its November 1999 meeting. The recommendations also call for a report by the Chief Administrative Officer on the resource implications of the proposed governance model.

The above recommendations were endorsed by the Planning and Transportation, Administration, Works, Community Services and Economic Development and Parks Committees in June with amendments asking for reports from the Auditor and the Commissioner of Economic Development and Parks.

(A copy of the Environmental Task Force's report dated July 6, 1999, entitled "The Proposed Governance Model for Advanced Environmental Decision Making for the City of Toronto" was forwarded to all Members of Council with the July 20, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

33

Sustainability By-Law/Legislation

(City Council on July 27, 28, 29 and 30, 1999, amended this Clause by replacing the words "City Clerk's Division" with the words "By-law Harmonization Group" in the first line of the recommendation of the Environmental Task Force, so that such recommendation shall now read as follows:

"The By-law Harmonization Group be requested to forward for information to the Environmental Task Force or its successor, a copy of any reports to Standing Committees which address the review and/or harmonization of any by-laws for the new City of Toronto which impact the environment.")

The Policy and Finance Committee recommends the adoption of the recommendation embodied in the following report (June 22, 1999) from the Chair of the Environmental Task Force:

The Environmental Task Force at its meeting of May 31, 1999, heard a presentation from Ms. Jane Welsh and Mr. Arnold Chan, graduate students in the Planning Program at the University of Toronto, detailing their findings of the results of their research in exploring the feasibility of establishing a by-law or some other legal regime for the City of Toronto to ensure enforcement of sustainability objectives.

The Environmental Task Force in considering the presentation, adopted the following recommendation and now respectfully submits the same for Committee's consideration:

The City Clerk's Division be requested to forward for information to the Environmental Task Force or its successor, a copy of any reports to Standing Committees which address the review and/or harmonization of any by-laws for the new City of Toronto which impact the environment.

Thank you for your consideration of this matter.

34

Year 2000 Priority One Business Functions

Status Report June 1999

(City Council on July 27, 28, 29 and 30, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee reports having concurred with the recommendations embodied in the following report (June 18, 1999) from the Commissioner of Corporate Services:

Purpose:

The Year 2000 Business Continuity Plan Status Report (June 1999) outlines the following information as requested by council at its November 1998 meeting:

(i) Status report of each Priority One business function (June 11, 1999);

(ii) Status report on the ABC's and their state of readiness;

(iii) Status report on expenditures for priority 1 Year 2000 functions (May 31, 1999); and

(iv) Change requests.

Funding Sources:

No funding is required at this time.

Recommendations:

It is recommended that:

(1) this report be received for information; and

(2) the Policy and Finance Committee refer this report to Council for its information.

Comments:

Communications:

Throughout the month of June, the Year 2000 Project Office has been presenting at the District Health Council meetings.

On June 16, 1999, the Year 2000 Project Office hosted a Councillor's Briefing at City Hall. The Year 2000 Project Office provided an update on the City's readiness program, the City's communication plan and the Community Liaison efforts under way. Co-presenters included the Toronto Transit Commission, Toronto Hydro, Toronto District Heating Company and Toronto Police.

The City of Toronto year 2000 householder, 'We're OK with Y2K" was distributed by Canada Post to all residences and businesses in the City of Toronto. This included information on how to obtain further information on the City's program in 14 different languages.

Status report on Priority One business functions (Appendix 1):

(1) External Partners and Agreements - All 750 critical suppliers to the City of Toronto have been contacted. A further prioritization of these suppliers is being conducted to identify mission critical versus business critical suppliers.

(2) Facilities - The City has an independent organization verifying the inventory previously compiled. To date 350 buildings have been re-verified. The first milestone review will be conducted at the end of June.

(3) Desktop - The Desktop team has added an addition implementation team to the project to ensure completion by the original implementation date. At present more than one-third of all the desktop units have been remediated.

(4) Servers - The Project is currently running according to schedule. At present, 75 units have been rolled out.

(5) Mainframes - Work in this area continues to progress as planned.

(6) Networks - Currently this project is 65 percent complete. The present implementation date for the network management system is September 15.

(7) Training - Assessment of staff training requirements is currently 1-2 weeks ahead of the desktop rollout schedule. Employees may schedule training within 3 months of receiving training eligibility vouchers. Of the estimated 12,000 City employees who use desktop computers, 4,000 have been assessed. Of these, 1,100 have been trained to date, with another 1,600 scheduled for training in June. 700 have been identified as not requiring training.

(8) Voice - This project is currently on target to meet its objectives by the original implementation date. Of the 840 sites in total, 48 systems have been found to be non-compliant. This includes five Criticality 1 systems (3 for Toronto Fire Services and 2 for Health Services.) The additional systems cover Works, Community Services, Recreation, Yards, Library, Administrative Offices, and others. These systems will be replaced rather than upgraded, in order to ensure adherence to standards.

