CITY CLERK

POLICY AND FINANCE COMMITTEE

REPORT No. 8

For Consideration by

The Council of the City of Toronto

on October 26 and 27, 1999

1 December 31, 1998, and June 30, 1999, Operating Budget Variance Report

2 School Planning - City-Wide

3 Response to the Provincial Operational Review of Toronto's Implementation of Ontario Works and Child Care Fee Subsidy Programs

4 Learning, Earning and Parenting (LEAP)

5 Mandate and Budget Allocation for Mayor's Homeless Initiative Reserve Fund

6 Water Harmonization and Universal Metering in the Former Cities of Toronto and Etobicoke

7 Redevelopment of Car Park 63 Located At 111 and 117 Richmond Street East (Ward 24 - Downtown)

8 Veterans' Clubhouses and Legion Halls - Property Tax Rebates Under Section 442.1 of the Municipal Act

9 Fair Tax Policy for Ethno-Cultural Centres and Similar Organizations

10 Property Tax Relief for Low-Income Disabled Persons - Criteria and Program Enhancement

11 Association of Municipalities of Ontario - Gas Franchise Defense Fund

12 Tree Maintenance Backlog - Funding from Department Sources (All Wards)

13 1999 Levy on Railway Roadways or Rights of Ways and on Power Utility Transmission or Distribution Corridors

14 2000 Operating Budget - Proposed Process and Schedule and Revised 2000 Capital Budget Schedule

15 Actions Required Resulting from the Board Meeting of the Federation of Canadian Municipalities

16 Fees Charged for Police Reference Checks

17 Year 2000 Priority One Business Functions Status Report - September 1999

18 Feasibility of Phase II Review of Fire Services

19 Other Items Considered by the Committee

City of Toronto

REPORT No. 8

OF THE POLICY AND FINANCE COMMITTEE

(from its meeting on October 14, 1999,

submitted by Mayor Mel Lastman, Chair)

As Considered by

The Council of the City of Toronto

on October 26 and 27, 1999

December 31, 1998, and June 30, 1999,

Operating Budget Variance Report

(City Council on October 26 and 27, 1999, amended this Clause by adding thereto the following:

"It is further recommended that:

(1) the recommendations of the Audit Committee, embodied in the communication dated October 25, 1999, from the City Clerk, be adopted, viz.:

'The Audit Committee recommends that the City Auditor be directed to review the reconciliation prepared by the Chief Financial Officer and Treasurer and report to the Audit Committee on the following items:

(a) the reconciliation between the City's audited statements for 1998 and the 1998 year end variance report in relation to the reporting of the gross expenditures and revenues by each program, and the closing balances of all reserve accounts;

(b) an assessment of financial transactions recorded, if any, for the year of 1998, in the City of Toronto's Financial Information System (TFIS) or any of the legacy systems, subsequent to the signing of the City's audited statements for 1998; and

(c) a review of expenditures incurred in 1998 and recorded in any of the City of Toronto's Financial Systems, but not assigned to any specific program listed in the December 1998 variance report (i.e. expenditures charged to "suspense accounts").'; and

(2) the recommendations of the Audit Committee, embodied in the further communication dated October 25, 1999, from the City Clerk, be adopted, viz.:

'The Audit Committee recommends that the City Auditor be directed to report to the Audit Committee at its meeting to be held on December 13, 1999, on the following items:

(a) the manner in which Funds Control was exercised in the City of Toronto during 1998;

(b) whether proper Council authorization was obtained in relation to the over spending incurred in 1998, and, if not, whether that resulted in an infraction of any City By-law or provincial legislation; and

(c) the manner and reliability of Funds Control exercised in the City during 1999 and whether programs are able to over spend in 1999 without prior Council authorization.';

(3) the City Solicitor be requested to submit a report to the Mayor's Committee on the Port Lands, for report thereon to the Policy and Finance Committee in December 1999, on the legality of terminating payment to the Toronto Harbour Commission until such time as the Chief Financial Officer and Treasurer and City Auditor are able to obtain the necessary information in order to:

(a) approve the 1999 Operating Budget of the Toronto Harbour Commission; and

(b) determine the over-expenditure of the Toronto Harbour Commission's Operating Budget; and

(4) the Mayor's Committee on the Port Lands be requested to bring forward an updated report on disentanglement to the next meeting of the Policy and Finance Committee.")

The Policy and Finance Committee recommends:

(1) the adoption of the report (October 5, 1999) from the Chief Financial Officer and Treasurer; and

(2) that an amount of $10.0 million be transferred from the $16.5 million contained in the Winter Control Stabilization Reserve Fund, to the Transportation Program.

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

(1) requested the City Auditor to review the $39 million snow budget over-expenditure with a view to determining whether the costs are controlled and/or in similar circumstances whether they can be reduced;

(2) requested the Chief Financial Officer and Treasurer:

(a) and other senior staff to review by December, 1999, the 1999 Budget and Council's 1999 objectives which include Homelessness, Child Care, Social Services - Welfare, Forestry, Street Cleaning, User Fees, Permit Processing, etc., and report on the availability of any funds to address these areas;

(b) to expedite her forthcoming report on the Police and Zoo over-expenditures and report to the Budget Advisory Committee no later than October 30, 1999;

(d) to provide quarterly expenditure reports, for each Department, to the Policy and Finance Committee to afford the Committee an opportunity to determine the amount that is being spent;

(e) to report to the Policy and Finance Committee on the factors behind the increase in projected 1999 expenditures versus 1998 actual related to Works and Emergency Services ($60.2 million) and Finance ($3.2 million);

(f) to report to the Policy and Finance Committee on the City of Toronto's policy on the allocation, charging and recovery of inter departmental charges;

(g) and the City Auditor to report to the Policy and Finance Committee:

(i) on the basis for expecting an increase of $38.2 million in 1999 over 1998 in Water revenues; and

(ii) on why the prior year surplus is only recovered to the extent of $869,000 by June, 1999, against the estimate of $45.0 million;

(3) requested the Commissioner of Community and Neighbourhood Services to submit a report to the Policy and Finance Committee on the rent increases in City Housing units, reported to be as high as 10 percent and particularly how such a rent increase was possible given that the 1999 budget for the Housing Company did not identify a rent increase in 1999;

(4) directed that the forthcoming report from the City Auditor and the Chief Financial Officer and Treasurer respecting the budget of the Toronto Harbour Commission be submitted to Council, as soon as possible; and

(5) received the report (October 8, 1999) from the Chief Financial Officer and Treasurer.

The Policy and Finance Committee submits the following report (October 5, 1999) from the Chief Financial Officer and Treasurer, entitled "December 31, 1998, Operating Budget Variance Report":

Purpose:

The purpose of this report is to provide an overview of the City of Toronto's financial performance for its first year of operation ended December 31, 1998. The report includes an analysis of significant Net Expenditure variances by City departments, and Special Purpose Bodies.

Financial Implications:

The financial results as of December 31, 1998, indicate that the City of Toronto has successfully managed operations within the 1998 Operating Budget approved by Council.

The operating surplus of $43.6 million or 1.7 percent of net budget, has been carried forward into 1999 operations, and was accounted for in the 1999 Operating Budget. City Operations contributed a net operating surplus of $52 million towards this amount. Special Purpose Bodies and higher than budgeted tax revenues, also contributed $2.1 million and $7.6 million respectively towards the surplus. These efficiencies were partially offset by an over expenditure in Corporate Accounts of $18.1 million.

Recommendation:

It is recommended that this report, reflecting the 1998 financial results of the City of Toronto, be adopted.

Comments:

December 31, 1998, Year-end Position - Overview:

The City of Toronto delivers municipal services through six departments and multiple Special Purpose Bodies. Below are the December 31, 1998, year-end variances by department, together with a corporate overview of the significant issues that impacted on each department and Special Purpose Bodies. A more detailed discussion of significant operating variances, by program, is provided further on in this report.

Year-end Variances ($ Millions)

	Gross Expenditures	Net Expenditures
Department	Over/(Under) Budget	Over/(Under) Budget

(a) Community and Neighborhood Services	(190.4)	(25.2)
(b) Works and Emergency Services	18.7	(18.0)
(c) Economic Development, Culture and Tourism	(0.3)	3.1
(d) Urban Planning and Development Services	0.4	(8.3)
(e) Corporate Services	3.5	(0.4)
(f) Finance	(5.0)	0.1
(g) Special Purpose Bodies	(4.2)	(2.1)
(h) Corporate Accounts	108.1	18.1
(i) Other	(51.3)	(3.2)
(j) Assessment Gain	N/A.	(7.6)
Year-end Total Variance	(120.4)	(43.6)

(A) Community and Neighbourhood Services:

The Community and Neighbourhood Services department ended the year with gross and net budgets under-expended by $190.4 million or 8.7 percent and $25.2 million or 4.1 percent respectively, as a result of under-expenditures in all programs, but primarily Social Services. Council approved transfers to reserves totalling $28.4 million during the year, redirecting some of these underexpended funds towards provisions for longer-term stability in the Social Services, Homes for the Aged and Children's Services programs.

(B) Works and Emergency Services:

Under-expenditures in Fire Services and Ambulance Services combined with higher than anticipated revenues in Solid Waste Management and Transportation Services enabled Works and Emergency Services to end the year favourably on a net basis at $18.0 million or 3.5 percent under budget.

The Economic Development, Culture and Tourism department ended the year over budget by $3.1 million or 1.9 percent on a net basis as a direct result of revenue shortfalls in Parks and Recreation, and Arts, Culture and Heritage programs.

(D) Urban Planning and Development Services:

Higher than projected development related revenues placed the department in a net underspent position of $8.3 million.

(E) Corporate Services:

Corporate Services ended the year within budget, with over-expenditures in Facilities and Real Estate and Information Technology being offset by under-expenditures in Audit, Clerks, Human Resources, Corporate Communications, Legal, and the Service Integration and Support office.

(F) Finance:

On a net basis, Finance is marginally above budget at year-end by $100,000.00.

(G) Special Purpose Bodies:

Revenue shortfalls in the Toronto Zoo, extraordinary expenses in Theatres and Galleries and a significant over-expenditure in Exhibition Place resulted in a net over-spent position of $3.4 million at year-end.

Net under-expenditures, totalling $5.5 million, in the operation of the Library Board, Public Health, Toronto Police Service, Toronto Transit Commission, Conservation Authority and Arena Boards, have placed the Special Purpose Bodies in a favourable net expenditure position of $2.1 million or 0.2 percent by year-end.

(H) Corporate Accounts:

Corporate Accounts include consolidated grants, capital and corporate financing, non-program expenditures and non-program revenues.

Consolidated grants and capital and corporate financing were underspent at year-end $6.6 million or 2.9 percent.

Non-program expenditures exceeded budget by $47.7 million or 16.4 percent largely as a result of higher tax deficiencies (over by $31.7 million), and year-end charges to other corporate expenditures (over by $37.2 million). This is in part offset by underutilized budget allocations for Corporate Contingency (under by $23.6 million) and Temporary Borrowing (under by $7.8 million).

Non-Program Revenues were $22.9 million or 5.6 percent higher than budget. Payments in lieu of taxes were significantly higher than budget. Lower than projected investment income and lower than projected Supplementary Taxes partially offset these higher revenues.

More detailed discussion of these variances can be found in the section on Corporate Accounts further on in the body of this report.

(I) Other:

This category includes the CAO's Office, Mayor's Office and Council. The CAO's Office, the Mayor's Office and Council were all within budget at year-end.

(J) Assessment Gain:

Actual 1998 tax revenues were slightly higher than budget reflecting a small increase in assessment that was realized upon billing.

The attached Schedules A, B and C reflects gross expenditures, gross revenues, and net variances by program. It should be noted that the 1998 budget numbers were adjusted to account for re-alignments related to changes in organizational structures. Council adopted these adjustments as part of the 1999 Operating budget process.

Schedule D summarizes expenditures on salaries and benefits by department and program providing a comparison with the 1998 approved budget for these expenditures. Salaries and benefits for the Corporation as at year-end are underspent by $26.6 million or 1.1 percent for tax supported operations.

Schedule E presents the staff reductions accomplished by amalgamating programs and departments as compared with the targets assigned to each program for 1998. On the whole, programs were able to meet their 1998 target reductions.

Departmental Net Expenditure Variances: Year-end Actual Vs September Projection:

The table below summarizes the changes in 1998 projected year-end net position from the September Variance report as compared to the actual December year-end summarized by department. With the single exception of Corporate Accounts, where year-end adjustments resulted in significant charges to non-program expenditures, departments and Special Purpose Bodies ended the year within their year-end projection from September.

Year-end Variances

($ Millions)

	September Projection	December Actual
Departments/Programs/Services	Over/(Under)	Over/(Under)

(a) Community and Neighborhood Services	(23.5)	(25.2)
(b) Works and Emergency Services	(4.2)	(18.0)
(c) Economic Development, Culture and Tourism	4.0	3.1
(d) Urban Planning and Development Services	(7.0)	(8.3)
(e) Corporate Services	3.1	(0.4)
(f) Finance	0.0	0.1
(g) Special Purpose Bodies	0.6	(2.1)
(h) Corporate Accounts	2.6	18.1
(i) Other	(0.5)	(3.2)
(j) Assessment Gain	0.0	(7.6)
Year-end Total Variance	(24.9)	(43.6)

Year-end Gross and Net expenditure variance explanations, comparing actual to budget by program within each department are provided below.

(A) Community and Neighborhood Services:

The gross and net budget variances of Community and Neighborhood Services are comprised of the following:

	Expenditures Over/(Under) Budget
	($ millions)

	Gross	Net
Programs	Dec. 31, 1998	Dec. 31, 1998

Children's Services	(32.9)	(2.8)
Social Services	(191.4)	(28.5)
Homes for the Aged	(3.3)	(13.4)
Other (Hostels, Housing, Social Development)	8.9	(8.9)
Contributions to Reserve Funds:
Children's Services - Child Care Capital Reserve	1.9	1.9
Social Services - Social Services Reserve	20.0	20.0
Homes for the Aged - Aged Capital Reserve	6.5	6.5
Tota1 Variance	(190.4)	(25.2)

Children's Services:

The Children's Services program's gross operating budget is under-spent by $32.9 million or 14.4 percent. This favourable variance is primarily due to a delay in transferring the management responsibility of purchased services such as Special Needs Resourcing, Resource Centres and Wage Subsidies from the Province.

On a net basis, the expenditure is $2.8 million or 8.7 percent below budget, which is due to increased user fees as a result of a more favourable client mix.

As approved by Council on July 30, 1998, $1.9 million of the net savings of $2.8 million was transferred to the Child Care Capital Reserve Fund.

Social Services:

For the year, the Social Services program has a favourable gross variance of $191.4 million or 16.6 percent, which is primarily attributable to the following:

(1) $102.9 million resulting from the change in budget assumptions relating to the number of transferred cases from provincially downloaded programs, as well as the delay in the transfer of these cases to the City of Toronto;

(2) $27.6 million relates to the Ontario Works program, due to a revised provincially approved Ontario Works Business Plan and an under-utilization of the Employment Support budget resulting from the maximum funding levels imposed by the Province; and

(3) $55.5 million attributable to a lower than budgeted monthly average caseload, in addition to savings from the National Child Benefit Savings (NCBS). The actual average monthly caseload was 80,837 versus the budgeted caseload of 88,000.

Insert Table/Map No. 1

mthly welfare caseload/'98 mthly welf

On a net basis, the program had a favourable variance of $28.5 million or 10.3 percent which is the result of the aforementioned favourable gross expenditures and also due to a change in the funding from the Ontario Works Program delivery from a 50/50 distribution to 80/20 one.

Of the $28.5 million net savings, a total of $20.0 million has been transferred to the Social Services Reserve Fund, comprised of $17.5 million for the Ontario Works Program and Administration and the Employment Placement Savings, and $2.5 million for the National Child Benefit Savings.

The Social Services Reserve Fund was established by City Council during the 1998 Budget approval process. The intent of this reserve is to protect the City against future caseload increases, to provide interim funding for a potential addition of 2,000 childcare spaces for clients leaving assistance, and to fund programs and services to support children of low-income families as per Provincial government directives.

Homes for the Aged:

Homes for the Aged reports favourable variances of $3.3 million or 2.6 percent gross, and $13.4 million or 57.7 percent net for the year. The gross expenditures variance is mainly attributable to savings of $2.0 million in salaries and benefits in the Homes program and $1.0 million savings from the Supportive Housing program which was the result of program restructuring as per the directive of the Ministry of Health. The remainder of the favourable variance is due to savings from the Homemakers and Nurses program and Central Services.

The under-expenditure on a net basis was due to a one-time Transition Subsidy funding that was made available by the Provincial Ministry of Health and higher user fee revenues.

Of the $13.4 million net savings, $6.5 million has been transferred to a Reserve Fund for capital expenditures as approved by Council on October 1, 1998.

Other:

This includes Hostels, Housing, and Social Development. The gross overexpenditure of $8.9 million was primarily due to greater than budgeted expenditure of $8.8 million in Housing, $5.3 million in Housing Support and $1.3 million in Hostels being partially offset by a $6.5 million below budget provincial download cost.

The favourable net expenditure of $8.9 million is caused by $9.5 million greater than budgeted revenues and interdepartmental recoveries in Toronto Housing, $0.8 million in Hostels, $0.8 million in Social Development, and $5.4 million in Housing Support.

(B) Works and Emergency Services (tax supported operations):

The gross and net budget variances of the Works and Emergency Services, excluding Water and Waste Water and Police, are comprised of the following:

	Expenditures Over/(Under) Budget
	($ millions)

	Gross	Net
	Dec. 31, 1998	Dec. 31, 1998
Programs	Year-endYear-end

Ambulance Services	0.0	(0.2)
Fire Program	(2.8)	(1.8)
Solid Waste Management	20.4	(9.1)
Transportation Program	1.1	(6.9)
Total Variance	18.7	(18.0)

Fire Program:

The program reports a gross and net under-expenditure of $2.8 million or 1.3 percent and $1.8 million or 0.8 percent, respectively for the year. The favourable gross variance is primarily attributable to a lower than budgeted actual fringe benefit rate, deferral of expenditures and reduced contributions to reserves. The under-expenditures are partially offset by lower than anticipated false alarm revenues.

Solid Waste Management:

For the year, the Solid Waste Management program reports a gross over-expenditure of $20.4 million or 16.2 percent and a net under-expenditure of $9.1 million or 12.3 percent.

The gross over-expenditure of $20.4 million is primarily due to:

(1) a total of $10.8 million, comprising higher interdepartmental charges than anticipated offset by higher interdepartmental revenues;

(2) $5.3 million for fleet and equipment purchases which were offset by transfers from fleet equipment reserves. The restated 1998 budget removed the gross budget and revenues for these costs and centralized these in Fleet Management Services;

(3) increases in disposal revenues triggered increases in operating costs by $2.7 million to cover royalties to the Region of York, as well as transfer and haulage costs; and

(4) other contributing factors for this over-expenditure included higher than budgeted costs related to price escalation for collection contracts, $0.2M; higher costs related to delay in the implementation of one-man packers in the former City of North York, $0.4M; higher costs related to rehabilitation assignments and retirement/sick pay bank disbursements, $0.8M; and; higher cost related to purchase of route design software system, $0.2M.

On a net basis, the favourable variance is attributable to higher revenues relating to the paid disposal tonnage, the sale of recyclable materials and to the rental of steel containers in the Toronto Community Council Area.

A graph of the budgeted and actual tonnage levels for the years 1996 to 1998 follows.

Insert Table/Map No. 1

waste mngmt pd tonnage/'98 pd waste tonnage rev

Transportation:

The Transportation program reports a net under-expenditure of $6.9 million or 4.1 percent.

Salaries are overspent by $4.4 million. Part of this overage is directly attributable to higher inter-departmental charges offset by inter-departmental revenues. Non-recurring revenues have also been credited to the program's 1998 results. The non-salary expenses are below budget for 1998.

The gross and net budget variances of the Economic Development, Culture and Tourism department are primarily comprised of the following:

	Expenditures Over/(Under) Budget
	($ millions)

	Gross	Net
	Dec. 31, 1998	Dec. 31, 1998
Programs	Year-end	Year-end

Arts, Culture and Heritage (Heritage Toronto incl., here)	(0.4)	0.3
Economic and Tourism Development	(0.4)	(0.3)
Parks and Recreation	0.3	3.2
Special Events	0.2	(0.1)
Total Variance	(0.3)	3.1

Arts, Culture and Heritage:

The program reports a favourable gross variance for the year of $0.4 million. Lower salaries and benefit costs as a result of unfilled vacant positions have resulted in this favourable gross expenditure variance.

The $0.3 million net unfavourable variances is caused by shortfalls in revenue due to lower than budgeted attendance rates at various programs and facilities.

Economic and Tourism Development:

The program reports a favourable gross and net variance for the year of $0.4 and $0.3 million, respectively. Factors contributing to the under-expenditure were lower salaries and benefits expenditures due to unfilled vacant positions, and lower non-salary expenditures caused by the delay in implementing program initiatives. This is offset by reduced revenues resulting from the delay in the creation of a Business Directory.

Parks and Recreation:

The program reports an unfavourable gross expenditure variance of $0.3 million or 0.1 percent for the year. Higher salary and benefit costs due to the delay in implementing the downsizing program are offset by lower non-salary expenditures.

On a net basis, the program reports an unfavourable variance for the year of $3.2 million or 2.2 percent. Revenue deficiencies were experienced in the following areas:

(1) $1.0 million in parking fees, unrealized brochures and facility advertising revenues, and the Council directive to provide no charge public swimming across the City, and the extension of the swimming season;

(2) $0.7 million in decreased participation in certain programs;

(3) $0.7 million in unanticipated delays and program reductions and cancellations; and

(4) $0.4 million in unrealized recoveries.

Special Events:

The unfavourable gross variance of $0.2 million or 5.6 percent for the year is mainly attributable to higher than anticipated expenditures for various events. Additional revenues from the Street Festival have caused a net under-expenditure of $0.1 million or 5.0 percent.

(D) Urban Planning and Development Services:

The gross and net budget variances of the Urban Planning and Development Services department are comprised of the following:

	Expenditures Over/(Under) Budget
	($ millions)

	Gross	Net
	Dec. 31, 1998	Dec. 31, 1998
Programs (excluding TTC)	Year-end	Year-end

Toronto Licensing	(1.6)	(1.8)
Urban Planning and Development	2.0	(6.5)
Total Variance	0.4	(8.3)

Toronto Licensing:

Year-end under-expenditures, on a gross and net basis of $1.6 million and $1.8 million respectively, are mostly attributable to salaries and benefits savings resulting from unfilled vacancies. This is partially offset by an increase in establishment strength linked to accessing the provincial icon system. Lower than anticipated costs for Police reports, mechanical inspections and deferred postal mailings contributed to the under-expenditure as well.

Urban Planning and Development:

The program reports an unfavourable gross variance of $2.0 million or 3.4 percent for the year. This is the result of the salaries and benefits budget being exceeded by $2.4 million due to the delay in the implementation of employee reductions and not achieving the gapping targets. The unfavourable variance is partially offset by a favourable variance in non-salary expenditures of $0.4 million.

On a net basis, the favourable variance of $6.5 million or 28.3 percent is attributable to higher revenues relating to the implementation of a harmonized fee structure.

(E) Corporate Services:

The gross and net budget variances of the Corporate Services department are primarily comprised of the following:

	Expenditures Over/(Under) Budget

	Gross	Net
	Dec. 31, 1998	Dec. 31, 1998
Program Area	Year-end	Year-end

Audit	(0.4)	(0.5)
Clerk's	(1.0)	(0.5)
Facilities and Real Estate	3.5	0.9
Fleet and Equipment	2.8	0.0
Human Resources	(0.7)	(0.5)
Corporate Communications	(0.3)	(0.3)
Information Technology	0.8	1.3
Legal	(1.2)	(0.7)
Service Integration and Support	0.0	(0.1)
Total Variance	3.5	(0.4)

Audit:

The program for the year reports favourable variances of $0.4 million gross and $0.5 million net. The under-expenditure is primarily due to a reduction in contracted services and other expenses, in addition to higher than anticipated revenues from attest audits. This is offset by higher salary and benefit costs resulting from the delay in implementation of the downsizing plan.

Clerk's:

The Clerk's program was split into three distinct programs midway through 1998 - Clerk's, Special Events, and Corporate Communications. The reclassified Clerk's budget was set at $36.2 million gross and $21.3 million net.

The program reports favourable variances of $1.0 million gross and $0.5 million net for the year 1998. The favourable variance resulted from a spending freeze imposed by the program in late summer.

The favourable gross expenditure variance of $1.0 million was reduced to $0.5 million net, due to pressures in revenue experienced by the program during the year. The closure of two Bingo halls, lower sales of break-open lotteries, and lower issuance of birth letters and birth registration caused these pressures.

Facilities and Real Estate:

For the year, the program is over budget on a gross and net basis by $3.5 and $0.9 million, respectively. The gross over-expenditure is attributable to salary and benefits costs exceeding budget by more than $3.6 million. Higher payroll costs are attributable to the delay in the approval of restructuring plans and the resultant deferral of implementation. On a net basis, a favourable revenue variance of $2.5 million is mainly attributable to higher rental income collected from properties where the closing date of sale was deferred.

Fleet and Equipment:

The program reports an over-expenditure of $2.8 million on a gross basis, which is primarily due to a contribution to the Vehicle Replacement Reserve Fund of $3.2 million. This amount was recovered from program budgets; so on a net basis there is no impact.

Human Resources:

Year-end under-expenditures of $0.7 and $0.5 million on a gross and net basis, respectively are the result of lower labour relations, training and development and consulting costs. Program revenues were lower than anticipated by $0.2 million due to unrealized grants for Access and Equity.

Corporate Communications:

The gross and net expenditures are both below budget by $0.3 million. These favourable variances are due to savings of $0.2 million on salaries and benefits and $0.1 million on non-salary expenditures.

Information Technology:

Year-end gross over-expenditure of $0.8 million is the result of hiring external staff to fill in vacancies created by resignations and reassignment of staff to the Y2K Project. The non-realization of planned revenues, in the amount of $0.5 million, from the sale of personal computers because of the freeze in the acquisition of new computers has resulted in a net-over- expenditure of $1.3 million.

Legal:

For the year, the program experienced a favourable variance of $1.2 and $0.7 million on a gross and net basis, respectively. The favourable gross variance is attributable to lower salary and benefit costs as a result of downsizing beyond the 1998 target, in addition to lower than budgeted use of outside legal counsel. Lower than anticipated revenues have reduced the under-expenditure on a net basis. The lower revenues were the result of unrealized revenue enhancements approved during the 1998 budget process. The revenue estimates for 1999 have been reduced to better reflect the actual experience.

Service Integration and Support

On a net basis Service Integration and Support was below budget by $102,700.00 at year-end.