Status report on TTC, May 31, 1999:

TTC Background

Project plans to remediate business applications, technology infrastructure and embedded systems are in place, and detailed plans have been integrated into a master plan. Integrated databases have been built to track the inventory of applications to be remediated, embedded systems, and the technical infrastructure.

Current remediation efforts for critical applications and embedded systems are expected to be completed by September 1999. Exceptions to this include a small number of replacement business applications, such as Scheduling, Timeline, and Engineering Document Control. Individual project plans are being tracked closely, and no critical delays are expected.

Contingency and continuity planning is well underway, to accommodate both IT application failures and external problems related to power supply, communications, and water which will significantly impact service. A Contingency Task Force has been established within TTC with senior representation from each Branch.

A communications strategy has been developed, and an Intranet site to disseminate Y2K information to TTC employees has been completed.

TTC Progress:

Details on progress by group, project, and project phase are represented in the TTC Y2K Progress Chart (Attachment 2). The chart represents the seven major phases of the Year 2000 project: Initiation, Inventory, Assessment, Remediation or Replacement, Testing, Implementation, and Post Implementation. The Y2K Compliant Date represents the forecast Implementation or Production completion date. The percentage complete is based on the amount of work accomplished.

A number of Critical IT applications have recently been certified and put into production. These include the Metropass Discount Plan, the Ticket Order Processing System, Payroll (Level 1 applications), Wheel Trans, and Delay Logs application, which monitors service delays. In addition, a number of smaller administrative systems have been certified Y2K compliant.

As the TTC assessment and remediation efforts have progressed, a few new applications have emerged, and others have been reduced in priority or deemed to be no longer required. As of the end of May 1999, there are 138 active Level 1 and 2 applications, of which 40 percent are completing remediation, 41 percent are actively being tested for Y2K compliance, and the remaining 19 percent are in the Implementation or Post Implementation Phase. By the end of June, the number of certified systems will more than double to 44 percent, with all of the most critical IT applications Y2K ready by September 30, 1999.

Testing of Embedded Systems is moving forward. The T-1 Subway cars, and all of the Commission's voice systems are Y2K compliant. Fare collection devices have now been tested and are Y2K compliant, including Metropass turnstiles, transfer machines and token vending machines.

TTC Budget:

The current projected cost for the TTC Y2K project is $17.8M. This does not include the costs for permanent IT employees working on Y2K (which is most of the department) nor the costs of the User Testers and User Coordinators from all Branches participating in the test planning, testing, and contingency planning efforts. This amount is $2.8M over the approved budget, and the TTC Y2K Project Office is currently investigating options to make up the shortfall internally.

Status Report on Toronto Police, June 3, 1999:

The following summaries have been prepared for each critical area of Year 2000 planning and remediation to provide you with the Toronto Police's most recent accomplishments:

Emergency Preparedness:

A team of TPS members with specialized skills in operations, planning and logistics has been formulated under the leadership of an incident commander to develop the operational plan for the Police Y2K event. As reported in the April update, this group will be tabling this plan with the Executive Management Team in early June. Anticipated critical milestones and deliverables for the plan are as follows:

(i) Assessment of Unit Impacts (May 99);

(ii) Personal Police Emergency Preparedness (December 99);

(iii) Unit Preparedness Guidelines (June 99);

(iv) System Owner Contingency Plans for 1, 3, and 7-Day Infrastructure Failures (June 99); and

(v) Operational Emergency Plan Exercises (October 99).

Further aspects of the plan will be provided to the Police Services Board and Council by the end of June 1999.

Information Processing:

The Service remains on track in converting and testing its information systems in keeping with system A-D prioritization. The status is as follows:

(a) Priority A: 95 percent of the remediation work for applications in this category is complete. They have not all been implemented as several are dependent on the deployment of the NT desktop operating system which will take place over the next five months.

(b) Priority B: 5 of the 22 systems in this category are complete; the rest are expected to meet their target date.

(c) Priority C: 5 of the 30 systems in this category are complete; the rest are expected to meet their target date.

(d) Priority D: 5 of the 13 systems in this category are complete; the rest are expected to meet their target date. System completion in this category is higher than first anticipated due to system enhancements related to the NT operating system rollout.

Facilities and Equipment:

Funding requirements and remediation plans for all other date dependent Service equipment assets for the Police will be identified by the end of June 1999 in keeping with priority A-D classifications.

The Service remains confident that they will be prepared to address Y2K challenges through their continued involvement with their public and private sector partners enabling them to deliver high quality police services in the new millennium.