(F) Chief Administrator's Office, Council and Mayor's Office and Finance:

	Expenditures Over/(Under) Budget

	Gross	Net
	Dec. 31, 1998	Dec. 31, 1998
Program Area	Year-end	Year-end

Chief Administrator's Office	(0.5)	(0.5)
Council and Mayor's Office	(2.7)	(2.7)
Finance	(4.9)	0.1
Total Variance	(8.1)	(3.1)

Chief Administrator's Office:

The program reports a favourable $0.5 million gross and net variance for the year. Factors contributing to this include savings in salary and benefits from vacant positions, reimbursements for staff secondments and delayed purchases of non-payroll related expenses pending completion of departmental restructuring/filling of vacant positions.

Council and Mayor's Office:

For the year, the program reports a favourable $2.7 million gross and net variance. The favourable variance is primarily attributable to lower Council expenses for salary and benefits. Some vacant positions were not filled until April 1998 and casual and part-time staff temporarily filled some vacant positions. Lower non-salary Council expenses also contributed to the favourable variance, as all services and activities were not in full operation during the entire year.

Finance:

The gross variance of $4.9 million or 9.2 percent is primarily due to $3.8 million in salaries and benefits and $1.1 million in Finance non-salaries and benefits directly charged to Water and Waste Water that ought to have been charged to the Finance Department and then recovered from Water and Waste with the same net result. This situation has been corrected in 1999.

(G) Special Purpose Bodies:

The gross and net budget variances of the Special Purpose Bodies are comprised of the following:

	Expenditures Over/(Under) Budget

	Gross	Net
	Dec. 31, 1998	Dec. 31, 1998
	Year-end	Year-end

Exhibition Place	5.2	2.1
Library	(0.4)	(0.0)
Public Health	(2.8)	(4.3)
Theatres and Galleries	(4.3)	0.7
Toronto Police Service	4.0	(0.1)
Toronto Transit Commission	(4.9)	(1.1)
Toronto Zoo	(0.7)	0.6
Others (Conservation and Arena Boards)	(0.3)	0.0

Total Variance	(4.2)	(2.1)

Exhibition Place:

There was a revenue surplus from budget, but it was not substantial enough to fully offset the overexpenditure at the 1998 CNE.

Library:

The gross under-expenditure for the year is $0.4 million. This relates primarily to the savings in non-payroll expenditures which is offset in part by overspending in payroll expenditures due to the delay in achieving staff reductions.

Public Health:

The program reports favourable year-end gross and net under-expenditures of $2.8 and $4.3 million, respectively. This relates to delays in program implementation of Healthy Babies / Healthy Children, Healthiest Babies Possible and Parents Helping Parents programs, as well as overachieved gapping and various unbudgeted revenues received from the Ministry during 1998.

Theatres and Galleries:

The gross favourable variance of $4.3 million is largely due to the Hummingbird Centre expenditure restraint in response to decreased revenue expectations. The net variance of $0.7 million overexpenditure arose from the North York Performing Arts Centre's extraordinary expenses related to the withdrawal of its major partner. This amount has been covered by a prior year surplus.

On an individual basis, both the Hummingbird and the St. Lawrence Centre show small net budget surpluses, while the North York Performing Arts Centre experienced a net budget deficit for the reasons stated above. It should be noted that 1998 was an extraordinary year for the North York Performing Arts Centre and it is in the process of being restructured. In the future, the Hummingbird will have a self-sustaining operating budget as it moves into a new corporate and relationship with the City.

Toronto Police Service:

The Toronto Police Service's gross expenditure is above budget by $4.0 million, but is fully offset by a favourable revenue variance of $4.3 million, resulting in a below budget net expenditure variance of $0.1 million in 1998.

The gross over expenditure of $4.0 million is the net result of the following variances.

Staff costs were over budget by $1.6 million due to the impact of the 1998 negotiated settlement in the amount of $7.7 million. This was partly offset by $3.5 million in the OMERS holiday savings used to fund the salary settlement; $2.5 million in gapping caused by below budget staffing levels, and savings due to lower than anticipated volume of medical/dental claims.

Other unfavourable expenditure variances are summarized below:

(1) expenditures for the legal defense of officers exceeded budget by $0.9 million due to higher than anticipated volume of legal cases;

(2) $0.7 million was overspent to update software on remote workstations;

(3) $0.4 million was overspent on uniform clothing and equipment due to increased demand caused by replacement new hires;

(4) a catch-up replacement plan for vehicles contributed to a $0.3 million overrun in vehicle parts; and

(5) premium pay exceeded budget by $0.3 million due to the impact of the July Yonge Street closure and increased crowd activity as a result of the World Soccer games.

The favourable revenue variance of $4.3 million is primarily due to the OMERS Type 3 surplus of $4.2 million allocated to miscellaneous revenues. This was also used to partly offset the 1998 salary settlement. Other net favourable variance in all other revenue accounts amounts to $0.1 million.

Overall the net expenditures were within budget with a marginally favourable variance:

Toronto Transit Commission (TTC):

The Toronto Transit Commission's (TTC's) gross operating budget is under-spent by $4.9 million or 0.7 percent This favourable gross variance is the net result of the following offsetting under and over expenditures.

The major factors including cost reduction measures implemented in response to the fall in ridership, experienced in early 1998, that would have resulted in a significant revenue shortfall and the corresponding outcomes are as follows:

(1) $1.5 million under-expenditure in subway operations relating to the reduction and/or cancellation of improvements, lower heating billings, lower average wage rates and workforce shortages;

(2) $0.9 million under-expenditure for lower training requirements and unbudgeted workforce changes in the Training and Service Planning areas of the Operations Branch;

(3) $1.9 million under-expenditure for corporate expenses resulting from cuts to product (market) launches, unbudgeted workforce reductions in telephone information and vacancies in health services;

(4) $4.3 million under-expenditure in employee costs relating to employee benefit provisions and from lower than anticipated Employment Insurance premiums;

(5) $3.3 million under-expenditure in traction power costs stemming from a reduction in the consumption rate (partially due to the milder winter of 1997/1998), combined with a hydro rate freeze and the cancellation of planned 1998 subway and streetcar service improvements;

(6) $0.8 million savings in vehicle fuel costs due to reduced prices and cancelled bus service improvements;

(7) $4.7 million net under-expenditure in surface operations caused by: the reclassification of costs for the 18-year Bus Rebuild program to capital (see point 12 below), greater than anticipated transfer of previously expensed material back into inventory, cancellation of planned service improvements, lower average wage rates, and workforce shortages partially offset by increased materials and overtime for bus maintenance; and

(8) $0.3 million underexpenditure in accident claims and insurance expenses;

The above favourable gross expenditure position was partially offset by the following adverse expenditures, thus resulting in a net favourable gross expenditure of $4.9 million.

(9) $1.1 million over-expenditure in the Divisional Stores Project;

(10) $2.7 million over-expenditure in depreciation expense for the write-off of existing computer equipment and Y2K expenses;

(11) $1.6 million net over-expenditure for adjustments to various provisions and unbudgeted interest expenses paid to the City of Toronto for the Toronto Coach Terminal loan; and

(12) $7.4 million over-expenditure, of which $6.0 million relating to the 18 year Bus Rebuild program, and the balance $1.4 million relating to the Queensway Rail Replacement Project, being financed from operating contributions.

On a net basis, TTC has recorded a below budget expenditure of $1.1 million or 0.6 percent. This is caused by a $3.8 million revenue shortfall, mostly in passenger revenue ($3.6 million), partly offsetting the favourable gross under-expenditure of $4.9 million.

Annual ridership for 1998 is 389 million rides which is 0.8 percent below budget for the year, but is 2.3 percent higher than compared to a year ago. The average fare was slightly over budget, due to the continuing increase in cash fares and higher rate of growth in the adult market. Passenger revenues for 1998 were 0.7 percent below budget. The Toronto Transit Commission's (TTC's) gross operating budget is under-spent by $4.9 million or 0.7 percent. This favourable gross variance is the net result of the following offsetting under and over expenditures.

Insert Table/Map No. 1

mthly ttc ridership/'98 ttc passenger rev

Toronto Zoo:

The gross expenditure of the Toronto Zoo is under budget by $0.7 million. The favourable gross expenditure variance is the result of expenditure reductions or deferrals implemented specifically to mitigate the impact of the revenue shortfall. On a net basis, the program is over budget by $0.6 million due to a revenue shortfall. Attendance for the year was only 92 percent of the budget target.

The drop in attendance at the Zoo is similar to that of other attractions monitored by Tourism Toronto in the GTA.

(H) Corporate Accounts:

	Over/(Under) Budget
	($ millions)

		Net
		Dec. 31, 1998
Corporate Accounts		Year-end

Consolidated Grants		(4.5)

Capital Financing and Corporate Financing		(2.2)

Non Program Expenditures:
(i) Temporary Borrowing		(7.8)
(ii) Tax Deficiencies		31.7
(iii) Liabilities - Employee Related		7.3
(iv) RTEP Contribution		0.6
(v) Contingency		(23.6)
(vi) Other Corporate Expenditures		37.3
(vii) Insurance Premiums and Claims		0.6
(viii) OMERS Surplus		3.4
(ix) Parking Tag Operations		(1.8)

Non Program Revenues:
(i) Interest / Investment Earnings		12.0
(ii) Payments in Lieu of Taxes		(48.8)
(iii) Supplementary Taxes		25.9
(iv) Prior Year Surplus		(7.1)
(v) Other Corporate Revenues		(3.8)
(vi) Tax Penalties		(2.1)
(vii) Parking Tag Operations		1.0

Total Variance		18.1

Consolidated Grants:

A year-end net under-expenditure of $4.5 million primarily due to:

(1) a duplication of $0.6 million in grants for TEDCO;

(2) unbudgeted revenue recovery of $1.6 million for Drain Claims, and $0.5 million for Heritage Funds; and

(3) unutilized grants of $1.8 million.

These issues have been addressed in the 1999 Operating budget.

Capital and Corporate Financing:

These costs are below budget by $2.2 million as a result of a delay in debt issuance resulting in lower debt charges than forecasted. The City issued $250 million in debt in December 1998 instead of earlier in the year, as was the assumption used in the 1999 budget.

Non-Program Expenditures:

Below is a discussion of the major over / under expenditures in Non-Program expenditures.

(1) Temporary Borrowing:

Due to the amalgamation of the cash management and investment functions of the former area municipalities and Metro as of January 1, 1998, it was anticipated that a significant amount of temporary borrowing might have to occur due to potential delays in receiving tax revenues. However, prudent management of these funds and reserves has resulted in adequate cashflows to internally fund operations during the year.

(2) Tax Deficiencies:

A concerted effort to address the backlog from prior years that existed in all former local municipalities resulted in an overspending in the amount of $31.7 million. At the start of 1999, there were approximately 25,000 prior year appeals relating to 1996, 1997, and 1998. The actual expenditure for 1998 reflects actual appeal refunds as well as an allowance for doubtful accounts. This allowance was required to cover the former Metro share of tax receivable, which prior to amalgamation, had not been provided for in the budget. The 1999 budget has been increased accordingly to provide adequate funds for the balance of the prior year appeals, and to include an estimated 1999 tax deficiencies.

(3) Employee Related Liabilities:

An over-expenditure of $7.3 million is largely a result of a provision to the Employee Workforce Reduction Reserve Fund.

Contingency:

The final status of the Corporate Contingency Account is summarized as follows:

$ Thousands

Approved Contingency Provision			29,945.0

Contingency draws in 1998: (Approved Council date)


Millennium Celebration Task Force, (5/14/98)		50.0
By-election in Ward 1 East York (6/01/98)		118.7
Cover cost of outside planning advice for OMB Ontario Hydro Lands (06/05/98)		50.0
Parking Tags System Upgrade (7/8/98)		350.0
Research study - impact of big Box Retail Development (7/30/98)		35.0
Year 2000 Project B Office (7/31/98)		1500.0
Year 2000 Project B Systems (7/31/98)		3596.0
Accessibility Improvement Projects from Capital Works Program (10/02/98)		100.0
Cover cost of outside planning advice for OMB 50 Prince Arthur Ave (11/24/98)		26.0
Cover cost of outside planning advice for OMB 129 Willowdale Ave. (11/27/98		10.0
Annual tenant notification (12/16-17/98)		453.4
Recount for Ward 18 Scarborough (12/16/98)		21.6
Cover cost of outside planning advice for OMB 1465 Lawrence Ave West (12/17/98)		10.0
Cover cost of outside planning advice for OMB 5 Queenslea Avenue (12/17/98)		10.0
Cover cost of outside planning advice for OMB Hazelton Ave. etc. (02/02/99)		25.0


Total Contingency Draws			6,355.7

Unutilized balance after approved draws			23,589.3

Other Corporate Expenditures:

A net over-expenditure of $37.2 million is primarily due to:

(a) $10.7 million expenditures for fleet vehicle purchases are recorded here. This cost is offset by a contribution from the Fleet Vehicle Reserve Fund contained in Other Corporate Revenues in Non-Program Revenues;

(b) $6.2 million set aside as an allowance for doubtful accounts as per the recommendation of the City Auditor in his report on parking tag receivables in May 1998;

(c) $1.2 million TTC surplus transferred to TTC Stabilization reserve fund in order to stabilize TTC funding over time as per Council direction April 26, 27 and 28, 1999, during the 1999 Operating Budget deliberations; and

(d) a transfer of $16.5 million to the Winter Control Reserve Fund following the experience of the snow storms during the 1998-99 winter season.

(6) Insurance Premiums and Claims:

In 1999 insurance costs were budgeted in programs as well as non-program expenditures. This resulted in a mismatch of actuals and budgets resulting in an over-expenditure in non-program expenditures but an under-expenditure in the programs. This issue will be addressed in the year 2000 when all insurance costs will be charged out to programs.

(7) OMERS Surplus:

The year 1998 ended with a shortfall of $3.4 million or 11.9 percent. A corporate item had been included in the approved estimate for the 2 percent OMERS contribution reduction effective January 1, 1998 and which amounts to $29.0 million. Negative net variances related to the 2 percent OMERS reduction for the year are due to original estimates being based upon maximum insurable earnings for the entire approved salary budgets, and lower than expected actual. Based on this experience the 1999 budget has been adjusted downwards.

(8) Parking Tag Operations:

The Parking Enforcement Unit of Police Services is underspent by $1.8 million or 7.1 percent as a direct result of anticipated shortfalls in revenues from parking tag issuance. When the program realized it would not be able to meet revenue projections, a concerted effort was made to keep costs down in an effort to ensure it remained within budget at year-end. The expenditure savings of $1.8 million more than offsets the revenue deficit of $1 million.

Non-Program Revenues:

(1) Interest/Investment Earnings:

The shortfall of $12.1 million was due to changes in the timing and frequency of the 1998 tax supported due dates, as compared to budget, and, the changes resulting from the following provincial actions:

(i) the delay in receiving the assessment rolls from the Province was forecasted to result in an investment income loss of approximately $12.3 million and penalty income loss, from taxpayers who are traditionally overdue on payment of their accounts; and

(ii) the late receipt of supplementary assessment tapes from the Province created at an investment loss of $0.7 million.

The Province attempted to compensate the City for these delays in two ways. It advanced funds to the school boards on behalf of the City, but later reimbursed the city for interest costs, and, it extended the payment date for the Local Service Realignment installments. Despite these actions, the estimated net shortfall to the City was $10.4 million

Interest rates remained within the budgeted range during 1998:

(2) Payments in Lieu of Taxes:

The 1998 budget was based on the experience under the old legislation. Changes to the new assessment system allow the City to retain a greater share of billed payments in lieu to other governments and agencies that may not be billed property taxes. This has resulted in PIL's $48.8 million higher than budget. The 1999 budget has been amended to $190.4 million to reflect the implication of the new legislation.

(3) Supplementary Taxes:

The 1998 budget was based on experience under the old legislation. Supplementary taxes have predominantly reflected the addition of new business assessment in the current year or two prior years past, and new construction, i.e., new assessment. As of January 1, 1998, business tax, which constituted a significant component of Supplementary Taxes, has been eliminated, thereby substantially reducing the actual by $25.9 million for 1998. The 1999 budget has been amended to $5.0 million to reflect the implication of the new legislation.

(4) Prior Year Surplus:

The surplus brought forward from 1997 to 1998 was $7.1 million higher than the budget.

(5) Other Corporate Revenues:

Other Corporate Revenues were higher than budget largely as a result of higher revenues from the Parking Authority - $6 million versus a budget of $3.8 million. An unbudgeted recovery of vehicle replacement costs from the Fleet Replacement Reserve ($10.7 million), was offset by the under charging of city costs of $10 million to the Water and Waste Water operations.

Non-Tax supported Operations:

(a) Toronto Economic Development Corporation (TEDCO)

TEDCO operations for 1998 resulted in a $1.3 million actual surplus. This was slightly under budget, by $0.5 million, due to delays in reaching leasing targets on vacant properties in the Port Area and General Real Estate Projects and unanticipated non-salary expenditures. Surpluses are directed into reserves for future year capital initiatives and to ensure operations continue to have no impact on the City's mill rate.

(b) Toronto Harbour Commission (T.H.C.)

The Toronto Harbour Commission's gross expenditure was overspent by $2.7 million on a $13.0 million gross expenditure budget, offset partly by a favorable revenue variance of $2.5 million, resulting in an unfavorable variance of $0.2 million on a net budget of $2.8 million for 1998.

The significant contributing factors to the unfavourable gross expenditure position are:

(1) Terminal Operations expenses were $0.9 million over budget due to increases in business during 1998. Increased business required additional resources, thus overspending on Labour, Materials and Equipment maintenance activities;

(2) Corporate division was $1.6 million above budget that can be attributed in large part to professional fees to deal with the transitional issues surrounding the T.H.C. in 1998. Other areas that required additional expenses include property, promotion, office and general, and bad debt provision; and

(3) The major item accounting for the remainder of the variance was higher amortization of the cost of computer upgrades.

The favorable revenue variance of $2.5 million is primarily due to increased Terminal Operations that resulted in an above budget revenue of $1.4 million. Increased volume of high value general cargo passing through the terminals, and increased market share for imported steel coils contributed large positive revenue variance. The Corporate division surpassed its revenue budget by $0.5 million. Investment income and property revenue received by the T. H. C. contributed to this positive variance by an additional $0.3 million.

The T.H.C. makes provisions for its net year end position, and any overexpenditure in this operation does not impact on the city.

For the year, the Toronto Parking Authority realized net revenue over expenditures of $24.7 million from combined off-street and on-street operations, as compared to budgeted net revenue of $22.8 million for a favourable variance of $1.9 million. The increase in net revenue is due mainly to improved business activity for off-street parking facilities.

The City's share of 1998 net revenue is $13.0 million. Of this amount $5.0 million was allocated to the Transportation Program which is responsible for maintaining streets that permit use of on-street metered parking, and $8.0 million was allocated to non-program revenues in support of the City's overall operations.

The under-expenditure variance of $11.7 million reflected in the City's consolidated gross expenditures represents the Toronto Parking Authority's share of net income for the year which is to be retained by the Authority to finance its capital works program.

(d) Water and Waste Water

Water and Waste Water operations had a gross under expenditure of $35.4 million at year end 1998. $23 million of this was from operating cost underspending - a result of operational efforts including best practices to tightly monitor costs in 1998, while the balance was a result of costs from tax supported operations not charged in 1998.

The operating surplus for the Water and Waste Water operations was transferred back to the Water and Waste Water Reserve Fund to finance its capital works program.

Conclusion:

The 1998 year-end operating surplus for tax supported operations in the City of Toronto is $43.6 million or 1.7 percent of the 1998 net tax supported budget.

Contact Name and Telephone Number:

Val Sequeira, Manager, Budget Services, Telephone: 397-4225; Fax: 392-3649, E-mail: vsequeira Val@mta1.metrodesk.metrotor.on.ca

Josie Lavita, Manager, Budget Services, Telephone: 397-4229; Fax: 392-3649, E-mail: jlavita@mta1.metrodesk.metrotor.on.ca

Glenn Vollebregt, Director of Budgets, Tel: 392-8095; Fax: 397-4465, E-mail: gavolleb@mta1.metrodesk.metrotor.on.ca

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The Policy and Finance Committee also submits the following report (October 8, 1999) from the Chief Financial Officer and Treasurer, entitled ""June 30, 1999, Operating Budget Variance Report":

Purpose:

To provide an overview of the gross and net expenditure position of the City of Toronto for the first six months of operation ended June 30, 1999, and to identify the resulting funding issues for the full year 1999. The report includes an analysis of significant net expenditure variances and year-end projections by City programs, and Special Purpose Bodies.

Financial Implications:

The financial results as of June 30, 1999, indicate that expenditures in the departments, Special Purpose Bodies and corporate accounts are well within budgeted spending allocations. It is anticipated that at year-end, the City's operating surplus will be $27.5 million, or below 1 percent, of approved budget. However, Council approved and proposed reserve fund transfers of $19.2 million for Community and Neighbourhood Services purposes, is expected to reduce this surplus to $8.3 million. The $8.3 million is an 81 percent, or $35.3 million, reduction in operating surplus from 1998, and will cause significant pressure on the 2000 operating budget. (Note: if the full amount of funds in the Winter Control Stabilization Reserve Fund of $16.5 million are utilized in 1999, then the operating surplus for 1999 would become $24.8 million - a reduction of $18.8 million from 1998 surplus levels.)

City operations project a year-end net over expenditure of $10.6 million after approved and projected transfers to reserves. Special purpose bodies project a year-end net over expenditure of $11.8 million. Corporate accounts are expected to end the year with a net $24.5 million under expenditure, while slightly higher than budgeted tax revenues will contribute a further $6.2 million towards the projected year-end surplus.

Recommendations:

It is recommended that this report be received.

Comments:

Overview:

This June 1999 variance report shows net year-to-date under expenditures of $179.7 million, with a significant component of that under expenditure accounted for by timing differences between disbursements and revenues. Where significant, the June variances are addressed in the commentary on individual programs.

The year-end picture is much tighter. City programs are projecting a year-end net over expenditure of $10.6 million after approved and proposed transfers to reserves, and special purpose bodies are projecting a year-end over expenditure of $11.8 million. Higher corporate revenues are anticipated however, and together with marginally higher tax revenue, these should enable the city to end the year with an operating surplus of $27.5 million before approved and proposed reserve fund transfers. The $8.3 million projected surplus after approved and proposed reserve fund transfers is a reduction of $35.3 million from 1998, causing a potential pressure of $36.7 million for the 2000 operating budget.

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

Over / (Under)

Gross

Net

Gross

Net

(1)

Community and Neighbourhood Services

(96.1)

(49.1)

(111.1)

(26.6)

(2)

Works and Emergency Services

(6.3)

(4.0)

38.6

39.2

(3)

Economic Development, Culture and Tourism

(10.8)

(2.9)

0.6

0.5

(4)

Urban Planning and Development Services

(0.9)

6.3

0.0

(5)

Corporate Services

(11.3)

0.1

0.2

(0.2)

(6)

Finance

(3.7)

5.9

(0.6)

(7)

Other

16.1

(1.9)

(1.6)

(8)

Special Purpose Bodies

(40.0)

(42.6)

9.3

11.8

(9)

Corporate Accounts

(159.7)

(91.5)

(11.8)

(24.6)

(10)

Assessment Gain

N/A

(6.2)

Total Variance

(312.8)

(179.7)

(76.3)

(8.3)

(1) Community and Neighbourhood Services:

The department is projecting year-end under expenditures of $45.8 million. This is comprised of net under spending of $27.1 million in Social Services, $9.0 million in Homes for the Aged, $7.1 million in Shelter, Housing and Support, and $1.7 million in Children's Services. However, Council approved and projected year-end reserve allocations reduce the department's underspending to $26.6 million.

(2) Works and Emergency Services:

Works and Emergency Services is projecting a net year end over expenditure of $39.2 million as a result of:

(i) $38.1 million over expenditure in Transportation representing the cost of the January snow storm.

(ii) $2.5 million in Fire Services. The program has indicated that it will not be able to meet the assigned gapping target of $1.3 million or savings from reduced absenteeism of $850,000 as directed by Council. Further additional costs due to the recruitment of 62 firefighters in November will add $340,000 to 1999 costs.

(iii) These over expenditures are partially offset by net under expenditures of $1.2 million in Solid Waste Management.

(3) Economic Development, Culture and Tourism:

Economic Development, Culture and Tourism is projecting to be marginally overspent at year end as a result of a $ 0.5 million over expenditure in the Customer and Business Support program for the production of an additional Toronto Fun guide in 1999.

(4) Urban Planning and Development Services:

The department is projecting it will be on budget at year-end.

(5) Corporate Services:

Corporate Services is projecting a net under expenditure of $0.2 million at year-end. A $1.0 million over expenditure in Facilities and Real Estate offsets projected net under expenditures in Corporate Communications ($0.6 million) and Clerks ($0.6 million). The projected year-end over expenditure in Facilities and Real Estate is largely the result of lease reductions not realized as projected, and delays in the implementation of the 1998 downsizing plan.

(6) Finance:

The Finance department is projecting a year-end under expenditure of $0.6 million.

(7) Other:

This category includes the CAO's Office, and Mayor's Office and Council. All these programs anticipate being within budget at year-end, with Council projecting a net under expenditure of $1.6 million.

(8) Special Purpose Bodies:

The following Special Purpose Bodies account for the projected year-end over expenditure of $11.8 million:

(a) The Toronto Police Service ($ 7.9 million): The projected over expenditure is a result of a variety of operational factors. These include costs incurred for mandatory increases for staff ($4.7 million), premium pay related to Kosovo demonstrations ($1.1 million), lower than anticipated attrition ($1.1 million), as well as revenue shortfalls ($1.0 million).

(b) The Toronto Zoo ($1.8 million): Poorer attendance as a result of the hot summer and lower school group admissions will cause a year end revenue shortfall of $2.3 million which is projected to be partially offset by under expenditures in operating costs of $0.5 million.

(c) The Toronto Transit Commission ($1.7 million): Staff salaries and benefits, primarily as a result of the negotiated wage increase, and other Operations and Administration costs are projected to be $5.6 million above budget. Further, accelerated write-off of existing computer equipment and Y2K expenses of $2.5 million and an exchange rate impact of $3 million (budget at 72 cents v/s 66 cents at time of budget approval) account for the major over expenditure items. These costs are partially offset by higher TTC revenues mainly from fare increases ($7.7 million); employee cost savings of $1.4 million, and Wheel Trans savings of $0.3 million.

(d) Heritage Toronto ($0.4 million): At Heritage Toronto, lower revenues from memberships, donations and sponsorship activities have been offset by appropriate expenditure controls. However, the delay in approval and implementation of the structural plan will create a net over expenditure of $0.4 million.

(9) Corporate Accounts:

The projected year end surplus in corporate accounts is largely from unutilized contingency funds ($10 million) and better than budgeted investment income ($11.3 million). Increased revenues from payments in lieu of taxes ($4.5 million) and tax penalties ($4.9 million) are offset by lower parking authority revenues from on street parking ($3.4 million), lower parking tag revenues ($3.2 million) and a lower surplus carried forward from 1997 ($1.4 million) against budget.

(10) Assessment Gain:

Actual 1999 tax revenues are projected to be marginally higher than budget reflecting a small increase in assessment.

Discussion of Variances by Program:

A detailed discussion of the program variances, by department, follows:

(1) Community and Neighbourhood Services:

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

Over / (Under)

Gross

Net

Gross

Net

(a)

Children's Services

(3.4)

(1.7)

0.0

(1.7)

(b)

Homes for the Aged

(2.8)

(8.0)

1.0

(9.0)

(c)

Shelter, Housing and Support

(31.5)

(25.0)

(6.1)

(7.1)

(d)

Social Development and Administration

(1.3)

(0.5)

0.0

(0.1)

(e)

Social Services

(59.4)

(16.4)

(125.2)

(27.9)

(f)

Toronto Housing Company

(0.2)

0.0

Projected Contributions to Reserves:

Social Services Reserve

2.5

7.0

Aged Capital Reserve

0.0

5.5

Child Care Capital Reserve

0.0

1.7

Mayor's Homelessness Initiative

0.0

5.0

Total Variance

(96.1)

(49.1)

(111.1)

(26.6)

(a) Children's Services:

The Children's Services program's year-to-date gross operating budget is under-spent by $3.4 million or 3.2 percent due primarily to enrolment patterns and the delay in transfer of downloaded programs. The year-to-date net below-budget expenditure variance of $1.7 million or 10.9 percent is mainly related to delay of downloading to July 1, 1999 and higher than budgeted user revenue.

The program is forecasting a net saving of $1.7 million or 4.1 percent due to delay in downloading, as the formula for cost sharing of administrative expenses did not take effect until July 1, 1999.

Council at its meeting of July 27, 28, 29 and 30 adopted the transfer of excess user revenue, to the Child Care Capital Reserve Fund. The Program is awaiting more detailed information from the Ministry related to the Pay equity amounts which it hopes to result in further cost savings.

(b) Homes for the Aged:

The program reports year-to-date favourable variances of $2.8 million or 4.6 percent gross and $8.0 million or 74.2 percent net. Salaries and fringe benefits account for a substantial portion of the gross savings while the increase in level of care funding announced by the Minister of Health and the program's success in negotiating a one-year extension of transitional funding contribute to the favourable variance.

The program forecasts a favourable net variance of $9.0 million or 39.3 percent for the year-end. This is mainly due to the one-year extension of transitional funding. As a result, the overall favourable variance in subsidy, approximately $5.5 million (transitional funding) is available to be transferred to the HFA Capital Reserve, which was established by Council in October 1, 1998. This reserve is used by the program to fund minor capital projects, which are no longer co-funded by the Ministry of Health as a result of the Province changing their capital funding policy.

Year-to-date favourable gross and net variances are $31.5 million or 15.8 percent and $25.0 million or 18.6 percent respectively. This is mainly attributable to timing differences in billings for provincial downloading for Social Housing.

The program is forecasting a favourable year-end gross expenditure variance of $6.1 million or 1.5 percent and a favourable net expenditure variance of $7.1 million or 2.6 percent, which are mainly related to provincial downloading of social housing. The projected gross expenditure variance of $6.1 million includes an over expenditure of $3.7 million gross and dollar zero net for Hostel Services to accommodate the additional 125,800 bed-nights projected for the year-end. The projected under-expenditures for the Provincial Downloading are $9.8 million gross and $7.4 million net.

The Community Services Committee is recommending that the Council approves an initial amount of up to $5 million to be transferred to the Mayor's Homeless Initiative Reserve Fund, in 1999, from the 1999 provincial Housing Download savings, contingent on the realization of such savings, within the shelter, Housing and Support. The intended purpose of the Mayor's Homeless Initiative Reserve Fund is to redirect housing spending back toward purposes that would alleviate the crisis of affordable housing and homelessness.

(d) Social Development:

The favourable gross variance of $0.6 million is comprised of $0.3 million in payroll costs due to delayed filling of vacancies and $0.3 million in non-payroll costs due to the budget distribution not matching the actual spending pattern. The non-payroll cost savings include an under spending of $0.1 million for Youth Outreach and the Toronto Jobs Corps program and administration transferred from the Social Services Division as per Council approval. The under-expenditures and favourable miscellaneous revenues mainly contributed to the favourable net variance of $0.4 million.

The net favourable projected year-end variance is $0.1 million.

(e) Social Services:

The year-to-date favourable gross variance of $59.4 million or 12.2 percent is mainly due to the following:

(1) $27.0 million below budget expenditure due to 2.5 percent lower than budgeted Municipal Caseload;

(2) $16.6 million below budget expenditure caused by lower than anticipated Transferred Caseload from the Province due to adjustments to the planned schedule of transfer;

(3) $6.5 million savings due to lower Provincial billings for Ontario disability Support Program (ODSP) and Mandatory Benefits programs; and

(4) $4.6 million favourable Ontario Works Program expenditures as a result of under-utilization of the budget due to lower caseload.

The program's year-to-date net favourable variance as a result of the aforementioned favourable gross expenditures is $16.4 million or 13.0 percent, of which $2.5 million will be set aside for the National Child Benefit Supplement (NCBS) reserve that was established in 1998.

At year-end, the program is projecting a favourable $125.2 million gross expenditure variance, primarily as a result of the annualization of the factors causing the year-to-date variance. On a net basis, the program is projecting a favourable expenditure variance of $27.9 million. Further, the program is projecting a year end transfer to the Social Services Reserve of $7 million.

(f) Toronto Housing Company:

Toronto Housing is reporting a year-to-date favourable gross expenditure of $0.2 million, while the net year-to-date expenditure does not show a variance. The year-end forecast is that gross and net expenditures will match budget.

(2) Works and Emergency Services (tax supported operations):

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

Over / (Under)

Gross

Net

Gross

Net

(a)

Ambulance Services

(0.2)

(0.1)

(b)

Solid Waste Management

(13.1)

(16.0)

(1.7)

(1.2)

(c)

Fire Services

(6.8)

2.5

(d)

Transportation

15.1

19.1

38.0

(e)

Works - Support Services

0.0

(f)

Works - Technical Services

(1.2)

0.0

Total Variance

(6.3)

(4.0)

38.6

39.2

(a) Ambulance:

Ambulance Services is estimating year-end under expenditures of approximately $0.1 million, or 0.1 percent less than budget. This estimate assumes that provincial funding consistent with the $33.7 million identified in the 1999 approved budget will be forthcoming and relates to minor decreases for a variety of activities and items.

(b) Solid Waste Management:

The 1999 year-to-date actual gross and net below budget expenditures are mainly attributable to the actual timing of expenditures not matching the spending pattern assumed in the budget combined with higher than expected paid private tonnage.

The projected year-end below-budget expenditures are mainly attributable to savings related to delays in filling vacancies, as well as higher than expected paid tonnage.

Anticipated revenues from charging the private sector for the collection of waste is projected to be $0.8 million as opposed to the budgeted $2.3 million as business operators have the option to cancel or reduce the municipal collection services. However, this is more than offset by additional revenues from higher paid private tonnage.

On a gross and net basis, Fire Services is approximately $6.8 million under spent year to date. This is primarily due to under spending in salaries and benefits. Benefits have been charged at a lower rate than anticipated. Year-to-date non-salary items are on budget.

Fire Services is projecting an end of year over expenditure of approximately $2.5 million, primarily in salaries and benefits. The gapping budgeted is not expected to be realized. Fire Services will be recruiting additional fire fighters in November 1999, approved by City Council at its meeting of July 27, 28, 29 and 30, 1999. No additional funding was provided in this budget. The non-salary expenditures are expected to be within budget.

(d) Transportation:

Transportation projects year-end gross and net over-expenditure of $38 million based on a soft projection for the unbudgeted January 1999 snow-clearing expenditure, which is related to non-salary features . Although this $38 million is included in the year-to-date expenditures, other expenditures that are underspent as of June 1999 but will incur before year-end have partially offset this at mid-year. A thorough projection, by Transportation, of the snow clearing cost is underway in order to examine the possibility of absorbing some of this cost within Transportation.

(e) Works - Support Services/Technical Services:

On a gross expenditure basis, Support Services/Technical Services report a combined year-to-date favourable variance of $1.2 million. This variance represents an actual to budget timing difference in other revenue for the Technical Services Division.

The Support Services/Technical Services net expenditures are fully recoverable from other Works and Emergency Services (WES) operating programs. By year-end, no net unfavourable revenue variance is anticipated.

(3) Economic Development, Culture and Tourism:

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

Over / (Under)

Gross

Net

Gross

Net

(a)

Arts and Culture

(0.5)

0.0

(b)

Customer and Business Support

(1.1)

0.6

0.5

(c)

Economic Development

(0.5)

(0.4)

0.0

(d)

Parks and Recreation

(7.7)

(1.0)

0.0

(e)

Special Events

(0.9)

0.2

0.0

Total Variance

(10.8)

(2.9)

0.6

0.5

(a) Arts and Culture:

The six-month position reported by Arts and Culture indicates $ 0.5 million (30 percent) under spending on a gross basis and $.5 million (44 percent) under spending on the net basis, due to three factors. First, half of the gross under-expenditure ($0.2 million) represents costs for staff exits and early payroll and benefit cut off dates. Second, expenditures for this program are concentrated to support seasonal program activity, which is greater in the last half of the year. This has caused a favourable variance in non-salary items of $ 0.2 million. The balance of the overall favourable variance of $0.5 million is in revenue. Because all of these variances arise from timing or seasonality issues, the year-end projection is for this program to be on target.

(b) Customer and Business Support:

On a gross basis, the program reports a favourable year-to-date variance of $1.1 million mainly resulting from under expenditures in salaries and benefits of $0.8 million. Revenues have been modestly over achieved to date resulting in a favourable year-to-date variance of $1.2 million on a net basis. These variances are expected to self-correct by year-end when posting delays are addressed.

The program is projecting an over expenditure of $0.6 million on a gross basis related to the production of an additional Toronto Fund Guide. Additional revenue of $0.1 million is anticipated from brochure advertising resulting in a projected year-end over expenditure of $0.5 million on a net basis.

The Economic Development Division, as of June 30, 1999 had a favourable operating variance of $0.5 million gross, and $0.4 on the net Budget. Expenditures are less than anticipated at this stage due predominantly to a timing issue, and as such, the favourable variance is expected to diminish in coming periods. Analysis suggests revenues are within budget.

(d) Parks and Recreation:

On a gross basis, the program reports a favourable year-to-date variance of $7.7 million or 9.5 percent, which is primarily related to the Parklands and Open Space service. Below budget salary expenditure of $1.2 million is mainly due to delays in expenditure charges. Below budget non-salary expenditure of $6.5 million is due to delays in processing inter-departmental charges for insurance, printing and vehicles, and contributions to reserve. However, the program is also reporting an unfavourable revenue variance of $6.7 million resulting from delays in the posting of revenues in both Parklands and Open Space ($4.1 million) and Sports and Recreation Programming ($2.6 million). The result is a favourable year-to-date variance of $1.0 million on a net basis.

At this time, the program is not projecting either a year end surplus or deficit position as the year-to-date variances are expected to self correct when the delays in the posting of expenditures and revenues are addressed. However, the public's response to the implementation of User Fees Policy - Option B in the Sports and Recreation Programming service may impact the year end revenue position.

(e) Special Events:

The favourable gross variance of $0.9 million reflects reduced spending on the Millennium project due to restructuring from initial plans. The unfavourable $0.2 million net variance is primarily due to the Millennium project's corporate sponsorship campaign not achieving its revenue target. The program is projecting to be on budget at year-end.

(4) Urban Planning and Development Services:

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

Over / (Under)

Gross

Net

Gross

Net

Urban Planning and Development Services

(including Licensing)

(0.9)

6.3

0.0

Urban Planning and Development Services:

The year-to-date 1999 budget for revenues does not reflect an appropriate distribution. However, the actual revenues as at June 30, 1999 are in line with the expected position. The department will be on budget at year-end.

(5) Corporate Services:

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

Over / (Under)

Gross

Net

Gross

Net

(a) Audit

(0.2)

0.0

(b) City Clerk's

(1.7)

0.5

(1.3)

(0.6)

(0.1)

0.0

(d) Corporate Communications

(0.9)

(0.6)

(e) Facilities and Real Estates

(6.0)

(5.5)

1.0

(f) Fleet Management Services

(0.8)

6.5

1.5

0.0

(g) Human Resources

(1.7)

(1.5)

0.0

(h) Information and Technology

0.8

1.2

(0.5)

0.0

(i) Legal

(0.7)

0.0

Total Variance

(11.3)

0.1

0.2

(0.2)

(a) Audit:

The year-to-date favourable variance mainly relates to timing differences due to the receipt of invoices at a later date than originally anticipated. The program will be on budget at year-end.

(b) City Clerk's:

As of June 30, 1999 City Clerk's reports a gross under-expenditure of $1.7 million and a net over-expenditure of $0.5 million. At year-end City Clerk's is anticipating under-expenditures of $1.3 million and $0.4 million on a gross and net basis respectively. The gross under-expenditure is primarily attributable to the delays in filling vacancies.

The lower gross under-expenditure at year-end is primarily attributable to two factors:

(1) the majority of their staffing complement will be hired by year-end; and

(2) increased printing and protocol services are expected in the fall.

On a net basis, the over-expenditure as at June 30, 1999, is primarily related to the seasonal nature of its revenue generating services. The peak revenue periods for licensing are June and July. These months are not captured in this report. By year-end City Clerk's is projecting a net under-expenditure.

The Service Integration and Support program in Corporate Services is marginally underspent at this time, and is expected to end the year within budget.

(d) Corporate Communications:

For the year-to-date the program is under budget on a gross and net basis by $0.9 million. By year-end these under-expenditures are expected to reduce to $0.6 million and $0.6 respectively. The bulk of the under-expenditure is related to the delay in implementing the final Corporate Communications organization structure. Recruitment in Corporate Communications and Media Relations, Public Information and Creative Services has not been completed; resulting in lower than anticipated wages and benefits expenditures. In addition, due to the lower staffing levels, training expenditures and equipment purchases are lower than budgeted.

(e) Facilities and Real Estate:

The net $5.5 million favourable variance to date does not fully reflect the expenditure commitments made by the program. The projected year-end over expenditure in Facilities and Real Estate is largely the result of lease reductions not realized as projected, and delays in the implementation of the 1998 downsizing plan. As of June 30, an FTE reduction of 41 has been accomplished. By year-end the program will have met the balance of its restructuring target (45.5 FTEs) carried forward from 1998.

(f) Fleet Management Services:

For the six months ending June 30, 1999 Fleet Management Services is reporting a gross under-expenditure of $0.8 million and a net over-expenditure of $6.5 million. The net over-expenditure as at June 30, 1999 is almost exclusively related to the delay in the recovery of costs and the delay in processing materials and supplies invoices. This issue will be resolved by year-end.

The projected gross over-expenditure is primarily related to the delay in implementing a fleet replacement program. As the City's fleet ages the cost to maintain it increases as well. In addition, Fleet incurred unanticipated costs for maintaining both City owned and volunteer snow removal equipment during January 1999. Finally, contracted services needed to maintain Fire Services vehicles (mainly body repairs required by the Ministry of Transportation) are higher than budgeted.

The year-end net expenditure is expected to improve significantly, as cost recoveries from programs are brought up to date.

(g) Human Resources:

The $1.5 million favourable variance to June 30, 1999 is a result of delays in processing charges for services such as printing, insurance, telephones and interdepartmental charges. Human Resources is currently finalizing its organizational structure and appointing staff to new positions. Additional expenses resulting from appointments and increments will be absorbed within the current budget allocation. Human Resources is projecting that actuals will be within budget at year-end.

(h) Information Technology:

Information and Technology has a net over expenditure of $1.2 million or 6.7 percent as at June 30, 1999. This over expenditure is primarily due to service contracts that have been encumbered at the beginning of the year instead of being distributed throughout the year. In addition, revenues and interdepartmental recoveries have not been processed for one-half of the year. Information and Technology is projecting that the program net expenditures will be within budget at the end of 1999.

(i) Legal:

Legal Services is on budget as of June 30, 1999, although underexpenditures in both revenues and expenditures are being analysed further at this time. It is projected to be on budget at year-end.

(6) Other:

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

Over / (Under)

Gross

Net

Gross

Net

(a)

Chief Administrator's Office

(0.0)

0.0

(b)

Council

(1.9)

(1.6)

(c)

Mayors Office

(0.0)

0.0

Total Variances

(1.9)

(1.6)

(a) Chief Administrator's Office:

The Chief Administrator's Office is under spent by $35,000 or 2 percent as at June 30, 1999. This under expenditure is due to delay in purchasing supplies pending the Executive Management division move to City Hall. There is also a delay in computer training expenses in Strategic and Corporate Policy which will spent by year-end. Actual expenditures will be within budget at year-end.

(b) Council:

The Council program has a favourable variance of $1.6 million or 9 percent to June 30, 1999. This is attributable to two factors: a delay in filling vacant positions in the Councillors' offices, and, some Councillors employing fewer than three full time equivalent staff. A year-end favourable variance of $0.9 million or 6 percent is projected.

The Mayor's Office has a favourable variance of $36,000 or 5 percent to June 30, 1999; however, all expenses incurred have not been processed to date. The Mayor's Office is projecting that actuals will be within budget at the end of 1999.

(7) Finance:

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

Over / (Under)

Gross

Net

Gross

Net

(a)

Finance

(3.7)

5.9

(0.6)

Total Variances

(3.7)

5.9

(0.6)

As of June 30, 1999 the Finance Department has a gross under expenditure of $3.7 million and net over expenditure of $5.9 million or 41 percent. The former is a result of delays in staff hiring, and staff turnover in excess of budgeted gapping. The latter is caused by delays in processing inter-departmental recoveries. At year-end 1999, Finance is projecting a favourable variance of $0.6 million or 2 percent.

(8) Special Purpose Bodies:

Variances ($ Millions)

As at June 30, 1999

Projected Y E 1999

WP="BR1">

Over / (Under)

Gross

Net

Gross

Net

(a) Public Health

(5.1)

0.0

(b) Toronto Public Library

(1.7)

(1.5)

(0.3)

0.0

(0.8)

(0.3)

(0.6)

0.0

(d) Heritage Toronto

(0.2)

0.1

0.0

0.4

(e) Theatres and Galleries

(0.5)

0.0

(f) Toronto Zoo

(0.2)

0.2

(0.5)

1.8

(g) Arena Boards of Management

0.0

(h) Toronto Region Conservation Authority

(0.2)

0.0

(0.2)

0.0

(i) Toronto Transit Commission

0.7

4.2

9.4

1.7

(j) Toronto Police Services

(32.1)

(40.3)

1.5

7.9

Total Variances

(40.0)

(42.6)

9.3

11.8 (a) Public Health:

The favourable year-to-date gross and net savings of $5.1 million or 9.5 percent and 20.9 percent respectively are caused by delays in the implementation of harmonization proposals to September 1999, over achievement of gapping and general under spending of non-salary expenditures. The year-to-date favourable variances are expected to decrease at year-end as positions are being filled and the non-salary expenditure will meet budget allocation.

(b) Toronto Public Library:

Year-to-date favourable under-expenditures of $1.7 million or 3.4 percent gross and $1.5 million or 3.5 percent net are primarily related to timing differences in expenditures. It is expected that the expenditures and revenues will meet budget at the year-end.

The year to date favourable net under-expenditure of $0.2 million is primarily a result of delayed contract payments for activities at the Canadian National Exhibition Association (CNEA). Results from the National Trade Centre (NTC) indicated a shortfall of $0.1 million emanating from lower than anticipated attendance at a number of trade and consumer shows in the spring resulting in lower than estimated revenues from food and beverage sales, electrical, telecommunications and interest. Activities within the Exhibition Place service element are on target at this time, the only real issue being shrinkage in revenues from parking activities which have been offset in other areas through revenue expansion and expenditure reduction.

The 1999 forecast is predicated on a number of future events occurring envisioned within the work plan, the most notable being the gate admission revenue from the CNEA which is forecast to be $5.4 million. Other factors which will be important in achieving the budget forecast will be the attraction of well attended trade and consumer shows in the fall, completion of the suite of in-house maintenance activities outstanding and responding in a timely manner to any unforeseen negative variables.

(d) Heritage Toronto:

At Heritage Toronto, lower revenues from memberships, donations and sponsorship activities have been offset by appropriate expenditure controls. However, the delay in approval and implementation of the structural plan will create an over expenditure of $0.4 million. Revenue targets for The Pier Museum will not be realized and expenditure control has already been implemented. Other miscellaneous revenue shortfalls have been addressed with appropriate expenditure control.

(e) Theatres and Galleries:

Although the Theatres show a negative net variance of $.020 million or 2.4 percent at June 30, they anticipate achieving a near break-even position at year-end due to the expectation of additional revenue in the second half of the year. This report includes variances from The North York Performing Arts Centre and the St. Lawrence Centre for the Arts. No variance information is included for the Hummingbird Centre for the Performing Arts, as their new operating entity is responsible for its own financial operation and draws no funds from the City.

(i) North York Performing Arts Centre :

Revenues are tracking to be under budget. Expenditure controls have been implemented to offset reduced projected year-end revenues.

(ii) St. Lawrence Centre for the Arts:

At June 30 a shortfall of $.005 million was projected for the year as a result of a decrease in rentals revenue to date. The suspension of programming during July and August to accommodate lobby and stage renovations was expected to further contribute to this situation. However, at the end of September, interim statements show a small positive variance and a small year-end surplus of under $.010 million is projected for year-end.

(f) Toronto Zoo:

The Toronto Zoo's June 30th variance report shows a positive gross variance of $0.2 million (2 percent), but a negative net variance of $0.2 million (5 percent). This is attributable to revenue shortfalls resulting from unfavourable weather conditions and the decrease in attendance from school groups due to school board funding reductions. Overall attendance numbers at the end of June was at only 94 percent of the Zoo's budgeted estimate.

The year-end projected position for the Zoo includes attendance shortfalls anticipated during July and August with an anticipated year end revenue shortfall of $2.3 million or 15 percent of budget. This is expected to be partly compensated by $0.5 million (gross) in expenditure restraint for a year-end net unfavourable variance of $1.8 million or 25.6 percent

This projected 1999 revenue shortfall at the Zoo arises from decisions to maintain prior year's admission fee structure while budgeting for increased attendance over the previous year. In addition, 1999 is proving to be a difficult year for attendance for outdoor venues due to the high temperatures in July, an oversupply of venue options in the Toronto area and the lack of a major special animal event "draw" at the Zoo this year.

(g) Arena Boards:

Financial information on Arena Boards is not available at this time. At this time there is no indication of any potential year-end over expenditure.

(h) Toronto and Region Conservation Authority:

A total revenue shortfall of about $0.3 million is projected, attributable to three program areas: at the Kortright Centre for Conservation; in Planning fees which have been delayed because of problems in establishing a collection mechanism at some municipal departments; and in corporate fundraising. To offset the shortfall, hiring for vacancies have been delayed as well as other cost cutting actions.

Since the Authority neither levies the city for a shortfall nor refunds a surplus, any projected deficit will be handled by the Authority itself and will not result in any amount being requested from the city that differs from the approved budget.

(i) Toronto Transit Commission:

The year-to-date net over expenditure of $4.2 million or 5.7 percent mainly reflects the lower than budgeted ridership as a result of the two-day strike, which resulted in a revenue shortfall of $3.1 million. Expenditures were $2.0 million over budget in conventional transit primarily as a net result of: the costs for the January snow storms and the negotiated increase effective April 1, 1999; partially offset by costs not incurred during the strike and timing differences on non-labour expenditures. Wheel Trans net expenditures were $0.9 million under budget as a result of: reduced contracted taxi service requirements, attributable to lower than anticipated demand levels; and timing differences in equipment maintenance and property taxes.

The year-end projected net expenditure is $1.7 million or 0.9 percent over budget. The currently estimated total year ridership is 388 million versus the 394 million underlying the approved budget. Revenues are, however, projected to be $7.7 million or 1.3 percent above budget, mainly as a result of the increased fares. Expenditures in Conventional Transit are projected to be $9.7 million or 1.2 percent over budget. This was primarily due to (i) overexpenditures of $5.6 million in Operations and Administration, largely reflecting the negotiated salary increases; (ii) $2.5 million in one-time costs related to an accelerated write-off of existing computer equipment and Y2K expenses; and a $3.0 million provision for Canadian dollar devaluation (based on a 1999 budget $CDN value of 66 cents vs. the 1998 budget value of 72 cents); partially offset by a favourable variance of $1.4 million in other employee costs from lower than budgeted EI and CPP premiums. Expenditures in Wheel Trans are projected to be $0.3 or 0.6 percent below budget as a result of savings from reduced contracted taxi services that are expected to be partially offset by unbudgeted legal fees.

(j) Toronto Police Service:

The Toronto Police Service is significantly under spent as of June 30, 1999 as a result of issues related to the timing of expenditures and budgets. However, it is projecting a year-end over expenditure of $7.9 million.

The projected over expenditure has been identified as being a result of a variety of operational factors. The most significant costs have been identified as mandatory increases of $4.7 million, including staff reclassifications and increments, inflationary pressures on benefits, previous and current year net separation and hiring costs, Use of Force expenses as well as other miscellaneous net increases. The remaining $3.2 million overexpenditures includes premium pay related to Kosovo demonstrations and large community events ($1.1 million), lower than anticipated attrition ($1.1 million); and revenue shortfalls ($1.0 million).

(9) Corporate Accounts:

Expenditures Over/(Under) Budget

($ millions)

Net to Net Estimate to

Corporate Accounts June 30, 1999 December 31, 1999

Consolidated Grants (3.0) 0

Capital Financing and Corporate Financing (88.5) 0.0

Non Program Expenditures

- Tax Deficiencies (40.3) 0.0

- Downloading - Assessment Function 0.0 0.0

- Temporary Borrowing 1.3 (1.6)

- Funding of Employee Related Liabilities (9.7) 0.0

- RTEP Reserve Contribution (5.9) 0.0

- Contingency (7.2) (10.0)

- Other Corporate Expenditures 0.3 0.0

- Downloading - GO Transit (22.1) 0.0

- Insurance Premiums and Claims (1.8) (0.6)

- OMERS Surplus 11.2 0.0

- Parking Tags and Enforcement (Expenditures) (2.9) (0.3)

- Recovery - Local Services Realignment 8.7 0.0

- Other Adjustments 0.4 0.7

Non Program Revenues

- Payments in lieu of Taxes 50.3 (4.5)

- Supplementary Taxes 2.5 0.0

- Tax Penalties (6.2) (4.9)

- Interest/Investment Earnings (29.2) (11.3)

- Prior Year Surplus 21.6 1.4

- Other Corporate Revenues 2.0 0.0

- Parking Authority Revenues 7.7 3.4

- Recoveries from Water Fund 9.5 0.0

- Downloading - Provincial Offences Act 6.5 0.0

- Parking Tags and Enforcement (Revenues) 3.4 3.2

Total Variance (91.5) (24.6)

Corporate Grants:

Corporate Grants are under spent at this time as a result of timing issues with grant disbursements. At year-end, the entire Council approved allocation will have been distributed.