Status report on the City of Toronto's expenditures:

Attached is a status report on the $149.6 million allocated to the Y2K project to remedy all Priority 1 business functions. As of May 31, 1999, a total of $47.3 million has been committed or spent. For May 1999, $14.8 million has been committed. The majority of this expenditure is again for resources, hardware, software, servers, and network equipment. See Attachment 3.

Change requests:

Community and Neighborhood Services:

112 - Replace EHIS application with CISS:

EHIS runs on North York mainframe computer using Natural/Adabas software. It was identified that CISS system has similar functions to EHIS and the users confirmed that they could use it with some added functions. This approach is less costly than the original approach that required upgrading to the application to Y2K release, remediating and creating it in MVS environment using EDS's computer. The decision to use CISS instead of remediating EHIS on the mainframe is in line with the City's decision to move away from the mainframe environment wherever there is an opportunity. In order to gain concurrence from the users for this strategy, data entry and extract capability are mandatory management data that must be built. It was agreed that MS Access 97 would be used to build these additional functions. Historical data must be maintained for legal limitations. The exact cost saving is not fully identified yet. We will be able to identify the saving during revising project plan. Recommendation was approved by the Y2K Steering Committee at their June 3^rd meeting.

118 - Change the strategy for EHIS:

EHIS runs on North York mainframe computer using Natural/Adabas software. It was identified that CISS system has similar functions as EHIS and the users confirmed that they could use it with some added functions. The purpose of this change request is to change EHIS strategy from code remediation to data migration. The EHIS will be retired before the end of this year.

Before retiring EHIS, the following tasks must be complete:

(i) Data Conversion (from EHIS to CISS)

(ii) Input/Output processes are defined and implemented to the user satisfaction

(iii) Save historical information from EHIS mainframe environment to PC environment

(iv) User acceptance

(v) Backup all the EHIS components from the mainframe.

Recommendation was approved by the Y2K Steering Committee at their June 17th meeting.

119 - Change the strategy for Dental Health:

The Dental Management Information System (DMIS) is a medium-sized network application written in Informix-4GL and Informix-SQL. It is designed to support the administration of Dental Programs in the Municipality of North York. DMIS does not interface with other systems.

After careful analysis of the Dental Information System (Toronto) and Dental Management Information System (North York) and meetings with the Managers and users from both Toronto North Region and Toronto South Region, it was decided that DIS could replace DMIS with some mandatory functionality additions to DIS. This would also require some minor adjustments to the business practice in Toronto North. Therefore, DMIS will be retired.

Retirement date TBD and will be possible as soon as the revised DIS is deployed to all users and DMIS data has been either converted or established as retained files for standard period. Recommendation was approved by the Y2K Steering Committee at their June 17th meeting.

139 - Retire SAS Application:

The purpose is to retire the SAS applications associated with this partition (SAS only applications - AEDE not included) as per user request. Move the entire suite of SAS application; programs, files, data and JCL from the mainframe environment will be completely in the hands of the users and the responsibility of it. Nothing will be permitted back on the mainframe or network unless it follows the rules and process of clean management. All the work done, up to this date by all teams, will be forwarded to the users. This was approved by the Y2K Steering Committee at their June 17^th meeting.

Corporate Services:

125 - Integrated Disability and Case Management $507,692.00

The Human Resources Division is requesting additional funds in the amount of $376,068.00 (+35 percent PM, QA, Systems Mgmt. $131,624.00) for the Integrated Disability and Case Management business case No. 028, partitions 1 and 2.

The original submissions for this business case identified funds for the "Best of Breed" integration and redevelopment of the Claims Management System (CMS) to include the WCB invoicing, Early Intervention, Return to Work, Long Term Disability, Demands Analysis and Job Matching functionality in a Graphical User Interface environment.

This Change Request is to correct two omissions in the original business case. The original case merely requested budget for the external contractor and did not take into consideration the cost of a Human Resources Y2K Project Manager or the staff required for testing the remediated system for both functionality as well as Y2K preparedness. It also neglected to mention the cost of the GST required to be paid to the vendor.

Human Resources requires an external experienced project manager to handle the Critical 1 business cases as the appropriate skill sets are not currently available within HR. The four internal test staff require back-filling in order to free them up from their present duties (i.e. casework) which cannot be performed on a part-time basis. The testing requirements are extensive as the "Best of Breed" approach has been taken and the full system functionality must be tested as well as Y2K preparedness. Recommendation was approved by the Y2K Steering Committee at their June 3^rd meeting.

140 - Request for additional resources to complete all essential actions to ensure year 2000 compliance of Clerks Division's 1^st level Critical systems - $1,259,816.00

The Clerks Division Y2K assessment of 1^st level critical systems greatly underestimated resource requirements (personnel, hardware and software). All partitions were missing remediation, implementation and training stages of the project and the estimates for funding the associated tasks for each stage. The testing stage was the only stage that was consistently identified throughout the level one critical business case partitions for City Clerks. Even so, the testing portion only addresses the execution of the testing, not the other tasks associated with testing. All the missing stages are vital components of any Y2K project. This was approved by the Steering Committee at their June 17, meeting.