Capital Financing:

The issuance of debt has been delayed due to capital market conditions and the uncertainty surrounding school board financing. This has resulted in an under expenditure of $88.5 million in this account as of June 30, 1999. However, it is anticipated that the capital financing budget will be on target at year-end.

Non Program Expenditures and Revenues:

Variances as of June 30, 1999 are primarily as a result of timing issues. These will resolve themselves at year-end resulting in a net surplus of $30.4 million. An explanation of the key factors that impact on the year-end net position follows:

(1) Temporary Borrowing: The $1.6 million favorable variance reflects the projection that the city will not incur any temporary borrowing costs in 1999.

(2) Contingency: Below is a table that summarizes all known commitments against contingency up to September 30, 1999. Actual charges to date do not reflect the full commitment presented in this table. It is projected that $10 million in corporate contingency funds will be unutilized at year-end.

Insert Table/Map No. 1

Contingency

(3) Payments in lieu of taxes: The city's share of anticipated payments in lieu of taxes for 1999 will be $4.5 million, or just over 2 percent, higher than budget at year end.

(4) Tax Penalties: Tax penalties on late tax payments, are expected to be higher than budget by $4.8 million based on year to date revenues booked.

(5) Investment Income: The numbers as of June 1999 are overstated because allocations to the Water Fund and Reserve Funds have not yet been made. Based on investment revenues to date, it is forecast that operating income should reach a net level of $72.3 million by year-end, or $11.3 million higher than budget.

(6) Prior Year Surplus: The prior year surplus consists of unexpended funds or additional revenues carried forward from 1998. The surplus was not finalized at the time of the approval of the 1999 Operating Budget, so this amount was estimated. The final surplus was $1.4 million lower than the $45 million budgeted in 1999.

(7) Parking Tags and Enforcement (Revenue): Parking Tag revenues are lower than budget in 1999. During the 1999 budget review process in April 1999, the Budget Committee directed the Parking Tags and Enforcement Unit to ensure full utilization of budget allocated towards staff so as to ensure consistent enforcement of municipal by-laws and effective parking enforcement, subsequently generating higher revenues from parking tag issuance.

The $52.1 million in parking tags revenue is composed of two parts. The largest revenue component by far is that of parking tag revenues. The 1999 revenue estimate of $50.3 million is based on the issuance of 2,687,000 tickets. The second revenue component represents the recovery of court costs and the 1999 estimate is $1.8 million.

Parking Tags is projecting a revenue shortfall of $3.2 million at year-end. Approximately $3.0 million of this shortfall resulted from the decreased number of tags issued. The bulk of the $3.0 million projected year-end shortfall in revenues is related to the January 1999 snowfall.

The balance of the revenue shortfall is related to several factors. The TTC strike in April 1999 resulted in lower than anticipated parking tag issuance and additional lost revenues in that month. It is also anticipated that the recovery of court costs will be lower than budgeted by year-end. However, this should be expected given that court costs are directly related to the number of tags issued.

The program has taken steps to follow the direction by Budget Committee. In an effort to address the revenue shortfall, Parking Enforcement hired 26 new officers in June 1999 and started 20 more in the training program in September 1999. However, as noted above and based on tag issuance for September 1999 these efforts will not prove sufficient in meeting the 1999 revenue estimate.

Non-Tax supported Operations:

(a) Toronto Economic Development Corporation (TEDCO):

At this time a major restructuring of operations has resulted in all capital spending in the Port area being put on hold. TEDCO operations for 1999 are expected however to generate a net surplus of $0.4 million at year-end primarily as a result of additional lease revenues. This is in addition to the budgeted surplus of $2.2 million that would be transferred to a reserve to fund future year capital initiatives and to ensure that TEDCO operations continue to be self-sustaining.

(b) Toronto Harbour Commission (T.H.C.):

The Toronto Harbour Commission has not made a budget submission for the June 1999 variance report. In the absence of any other information, it is presumed that operations will be on budget at year-end.

The Toronto Parking Authority is reporting a net income of $0.1 million above the year-to-date budget and is projecting a net income $1.0 million below budget at year-end. Off street revenues are expected to be $3.5 million above budget, but this is offset by street meter revenues $4.5 million below budget. The street meter revenue projections will not be met primarily as a result of the delay in approval and implementation of revised meter rates.

Based on June 1999 projections, the City's share of Toronto Parking Authority net income will be $3.4 million short of budget because under the current revenue arrangement the City receives only 50 percent of net income from off-street operations and 100 percent of net income from on-street meter operations. Although off-street net income is projected to be $3.5 million over budget, the City will receive only $1.75 million. In contrast, the City will be absorbing 100 percent of the projected shortfall of $5.1 million in net income from on-street meter operations. The TPA is also projecting a favourable variance in interest income of $.7 million which is not shared with the City.

Since the City only receives 50 percent of the off-street net income and does not share in sundry income, the projected shortfall of $5.1 million in net income from on-street metered parking is only partially off-set by the increase in off-street revenues resulting in an overall shortfall of $3.4 million in the City's share of net income from both operations.

(d) Water and Waste Water:

Water and WasteWater operations have a gross expenditure variance of $60.8 million as of June 1999. A large part of the variance can be explained by timing differences between actuals and budget. The year-end projection is that expenditures and revenues will be on budget.

Conclusion:

The June 1999 variance report has identified that departments are managing within approved budgets except for the unexpected snowstorm in January 1999. Special purpose bodies are projecting a year-end over expenditure of $11.8 million. The projected year-end surplus on tax supported operations is $8.3 million after transfers to reserves. This is 81 percent below the 1998 surplus of $43.6 million, and suggests that continued vigilance is required to ensure services continue to be provided within the 1999 operating budget envelope approved by Council.

Contact Name and Telephone Number:

Val Sequeira, Manager, Budget ServicesTelephone: 397-4225; Fax: 392-3649, E-mail: vsequeira Val@mta1.metrodesk.metrotor.on.ca

Josie Lavita, Manager, Budget ServicesTelephone: 397-4229; Fax: 392-3649, E-mail: jlavita@mta1.metrodesk.metrotor.on.ca

Glenn Vollebregt, Director of Budgets Tel: 392-8095; Fax: 397-4465, E-mail: gavolleb@mta1.metrodesk.metrotor.on.ca

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

- Mr. Rick Zerr, Coalition Against Target Policing;

- Mr. Stefan Kipfer, Policy Analyst, Community Social Planning Council of Toronto, and filed a written submission in regard thereto;

- Councillor Olivia Chow, Downtown;

- Councillor Jack Layton, Don River; and

- Councillor Jane Pitfield, East York.

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(City Council on October 26 and 27, 1999, had before it, during consideration of the foregoing Clause, the following communication (October 25, 1999) from the City Clerk:

Recommendation:

The Audit Committee recommends that the City Auditor be directed to review the reconciliation prepared by the Chief Financial Officer and Treasurer and report to the Audit Committee on the following items:

Background:

The Audit Committee, on October 25, 1999 had before it a communication (October 19, 1999) from Councillor Pitfield respecting Reconciliation with City's Audited Financial Statements.

The Committee's recommendation is noted above.)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (October 25, 1999) from the City Clerk:

Recommendation:

The Audit Committee recommends that the City Auditor be directed to report to the Audit Committee at its meeting to be held on December 13, 1999 on the following items:

(1) the manner in which Funds Control was exercised in the City of Toronto during 1998;

(2) whether proper Council authorization was obtained in relation to the over spending incurred in 1998, and if not, whether that resulted in an infraction of any City by-law or Provincial legislation; and

(3) the manner and reliability of Funds Control exercised in the City during 1999 and whether programs are able to over spend in 1999 without prior Council authorization.

Background:

The Audit Committee, on October 25, 1999 had before it a communication (October 19, 1999) from Councillor Pitfield respecting Funds Control in the City of Toronto.

The Committee's recommendation is noted above.)

School Planning - City-Wide

(City Council on October 26 and 27, 1999, amended this Clause by adding thereto the following:

"It is further recommended that:

(1) the following motion be adopted:

Moved by Councillor McConnell:

'WHEREAS the proposed school closures by the Toronto District School Board (TDSB) will cost the City 27 acres of open space, between 300 and 1,000 child care spaces, 4,000 hours of recreation programs serving 10,000 children, past capital investments of $6,000,000.00 and $2.4 million in future capital costs for day care; and

WHEREAS the TDSB is moving forward with the closing of schools; and

WHEREAS there are steps the City can take to protect our interests without committing funds;

NOW THEREFORE BE IT RESOLVED THAT the City work with the TDSB to review the implementation options developed by the Community Implementation Teams to ensure that the impacts on the City and the community from the closures are identified and that the affected Council members receive full notification at all steps in the process;

AND BE FURTHER IT RESOLVED THAT the City enter into discussion to ensure that the TDSB immediately provides existing child care spaces with leases to remain in closed facilities until the 2000/2001 year;

AND BE IT FURTHER RESOLVED THAT the TDSB and the City, in consultation with local communities, develop protocols for the reuse of school sites, by exploring opportunities to meet mutual service objectives such as daycare, giving existing service providers first option to lease the space, preserving access to the open space currently provided by school yards, and ensuring the ultimate use is compatible with the surrounding community and the users remaining on the site;

AND BE IT FURTHER RESOLVED THAT the City develop a response to the TDSB proposal call which identifies current City interests such as loss of programming and the resulting cost of alternate service provision, and that this response be forwarded to the appropriate Committee;

AND BE IT FURTHER RESOLVED THAT these principles and protocols be reviewed by both the City and the TDSB by the spring of 2000;

AND BE IT FURTHER RESOLVED THAT staff be directed and authorized to give effect to the foregoing, reporting to the appropriate Standing Committee where financial policy considerations arise.';

(2) the School Tax Sub-Committee be requested to identify those communities where school closings have been announced by both the public and separate School Boards and review the issue of such school closings in these areas;

(3) the City Solicitor be requested to submit a report to Council for its meeting to be held on November 23, 1999, through the School Tax Sub-Committee and the Policy and Finance Committee, on the possibility of an injunction to prevent the School Boards from making final decisions, in view of the considerable sums of money invested by the City in schools in the City of Toronto; and

(4) the Acting Commissioner of Corporate Services be requested to submit a report to Council, through the School Tax Sub-Committee and the Policy and Finance Committee, outlining a communications strategy in this regard.")

The Policy and Finance Committee recommends the adoption of the report (October 7, 1999) from the Acting Commissioner of Urban Planning and Development Services subject to:

(A) amending Recommendation No. (1) by adding thereto the following words "that such assessment include Child Care Centres, after school and other recreational and community use", so that Recommendation No. (1) shall now read as follows:

"(1) the Toronto District School Board and the Toronto Catholic District School Board be requested to undertake an assessment of the broader community's use of schools, specifically in the communities currently facing closures; that such assessment include Child Care Centres, after school and other recreational and community use;" ; and

(B) amending Recommendation No. (2) by adding thereto the following words "and that these recommendations and any community meetings concerning school closures be sent to affected Councillors, City staff and users", so that Recommendation No. (2) shall now read as follows:

"(2) the Toronto District School Board be requested to provide City staff with the opportunity to review the proposed recommendations of the school Closure Implementation Teams and provide comments for Board staff's consideration in the preparation of their final report and that these recommendations and any community meetings concerning school closures be sent to affected Councillors, City staff and users;".

The Policy and Finance Committee reports, for the information of Council, having referred the communication (September 27, 1999) from the City Clerk, containing the Recommendations of the School Tax Sub-Committee entitled "School Closings", to the Chief Financial Officer and Treasurer, the Chief Administrative Officer and the Commissioner of Community and Neighbourhood Services for further consideration and report thereon, in an expeditious manner, to the Policy and Finance Committee.

The Policy and Finance Committee submits the following report (October 7, 1999) from the Acting Commissioner of Urban Planning and Development Services:

Purpose:

To provide a preliminary assessment of the impact of the Toronto District School Board (TDSB) Phase I school closures on the local delivery of municipal services and programs. To provide the information and background in a report format, for the recommendations approved at the September 27, 1999, meeting of the School Tax Sub-Committee.

Financial Implications:

Potential financial impacts for the City will be reported on separately once additional information is provided by the Toronto District School Board with respect to the issues raised in this report.

Recommendations:

It is recommended that:

(1) the Toronto District School Board and the Toronto Catholic District School Board be requested to undertake an assessment of the broader community's use of schools, specifically in the communities currently facing closures;

(2) the Toronto District School Board be requested to provide City staff with the opportunity to review the proposed recommendations of the school Closure Implementation Teams and provide comments for Board staff's consideration in the preparation of their final report;

(3) the Acting Commissioner of Urban Planning and Development Services develop principles for the reuse of surplus school facilities jointly with Toronto District School Board staff, in consultation with the Commissioners of Community Services and Corporate Services, Economic Development, Culture and Tourism approved by both the Toronto District School Board and City Council; and

(4) this report be forwarded to the Toronto District School Board and the Toronto Catholic District School Board for information.

Executive Summary:

Despite revisions to the Provincial funding formula for the operation and maintenance of schools, the Toronto District School Board has 2 million square feet of unfunded facility space. In order to bring expenditures in line with Provincial funding, the TDSB has embarked on a school closure process which will result in the closure of an estimated 30 schools over a three year period.

The City has made extensive use of school facilities primarily for the delivery of recreation, licensed child care and public health programs. Within the 10 schools identified for closure in June 2000, the following municipal programs are offered:

(i) 3,937 hours of recreation programming ranging from aquatics programs to after school programs, for a total of 9,764 participants;

(ii) 27.7 acres of open space is available for outdoor recreation programming and use by local residents;

(iii) 6 licensed child care programs offering a total of 325 spaces for children aged 18 months to 12 years; and

(iv) dental screening, immunization and prenatal support offered by Public Health.

An eleventh school is undergoing further review (Cordella), and could also be approved for closure in June 2000.

The broader community's use of school facilities has not been inventoried, however staff are recommending the development of principles for reuse, which would protect use of these publicly funded facilities.

The City will be invited to express its interest in these sites, in addition to a number of other public bodies, through a Provincially regulated (regulation 446) "Proposal Call" process. The inter-departmental staff team will undertake further analysis to review the ability of these sites to further City service priorities and objectives, this will also include an assessment of the financial implications. The staff response to the Proposal Call will then be brought forward to Council for their consideration.

Background:

At its meeting held on October 30, 1998, Members of Council adopted a report originating from the Urban Environment and Development Committee regarding potential school closures throughout the City. Changes in Provincial funding for the operation and maintenance of school facilities proposed at that time would have resulted in the closure of up to 160 schools. As a consequence, City staff were authorized to work with officials from both the Toronto Catholic District School Board (TCDSB) and the Toronto District School Board (TDSB) to ameliorate the impacts of insufficient Provincial funding for the operation and maintenance of Toronto schools.

Since the adoption of the aforementioned report, a number of revisions have been made to the Provincial funding formulae for the operation and maintenance of school facilities including:

(i) one year delay in the implementation of funding reforms, and an assurance that no school board will receive less money in 1999 than it did in 1998;

(ii) top-up of up to 20 percent for the operation and maintenance of school facilities at less than full capacity to be calculated annually;

(iii) recognition of unique design features of older school facilities;

(iv) additional funds for the renewal of aging school facilities; and

(v) annual review and adjustment of capacity and enrolment figures.

These changes have resulted in a reduction in unfunded space within TDSB schools from 11 million square feet to 2 million, and an additional $54 M for facility operations and renewal.

Despite these funding reforms the TDSB has an annual budget shortfall of $73 M for these line expenditures. The shortfall is largely attributable to the TDSB's outstanding capital funding requirements for aging school facilities and the discrepancy between the actual operating costs of $5.95 per square foot and the Provincial allocation of $5.20 per square foot.

In order to bring expenditures in line with Provincial funding, the TDSB has approved the closure of 10 school facilities for educational purposes, effective June, 2000. Plans to close an eleventh school will undergo further review, and a decision to close this school in June, 2000 will be made in the New Year. This is the first phase of a 3 year process expected to result in the closure of up to 30 public schools throughout the City.

The preparation of all of the staff reports have required an inter-departmental team approach, consisting of staff from: Community and Neighbourhoods Services, Children's Services Division; Economic Development, Culture and Tourism, Parks and Recreation Division; Finance; Corporate Services, Property and Realty Division, City Legal; and Urban Planning and Development Services, Planning Division. The CAO and the Senior Management Team, formalized this successful working arrangement through the creation of the Inter-departmental Staff Working Group on School Matters. The Acting Commissioner of Urban Planning and Development Services, serves as the coordinator of this group. This report was prepared in coordination with the staff team.

The School Tax Sub-Committee met on September 27, 1999, to consider the matter of school closures and made the following recommendations:

(1) there be approval, in principle, for the City of Toronto to develop a response to the Toronto District School Board Proposal Call to identify City interests (costs and opportunities) with the final document to be approved by City Council;

(2) Toronto District School Board staff work with City staff to review implementation options developed by the Community Implementation Teams to identify any costs to the City or community users and that notification of all meetings be sent to affected Councillors, City staff and users;

(3) the Toronto District School Board immediately provide existing child care centres with leases to remain in closed facilities until 2000/2001;

(4) the City and the Toronto District School Board develop principles and protocols for the reuse of school sites including community outreach and participation, exploring opportunities to meet mutual service objectives (e.g., Child care facilities) existing services being provided first option to lease, open space access being retained, compatibility being ensured, etc.;

(5) principles and protocols be adopted by both the City and the Toronto District School Board; and

(6) given school closings have a dramatic impact on all services affecting children, families and their communities in the City of Toronto, the Toronto District School Board be urged to fully examine this issue, particularly as it relates to affected programs and schools, including feeder schools.

These recommendations were forwarded to the Policy and Finance Committee for its consideration.

Comments:

(A) City Impacts:

Toronto is often described as one of the best cities in which to live. The relative safety of our neighbourhoods, the quality of our health care and educational systems, and the City's racial and cultural diversity are what help make our communities strong and healthy. Yet, the community and social supports which make this quality of life possible have been slowly eroding.

Cuts in government funding have had far-reaching impacts on some of our most vulnerable residents. The cuts to welfare payments and funding for social housing, immigrant services and health care were amongst the first impacts to be felt by Toronto residents. The recent announcement of the closure of 10 public schools is yet another indication of the "stress" placed on the social fabric of our neighbourhoods.

Local residents identify strongly with their local schools, and often describe them as the "heart" of their neighbourhoods. For residents with children enrolled in the local school, it provides a venue to meet other parents and participate in a number of formal and informal social networks. In many instances schools also serve as hubs for local service delivery, and play yards are used extensively as local open space.

Community access to schools is also affected by school board policies restricting after hours use. The TCDSB has already restricted community access to over 60 schools as a means of dealing with their operational deficit. TDSB staff have reported a considerable increase in demand for community use of their facilities as a consequence of this policy. However, the TDSB may have to enact a similar policy in response to their funding shortfalls.

Successful city-building has to have regard for residents' access to high-quality, publicly funded education. The retention of these assets in the public realm is important in order to respond to the demographic shifts that mature neighbourhoods regularly undergo, as well as additional demand created as a result of residential intensification. Therefore, appropriate reuse of these facilities, with the flexibility to reopen them when required, is an important consideration for the School Boards, the City, local residents and business owners.

(B) School Closure Process and Timing:

TDSB staff first recommended 10 school facilities for potential closure in a report to the Board of Trustees presented at their April 28, 1999 meeting. After consultation with representatives of the effected school communities, the staff amended their original recommendations and the Trustees made their final decision at their Board meeting held on September 29, 1999, recommending the closure of the education programs offered in the following schools, effective June 2000:

- Brookbanks Public School, D. B. Hood Public School, Earlscourt Public School, the Shaw Street portion of Givins/Shaw Junior and Senior Public School, Grace Street Public School, Hughes Junior Public School, McNicoll Public School, the Old Orchard portion of Ossington/Old Orchard Public School, and Midland Avenue Collegiate Institute.

- Heydon Park Secondary School will be closed as of June 2000 and the program will be relocated to D'Arcy Street Public School. The West End Alternative School program which is presently housed within this facility will be moved to an appropriate site elsewhere.

- The recommendation to close Cordella Public School will be further considered to determine the viability of relocating Grade 6 students from Rockcliffe Middle School. The decision to close Cordella as of June 2000 will be revisited by the Trustees in the New Year.

(a) Factors in Determining Candidates for Closure:

In determining the schools to be included in the first phase of recommended closures, TDSB staff first excluded schools which:

(i) serve developmentally handicapped students solely;

(ii) have recently undergone significant capital improvements;

(iii) are situated in areas expected to undergo residential intensification;

(iv) are located within "isolated" communities that do not have neighbouring school facilities; and

(v) will undergo review in subsequent phases of the school closure exercise, such as specialized schools and those which are operationally inefficient.

The first phase review then focussed on schools in proximity to former municipal boundaries, and with enrolment rates of 55 percent or less. Additional considerations included:

(i) overall operational efficiency;

(ii) the costs associated with accommodating students within neighbouring schools;

(iii) reduction in the use of portable classrooms;

(iv) the need for capital improvements in the near future; and

(v) projected enrolments.

(b) Public Consultation:

School Boards considering the potential closure of a school facility are required to form an Area Review Committee (ARC), comprised of parents, community members and/or secondary school students (if applicable). The TDSB ARC's also included Trustees and school principals, and City Councillors were invited to attend as non-voting members.

The TDSB formed ARC's for each of the 10 effected schools (on 9 sites) in early May of this year. Committee members were given an opportunity to review the factors leading up to the decision to review the school for closure, assess the impact of potential closure and make alternative recommendations to the Board of Trustees. This work was completed in time for the June 21, 1999 meeting of the TDSB.

Without exception, all of the ARC's recommendations advocated for the retention of either the school facility, and/or the specific educational program. A number of ARC's recommended further exploration of the possibility of leasing portions of schools identified for closure, as a means of raising the revenue required to keep the school open. Most expressed concern about the tight time lines associated with the work of the ARC's.

A summary of the ARCs' recommendations is provided in Appendix A:

The TDSB will also be asking parents and community members to provide in-put into the closure implementation process once the Closure Implementation Teams are constituted.

In an effort to estimate the impact of school closures on the provision of municipal programs, the interdepartmental staff team has compiled information regarding each of the school sites identified for closure. Local programs offered in school facilities are provided by a variety of entities, ranging from for-profit corporations to "grass roots" groups. However, a complete listing of these uses is not yet available from the school boards. School board staff have indicated that this information will not be available until 2000, and so the information described below pertains only to either directly operated municipal programs, or those receiving extensive City funding.

Licensed Child Care:

School closures will have a significant impact on the provision of child care and family resource programs. System-wide, there are currently 325 child care centres providing licensed care for 17,241 children and 18 family resource centres located in schools operated by the TDSB, TCDSB, the French Public and French Catholic boards. The TDSB houses 87 percent of these programs within their facilities, including 285 child care centres and 14 family resource programs.

The TCDSB houses 32 child care centres and 4 family resource programs. Five of the 28 TCDSB schools identified as candidates for closure contain child care centres. Potential TCDSB closures will impact the care of 235 children enrolled in the child care centres housed within candidates for closure.

Finally, the French Public Board and French Catholic School Board house 4 child care programs each.

The 6 child care centres located within TDSB facilities due to close in June 2000 serve 325 children, of which 10 are toddler age, 186 preschool age and 129 are school age. Whereas the closures of the 6 TDSB schools have the most impact on the child care services located within them, there will also be significant pressure on recipient schools and the child care programs they house. The majority of students displaced from the closed TDSB schools will enroll in recipient schools. There are 20 TDSB feeder schools that will be affected by the initial school closures, which also contain child care programs. To make room for the swelling enrollment in these schools the child care centres could also face displacement or downsizing of their space. This group of centres offers care to an additional 1,128 children, of which 10 are infants, 70 are toddlers, 603 are preschool age and 445 are school age.

The closure of the 10 schools and the subsequent impact on the child care programs also affects service to younger aged children as more than half of the children are infant, toddler and preschool aged. Even if the child care programs in recipient schools are not negatively affected by school enrollment pressures, they may not have sufficient licensed vacancies to accommodate the children from the centres in the closed schools. While it may be possible to negotiate shared use of school space for some of the displaced programs for school aged children, this is not an option for the younger children who require dedicated space. Increasingly schools are reluctant to allow the shared use of their classroom space with child care.

Child care programs facing displacement do not always have the option of relocating their programs to other locations. Because child care programs must meet the requirements of the Day Nurseries Act, finding suitable alternative space in the surrounding communities affected by school closures will be difficult if not impossible. In addition to the difficulty in funding suitable space, the capital costs associated may prove prohibitive. A conservative estimate of the capital costs associated with relocating child care for the youngest children expected to be displaced by TDSB school closure in 2000 is $2.4 million. The estimate assumes a per space relocation and renovation cost of $12,300.00. To meet the child care need created over the full three year phased closure of schools, an estimated $10.8 million would be required. These figures do not include the impact of potential TCDSB closures.

The current Child Care Capital Reserve of $900,000.00 is insufficient to address the combined impact of forced relocation of child care centres as a result of school closures and changing school enrollment patterns. The Child Care Capital Reserve was originally established as an emergency response to a handful of child care centres whose future was threatened first by school renovations. In addition to the pressure for capital funds there will be increased operating costs resulting from relocation of child care programs into community space. Escalating per diem costs will result in on-going pressures on operating funds.

However, the TDSB has indicated that in some instances it may be appropriate for the child care operators to remain in the closed school, and share the facility with a new tenant. Care would have to be taken to ensure that any reuse of closed schools is compatible with child care, and any other service provider. This could substantially reduce the need for capital funding for the relocation of programs for younger children. However, the ultimate decision rests with the centre operators and their respective parents. In some cases, the program is directly dependent on the physical location and would therefore want to remain in the facility. In other cases the program is more strongly connected with the school community and would more than likely want to re-locate to the "recipient" school. Each case must be assessed individually, within its local and programmatic context.

In addition, service providers located within the surplus schools report being adversely affected by the announcement of the closure of their host school. Some parents are opting to enroll their children in other programs in order to avoid the possibility of a disruption of service later on. This creates a drain on limited financial resources which may be required in the event that the program is relocated. Staff are therefore recommending a minimum security of tenure for these programs until at least the end of the 2000/2001 academic year. This will provide an appropriate and important "safety net" for these facilities, as well time to plan for any potential relocation.

School closures and the resulting loss of child care space may also threaten the City's ability to realize their service targets. The City maintains a service agreement with the Ministry of Community and Social Services which outlines service level expectations. School-based programs provide a significant proportion of the total service capacity, and the ability to meet the service levels required is dependent upon having sufficient licensed child care space available for families.

With over 12,745 children currently waiting for subsidized child care space in Toronto, it is apparent that the current needs for child care are not being met. Further loss of licensed child care space will extend the time families and children wait for child care service. Estimating dollar costs alone does not adequately reflect the impact of lost community-based services to children and families.

A description of child care programs in TDSB schools identified for closure is contained in Appendix B.

Parks and Recreation Programs:

Parks and Recreation operates many programs in school facilities throughout the City, largely through the permitting of space during after-school hours and during the summer months, but also through the terms and conditions of various agreements with the TDSB. This includes programs utilizing both indoor and outdoor facilities and amenities. In a number of cases, the City has also contributed capital dollars toward the development or enhancement of recreational facilities on TDSB property.

Parks and Recreation also recognizes that the community at large makes extensive use of TDSB facilities for numerous recreational pursuits. Both indoor and outdoor facilities are used year round for activities such as socials, fitness programs, as well as numerous sports and community events.

(a) Recreation:

With reference to the ten closures slated for June 2000, Parks and Recreation provides programs in six of those schools, involving almost 10,000 participants annually. Appendix D summarizes current programming of those facilities and illustrates the City's capital investment in those sites. Parks and Recreation staff have reviewed each school to be closed and identified alternative locations to deliver the majority of the current programs. Their analysis and options for each are as follows:

(1) Brookbanks Public School:

Parks and Recreation currently operates an Afterschool Arts Studio for children (34 participants) and Special Needs programs for youth and for adults (120 participants) during the winter months.

The Afterschool program can be relocated to nearby Fenside Public School at minimal cost.

Relocation of the Special Needs programs is problematic due to the lack of permit availability in nearby schools and the need for an accessible facility of sufficient size and suitable layout for the program. Alternatives are still being investigated at this time.

No specific agreement exists and no capital improvements have been made to this site.

(2) Cordella Public School:

Parks and Recreation does not offer programs at this location. No specific agreement exists and no capital improvements have been made at this site.

(3) D.B. Hood Community School:

Parks and Recreation does not offer programs at this location. No specific agreement exists and no capital improvements have been made at this site.

(4) Earlscourt Junior Public School:

A summer Playschool Program for preschoolers (65 participants annually) and summer Sports Programs for children and youth (165 participants annually) are offered at this site. As Stella Maris Catholic Secondary School shares this site and is suitable for both programs and is not affected by the closing of Earlscourt, no implications for these programs are anticipated.

No specific agreement exists and no capital improvements have been made to this site.

(5) Givins/Shaw Junior and Senior Public School:

A Youth Gym Night (18 participants annually) operates in the Shaw facility during the winter months and a children's T-Ball League (118 participants annually) functions at this site during the summer. As only the Givins facility is slate to close, no effect on either program is foreseen.

A 1981 shared use agreement exists at this site and the City invested $177,150.00 into schoolyard improvements including sports field. construction and landscaping up-grades.

(6) Grace Public School:

Parks and Recreation does not offer programs at this location.

A 1985 shared use agreement exists at this site and the City invested $176,000.00 into schoolyard improvements.

(7) Heydon Park Secondary School:

Parks and Recreation does not offer programs at this location. No specific agreement exists and no capital improvements have been made at this site.

(8) Hughes Junior Public School:

A Playschool Program for preschoolers (96 participants annually) and Sports Camps (128 participants annually) for both children and youth operate out of this school during the summer months. During the winter months, programs include children's Jazz (40 participants annually) and Tae-kwondo (68 participants annually). Proximity to the TCDSB's St. Nicholas of Bari Secondary School allows for relocation of all programs. These programs can be relocated at minimal cost.

A 1991 shared use agreement exists at this site and the City invested $132,000.00 into schoolyard improvements including the construction of a soccer field, a ball diamond, a bocce court, a ball hockey enclosure, a hard surface court and a play structure.

(9) McNicoll Public School:

A children's Summer Fun Centre (240 participants annually) operates out of this facility. Nearby Hillmount Public School is a viable relocation alternative. This program can be relocated at minimal cost.

No specific agreement exists and no capital improvements have been made at this site.

(10) Midland Avenue Collegiate Institute:

Parks and Recreation operates a large number of fitness and sports programs at this facility (505 participants annually) primarily for children and youth. The Midland facility contains a swimming pool and a full aquatic program including Learn to Swim and Leisure Swimming opportunities (8,167 participants annually) is offered at this location.

Fitness and Aerobic programs, which draw participants from the community at large, can be relocated to McGregor Park Community Centre. The entire aquatic program can be relocated to R.H. King Academy which Parks and Recreation currently does not program. These programs be relocated at minimal cost.

However, the sports programs service primarily local children and youth and no suitable facility to continue these programs currently exists.

Although the City does not have all the specifics, it should be noted that the community at large makes extensive use of this facility, both indoors and outdoors, for a variety of purposes including sports, aquatics and social events.

A partnership agreement concerning the permitting and use of secondary school gymnasiums and an agreement concerning shared use of pools exists between the TDSB and the former City of Scarborough. In 1965, the City paid for 50 percent of the construction cost of the Midland pool ($122,500.00).

(11) Ossington/Old Orchard Junior Public School:

Parks and Recreation does not offer programs at this location. No specific agreement exists and no capital improvements have been made at this site.

(b) Open Space:

Parks and Recreation utilizes TDSB open space and the facilities contained thereon predominantly during the summer months to operate a variety of programs primarily for children and youth. As school sites are generally available to the public, it is recognized that schoolyards, with their various facilities and amenities, play a role in providing both active and passive recreational opportunities for the local and in some cases the larger community.

With reference to the eleven schools slated to be closed in June 2000, a total of approximately 11.2 hectares, or 27.7 acres of open space exist at these sites. A specific breakdown including facilities and amenities at each site is contained in Appendix C.

It should be noted that the Department of Economic Development and Tourism, with the assistance of Urban Planning and Development Services, is currently undertaking a City-wide study of how Toronto's parks and open spaces are distributed throughout the City as part of the Official Plan process. This study will include an inventory of current City owned parks and open spaces and an assessment of which areas of the City require additional parkland. This study will also examine the role that schoolyards play in the provision of publicly accessible open space.

Generally speaking however, should these sites cease to be available to Parks and Recreation and the community at large for recreational use, the impact would be significant.

Public Health Programs:

The City's Public Health Department's emphasis on prevention and early intervention has resulted in extensive use of virtually every school for programs such as dental screening, immunization and prenatal support. The majority of these programs do not require dedicated space and tend to be quite portable. Public Health staff have indicated that these programs will re-locate with the students, at minimal cost.

(D) Implications for Municipally Delivered Services:

In summary, many of the Recreation and Public Health programs offered at these 10 facilities serve the children attending these schools, and can be relocated at minimal cost. The only exceptions are Recreation's youth basketball program currently being offered at Midland Avenue Collegiate and the programs for the physically and developmentally handicapped being provided at Brookbanks Public School. Economic Development, Culture and Tourism staff continue to look for appropriate accommodation for these programs within the area of their present locations.

The potential impacts for child care are less straightforward. The boards of directors operating each of these programs must first decide if they want to relocate to one of the recipient schools. In some instances, if a compatible tenant is found for the rest of the facility, it may not be necessary or desirable for the program to move. In any event, funding for any capital improvements required to meet licensing standards has not been identified.

(E) Costs to the City for Use of School Facilities:

Negotiations with both the TDSB and TCDSB are still on-going, however, the bulk of municipal programming occurs in TDSB facilities. At its meeting held on April 14 and 15, 1999, Council adopted a number of motions regarding school lands, which included a directive to staff to explore the possibility of off-setting occupancy costs associated with the City's use of school facilities with the provision of municipal services such as water and garbage collection. Efforts are being made to ensure that previous agreements in force in some of the former municipalities which provided for exchanges of in-kind services, are strengthened and expanded in an effort to minimize the impact on the City's budget.

(F) Zoning and Permitted Uses of Surplus School Facilities:

With the exception of Midland Avenue Collegiate, all of the sites declared surplus have some form of residential permission. Midland permits Institutional uses only, such as schools, day nurseries and homes for the aged, etc. Zoning and Official Plan designations are described in Appendix E.

Council has previously requested the City Solicitor to explore the legal remedies available to the City in dealing with surplus school sites. In particular, the possibility of re-zoning closed school sites as open space was raised.

Any amendment to a zoning by-law must be supportable on land use planning grounds. The burden is particularly heavy when the proposal is to reduce the uses to which land can be put, especially if these uses are generally permitted in the surrounding lands. The OMB has a long standing tendency to ensure that lands not owned by the City not be transformed to public purposes, such as open space, by zoning instruments unless there is a commitment on the part of the municipality to acquire the lands.

However, TDSB staff have recommended that each of the closed facilities be retained by the Board, and leased to compatible organizations which are in compliance with the relevant Zoning By-law. Leasing is seen as a steady source of revenue from properties already owned by the TDSB.

In order to ensure continued public access to the outdoor playing fields and other public amenities within surplus school facilities, staff are recommending the adoption of a set of guiding principles for the re-use of these important community assets, which would address:

(i) leasing as the first option in dealing with closed schools;

(ii) community in-put into the reuse of surplus schools;

(iii) appropriate maintenance standards for subsequent tenants;

(iv) on-going community use of closed facilities and the associated play yards; and

(v) appropriate security of tenure provisions for service providers which decide to continue to provide programs in closed schools.

These principles would be adopted by both City Council and the TDSB and would provide a framework for staff in determining appropriate alternate uses of surplus sites, and the required safeguards to ensure public access.

(G) City's Response to Proposals to Lease Received from School Boards:

The sale or long term lease of surplus school sites is subject to Provincial regulation 446, contained within the Education Act which stipulate the various public bodies which must receive proposals to lease, sell or jointly-use school facilities. The ranking of priorities are as follows:

(i) the French Public Board;

(ii) the TCDSB;

(iii) the French Catholic Board;

(iv) local universities and colleges;

(v) the City;

(vi) the Province of Ontario and its agencies;

(vii) the Government of Canada and its agencies; and

(viii) the Ontario Realty Corporation.

All of these public bodies will receive the proposals to lease simultaneously and will be given 90 days to respond. Expressions of interest will be prioritized in according to the above priorities. The regulation further dictates that the lease or sale of the lands must be at fair market value.

In some instances, the availability of surplus school facilities may present an opportunity to meet Council objectives and priorities. In order to respond within the 90 day time frame set out in the Provincial regulation, City staff will need to assess local service and open space priorities, determine capital and annual operating costs and make recommendations to Council regarding the advisability of leasing any of the surplus school sites within this phase of school closures, if any.

The Provincial regulations also stipulate that any revenues generated through the leasing of surplus educational facilities must be placed in a Pupil Accommodation Reserve Fund, which can only be used for capital improvements to the remaining operational schools. The TDSB views leasing as an important strategy in making up the budget shortfall of almost $35 M/annum, for the renewal of older schools.

Staff are therefore proposing the preparation of an interdepartmental report, identifying the most appropriate sites from the City's perspective, the costs associated with leasing them and seeking Council authority to proceed.

(H) Next Steps:

TDSB Implementation Process:

Parental in-put into the implementation process will be provided through Closure Implementation Teams (CIT's), with representation from both the closed facility as well as the receiving schools. Former ARC members are encouraged to participate, as well as the groups and agencies housed within the schools identified for closure as well as the receiving schools. It is anticipated that this will include representatives from child care programs of both the closed and feeder schools. City representatives may attend as observers.

CIT's will be asked to make recommendations regarding:

(i) the appropriate placement of displaced students;

(ii) distribution of specialized educational programs;

(iii) the placement of tenants with exclusive use of school space, such as child care; and

(iv) the safety of students required to walk longer distances to school.

The CIT's will begin to meet in October, 1999 and their findings and recommendations will be reported to the Board of Trustees for their consideration. The staff of the TDSB will be reporting on the role of the CIT's at the October, 14, Board meeting. The task the CIT's face is enormous. Given the significant impact on city operated and supported programs, City staff would like to review both proposed and final recommendations developed by the CIT's to offer an assessment of the implications for both the impacted communities, agencies and Board staff consideration.

Future Closures:

A staff report identifying candidates for closure in Phase 2 will be presented to the TDSB's Trustees in January/February, 2000, with a decision of the Board of Trustees expected in May, 2000. Phase II will effect up to 10 additional school facilities and will focus on:

(i) operational efficiencies system-wide;

(ii) facility condition;

(iii) continuation of boundary adjustments/rationalization; and

(iv) limited program rationalization.

Closures of Phase 2 schools are expected to occur in June 2001.

It is assumed that Phase 3 will also effect up to 10 schools, however the benefits of operational efficiencies attained in the interim may result in fewer schools being identified for closure. The focus of this phase of the school closure exercise will be the completion of the program rationalization process. Efficiencies will be gained through a redistribution of specialized programs, such as schools for the performing arts, alternative schools, etc., on an equitable basis.

Contact Name:

Ann-Marie Nasr, Manager, Policy and Programs, Tel: 392-0402.

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Appendix A

Summary of Area Review Committee Recommendations

ARC Recommendations/Concerns	Staff Response
Maintain a viable school presence in each community.	In identifying schools for closure, care was taken to ensure that there was a school within a 1.6 km radius.
Preservation of schools as part of a community's identity.	Community activity can still occur within a closed school, depending on the City's ability to pay for on-going community use.
Dislocation of school-based community programs.	Where child care is concerned, every effort will be made to work with funders and service providers to accommodate programs as tenants in either the closed or the receiving school. The extent of relocation is dependent on City priorities and funding.
Possible errors in enrolment projections.	TDSB enrolment projections have historically deviated from actuals by less than 1 percent. Projections for each of the affected schools were carefully reviewed and are thought to be accurate.
Potential loss of students to the TCDSB.	TCDSB is under-going its own closure process, which may impact on parents' ability to switch schools. Parents have always had the option of enrolling children in TCDSB schools.
Too many closures are proposed for low income areas.	Recommendations were based on utilization rates, not the income levels of local residents.
Alternative options to closures have not been adequately explored.	Many of the schools identified for closure in the first phase would have to be closed as a consequence of amalgamation. The amount of unfunded space makes some closures necessary. Other options for financing are actively being explored.
Advocacy for additional Provincial funding is needed.	Advocacy efforts are on-going.
Identification of specific schools for closure has prejudiced the discussions.	No clear decisions would likely be made without a prior identification.
Partial leasing of all facilities should be explored, rather than closing a single facility.	Cost efficiencies are greater when the entire facility is closed and leased.
Portable classrooms should be reduced before school closures are contemplated.	The calculation of surplus space excludes portables, and elimination of them would not off-set the amount of unfunded space.
Process was too condensed.	The short time lines resulted in a concentrated process, however a longer time period is recommended for subsequent phases.
Rationalization of specialized programs should be completed before schools are closed.	This will be accomplished in subsequent phases.
Communities effected in Phase 1 should be exempt from the disruption of subsequent phases.	Efforts will be made to avoid this situation, but no guarantees can be made.
Student safety issues have not been adequately considered.	The 1.6 km guideline has been satisfied.
Relocation issues have not been addressed.	Student relocation will be dealt with by CIT's, and safety issues can be addressed in this context. The TDSB's Human Resources Dept. will oversee the redeployment of staff.
Appropriate alternate uses of closed facilities.	Alternate uses are governed by the Education Act.
Walking distances to receiving schools.	The 1.6 km guideline has been satisfied.
Property Values.	Property values have not decreased in areas of the City which have already experienced school closures.

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Appendix B

Child Care in Closed Schools

School	Outstanding Needs	Licensed Capacity/Ages Served
Brookbanks	infants and toddlers	no programs presently offered at this site
Cordella	infants and toddlers	no programs presently offered at this site
DB Hood	all ages	32 spaces for children aged 2 � to 5 years
Earlscourt	infants and toddlers	68 spaces for children aged 0 to 5 years
Givins/Shaw	infants and toddlers	31 spaces for children aged 21/2 to 12 years
Grace Street	all ages	no programs presently offered at this site
Heydon Park	all ages	no programs presently offered at this site
Hughes	infants and toddlers	37 children aged 2 � to 9 years
McNicoll	infants and toddlers	66 spaces for children aged 1 � to 12 years
Midland Avenue	infants and toddlers	no programs presently offered at this site
Ossington/Old Orchard	infants	80 spaces for children aged 18 months to 12 years

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Appendix C

Recreation Programming - Outdoors

Schools	Ward	Open Space	Outdoor Facilities Include
Brookbanks PS	11	1.08 h/2.66 ac	Ball Diamond/Play Structure/Soccer Field
Cordella Jr PS	27	.98 h/2.41 ac	Ball Diamond/Play Structure
D.B. Hood SS	28	.57 h/1.41 ac	Play Structure
Earlscourt PS	21	.57 h/1.41 ac	Nil
Givins/Shaw Jr/Sr PS	20	.72 h/1.78 ac	Tennis Courts/Ball Diamond/Play Structure/Soccer Field
Grace Street Jr PS	11	.48 h/1.18 ac	Play Structure/Ball Diamond/Hard Surface Court/Wading Pool
Heydon Park SS	20	.25 h/.61 ac	Nil
Hughes Jr PS	21	.39 h/.97 ac	Ball Diamond/Soccer Field/Play Structure/Bocce Court/Ball Hockey Enclosure
McNicoll PS	12	2.72 h/6.73 ac	Two Ball Diamonds/Play Structure/Soccer Field
Midland Avenue CI	15	2.21 h/5.46 ac	Football Field/Running Track
Ossington/Old Orchard Jr PS	11	1.23 h/3.05 ac	Nil
Totals		11.20 h/27.67 ac

Appendix D

Recreation Programming - Indoors

Schools	Ward	Program Hours/Year	No. of Participants/Year	Capital Expenditure
Brookbanks PS	11	150	154	Nil
Cordella Jr PS	27	0	0	Nil
D.B. Hood SS	28	0	0	Nil
Earlscourt PS	21	303	230	Nil
Givins/Shaw Jr/Sr PS	20	168	136	$177,150
Grace Street Jr PS	11	0	0	$176,000
Heydon Park SS	20	0	0	Nil
Hughes Jr PS	21	830	332	$132,000
McNicoll PS	12	315	240	Nil
Midland Avenue CI	15	2171	8672	$122,500
Ossington/Old Orchard Jr PS	11	0	0	Nil
Totals		3937	9764	$607,650

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Appendix E

Zoning and Official Plan Designation

Location	Official Plan Designation	General Zoning Permission
Brookbanks Public School 217 Brookbanks Drive North York	Minor Institutional	Permits single-detached dwellings; recreational uses run by a government body; institutional uses and day nurseries accessory to certain institutional uses.
McNicoll Public School 155 McNicoll Avenue North York	Minor Institutional	Permits single-detached dwellings; recreational uses run by a government body; institutional uses and day nurseries accessory to certain institutional uses.
Midland Avenue C.I. 720 Midland Avenue Scarborough	Secondary School	Permits institutional uses, day nurseries, homes for the aged.
Earlscourt Public School 21 Ascot Avenue Toronto	Low Density Residential Area	Permits residential houseform, some shared accommodation, apartment buildings and public schools
Givins/Shaw Public School 180 Shaw Street Toronto	Low Density Residential Area	Permits all residential and shared accommodation, apartment buildings, public and private schools, private and public hospitals, clinics, places of worship, public museum and art gallery
Grace Street Public School 65 Grace Street Toronto	Low Density Residential Area	Permits residential houseform, some shared accommodation, apartment buildings and public schools
Heydon Park Secondary School 11 St. Annes Road Toronto	Low Density Residential Area	Permits residential houseform, some shared accommodation, apartment buildings and public schools
Hughes Public School 177 Caledonia Road Toronto	Low Density Residential Area	Permits residential houseform, some shared accommodation, apartment buildings and public schools.

Location	Official Plan Designation	General Zoning Permission
Ossington/Old Orchard Junior Public School 380 Ossington Avenue Toronto	Low Density Residential Area	Permits residential houseform, some shared accommodation, apartment buildings and public schools
Cordella Public School 175 Cordella Avenue York	School	Permits detached, duplex and semi-detached dwellings; public service uses, owned by the municipality or any total board or agency; public schools, separate schools and religious schools
DB Hood CS 2327 Dufferin Street York	School	Permits detached, duplex and semi-detached dwellings; public service uses, owned by the municipality or any total board or agency; public schools, separate schools and religious schools

The Policy and Finance Committee also submits the following communication (September 27, 1999) from the City Clerk:

Recommendations:

The School Tax Sub-Committee recommends to the Policy and Finance Committee and City Council that:

(2) the Toronto District School Board staff work with City staff to review implementation options developed by the Community Implementation Teams to identify any costs to the City or community users and that notification of all meetings be sent to affected Councillors, City staff and users;

(3) the Toronto District School Board immediately provide existing child care centers with leases to remain in closed facilities until 2000/2001;

(4) the City and the Toronto District School Board develop principles and protocol for the re-use of school sites including community outreach and participation, exploring opportunities to meet mutual service objectives (e.g. Child care facilities) existing services being provided first option to lease, open space access being retained, compatibility being ensured, etc.;

(5) principles and protocols be adopted by both the City and Toronto District School Board; and

The School Tax Sub-Committee reports, for the information of the Policy and Finance Committee and City Council, having received a presentation from Ms. Anne-Marie Nasr, Manager, Policy and Programs, City Planning Division, Urban Planning and Development Services, respecting the Toronto District School Board report on the first phase of school closures released on September 14, 1999.

Background:

The School Tax Sub-Committee at its meeting held on September 27, 1999, had before it the following:

(1) Toronto District School Board report on the first phase of school closures released on September 14, 1999 (copy of which was distributed to all Members of Council); and

(2) Communication (September 23, 1999) from the Children and Youth Action Committee, recommending to the School Tax Sub-Committee and City Council, that given school closings have a dramatic impact on all services affecting children, families and their communities in the City of Toronto, the Toronto District School Board be urged to fully examine this issue, particularly as it relates to affected programs and schools, including feeder schools.

The following persons addressed the School Tax Sub-Committee in connection with the foregoing matter:

- Councillor B. Disero, Davenport;

- Councillor J. King, Seneca Heights;

- Trustee Elizabeth Boyd, Toronto Catholic School Board;

- Trustee Shelley Laskin, Toronto District School Board; and

- Trustee Judy Codd, Toronto District School Board

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The Policy and Finance Committee reports, for the information of Council, having also had before it a communication dated September 23, 1999, addressed to the School Tax Sub-Committee from the City Clerk, Children and Youth Action Committee, respecting school closings, which was forwarded to all Members of Council with the October 14, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.

________

The following Members of Council appeared before the Policy and Finance Committee in connection with the foregoing matter:

- Councillor Olivia Chow, Downtown; and

- Councillor Pam McConnell, Don River.

Response to the Provincial Operational Review

of Toronto's Implementation of Ontario Works

and Child Care Fee Subsidy Programs

(City Council on October 26 and 27, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the Recommendations of the Community Services Committee embodied in the following communication (October 7, 1999) from the City Clerk:

Recommendation:

The Community Services Committee on October 7, 1999, recommended to the Policy and Finance Committee, and Council:

(1) the adoption of the attached report (September 22, 1999) from the Commissioner of Community and Neighbourhood Services, subject to amending Recommendation No. (1) to provide that the following Recommendation No. 47, headed "Directly Provided Child Care: Creating an Arm's Length Agency", contained in the KPMG report on Ontario Works, not be supported until a further review of such recommendation has been undertaken by the Commissioner of Community and Neighbourhood Services and a report submitted thereon to the Community Services Committee:

"Recommendation No. 47

The City of Toronto should renew efforts to make its directly operated child care service an arm's length agency of the City. If the City is successful in establishing this new arrangement, it should avail itself of the opportunity to invite centres of excellence involved in the treatment of children at risk to participate in the governance and programme development of directly operated child care services. Should the Province devolve the licensing of child care to municipalities, it should not do so with the City of Toronto until the City has taken steps to eliminate the potential for conflict of interest in its provision of child care, by the means above or otherwise.";

(2) the City of Toronto seek provincial cost-shared funding to pay actual costs of licensed child care centres and additional child care providers; and

(3) in the event that the provincial cost-shared funding is not forthcoming, the City of Toronto continue to pay its share of the actual costs, and that the necessary funding be included in the year 2000 Operating Budget.

The Community Services Committee reports, for the information of the Policy and Finance Committee, having requested the Commissioner of Community and Neighbourhood Services to:

(a) provide the Community Services Committee with a comprehensive report concerning all pressures facing child care services in Toronto, and that such report include:

(i) the capital funding crisis;

(ii) impact of school closures; and

(iii) implementation of Ontario Works and the Learning, Earning and Parenting Program;

(b) explore the feasibility of providing subsidies to fill the 2000 vacant child care spaces, and sending the bill to the Province; and

Background:

The Community Services Committee had before it a report (September 22, 1999) from the Commissioner of Community and Neighbourhood Services providing a response to the provincial operational review of the Toronto's implementation of Ontario Works and Child Care Fee Subsidy Programs; and outlining recommendations in regard thereto.

The Community Services Committee also had before it a synopsis of the KPMG review of Ontario Works, submitted by Councillor Olivia Chow.

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

- Mr. Andy Mitchell, Community Social Planning Council of Toronto;

- Ms. Jane Mercer, Toronto Coalition for Better Child Care, and submitted a brief in regard thereto; and

- Ms. Anne Dubas, President, and Mr. Tim Maguire, Canadian Union of Public Employees, Local 79, and submitted a brief in regard thereto.

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(Report dated September 22, 1999, addressed to the

Community Services Committee from the

Commissioner of Community and Neighbourhood Services)

Purpose:

The purpose of this report is to update City Council on the Provincial Operational Review of Toronto's implementation of Ontario Works (OW) and Child Care Fee Subsidy Programs. The findings and recommendations contained in "Ontario Works in Toronto: An Operational Review", the Final Report prepared by the consulting firm KPMG on behalf of the Ministry of Community and Social Services, are briefly reviewed. Subsequently, the implementation process outlined in the Final Report is discussed.

Financial Implications:

At this time, there are no immediate direct financial implications. Future reports to Council proposing changes in structure or policy resulting from the Operational Review will include a full discussion of potential financial implications.