Economic Development, Culture and Tourism:

126 - AOCC - Request to bring forward this Critical 2 Business Case for Independent Community Centres in the former City of Toronto $475,000.00.

Assistance to the Toronto Association of Community Centres (AOCC) is requested to provide Y2K compliant hardware and upgrade financial software where necessary to ensure the Community Centres are able to operate, provide services and track finances through the year 2000. Recommendation was approved by the Y2K Steering Committee at their June 3^rd meeting.

Works and Emergency Services:

120 - Obtain approval to start planning and execution of remediation, testing and implementation of high criticality 2, Y2K affected systems in Water and Wastewater Services - $250,400.00

Some criticality 2 systems support criticality 1 systems and should be investigated and remediated to ensure continued effective operation of water and wastewater systems. Examples of these systems include various QA systems used to monitor and report compliance with legislation and management systems that ensure effective administration and customer service (various inventory, preventive maintenance, scheduling systems). These systems are desktop applications that may require file conversion, software upgrades, and training. Recommendation was approved by the Y2K Steering Committee at their June 3, meeting.

121 - Criticality 2/3/4 Systems, Fire Division - Projected cost is $770,000.00 within the Business Case total cost at $1,950,000.00

Start work on criticality 2/3 systems with a targeted completion date of September 30, 1999. Recommendation for $770,000.00 was approved by the Y2K Steering Committee at their June 3^rd meeting.

123 - Transportation Systems Division costs for Y2K Contingency Planning - $939,189.00 plus an advancement of $250,000.00

This change Request is to request $939,189.00 to support Y2K Contingency Planning for WES Transportation Systems Division and to request an advancement of $250,000.00 this year against the hardware component of the new signals portion of the WES Transportation Systems Division Capital Budget for the year 2000. Recommendation for $939,189.00 was approved by the Y2K Steering Committee at their June 17^th meeting.

127 - Fund requested in advance for Business case TS-078-#2, 3, 4 - $238,652.00

Few systems were considered criticality No. 2 and were listed in the Support Services Business Case 2, 3, and 4. These systems are now deemed to be of high 2 and funding of $238,652.00 is required for Y2K Testing and Certification. Recommendation was approved by the Y2K Steering Committee at their June 17, meeting.

Finance:

143 - Water Revenue System - $270,237.00

A new Water Revenue System is being developed on one of the Nodes in the IBM SP Server. When the new Water Revenue Service is in production, it is recommended that it run on the same server as the Tax System, therefore an additional IBM S70 server must be used. The cost for an IBM S70 is $230,000.00 plus applicable taxes and required license for software. The upgrade option can save $49,842.00. Recommendation was approved by the Y2K Steering Committee at their June 17^th meeting.

144 - Water Revenue System - $1,755,000.00

The Water Revenue System must be developed to handle the increasing volume of billing transactions as well as to process the large volume of user information. The Water Revenue Systems of the former municipalities are either out-of-date in technology, are not year 2000 ready, or do not have the ability to handle large volumes of data. The development cost for this is driven by three major elements staffing $1,170,000.00, equipment and Software $270,237.00 (covered under change request 144) and other costs such as taxes and contingency funds. If a new Water Revenue System is not developed, the Water Revenue System of the former municipalities have to be remedied for year 2000 readiness so that the business can continue in and beyond the year 2000. As these systems are separate and have their own databases for maintaining client information, it is very difficult to prepare reports for operations control and decision support required by senior management. As well, the operating cost for running multiple systems at different locations is very high. Total requested is $1,755,000.00. This request was approved by the Y2K Steering Committee at their meeting of June 17, 1999.

Urban Planning and Development:

135 - Additional Support Resources (desktop rollout, test co-ordinator) - $40,000.00

Additional resources are required to support three areas: desktop rollout, server migration and test co-ordination.

(a) The scope and resources of the desktop rollout team are limited, such that significant departmental effort is required to implement the NT desktops (e.g. re-deploying "non-standard" applications). The UPDS department has had to acquire additional resources to support this effort (particularly, as the department has more complex applications such as GIS, CAD systems that require more effort to correctly set up and reinstall). This effort will continue to be required with the planned rollouts for City Hall and North York in particular.

(b) Server migration will require additional assistance from UPDS

(c) The test co-ordinator role requires support, as a new employee has now taken on the Account Project Manager position.

This effort requires 4 people x 16 weeks each total of 64 weeks. Recommendation was approved by the Y2K Steering Committee at their June 3, meeting.

137 - Purchase of Eight Barcode Readers - $3,680.00.00