Recommendations:

It is recommended that:

(1) City Council support in principle the recommendations contained in the consultant's Final Report that will contribute to the improvement of the Ontario Works program, and the child care required to support it, in Toronto;

(2) based on Provincial endorsement of the directions contained in the Operational Review, and Provincial cost-sharing commitments, the Commissioner of Community and Neighbourhood Services provide City Council, in future reports:

(i) with further details about those recommendations that have funding or service delivery implications for the City; and

(ii) with an implementation plan, developed in conjunction with Provincial officials, outlining steps that will be taken to implement those recommendations requiring joint City and Provincial action;

(3) with respect to Social Services, the Department evaluate and report back on the recommendations from the Operational Review which may be implemented immediately by the City within the current provincial legislation and the existing Council policies;

(4) with respect to child care, the Department evaluate and report back on the recommendations from the Operational Review which may be implemented immediately by the City within the current provincial legislation and the existing Council policies; and

(5) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Background:

In a previous report dated September 29, 1998, the Commissioner of Community and Neighbourhood Services informed City Council that the Ministry of Community and Social Services (MCSS) intended to undertake a review of the Ontario Works and Child Care programs in the City of Toronto. In a letter to the Mayor of Toronto dated September 18, 1998, the Minister of MCSS stated: "The review is required because the city has told us it is having difficulty implementing Ontario Works." The letter further indicated the review would also encompass "the city's Child Care program because it is an important support to employment".

At that time, a final terms of reference had been developed, and a time frame established for completion of the review. KPMG was retained to perform the review, which was to begin immediately, with the collection of information and data in the field commencing in late September 1998.

The Final Report prepared for MCSS by KPMG, entitled "Ontario Works in Toronto: An Operational Review" was forwarded to the City on September 18, 1999. Appendix 1 contains the Report's table of contents, introduction and summary (chapter I) and recommendations (chapter X). A copy of the full report has been filed with City Clerks.

Review Mandate:

In the initial terms of reference for the Operational Review, the Ministry expressed serious concerns about the City's ability to implement OW, and to effectively manage the delivery of the OW and Child Care programs. This was reflected in the Review's basic mandate which was aimed at assuring the Province that the City was in compliance with Provincial OW and child care directives, and was competently administering the respective delivery systems.

As stated in the terms of reference, with regard to the City's OW program: "The review will identify and resolve issues that are preventing the orderly implementation of Ontario Works." Regarding the City's delivery of child care: "The review will analyze the City of Toronto's current use of child care subsidies and recommend how to maximize their use. The review will assure that the City of Toronto has appropriate child care policies, practices and structures to manage child care effectively and efficiently prior to realignment." Overall, the scope of the Review was seen to include "all aspects of the City of Toronto's implementation of the Ontario Works program and Toronto's child care fee subsidy program (regular and Ontario Works)".

However, early on there was consensus among the senior City and Provincial staff, as well as the consultant, that the Review represented an opportunity to look at the OW program as a whole, and to concentrate on improving future program performance. The Review thus progressed with the agreement that a forward looking perspective should be adopted, and that the primary emphasis should be to work co-operatively to identify changes to the City's delivery system which would better meet the needs of Toronto's residents, as well as to seek improvements or refinements to the OW program as a whole, which could apply across the Province. As a result, actions recommended by the consultant in the Final Report have implications not only for Toronto's OW delivery system, but also for key Provincial policies governing the OW program, as well as for the program's technological supports.

With respect to the City's Child Care program, while the Review focused on child care as a support to the OW program, this was done in the context of the overall fee subsidy system administered by the City. Therefore, issues of access to regular as well as OW funded child care are addressed in the Final Report's recommendations.

Findings from the Review and an action plan were initially slated to be delivered to the Ministry on December 1, 1998. In recognition of the complexity and breadth of the issues under review, and, in conjunction with the change in mandate, the time frames were extended.

Review Process:

A number of committees and working groups were established both to oversee and to undertake the Review. The Senior Advisory Committee, whose role was to oversee the project, was composed of representatives from the Provincial Ministry, the Toronto Area Office branch of the Ministry, and the City of Toronto, as well as representatives from KPMG. The City representatives included the Commissioner and senior managers from the Community and Neighbourhood Services Department.

A Steering Committee was established composed of senior operational staff from the Province and the City, and included KPMG representatives. It met regularly to monitor the Review's progress, and tackle operational issues related to conducting the Review. The Steering Committee was chaired by a project management consultant appointed by the Province. Appendix 2 lists the members of both the Advisory and Steering Committees.

Fieldwork for the Review was conducted by KPMG consultants, supported by City of Toronto and MCSS staff. Completion of the Review required the dedication of substantial time and resources by Departmental staff.

In the Final Report, KPMG expressed its appreciation for the co-operation and assistance that was demonstrated by City staff throughout the review process. The Review process itself contributed to a better mutual understanding by City and Provincial staff of their respective issues concerning implementation of OW. City staff used the opportunity to obtain greater clarity about Provincial policy objectives and approaches, and to convey to Provincial officials the distinctive features of the City's delivery system and of client needs in Toronto.

Summary of Findings:

The report's key finding, in relation to OW, is that the City is in compliance with the policy and program guidelines established by the Province for the program. However, reflecting the Review's extended mandate, the Report proposes a range of ways in which the OW program as a whole, as well as the City's delivery system, can be improved. Regarding child care, access issues were the main problem brought to light in the Review. There is an insufficient stock of service options to meet the needs and preferences of OW families in Toronto who are studying, working or contributing to their communities. Again, the report found that the child care system is currently managed in a way that is consistent with relevant Provincial legislation and regulations.

Discussion:

Operational Review Final Report: Key Findings and Recommendations:

The results of the consultant's analyses form the substance of the Final Report. The findings are discussed in the body of the report and consolidated in the report's 60 recommendations, organized under four separate headings: Ontario Works, Child Care, Recommendations for the Province, and General Recommendations. This section briefly summarizes the key findings and recommendations related to the OW program and child care.

From the Department's perspective, the Final Report's recommendations fall into three groups:

(1) changes aimed at improvements in the delivery systems for OW and child care which the City can implement independently;

(2) changes to Provincial programs and policies, funding arrangements or technological supports; and

(3) changes that require joint action on behalf of the Province and the City.

The implications surrounding the need for changes at the Provincial level, as well as the requirement for joint action to implement many of the report's recommendations, are discussed below and in Section III.

(I) OW Program: Findings and Recommendations:

Regarding the delivery of OW in Toronto, the Final Report found that the City is in compliance with the policy and program directives established by the Province. According to the consultant:

"We found that, as of the end of 1998, the City had not failed in any broad or obvious way to comply with the policy or program guidelines established by the Province for Ontario Works. Toronto Social Services (TSS)....is now providing a reasonably balanced program. Financial support appears to be available in a timely manner to eligible recipients. City management and staff consistently demonstrate a full and informed commitment to the objectives of Ontario Works."

As the report noted, City performance has accelerated dramatically in 1998, and full program implementation has been achieved. By year end, over 99,000 clients were actively participating in the OW program in Toronto.

Given that the Review's mandate was extended early on to concentrate on future program performance versus City compliance and competence, the report's findings and recommendations seek improvements in the overall OW program and the City's delivery system. To this end, changes affecting the program's design, notably the establishment of program targets, funding structures, delivery, and technology are proposed. These are summarized below.

(A) Program Design:

The report found that how program targets are set is particularly important. Currently, the OW program is structured in a manner that relies on process or activity targets (number of clients participating in the three program components - ES, CP, and EP). As a result, in the consultant's view, there may be insufficient emphasis placed on employment output targets. A greater emphasis on outputs, namely the number of clients finding employment and achieving financial independence from social assistance, is therefore proposed. Subsequently, the report delineates a number of ways in which funding and budget structures could be realigned to support this change.

By refining targets in this manner, it is expected that a better program balance will be achieved in the delivery system for staff and clients in terms of the importance of participation activities compared to employment outcomes. In addition, the consultant notes that these changes will allow the City to gain greater recognition and credit for its substantial success in placing people in employment.

In principle, the Department supports the report's directions in this area. Ultimately, Provincial endorsement of these directions would represent an important signal to the City in relation to its efforts to implement modifications to the OW delivery system envisioned by the consultant, and discussed in sub-section C below.

(B) Program Funding:

Three key issues are addressed related to program funding. First, the report indicates that increased funding flexibility, in terms of the ability to move unused funding between separate program streams (e.g., ES, CP and EP), would enable delivery agents to better achieve intended program goals and outcomes. Increasing flexibility in this area had previously been urged by municipalities, including Toronto.

The rules governing the way agencies are funded were found to be complex and highly detailed, and in need of streamlining. It was also noted that the Provincial funding formulas may not adequately recognize the real costs of delivering services faced by some agencies in Toronto. The report thus calls on the Province to formally modify the payment procedures for agencies, as well as to increase the level of payment to appropriate agencies as a means of supporting their ability to achieve increased employment outcomes. The Department supports these changes.

Finally, the consultant notes that there have been consistent delays in the approval of the City's OW budget by the Province related to a number of issues, including extensive Provincial oversight of budget submissions and the use of different fiscal years. This has presented additional difficulties in the smooth operation of the OW program in Toronto. Suggestions for developing an improved protocol for the budget approval process, and for establishing generally better communications between TSS and the Provincial Area Office, were put forward during the Review, with the aim of ensuring timely and consistent decisions in this area.

The report's principal findings in relation to the City focus on the need for changes to the OW delivery system to further improve its capacity to achieve agreed upon program outcomes. Indicative of the steps taken to date, according to the consultant, are the City's efforts to link clients with employment opportunities and employment related resources in the community, through "the excellent network of Employment Resource Centres" that have been set up, and through the City's ongoing collaboration with Human Resources and Development Canada (HRDC).

In the consultant's view, rigorous assessment of client employability is essential to realize improvements in the delivery system. To this end, the consultant stresses that TSS must employ more effective screening and assessment tools at the point of first contact with the client. The consultant also proposes that specific groups of clients undergo a comprehensive in-depth assessment at intake.

Based on this initial assessment, the consultant subsequently recommends that all OW clients be streamed, at point of entry, into one of at least three major categories based on their degree of employment readiness: employment ready clients; those who can become employment ready in a short time; and those who face serious barriers that will require a range of interventions over an extended period. A number of other changes which support this direction are also recommended.

The Department agrees with the general thrust of the Report's findings, and supports changes to the OW delivery system which will assist clients to find employment as rapidly as possible. Better screening and assessment are clearly pivotal. However, depending on client characteristics and barriers, and on service needs, different types and levels of screening and assessment are appropriate. Distinguishing the role for screening versus in-depth assessment at intake and other points in the client's service path will be crucial to successful implementation of the consultant's recommendations. At this point, an initial review of assessment and screening tools and processes used in employment oriented programs is underway. A further evaluation of assessment processes in particular will be undertaken as part of the Department's analysis of the consultant's proposals.

Improvements required at the local office level to expedite certain changes in the delivery system sought by the consultant are already being addressed by TSS. As an initial step, for example, program targets are being established for each local office, based on caseload composition. In addition, specific targets for key client groups are also being implemented at the office level.

Finally, TSS is currently examining the way the Division is organized centrally and at the local office level to deliver services. This process will provide the Division with a solid basis for responding to the consultant's recommendations, and position it to readily make changes that are needed to support the OW program as a whole, including income support and quality assurance responsibilities.

(D) Purchase of Service Relationships:

The Report observes that the City relies to a substantial extent on third party agencies to provide direct services to OW clients, and concludes that the way these agencies function is essential to the success of the program. However, a number of key issues are identified related to the need for greater simplification in Provincial guidelines covering agency relationships with delivery agents, as well as the need for more stringent accountability related to agency performance and for more sophisticated evaluation of agency outcomes and effectiveness. Recognizing the complexity and scale of the City's management responsibilities in relation to purchase of service agencies, the consultant concludes that improvements can be made to the way services are provided by agencies, and contracts administered by the City.

The Department is already taking steps to improve the way it works with agencies, including simplifying certain components of the service agreements TSS has negotiated with agencies. TSS has committed to performing evaluations of contracted agencies, as noted in the report, and will annually assess the performance of all agencies under contract against existing service contracts and program standards. Targeted in-depth reviews will enable the Division to work with agencies to make necessary improvements, as well as provide a means to share "best practices."

As noted elsewhere, joint City and Provincial action is again required to proceed with certain key changes recommended by the Review.

(E) Technology:

The report confirms that there are ongoing problems with the Provincial technology systems that the City uses to support the delivery of OW. These include the lack of integration between Ontario Works Technology (OWT) and Caseworker Technology (CWT); the fact that OWT is not user friendly; the lack of reliable reports generated by OWT; and OWT's inability to serve as a case management tool. The report notes these issues have been raised by a wide range of delivery agents, and that the City has previously documented its concerns with MCSS.

Ongoing interim improvements in OWT are noted and commended. However, with regard to the implementation of the report's core recommendations, the consultant stresses: "If new technology cannot be obtained, the success of the new system is in doubt and its implementation should be delayed until this is resolved." The Department endorses this position, but recognizes that incremental changes can be made with modifications to existing technology.

Summary:

Overall, the Department supports, in principle, the directions for change that are recommended in the Final Report. Through their recommendations, KPMG provides a viable argument for altering key facets of both the OW program and the City's delivery system.

However, it is also clear that without Provincial endorsement of the report's overall direction, plus a commitment to make changes in certain aspects of Provincial policy and funding arrangements, the City's ability to act on key recommendations related to the OW delivery system is restricted. The report specifically indicates that successful implementation depends on the following:

(a) development of necessary technological supports; and

(b) changes to key aspects of overall OW program funding arrangements, payment procedures involving contracted agencies, as well as necessary Provincial approvals required in other critical areas.

(II) Child Care Findings and Recommendations:

(A) General Findings and Recommendations:

With regard to child care, the report confirms that child care is a critical support to the success of the Ontario Works Program. The report goes on to say that "access issues are the main child care problem brought to light" and asserts that "the cost of care, the types of options available, their uneven distribution across the City and the availability of subsidies to assist families requiring financial support pose challenges for the child care system in general and the OW program in particular". While the report also confirms the City's claim that the current supply of child care is insufficient to meet the current service demand and that service demand will only increase with the continuing successful implementation of Ontario Works, it stops short of acknowledging the validity of the City's estimate of child care required to support a mature OW program. The report suggests that more comprehensive analysis of both supply and demand is first required.

The report's findings also identify a need for more part-time care and a broader range of service options including non-licensed care but acknowledge that revisions in provincial legislation and policy are needed to support some of the changes proposed by the review. Finally, the report acknowledges that the City is currently administering the child care strategy for Ontario Works in accordance with the Business Plan originally approved by both the City and the Province. Any changes in child care service strategy in support of the Ontario Works Program will require amendments to that Business Plan.

The recommendations pertaining to child care which flow from these findings propose the following:

(a) an independent joint review to undertake a more complete and comprehensive analysis of both child care supply and demand;

(b) modification of the level of child care entitlement of Ontario Works clients to more closely reflect the level of their current OW participation requirements; and

(c) more unrestricted access by Ontario Works clients to non-licensed care options should that be their first service choice.

In addition to these recommended directions which are intended to enhance the effectiveness with which available child care resources are used to support OW clients, the report also makes recommendations related more specifically to the transfer of system management responsibility for a broader range of child care programs to the City. The report recommends that the City avoid a perceived conflict of interest between its role as a direct service provider and a service system manager.

As with the OW recommendations discussed above, many of the key recommendations pertaining to child care require enabling action by the Province before recommended action by the City can even be considered.

(III) Next Steps:

The Department's overall assessment of the Final Report of the Operational Review is that the City's ability to implement core recommendations related to the delivery of Ontario Works and child care depends to a great degree on Provincial decisions in key areas. In this light, and given the interdependencies among the recommendations contained in the report, the Department strongly endorses the consultant's position that the Province and the City of Toronto work closely to implement the recommendations contained in the Final Report. Similarly, the Department concurs with the consultant that it is crucial for "the Province and the City to develop a joint work plan, spelling out their common objectives".

Pending Provincial endorsement of the report's overall direction, the Department will, with Provincial officials, establish a joint work plan which identifies mutually agreed upon priorities for implementation, and which organizes the two jurisdictions' efforts to accomplish these. It should be noted that while certain recommendations could be implemented in the near term, other changes will require a longer implementation time frame. A report will be provided to City Council describing the key features of this work plan.

In the course of developing the work plan, the Department will assess the major implications of the report's recommendations for the funding and delivery of OW and Child Care in Toronto, as well as determine the impacts on staff resources within TSS and the Children's Services Division. The Department will subsequently bring forward further reports detailing the critical issues in these areas.

The Department will begin to carefully examine those recommendations that the City can implement independently and proceed to make changes that will improve program performance.

Conclusion:

The Operational Review process and the consultant's Final Report highlight and give added recognition to the complexity of administering the OW program in Toronto. Extension of the Review's mandate to focus on ways in which overall program performance, as well as delivery of OW and child care in Toronto, could be improved was a positive decision. The Department believes the process itself, which involved close co-operation between City and Provincial staff throughout, has provided both parties with a better understanding and appreciation of key program, policy and service delivery issues. It is anticipated that this will provide a solid basis from which to move forward to meet common program objectives.

The Department supports in principle the proposals for improvements to the OW program recommended in the Operational Review. However, it is evident that Provincial endorsement of these directions is necessary prior to proceeding with implementation. Similarly, it is imperative, as noted in the Final Report, that an action plan for implementing the proposed changes be developed jointly by City and Provincial officials.

As a delivery agent, the Department is committed to making changes to the City's child care and OW delivery systems which will both strengthen their capacity to achieve key program objectives, and increase effectiveness and efficiency. To this end, the Department will build on the work currently underway in TSS and Children's Services to address key issues raised, and recommendations made, by the consultant. In the longer term, the Department will continue to work with the Province to achieve maximum results within the existing policy and funding framework.

Contact Names:

Heather MacVicar, General Manager, Social Services Division, Tel: 392-8952

Marna Ramsden, General Manager, Children's Services Division, Tel: 392-8128

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Appendix 2

Senior Advisory Committee Members:

- Kevin Costante, ADM, Program Management - Chair

- Bonnie Ewart, ADM, Social Assistance and Employment Strategies

- Marilyn Renwick, Area Manager, Toronto Area Office

- Ann Masson, Director, Child Care Branch

- Dan Lafranier, Area Manager, Northern Area Office

- Shirley Hoy, Commissioner, Community and Neighbourhood Services, City of Toronto

- Marna Ramsden, General Manager, Children's Services Division, City of Toronto

- Eric Gam, Executive Director, Social Development Division, City of Toronto

- Heather MacVicar, General Manager, Social Services Division, City of Toronto

- Bob Glass, Project Director

Steering Committee Members

- Bob Glass, Project Director, Chair

- John Wilson, Senior Policy Analyst

- Ron Hikel, Partner, KPMG

- Cliodhna McMullin, Director, Employment Programs Branch

- Andre Lafantaisie, Manager, Financial and Information Systems

- Karen Meehan, Program Supervisor, Toronto Area Office

- Marilyn Renwick, Area Manager, Toronto Area Office (ex officio)

- Jack Ray, Manager, Children's Services Unit, Toronto Area Office

- Eric Gam, Social Development and Administration, City of Toronto

- Bill Mairs, Social Services Division, City of Toronto

- Petr Varmuza, Children's Services, City of Toronto

(A copy of the Appendices 1 and 2 referred to in the foregoing report was forwarded to all Members of Council with the agenda of the Community Services Committee for its meeting on October 7, 1999, and a copy thereof is on file in the office of the City Clerk.)

________

Councillor Olivia Chow, Downtown, appeared before the Policy and Finance Committee in connection with the foregoing matter.

(Councillor Joe Pantalone declared his interest in the foregoing Clause, in that one of his children is registered in a day care centre which has a purchase of service agreement with the City of Toronto.)

(Councillor Pantalone, at the Council meeting on October 26 and 27, 1999, declared his interest in the foregoing Clause, in that one of his children is registered in a day care centre which has a purchase of service agreement with the City of Toronto.)

(Councillor Ashton, at the Council meeting on October 26 and 27, 1999, declared his interest in the foregoing Clause, in that his daughter is registered in a non-profit child care centre.)

Learning, Earning and Parenting (LEAP)

(City Council on October 26 and 27, 1999, adopted this Clause, without amendment.)

Recommendation:

The Community Services Committee on October 7, 1999, recommended to the Policy and Finance Committee:

(1) the adoption of the report dated September 30, 1999, from the Commissioner of Community and Neighbourhood Services respecting the Learning, Earning and Parenting (LEAP) Program; and

(2) that the provincial Ministry of Community and Social Services be advised that the City of Toronto will not implement the LEAP Program until such time as an adequate response has been received from the Province of Ontario through discussions of the KPMG recommendations on the implementation of Ontario Works, and the impact on child care services.

(Report dated September 30, 1999, addressed to the

Community Services Committee from the

Commissioner of Community and Neighbourhood Services)

Purpose:

This report discusses Learning, Earning and Parenting ( LEAP), a mandatory Provincial program that will be delivered by municipalities under the Employment Supports (ES) component of Ontario Works (OW). An initial overview of the program's key features is provided. Funding and service delivery implications for the City of implementing the program are identified, and initial implementation steps are described.

Financial Implications:

Mandatory changes to the Employment Supports stream of OW under LEAP recently announced by the Province will be cost-shared on an 80/20 Provincial/Municipal basis. Toronto Social Service's (TSS) and Children's Services year 2000 budget submissions incorporate costs associated with delivering LEAP. No funds will be required in 1999.

Recommendations:

It is recommended that:

(1) City Council endorse the proposed direction for delivering LEAP in Toronto;

(2) funds for LEAP be included in the year 2000 budget requests of Toronto Social Services and Children's Services in the amounts of $1.89 million gross/$378,000.00 net and $4.00 million gross/$800,000.00 net respectively; and

(3) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Background:

The Province announced its intention to introduce the LEAP program in the 1998 Ontario Budget. Provincial guidelines, intended to be used in conjunction with Ontario Works Directives, were received in Toronto in March 1999. LEAP is a mandatory Provincial program that will be delivered by municipal OW delivery agents.

LEAP is targeted at young parents between 16 and 21 years of age on social assistance, and provides a range of supports to enable them to meet their educational, employment and parenting objectives. It has two primary objectives:

(1) to encourage young parents to complete high school; and

(2) to assist young parents improve their basic parenting skills.

As per Provincial guidelines, the City will forward a business proposal regarding its approach to delivering LEAP to the Ministry of Community and Social Services' (MCSS) Toronto Regional Office. Program implementation will commence in late 1999. Service targets and performance requirements for this new program feature will be integrated into the City's OW Business Plan.

This report initially provides an overview of the main features of the program. Funding, child care and program management implications of delivering the program are identified. Initial steps taken by Community and Neighbourhood Services to implement the program are also discussed.

Discussion:

(I) An Overview of the Main Features of LEAP:

LEAP Target Group:

As per the Provincial LEAP Guidelines, the LEAP caseload will be comprised of mandatory and voluntary participants. Mandatory participants are parents in receipt of OW, aged 16 and 17, who have not completed high school, while voluntary participants are parents, aged 18-21, who have not completed high school.

In Toronto in 1999, there are just under 200 participants per month in the 16 and 17 year old age group. In turn, there is an average of approximately 200 very young children in these families. The municipality must ensure that these parents attend high school and receive assistance to improve parenting skills. At the same time, the municipality must support the provision of flexible child care while the parent is in school. A range of other supports can also be provided (e.g., school supplies).

Parents between the ages of 18 and 21 may also participate in LEAP, but participation is on a voluntary basis. It is estimated that there are approximately 1,600 parents per month in the voluntary group. They may also access supports, including child care, to facilitate their participation. In August, there were 1,953 dependent children in the voluntary group, of which 1,755 were under the age of 5, and 198 between the ages of 5 and 6.

It is estimated that, in year 2000, on average a maximum of 700 participants will be involved in the program each month. However, it is difficult to project the number of voluntary participants who will participate in the LEAP program. Participation rates will depend both on client interest, and on availability and access to child care.

Deferrals can be granted to clients for maternity leave for the earning and learning elements of LEAP, although participants with newborns will be expected to focus on the parenting and child development element. Eligible LEAP participants may also have their participation requirements deferred if they are ill or if they cannot access appropriate child care.

LEAP Program Components:

(1) Learning:

Participants are required to regularly attend an educational program leading to a high school diploma. Individual service plans must be sensitive to the individual's barriers to school success, such as the need to attend an alternative school or adult education program versus a traditional high school program, the phasing in of attendance if needed to build confidence, or attention to language or disability.

(2) Earning:

LEAP participants will access the full range of employment measures. These may include: Co-op education program, apprenticeships, part-time summer employment, job shadowing, the Provincial Job Connect program and Summer Employment Strategy, or Community Placement positions. As participants approach graduation, an appropriate plan for the transition to work or further education must be developed in conjunction with the client.

(3) Parenting:

Parenting and child development programs need to be scheduled at times convenient for parents, and focus on the needs of the target group as well as provide a full range of activities specified in the guidelines. Individual service plans will set out specific activities appropriate to individual participants.

Upon high school graduation, a parent may receive a $500.00 bursary if they are proceeding to post secondary education, or may opt to place the $500.00 in trust for the education of the child(ren). A parent must attend a minimum of 35 hours of parenting/child development programming to be eligible for this incentive.

Program Management:

Delivery agents must manage overall development and delivery of the program for their area of responsibility, work with community partners to develop implementation plans, deliver and/or co-ordinate delivery, ensure a focused seamless continuum of service, provide case management, and monitor and report on outcomes. Additional personalized support for the target group may be purchased as necessary.

(II) Funding Delivery of LEAP:

There is specific funding available from the Province to deliver LEAP. However, delivering the program will impact on existing funding envelopes under both the City's OW and child care programs. This section discusses how the City will fund LEAP services, including child care, and articulates the City's position regarding the level of LEAP funds required in Toronto. The implications of the proposed LEAP funding model on the City's child care system are also identified.

(a) Redirecting Existing Employment Related Expenses (ERE) Funding:

LEAP is a targeted strategy under the ES component of OW which uses supports provided through the OW program. In many cases, supports provided to LEAP participants, including transportation, school supplies, and money for other school related activities, will be funded through the existing Employment Related Expenses (ERE) envelope under ES. It is estimated that $1.2 million gross, $240,000.00 net will be redirected to support LEAP participants out of the $4.169 million gross, $833,860.00 net budgeted under ERE for the year 2000. Detail about the specific supports available to clients under ERE is provided in section (III).

(b) New Funding Under LEAP:

LEAP funding is intended to complement existing OW funding and not to duplicate existing services. Cost-sharing is on an 80 Provincial/20 Municipal basis. Funding is outcome based with agreed upon service levels, and will be recovered if service levels are not met.

In the LEAP Guidelines, issued in late March, the Province initially indicated that up to an average of $4,500.00 per participant per year would be available to all delivery agents to support program delivery, plus an additional $500.00 per participant to cover bursary costs. Upon receipt of further LEAP program information from the Ministry in August, TSS learned MCSS' Regional Offices will, in fact, negotiate an average per participant per year cost with each delivery agent. The maximum amounts available per participant will vary based on a set of criteria, which assess the maturity of the municipality's existing community-based services and institutional infrastructure, as well as the availability of child care funding to support the program's objectives.

In Toronto, since the community based and institutional infrastructure is well developed, direct services (e.g., parenting courses) for LEAP participants are to be provided through the existing community-based social services sector, and through the wide range of provincially funded health, education and mental health services available. As a result, there will be no additional funding for new services, and very limited scope to expand existing service capacity. In addition, no new funding will be available to agencies other than through the purchase of services in specific situations. However, LEAP funding is available to the City to provide specialized supports on a case by case basis, dependent on client need. These supports include: tutoring, specialized services (e.g., Family Counselling), respite care in situations where parents need time to study after school hours, graduation fees, etc.

With reference to the criteria being used by the Province to determine what level of funding will be available to delivery agents, it would appear that Toronto is considered to have a well developed direct service infrastructure. As such, it is the Department's understanding that the City will potentially receive up to $2,500.00 per participant per year under LEAP. However, the final funding level available to the City remains to be negotiated with the MCSS Toronto Regional Office.

Based on projected client participation rates for year 2000, TSS has budgeted $1.75 million gross, $350,000.00 net for provision of specialized supports under LEAP. TSS has also budgeted $140,000.00 gross $28,000.00 net to cover the costs of the $500.00 bursary that is provide to clients who complete high school.

The introduction of LEAP will have significant implications for the child care system in Toronto, notably related to required funding levels. The following section discusses the salient issues.

Historically, teen families have received child care through the City's regular subsidy system in order to pursue their high school education. The Department already has purchase of service agreements with many licensed child care programs located in or adjacent to high schools and specializing in service to this client group. Licensed home child care programs have also provided subsidized child care to these young families when this has been their first choice of care.

With the advent of LEAP, its mandatory requirements and its participation incentives, the Department projects an increase in the number of young families it will serve. According to Provincial Guidelines, LEAP participants are priority clients for OW child care, and must not be subject to any existing waiting list for subsidized care, nor charged user fees. Supports must continue beyond high school graduation as long as the participant is considered a person in need under The Day Nurseries Act.

Potentially, an estimated 200 young children per month could require child care. In a full year of operation, given the cumulative addition of approximately 36 new young children per month, as many as 450 children of mandatory participants and up to 2,100 children of voluntary participants may require child care support under LEAP. Providing ongoing child care to these participants would more than exhaust the child care resources currently provided under the Ontario Works initiative. This would significantly impact the City's continuing ability to meet the child care needs of other OW participants who are engaged in employment, education or community participation.

At this time, the cost of serving the significantly younger children of teen families is already having a financial impact on the City. Whereas the Children's Services Division's 1999 budget for the OW funded and regular child care subsidies assumed an average unit cost of approximately $7,000.00 per year, the average unit cost of serving the infant and toddler children of potential LEAP participants is $12,000.00 per year. Therefore, even if available LEAP funding was used to cover the cost differential of the care for the children of the projected 450 mandatory participation clients, the added cost of service would be $2.2 million per annum.

In addition, because LEAP clients will not be required to pay any user fees, there will be a future revenue loss to the City of up to $750,000.00 annually assuming child care is provided only to the 450 projected mandatory clients.

There are other potential cost implications with delivering LEAP. For example, one cost-effective way in which child care might be provided to allow homework completion, or participation in parent education activities, would be to extend the hours of service in the child care centres located in high schools and by the providers working through a licensed child care agency. Such costs would be in addition to the top up to cover the cost differentials mentioned above and will require further discussion and negotiation with the Ministry.

Depending on the actual utilization of the LEAP program, the City could also be faced with expanding its supply of both licensed and non-licensed care services for infants and toddlers. The average cost of renovating to serve infants and toddlers is approximately $6,000.00 per space. As part of its negotiation with the Ministry regarding LEAP funding, the City should also be including some recognition of these minor capital costs. Increased funding support to family resource programs currently managed as part of the City's child care portfolio is another way to augment care and support alternatives for teen families.

Provision has been made in the year 2000 Children's Services budget request for $4.0 million (gross) in additional funding ($.8 million net) to supplement the existing child care funding available through both OW and the regular subsidy stream to meet the child care needs of the anticipated LEAP participants.

(d) Transitional Funding:

One hundred percent Provincial transitional funding is available for implementation plan development, communication, and staff training, estimated at $78,350.00.

(III) Delivering LEAP in Toronto:

Initial Planning:

LEAP service delivery strategies were initially developed jointly by senior staff from TSS and the Children's Services Division. Implications for the existing service delivery system, as well as new demands, were identified. The need for an assessment of client circumstances was also identified. The results from this assessment are discussed below.

TSS also initially met with a number of service providers, identified primarily as a result of MCSS's orientation to local service deliverers in May. These included Toronto Public Health (Healthy Babies, Healthy Children), the Toronto District School Board, Young Parent Resource Centres, parent/child programs, and local providers of mental health services. Other municipalities and Departmental staff have also provided information on service requirements, availability of gaps in service and/or potential ways to deliver the services specified in LEAP. Further input will be obtained from other service providers, including child care providers.

As noted above, potential LEAP participants were contacted to identify current activities of the target group and to explore future client activities and potential child care needs. Information was obtained from ninety-one 16 and 17 year old clients, plus over two hundred and fifty 18 to 21 year old clients.

The majority of those contacted were female single parents. Of the 16 and 17 year old group, 4 percent of the respondents were working part-time, while 56 percent were attending or had attended school full-time in the previous school year. Of those who had child care, it was almost evenly provided through licensed and informal care. Sixty-eight percent reported that they had been given some parenting instruction, primarily from their school, a community agency or Toronto Public Health, in that order.

In the 18 to 21 year old group, 7 percent of the respondents were working part-time, while only 36 percent were attending or had attended school full-time in the previous school year. Again, child care was almost evenly provided through licensed and informal care. Fifty percent of the parents contacted indicated that they had been given some parenting instruction, primarily from their school, a community agency or Toronto Public Health, in that order. Significantly, 81 percent of the younger group and 79 percent of the 18 to 21 year old group indicated that they would be interested in returning to school in the fall.

Service Delivery Approach:

The Department's approach to serving LEAP participants builds on the existing OW delivery system, which involves close and ongoing collaboration between TSS and Children's Services. Since direct services under LEAP can be provided through existing community-based agencies and institutions, the Department's central service delivery and program management role will be to co-ordinate access to required services, and to ensure necessary supports are provided to clients to facilitate successful completion of their learning, earning and parenting goals. To that end, overall OW case management will be provided through TSS caseworkers and Children's Services child care brokers.

LEAP will require that the Department take on a number of specific responsibilities as follows:

(1) one-stop client shopping for services and supports which facilitates access to appropriate child care, integrating LEAP delivery with the existing OW structures and processes within TSS and co-ordinating with child care delivery structures within the Community and Neighbourhood Services Department;

(2) ensuring that flexible respite supports are available to assist clients with examination preparation, homework, parenting activities and for emergency parent relief;

(3) providing for children with special needs, and for when the child is ill;

(4) helping teen parents to choose the most appropriate child care option during the service planning process;

(5) ensuring access to the full range of supports needed to facilitate attendance at school, inclusive of access to transportation;

(6) enabling clients to obtain funds for a range of supports (e.g., school supplies, clothing, trips, graduation fees, tutoring, additional child care, computer lending libraries, fees for recreational activities, and other positive reinforcements), and/or to obtain counselling for depression, low self-esteem, substance abuse, family violence or securing safe, or affordable housing; and

(7) ensuring effective linkages between LEAP and programs delivered by Toronto Public Health.

(a) TSS's Program Delivery Role:

Currently, TSS employs a case management approach to delivering services to youth on OW. Enhancing this case management capacity represents the most practical way to deliver LEAP in Toronto, given that there is already a well developed network of agencies and institutions available to directly provide needed services to clients. This approach is characterized by a strong focus on service co-ordination among service providers, and frequent contacts with clients.

TSS will deploy specialized caseworkers who will receive additional training to understand the circumstances facing young families. Caseworkers will work closely with young parents to achieve their educational and employment goals, ensuring access to necessary community supports.

Using this approach, public sector and non profit agencies who are already involved with social assistance clients will be able to work closely with caseworkers to keep track of client progress and attendance. Through improved collaboration with service providers, TSS caseworkers will quickly be advised when access to LEAP supports are needed and will be able to respond accordingly. Overall, caseworkers will play a crucial role as liaisons between and amongst clients, the child care system, the educational system, child welfare authorities, public health, the medical community, etc.

From an overall OW program management perspective, TSS will be responsible for ongoing OW program administration, monitoring participation requirements, developing and supporting community linkages, and documenting outcomes.

(b) Child Care Delivery:

Child Care Brokers from the Children's Services Division, who are located in each local OW office, will discuss with young parents their child care options as part of the service planning process and will assist LEAP participants to access formal child care spaces or access funding for their informal care arrangements, depending on the service option chosen. Children's Services will be responsible for assessing child care and family support needs, providing information regarding care and support options available and referring participants to the required resources as necessary.

However, the introduction of LEAP poses key policy and service level challenges for the City in addition to the significant funding implications noted above. Most notably, there are substantial implications for other clients requiring care and eligible for subsidy support.

The Provincial priority attached to LEAP clients makes them an exception to the City's "First come, first served" admission policy. The expected utilization of this new program will potentially limit the access of other OW clients to timely child care support. The LEAP requirement that subsidized child care support for these young families continue beyond their original entitlement through LEAP will eventually also begin to limit the access of other families, both full fee paying and those eligible for subsidy support. The LEAP program will have a major impact on the future availability of infant and toddler care in particular. Based on the City's birth statistics, it is interesting to note that there are potentially up to 5,000 young families who are not on social assistance but do fall into the same age group covered by LEAP and who may also require but not be able to readily access child care support.

Thus while the Department supports the objectives of the LEAP initiative and agrees that high quality child care is a critical support to the overall program success, the current stock of care options and the current level of subsidy available to the City are inadequate to both meet the needs of LEAP and continue to meet the needs of other OW clients and families qualifying for regular child care subsidy.

Mandatory/Voluntary participants of LEAP will have access to services, offered by one or more of the following primary service providers:

(1) Child Care and Family Resource Programs;

(2) Public Health;

(3) Young Parent Resource Centres;

(4) Parent and Child Programs; and

(5) Educational Institutions.

Services will be also obtained from other service providers as required, including mental health agencies, addictions and family counselling agencies, etc.

LEAP participants can enter this network of services through a range of paths, including self referral, or referrals from health care professionals, Public Health programs (e.g., Healthy Babies, Healthy Children), child protection services and TSS.

(IV) Implementing LEAP:

The initial target group are those clients whose participation is mandatory. In addition to the planning steps taken above, the first priority for clients whose participation is mandatory was deemed to be access to licensed child care. As part of what was known as the Student Child Care Initiative (SCCI), established by the former Metropolitan Toronto in 1989, admissions to child care subsidy have been timed to coincide with the onset of each new school semester or school term. So, in anticipation of the implementation of LEAP in Toronto, 76 children of teen clients who would qualify for mandatory participation in this program have already been admitted to subsidized child care this fall. Eight more clients have children waiting for an appropriate licensed vacancy so placements can be made. Twenty-seven clients have made their own child care arrangements with relatives and have not identified associated child care costs.

Prior to program implementation, Departmental staff will also assess the need for support services beyond those currently being provided, and ensure that ancillary supports are in place. Clients not already participating in one or more program component will be linked to identified networks.

Departmental staff will continue to meet with stakeholders, including community child care providers, and providers of the Healthy Babies, Healthy Children program, to determine how service co-ordination can best be achieved, and to further determine the range of services required to support LEAP participants. LEAP will be continuously refined as experience is gained in program delivery. This will include improving access to existing service networks, developing or refining service protocols as necessary, identifying and maintaining an inventory of appropriate community resources and refining referral processes.

Current delivery structures in the form of specialized caseloads for youth 16 and 17, and for clients up to 21 years of age, are already in place in many local OW offices. LEAP implementation will require further identifying the characteristics of potential participants, including: parental status (single parent/two parent families), children's age(s), educational needs, and whether clients are currently accessing/not accessing services.

At this point, therefore, it is still not possible to accurately estimate program up-take for the voluntary client group. It must also be noted that participation among these families will be contingent upon access to appropriate child care supports.

Conclusion:

LEAP potentially affects a small group of mandatory clients, with about two hundred 16 and 17 year old parents required to participate on a monthly basis. Nonetheless, by extending needed services to this potentially vulnerable and at risk client group, LEAP's introduction will mean that the City will be better able to provide young clients with a wider range of service choices.

In Toronto, obtaining the maximum funds available under the LEAP program will be critical to support the provision of appropriate and required child care. However, even with additional funds available under LEAP, there are significant implications for the City's child care system related to the implementation of the program. It is critical that these issues be addressed in the City's negotiations with the Province.

Contact Names:

Heather MacVicar, General Manager, Social Services Division, Tel: 392-8952.

Marna Ramsden, General Manager, Children's Services Division, Tel: 392-8128.

________

Councillor Olivia Chow, Downtown, appeared before the Policy and Finance Committee in

connection with the foregoing matter.

(Councillor Ashton, at the Council meeting on October 26 and 27, 1999, declared his interest in the foregoing Clause, in that his daughter is registered in a non-profit child care centre.)

Mandate and Budget Allocation for Mayor's

Homeless Initiative Reserve Fund

(City Council on October 26 and 27, 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 (October 7, 1999) from the City Clerk:

Recommendation:

The Community Services Committee on October 7, 1999, recommended to the Policy and Finance Committee the adoption of the report dated September 23, 1999, from the Commissioner of Community and Neighbourhood Services proposing a mandate and budget allocation for the Mayor's Homeless Initiative Reserve Fund, subject to amending the mandate to provide that City-initiated initiatives also be eligible for funding from the Mayor's Homeless Initiative Reserve Fund.

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(Report dated September 23, 1999, addressed to the

Community Services Committee from the

Commissioner of Community and Neighbourhood Services)

Purpose:

This report proposes a program mandate for the Mayor's Homeless Initiative Reserve Fund. It also proposes a first allocation to the Fund, based on underspending in social housing subsidy.

Funding Sources, Financial Implications and Impact Statement:

The funding source for the transfer into the new Mayor's Homeless Initiative Reserve Fund is the savings generated through lower social housing mortgage payments in 1999, compared to the provision for such payments within the Provincial Housing Download area of the approved 1999 operating budget for the Shelter, Housing and Support Division.

The Finance Department concurs with the recommendations for funding this reserve in 1999.

Recommendations:

It is recommended that:

(1) (a) the Chief Financial Officer and Treasurer be authorized to create a Mayor's Homeless Initiative Reserve Fund, in accordance with Recommendation No. 16 in the approved 1999 Operating Budget for the Shelter, Housing and Support Division;

(b) Council approve an initial amount of up to $5 million to be transferred to the Mayor's Homeless Initiative Reserve Fund in 1999, from the 1999 Provincial Housing Download savings within the Shelter, Housing and Support Division's 1999 Operating Budget, contingent on the realization of such savings; and

(c) the Commissioner of Community and Neighbourhood Services report to Council for approval of any further transfers into the Mayor's Homeless Initiative Reserve Fund that the Commissioner deems necessary;

(2) the following mandate be approved for the Mayor's Homeless Initiative Reserve Fund:

(i) to help stabilize the housing of homeless people or those in identified high-risk groups, by providing one-time capital support to suitable projects that have short timeframes to completion;

(ii) to combine with federal capital funding, in the event that federal housing or homelessness capital funding announced within the timeframe of fiscal 1999/2000 requires a City contribution;

(iii) the Commissioner of Community and Neighbourhood Services report to Council on all expenditures from the Mayor's Homeless Initiative Reserve Fund on a regular periodic basis; and

(iv) such funding to be administered by the Commissioner of Community and Neighbourhood Services, in consultation with the Chief Financial Officer and Treasurer, in accordance with the Process for Project Development and Funding Approval set out in this report, including Council approval being required for each specific allocation from the fund in excess of $25,000.00;

(3) the Commissioner of Community and Neighbourhood Services and the Chief Financial Officer and Treasurer report back at the appropriate time with updated information on 1999 underspending in the Provincial Housing Download; and

(4) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

Council's approval of the 1999 Operating Budget for the Shelter, Housing and Support Division included adoption of the following motion, intended to ensure that savings arising in the Provincial Housing Download (the City share of pooled GTA social housing subsidy costs) be redirected to housing and homeless needs in the face of mounting problems in those areas: "Any savings from the Mortgage Renewal Portfolio (beyond the existing budget) be transferred to a Mayor's Homeless Initiative Reserve Fund, for 1999 only, the use of this fund to be reported on and be subject to City Council approval."

Council, at its meeting of July 27-30, 1999, requested that staff report back by October on funds that could be made available as a result of underspending in the Provincial Housing Download.

Council, also in July, adopted a report identifying the Mayor's Homeless Initiative Reserve Fund as a likely source of City funds for the proposed "Add-a-Suite" incentive program. The program would assist home-owners to install or upgrade second suites, and was endorsed in principle by Council with a proviso restricting it to owner-occupied residences. Council directed that federal and provincial funding be sought first.

As the City is still awaiting a response on federal funding, this report proposes that the Mayor's Homeless Initiative Reserve Fund be used for immediate responses directly related to homelessness.

Proposed Mandate for the Mayor's Homeless Initiative Reserve Fund:

The intended purpose of the Mayor's Homeless Initiative Reserve Fund was to redirect housing spending back toward purposes that would alleviate the crisis of affordable housing and homelessness. The uses for the money should provide some quick results.

The Add-a-Suite proposal is now on a delayed timeline for two reasons. Firstly, it is linked to the by-law amendments permitting second suites as-of-right, on which an Ontario Municipal Board hearing is not expected until winter or spring 2000. Secondly, the City is still awaiting a response from the federal or provincial governments to letters seeking funding, sent by the Mayor following the July Council motions. There have been indications that there may be some short-term response from the federal government on homelessness within the 1999/2000 fiscal year. Added RRAP funding, possibly including eligibility of "add-a-suite" type of work, may be a possibility. Any such response is not likely until later in the fall or winter.

It is therefore necessary to identify some near-term priorities for the Fund.

The proposed mandate of the Mayor's Homeless Initiative Reserve Fund is to provide some immediate responses to the needs of homeless people in the City, as follows:

(1) Immediate Priorities:

(i) The Mayor's Homeless Initiative Reserve Fund will provide one-time capital support (which may include some ancillary project planning or pre-occupancy staff costs).

(ii) Priority will be given to projects which help homeless people move toward stable housing, with a focus on people who are hostel users or street homeless or are in high-risk groups as identified by the Mayor's Homelessness Action Task Force.

(2) Broader Priorities:

The Mayor's Homeless Initiative Reserve Fund may be used to cost-share or stack onto any federal housing or homelessness capital funding that may be announced within the timeframe of fiscal 1999/2000, in the event that such City contributions are required.

(3) Process for Project Development and Funding Approval:

(i) Priority will be given to projects sponsored by community-based agencies and have short timeframes to completion, preferably between now and the end of the first quarter 2000.

(ii) The Shelter, Housing and Support Division will work with agencies in targeted sectors serving homeless and at-risk groups to formulate or invite suitable proposals.

(iii) Staff will report back seeking Council approval for each specific allocation from the fund in excess of $25,000.00.

Projects eligible as "immediate priorities" would include transitional housing for high-risk groups. Transitional housing is useful for homeless people whose problems go beyond simple lack of money and housing, and who cannot move right away into permanent housing. An example is described in the appendix to this report. More briefly, examples include "second stage" housing for abused women, where they can live for an interim period with higher support and higher security; transitional housing for homeless youth where they can acquire a tenancy record and get back into school or employment; or transitional housing where long-term homeless people can relearn the skills of keeping a home and unlearn the habits of the street.

The proposed mandate is distinct from, and complements, other City funding mechanisms. The existing Homeless Initiatives Fund is directed at services in areas such as homeless prevention, food, health and day programs for homeless people, and staff to help homeless people find housing. The existing Capital Revolving Fund for affordable housing will provide capital support to permanent affordable housing. By contrast, the Mayor's Homeless Initiative Reserve Fund will provide capital assistance to projects that assist homeless or at-risk people to move toward stable housing.

The short time frame means that projects are likely to be ones already in the planning stages. Projects will be sponsored by agencies in the community, not by the City. The City has been approached by a number of groups with proposals or ideas.

Allocation of Underspending to the Fund:

Savings continue to arise in social housing subsidy. Overall, approximately 45 percent of GTA social housing costs are for amortization of mortgages. Renewal (rollover) of mortgages for various projects continues to bring the benefit of current lower interest rates, reducing the subsidy required.

Staff of the Finance Department and the Shelter, Housing and Support Division have reviewed underspending in the Provincial Housing Download area. The Province, this spring, released a forecast of $241.9 million as the City's share of costs, or $7.4 million under the approved 1999 City operating budget of $249.3 million. This included a cushion for some rise in interest rates. Provincial staff are unable to provide an updated projection as of September, but informal contacts with provincial staff suggest that the earlier forecast is on track. This conclusion is also supported by the pattern of year-to-date (January-July) billings which, assuming no further reductions from 1998 billing levels in the remainder of 1999, would result in over $8 million underspending.

Based on this projected 1999 underspending of $7.4 million, it is reasonable to allocate $5 million to the Mayor's Homeless Initiative Reserve Fund at this time. Such an allocation reflects a cautious approach to underspending, and provides an allowance for unanticipated costs during the remainder of the year. This report recommends accordingly. Staff will report back as further information becomes available.

Conclusion:

The Mayor's Homeless Initiative Reserve Fund was established by Council to redirect savings in social housing subsidy toward alleviating the crisis of affordable housing and homelessness. This report proposes that the Fund be used for immediate responses directly related to homelessness. The City is still awaiting a federal response on funding for the Add-a-Suite program earlier proposed.

The recommended mandate for the Fund is to provide one-time capital to projects helping people move toward stable housing, focusing on homeless people and those in identified high-risk groups. This is distinct from the mandates of the Homeless Initiatives Fund (services, not capital) and Capital Revolving Fund for Affordable Housing (permanent housing). Priority will go to projects that can be funded by the end of first quarter 2000. One likely target is transitional housing, for people whose problems go beyond money and who cannot move directly into permanent housing.

The Mayor's Homeless Initiative Reserve Fund may also be used to cost-share or stack onto any federal housing or homelessness capital funding that may be announced within the timeframe of fiscal 1999/2000, in the event that such City contributions are required.

Funding will be administered by the Commissioner of Community and Neighbourhood Services, in consultation with the Mayor's Office and Chief Financial Officer and Treasurer. Staff will report back seeking Council approval for each specific allocation from the fund in excess of $25,000.00, and on overall spending from the fund.

Based on a review of underspending in the Provincial Housing Download area, $5 million can be transferred to the Fund at this time. Staff will report further on projected additional underspending once firmer information is available.

The Mayor's Office and the Finance Department concur with the recommendations of this report.

Contact Name:

Joanne Campbell

Tel: (416) 392-7885/Fax: (416) 392-0548

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Appendix

Features of Transitional Housing, Citing the Example of a Project for Aboriginal Youth:

(a) The project serves a particular client group, in this case Aboriginal Youth. It would be operated by a community-based agency with experience and a solid track record providing services to that target group;

(b) The facility has higher levels of staffing than an ordinary housing project, reflecting the fact that the project is helping deal with much more than the housing needs of residents/clients. The facility is often smaller than an ordinary housing project, in order to foster closer relations among residents or with staff. In some cases, the project might involve collective living rather than separate apartments;

(c) Residents are referred from the hostel system and stay in the transitional housing for typically 12 to 18 months. Workers at the hostel and the transitional housing facility are acquainted with each other and suitable applicants can be selected;

(d) Residency is tied to participation in programs described here, to deal with non-housing issues that contributed to the person's homelessness;

(e) Emphasis is placed on completing high school and/or enrolling in an employment training program;

(f) Residents have ready access to a variety of other programs. These could include peer support, alcohol/drug programs, personal counselling, crisis intervention, etc. These can enable the person to deal with incidents or problems that would otherwise land them on the street again, and make sure they leave the streets permanently, not just temporarily. Programs may be operated by the sponsor agency, or through links that are established with other agencies;

(g) Living at a transitional housing project gives people who have been on the street for some time a period to develop the habits of paying rent (or room and board) regularly, getting along with neighbours in a stable housing situation, and just keeping a home (shopping, cleaning, etc.). Unlearning the skills and habits of the street may be necessary to do this; and

(h) Setting up the transitional housing facility and the associated programs provides an opportunity to line up funding for the support service programs. In the case of Aboriginal youth, federal funding through HRDC (Human Resources Development Canada) and Indian Affairs would be leading potential sources;

Water Harmonization and Universal Metering

in the Former Cities of Toronto and Etobicoke

(City Council on October 26 and 27, 1999, amended this Clause by adding to Recommendation No. (4) embodied in the joint report dated June 30, 1999, from the Commissioner of Works and Emergency Services and the Chief Financial Officer and Treasurer, as amended by the Works Committee, the words "subject to the approval of the Capital Works Program", so that such recommendation shall now read as follows:

"(4) Council redirect the provision of $21.0 million contained in the 1999-2003 Capital Works Plan of the Water and Wastewater Program respecting Universal Metering to providing funding to the City's water efficiency programs, and that the Commissioner of Works and Emergency Services report to the Works Committee in the fall of 1999 on a Water Efficiency Plan for the new City and the use of these funds, subject to the approval of the Capital Works Program;".)

The Policy and Finance Committee recommends the adoption of the Recommendations of the Works Committee embodied in the following communication (October 6, 1999) from the City Clerk:

Recommendations:

The Works Committee recommends the adoption of the joint report dated June 30, 1999, from the Commissioner of Works and Emergency Services and the Chief Financial Officer and Treasurer, with the exception of Recommendations Nos. (7) and (10) which were previously adopted by Council (Clause No. 10 of Report No. 2 of The Works Committee, adopted by Council on July 27, 28, 29 and 30, 1999), subject to:

(1) deleting the word "voluntary" in Recommendations Nos. (1), (2) and (6) and inserting in lieu thereof the word "mandatory";

(2) striking out Recommendations Nos. (1)(ii), (1)(iii) and (1)(iv) and inserting in lieu thereof the following:

"1(ii) the flat rate water and sewer service charge be increased by 100 percent for customers who have received adequate notice (minimum three written notices) and have been provided with sufficient time to arrange for the mandatory installation of a water meter but continue to refuse to co-operate, and that the flat rate water and sewer service charges be increased by an additional 100 percent every year thereafter";

(3) striking out Recommendations Nos. (2)(i) and (3);

(4) striking out the words "three years" and "November 1, 2002" in Recommendation No. (2)(ii) and inserting in lieu thereof the words "three and one-half years" and "April 1, 2003" respectively;

(5) striking out Recommendation No. (2)(iii) and inserting in lieu thereof the following:

"(iii) the anticipated new revenue from the former City of Toronto, in the amount of $20.5 million from the three and one-half year deferral of decreases respecting metered customers, be used to fund the Universal Metering Program"; and

(6) deleting the words "and the metering incentives," in Recommendation No. (8);

so that the recommendations embodied in such report shall now read as follows:

"It is recommended that:

(1) with respect to the implementation of the Universal Metering Program, a mandatory program be implemented over a four-year period to convert the remaining 85,000 flat-rate accounts in the former City of Toronto and 1,500 flat-rate accounts in the former City of Etobicoke, subject to the following conditions:

(i) the City install water meters free of charge to homeowners and provide one water efficiency kit per home; and

(ii) the flat rate water and sewer service charge be increased by 100 percent for customers who have received adequate notice (minimum three written notices) and have been provided with sufficient time to arrange for the mandatory installation of a water meter but continue to refuse to co-operate, and that the flat rate water and sewer service charges be increased by an additional 100 percent every year thereafter;

(2) with respect to funding the Mandatory Meter Conversion Program:

(i) the rate decrease that would be realized by former City of Toronto's metered customers under the phased-in competitive rate structure be deferred for a period of three and one-half years, and effective April 1, 2003, the harmonized competitive rate structure be applied for metered customers in the former City of Toronto; and

(ii) the anticipated new revenue from the former City of Toronto, in the amount of $20.5 million from the three and one-half year deferral of decreases respecting metered customers, be used to fund the Universal Metering Program;

(3) the following be established as mandatory water meter installation criteria for the City to install a free of charge meter where no meter exists:

(i) homeowners who take out a plumbing permit to upgrade their household plumbing;

(ii) new home construction;

(iii) purchasers of properties which are on a flat-rate billing system agree, as a condition precedent to receiving a clearance letter from the City at the time of property ownership transfer, to having a water meter installed; and

(iv) as a condition of the City's Water Service Connection Repair Program, flat rate customers agree to having a water meter installed;

(4) Council redirect the provision of $21.0 million contained in the 1999-2003 Capital Works Plan of the Water and Wastewater Program respecting Universal Metering to providing funding to the City's water efficiency programs, and that the Commissioner of Works and Emergency Services report to the Works Committee in the fall of 1999 on a Water Efficiency Plan for the new City and the use of these funds;

(5) the Commissioner of Works and Emergency Services and the Chief Financial Officer and Treasurer prepare an annual report to the Works Committee and the Policy and Finance Committee on the annual progress and financial impact of the Mandatory Universal Metering Program, and recommend any modifications to the financing and/or implementation plan described herein;

(6) a public awareness program be carried out over a four-year implementation period of the Universal Metering Program at an estimated cost of $100,000.00 to inform homeowners of the benefits of a metered water supply, described herein;

(7) the Chief Financial Officer and Treasurer report to the Works Committee in the fall of 1999 regarding joint meter reading and billing opportunities and financing options for automated meter reading technologies; and

(8) the appropriate City officials be granted the authority necessary to give effect thereto."

The Works Committee reports, for the information of the Policy and Finance Committee and Council, having requested the Commissioner of Works and Emergency Services to submit a report to the Works Committee on a strategy with respect to absentee landlords that would include the following:

(i) special notification procedures, given that the owner is not located at the property;

(ii) an investigation of the feasibility of placing the project cost on the tax bill rather than the water bill for such owners; and

(iii) in the event that the owner refused and an increase in the flat rate were brought about, the placement of such increase on the tax bill rather than the water bill.

Background:

The Works Committee on October 6, 1999, again had before it a joint report (June 30, 1999) from the Commissioner of Works and Emergency Services and the Chief Financial Officer and Treasurer responding to Council's request for a report on funding and implementation options available for the water meter conversion program and the implications on water rates in the former City of Toronto.

The Committee also again had before it a communication (May 4, 1999) from the City Clerk advising that City Council, at its Special Meeting on April 26, 27 and 28, 1999, in adopting, as amended, Clause No. 1 of Report No. 8 of The Strategic Policies and Priorities Committee, headed "1999 Operating Budget", referred a motion by Councillor Prue with respect to a harmonized water rate structure to the Works Committee for further consideration and report thereon to Council.

The Committee also had before it a communication (October 6, 1999) from Councillor Mario Silva, Trinity Niagara, submitting motions with respect to the joint report dated June 30, 1999, entitled "Water Harmonization and Universal Metering in the Former Cities of Toronto and Etobicoke.".

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(Joint report dated June 30, 1999, addressed to the

Works Committee from the

Commissioner of Works and Emergency Services

and the Chief Financial Officer and Treasurer)

Purpose:

To respond to Council's request for a report on funding and implementation options available for the water meter conversion program and the implications on water rates in the former City of Toronto.

Funding Sources, Financial Implications and Funding Impact:

All options presented in this report continue to provide full funding for the water and wastewater program through the water and sewer rates. The 1999-2000 water and sewer rates for the former Cities of East York, Etobicoke, North York, Scarborough and York have already been adopted by Council (a four-year phase-in to the competitive rate structure), and as such, will not be affected by any of the options discussed in this report.

Funding in the amount of $21.0 million for the conversion of flat-rate accounts to metered service for the former City of Toronto is contained in the 1999-2003 Capital Works Program previously received by Council, however, this amount was held in reserve pending a resolution on an appropriate Universal Metering strategy. New funding sources for this conversion, such as that available through the deferral of decreases that would be realized by former Toronto water customers and/or a rate increase specific to flat-rate customers, will have a favorable impact on the 1999-2003 Capital Works Program Budget.

Recommendations:

It is recommended that:

(1) with respect to the implementation of the Universal Metering Program, a voluntary program be implemented over a four-year period to convert the remaining 85,000 flat-rate accounts in the former City of Toronto and 1,500 flat-rate accounts in the former City of Etobicoke, subject to the following conditions:

(i) the City install water meters free of charge to homeowners and provide one water efficiency kit per home;

(ii) as an incentive to installing a water meter, the flat-rate customers in the former City of Toronto and the former City of Etobicoke be eligible for a $60.00 subsidy towards the installation of a low-flow toilet;

(iii) on January 1, 2004, the rate charged to flat-rate customers in existence at that time be increased by 100 percent, and by a further 100 percent in each successive year; and

(iv) effective January 1, 2004, any flat-rate customers that have not voluntarily participated in the meter conversion program be required to pay for the cost of the water meter if the customer then so chooses to convert to a metered service;

(2) with respect to funding the Voluntary Meter Conversion Program:

(i) the rate charged to flat-rate customers in the former City of Toronto and the former City of Etobicoke be increased by:

(i) 5.0 percent effective January 1, 2000;

(ii) a further 10.0 percent effective January 1, 2001;

(iii) a further 15.0 percent effective January 1, 2002;

(iv) a further 20.0 percent effective January 1, 2003; and

(v) a further 100.0 percent effective January 1, 2004, and a further 100.0 percent in each subsequent year;

(ii) the rate decrease that would be realized by former City of Toronto's metered customers under the phased-in competitive rate structure be deferred for a period of three years, and effective November 1, 2002, the harmonized competitive rate structure be applied for metered customers in the former City of Toronto; and

(iii) the anticipated new revenue from the former City of Toronto, in the amount of $14.6 million from the three-year deferral of decreases respecting metered customers, and $11.6 million from the increases in flat-rate charges, be used to fund the Universal Metering Program ($21.0 million), and the balance be used to fund an incentive program directed at facilitating the conversion of residential flat-rate customers to metered service ($5.2 million or approximately $60.00 per residential flat-rate customer), and such an incentive program to include consideration of a subsidy towards low-flow toilets;

(3) a list of flat-rate customers requesting conversion to metered service be established on a first-come basis and tendered as a priority each year;

(4) the following be established as mandatory water meter installation criteria for the City to install a free of charge meter where no meter exists:

(i) homeowners who take out a plumbing permit to upgrade their household plumbing;

(ii) new home construction;

(iv) as a condition of the City's Water Service Connection Repair Program, flat rate customers agree to having a water meter installed;

(5) Council redirect the provision of $21.0 million contained in the 1999-2003 Capital Works Plan of the Water and Wastewater Program respecting Universal Metering to providing funding to the City's water efficiency programs, and that the Commissioner of Works and Emergency Services report to the Works Committee in the fall of 1999 on a Water Efficiency Plan for the new City and the use of these funds;

(6) the Commissioner of Works and Emergency Services and the Chief Financial Officer and Treasurer prepare an annual report to the Works Committee and the Policy and Finance Committee on the annual progress and financial impact of the Voluntary Universal Metering Program, and recommend any modifications to the financing and/or implementation plan described herein;

(7) the effective date for the first year water and sewer rates (of the four-year phase-in plan) for the former Cities of East York, Etobicoke, North York, Scarborough and York, be amended by changing the words "Effective September 1, 1999" to read "Effective November 1, 1999", to coincide with implementation of the new water billing system;

(8) a public awareness program be carried out over a four-year implementation period of the Universal Metering Program at an estimated cost of $100,000.00 to inform homeowners of the benefits of a metered water supply and the metering incentives, described herein;

(9) the Chief Financial Officer and Treasurer report to the Works Committee in the fall of 1999 regarding joint meter reading and billing opportunities and financing options for automated meter reading technologies;

(10) due dates for water billing be set at the discretion of the Treasurer, at least 21 days after the billing dates; and

(11) the appropriate City officials be granted the authority necessary to give effect thereto.

Council Reference:

At its meeting of April 26 to 28, 1999, during consideration of water rate harmonization, Council adopted Recommendation No. 233 of Report No. 8 of The Strategic Policies and Priorities Committee, respecting the phasing-in of the competitive rate structure for all of the former cities with the exception of the former City of Toronto, with the following amendment:

"The Commissioner of Works and Emergency Services and the Chief Financial Officer and Treasurer be requested to submit a joint report to the Works Committee, for subsequent submission to Council by the end of July 1999, on all funding options for the meter conversion program, such report to also consider the issue of freezing water rates in the former City of Toronto."

This report also addresses issues raised by the Works and Utilities Committee and the Toronto Community Council respecting the implementation of the Universal Metering Program as contained in the October 19, 1998 report from the General Manager of Water and Wastewater Services, "Universal Metering Program", to which the responses to these motions are summarized in Appendix A along with appropriate responses.

Comments/Background:

This report presents options for funding the Universal Metering Program. The key decision to be made is who should pay for the cost of converting the 85,000 flat-rate customers in the former City of Toronto and the 1,500 flat-rate customers in the former City of Etobicoke to metered service. Funding may be provided via:

(1) the Capital Works Program, whereby water customers from all of the former municipalities share in the cost of meter conversion;

(2) flat-rate customers, whereby increases to the flat rate charges would be used to obtain the required funding;

(3) metered customers in the former City of Toronto, whereby the decreases that would be entitled to these customers under water rate harmonization would be deferred, and the surplus revenue would be used to fund the conversion program; and

(4) a combination of flat-rate customers and metered customers, whereby a combination of increases in flat-rate charges and a deferral of decreases that would be realized by former Toronto metered customers would be used to provide the necessary funding.

Although each of these options is viable, various stakeholders have raised concerns with respect to each of the options.

With respect to funding the Universal Metering Program from the Capital Works Budget, stakeholders from all of the former municipalities except Toronto have expressed concern that it was unfair for them to share in the cost of converting the former City of Toronto to metered services, as the cost of meters in their municipalities were paid by the residents historically through higher development fees.

With respect to funding through increases in flat-rate charges, stakeholders expressed concern that this would require sizeable increases in these charges, which may result in a hardship to some customers, and further that, while some customers may wish to accelerate the timing of their conversion in order to avoid the rate increases, the logistics involved in such a large conversion program may result in customers having to wait for a significant period of time to receive a meter.

With respect to funding from metered customers in the former City of Toronto, these customers have indicated that this approach is punitive, as they have, in the past, voluntarily installed water meters and should not be punished by deferring the decreases they would otherwise be entitled to under rate harmonization. A contrary view is that, had amalgamation not taken place, all customers in the former Toronto, metered and unmetered, would have shared in the cost of conversion for the rest of the customers.

The combination approach attempts to balance the interests and concerns of both the metered and unmetered customers in the former City of Toronto.

Universal Metering in the former City of Toronto:

A customer on a flat-rate account is generally charged in accordance with the number of rooms and fixtures installed in the building, or in some cases, on a per-building basis. Flat-rate accounts predominate in the former City of Toronto, within which there are approximately 85,000 flat-rate accounts verses 46,000 metered accounts. Generally, flat-rate accounts are scattered throughout the former City of Toronto with the exception of the former communities of Forest Hill and Swansea which have a higher concentration of metered customers. The former City of Etobicoke also has a few remaining flat-rate accounts (less than 1,500), which is not significant compared to its 66,000 metered accounts. These accounts are generally located in the older part of the City, south of Lake Shore Boulevard between Royal York Road and Kipling Avenue.

A preliminary review of the billing data indicates that the average annual flat-rate bill is $348.00 whereas the average annual bill for metered residential customers is $286.00. Over the years, the rate charged to flat-rate water users has increased in proportion to rate increases for metered customers.

In 1990, the former City of Toronto adopted a policy of universal water metering whereby all new buildings and buildings where the water service or the plumbing in the basement is being replaced are to be metered. The City also installed free of charge water meters and provided a water efficiency kit to homeowners who voluntarily requested a water meter. Further, homeowners were required to install water meters as a condition of the City's Water Service Repair program. The Universal Metering Program has been promoted through an ongoing education program to make homeowners aware of the benefits and cost saving opportunities which can result from a metered water supply. Since 1990, approximately 23,000 water meters have been installed under these programs. The former City of Etobicoke had no formal program for meter conversion, however, the City installed approximately 30 to 50 meters per year for flat-rate customers who requested it.

The estimated average cost for each water meter retrofit installation including a water efficiency kit amounts to $247.00 including GST, and based on current prices, the estimated total cost of retrofitting the 85,000 remaining buildings on flat-rate billing amounts to approximately $21.0 million.

In November 1998, the General Manager of Water and Wastewater Services reported to the Works and Utilities Committee on the program of Universal Metering as part of the service leveling process across the new City of Toronto. The report recommended the mandatory metering of all buildings in the former City of Toronto with a five-year implementation plan. The report further recommended that the flat-rate charges be increased by 100 percent for customers who have received adequate notice (minimum three written notices and have been provided with sufficient time to arrange for the mandatory installation of a water meter but continue to refuse to cooperate), and that the flat-rate charges be increased an additional 100 percent every three months thereafter.

While the Committee endorsed the program, a number of questions were raised and the report was referred to the Toronto Community Council for consideration, which in turn raised additional questions particularly regarding the use of incentives such as water efficiency initiatives. Further, the Community Council discussed the feasibility of further cost sharing incentives under the Water Service Repair Program for the private side portion of the water service which would result in additional meter installations. City Council at its meeting of June 9, 1999, approved a harmonized Water Service Repair Program, in which substandard water service connections are replaced at no cost to homeowners within the road allowance. Under the harmonized program, homeowners are responsible for the cost of repairing the private side portion of their water service.

Funding in the amount of $21.0 million for the conversion of flat-rate accounts to metered service for the former City of Toronto was requested under the Universal Metering Project in the 1999-2003 Capital Works Program. At the time of the capital budget review, the strategies for water conservation and universal metering were yet to be finalized, and the Budget Committee recommended that the expenditures earmarked for 1999 be put on hold until a formal direction in this matter was set by Council.

Water Rate Harmonization:

The report from the Chief Financial Officer and Treasurer, dated March 22, 1999, provided a comprehensive review of the current practices and rate structures respecting the water and wastewater program, and an analysis of a number of options to provide a harmonized rate across the new city. The report recommended the competitive pricing structure (Option 3).

Addendum (1), dated March 31, 1999, provided additional options respecting water rate harmonization in response to the motions raised by the Community Councils at their meetings of March 26 to 30, 1999. In particular, a four-year phase-in of the competitive pricing strategy was presented.

Addendum (2), dated April 12, 1999, provided further options regarding the water rate harmonization initiative, which addressed issues raised respecting funding for the conversion of flat-rate (unmetered) accounts to metered services, in response to the discussions of the Budget Committee at its meeting of April 6, 1999. The options presented in that addendum included funding the Universal Metering Project through a rate increase specific to flat-rate water users, funding the project through a two-year deferral of the decreases that water customers in the former Toronto would realize under rate harmonization while the competitive rate would be phased-in over two years for all other users, and funding the project through a four-year deferral of decreases for the former Toronto while phasing-in increases and decreases for all other users over a four-year period.

Funding Options Respecting Universal Metering:

In general terms, the water rate setting process is premised upon the objective that the program remain fully self funding with a high degree of financial stability for both operating and capital needs over the long term. The approach taken with respect to the harmonization of the differing rates of the former municipalities was that the anticipated revenue increase from those former municipalities whose rates would increase under harmonization would be balanced with the anticipated revenue decreases from those municipalities who would be experiencing rate decreases under harmonization (i.e., the exercise would be revenue neutral).

Council at its meeting of April 26 to 28, 1999, during consideration of the matter of water rate harmonization, adopted the phasing-in over four years of the competitive rate structure for all of the former cities with the exception of the former Toronto, leaving open the option for funding the Universal Metering Program from the deferral of the decreases that would be realized by the former Toronto under rate harmonization. Having adopted the rates for the other cities, the monies available from the deferral of Toronto's decreases is now fixed. Table 1 shows the potential funding available from the deferral of Toronto's decreases. For example, deferring the decreases for one year would result in the accrual of approximately $2.4 million in surplus funds; two years would result in the accrual $7.3 million in surplus funds; three years in $14.6 million; and a deferral of three-and-one-half years would accrue in the order of $21.0 million, which would be sufficient to fund the entire Universal Metering Program.

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Table 1

Potential Funding Available from the Deferral of former Toronto's Metered Customer Decreases ($000's)

No. of Years Decrease 1 2 3 4 5

Deferred

Four Year Phase-In of Incremental Incremental Incremental Incremental Incremental

Harmonized Rate Impact Impact Impact Impact Impact

Sep/99-Sep/00 Sep/99-Sep/01 Sep/99-Sep/02 Sep/99-Sep/03 Sep/99-Sep/04

East York (435) (435) (435) (435) (1,741)

Etobicoke 212 212 212 212 847

North York (17) (17) (17) (17) (70)

Scarborough 2,975 2,975 2,975 2,975 11,899

York (304) (304) (304) (304) (1,217)

Incremental/Annual Impact 2,430 2,430 2,430 2,430 9,719

to City

Toronto Incremental/Annual (2,430) (2,430) (2,430) (2,430) (9,719)

Decreases Deferred

Cumulative Revenue Impact *2.430 7,289 14,578 24,297** 34,016

* Interest not accrued as it is anticipated additional revenue would be expended as incurred to cover the costs of Universal Metering.

** Assuming 3.5 year deferral to the harmonized rate for the former City of Toronto instead of four years would result in the accrual of $20,682,223, which would be sufficient to fund the Universal Metering Project

It should be noted that the above analysis is premised on the deferral of the decreases that is to be realized by former Toronto's metered customers. Another source of funding is potentially available through increasing the rates charged to flat-rate customers. Table 2 shows the potential funding available from increases to former Toronto's flat-rate charges. For example, a 15.0 percent annual increase in the flat-rate charges will provide an additional $21.2 million in revenue to the City over the projected four years that it may take to phase-out flat-rate accounts. The recommended 5 percent incremental annual increase in flat rates will provide an additional $11.6 million in revenue. Such an approach will result in the average flat-rate bill increasing from the current $348.00 to approximately $554.00 in the fourth year.

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Table 2

Potential Funding Available from Rate Increases on Toronto's Flat-Rate Customers Assuming 4 Years to Implement Conversion ($000's)

Funding Available from

Rate Increases on Flat

Rate Customers over the

4-Year Implementation

Period

Year 1 2 3 4

Cumulative Cumulative Cumulative Cumulative Funding Funding Funding Funding

Impact Impact Impact Impact

Sep/99-Sep/00 Sep/99-Sep/01 Sep/99-Sep/02 Sep/99-Sep/03

No. of Conversions* 10,000** 25,000 25,000 25,000

Projected Number of 75,000 50,000 25,000 0

Flat-Rate Accounts Remaining

Annual Increase to Flat-Rate Charges:

Option B 5% per annum 1,392 3,621 5,678 6,616

Option C 10% per annum 2,784 7,352 11,671 13,690

Option D 15% per annum 4,176 11,190 17,988 21,246

Option E 20% per annum 5,568 15,138 24,638 29,309

Variable Rate Increases:

Option F 5% 1^st year, 1,392 4,763 9,047 11,630

10% 2^nd year, 15% 3^rd year

20% 4^th year,***

Option G 20% 1^st year, 5,568 15,138 20,880 22,794

20%2^nd year, 0% 3^rd year

0% 4^th year,****

* Assumes a planned and orderly conversion of flat-rate accounts to metered service over a 4-year period, and that flat-rate customers continue to pay the increased flat-rate charges until meter conversion.

** Assumes 10,000 customers converted in start-up year of program.

*** Rate increases in each successive year.

**** Councillor Prue moved a motion at Council's meeting of April 26, recommending that conversion be implemented over two years, to be funded from a two-year deferral of former Toronto's decreases ($7.2 million from column 2 of Table 1, and a 20% per annum increase in flat-rate charges over the two-year implementation plan ($15.1 million from column 2 above), for a total of $22.0 million.

The above analysis is premised upon a planned and orderly conversion of flat-rate accounts to metered service over a four-year period. It is noted that some customers may wish to accelerate the timing of their conversion in order to avoid the rate increases. Such an acceleration would have a direct negative impact on the projections of incremental revenue from the rate increase, and a further indirect impact through higher conversion costs associated with a more demographically fragmented response to conversion.

It is recognized that in spite of the flat-rate charge increases referred to in Table 2, there may be a small percentage of customers who will resist installation of a water meter. To reach closure with respect to Universal Metering and achieve full participation, it may be necessary to significantly increase flat-rate charges for the few remaining customers. In the City of Niagara, which recently adopted a mandatory metering program, customers who refuse the installation of a water meter are subject to a 300 percent increase in their flat-rate charge. The withdrawal of the offer of a free meter after a well-advertised cut-off date would be further encouragement for customers.

Table 3 below shows the potential funding available from a combination of rate increases on flat-rate customers and the deferral of the decreases that would be realized by metered customers in the former Toronto. Combinations that approximately result in the $21.0 million required for the Universal Metering program included:

(i) funding solely from the deferral of decreases that would otherwise be realized by former Toronto's metered customers, which would mean former Toronto's metered rate would remain at the current level for three-and-one-half years, before moving to the lower harmonized rate; or

(ii) funding from a 5.0 percent per annum increase in the flat-rate charges in combination with the deferral of the decreases for a three-year period for former Toronto's metered customers; or

(iii) funding from a 10.0 percent per annum increase in the flat-rate charges in combination with the deferral of the decreases for a two-year period for former Toronto's metered customers; or

(iv) funding solely from a 15.0 percent per annum increase in the flat-rate charge over the four year implementation plan; or

(v) funding solely from increases of 20.0 percent in flat-rate charges for the first two years; or

(vi) some other combination, such as that moved by Councillor Prue at the Council meeting of April 26, whereby funding would be obtained through a 20.0 percent per annum increase in flat-rate charges over the first two years, in combination with the deferral of former Toronto's metered customers decreases for two years (this motion assumes that meter conversion would be over an accelerated two year plan).

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Table 3

Potential Funding Available from a Combination of Rate Increases on Flat-Rate Customers* and the Deferral of Decreases of Metered Customers ($000's)

No. of Years Deferral of Decreases 0 1 1.5 2 2.5 3 3.5 4 5.5

for Former Toronto's metered

customers

Annual Increase in Flat-Rate Charge

Option A 0% (i.e. Funding from 0 2,430 4,859 7,289 10,934 14,578 19,438 24,297 38,875

Deferral of Decreases of

metered accounts

Option B 5% 6,616 9,204 11,634 14,064 17,708 21,353 26,212 31,072 45,650

Option C 10% 13,690 16,498 18,928 21,358 25,002 28,647 33,506 38,366 52,944

Option D 15% 21,246 24,342 26,772 29,202 32,846 36,491 41,350 46,210 60,788

Option E 20% 29,309 32,768 35,198 37,628 41,272 44,917 49,776 54,636 69,214

Variable Rate Increases:

Option F 5%, 10%, 15%, 20%** 11,630 14,060 16,490 18,919 22,564 26,209 31,068 35,928 50,506

Option G 20%, 20%, 0%, 0%** 22,794 25,200 27,600 30,100 33,700 37,400 42,200 47,100 61,678

* Assumes that implementation of meter conversion occurs over four years regardless of deferral option.

** Flat-rate charge increases in each successive year

Universal Metering Implementation Options and Issues:

Implementation options fall into two general categories, i.e., voluntary programs and mandatory programs. The following presents numerous options respecting the rolling-out of the Universal Metering program and implementation issues.

(A) Voluntary Programs:

Voluntary programs depend on the good will of the customers towards converting to metered service. Voluntary customer participation may be facilitated through financial motivation, such as through increases in the flat-rate charges, or through incentive programs. The following sections provide a description of several voluntary implementation programs.

(1) Status Quo:

This approach continues the 1990 policy adopted by the former City of Toronto whereby all new buildings and property owners who undertake plumbing upgrades are required to install a water meter along with those participating in the Water Service Repair program. In addition, homeowners are encouraged to voluntarily install a meter all of which is done at no cost to the homeowner. Historical experience suggest that approximately 2,000-4,000 conversions per year may be achieved, notwithstanding any other policy interventions such as rate increases specific to flat-rate customers. At this rate, the funding requirement would be approximately $500 thousand to $1.0 million per year, and it would take more than 25 to 40 years to achieve universal metering.

(2) Voluntary with Incentive Program:

This approach utilizes financial motivation and/or incentives to increase the voluntary participation rate. One means to motivate flat-rate customers to convert to metered service would be to increase flat-rate charges. It is recommended that the flat rates increase incrementally each year from 5 percent to 20 percent over the four-year metering program. Such increases should not be punitive to those flat-rate customers who wish to accelerate their conversion, but may have to wait due to the logistics involved in coordinating such a large number of conversion. One approach to alleviate this concern would be to establish a priority list of flat-rate customers requesting conversion, and as such, those customers who are more motivated to convert may avoid some of the rate increases.

Incentives are another means to encourage conversion. Many incentives are available in this respect, including providing a full or partial subsidy towards a low-flow toilet, or a subsidy towards the repair of deficient water service (i.e., lead or galvanized pipes) on the private side of a customer's property.

The Works and Utilities Committee at its meeting in November 1998, in considering the Universal Metering Program, requested, among other things, a report on the issue of the use of incentives such as free water saver kits and/or low-flow toilets to reduce water use, and on opportunities to combine Universal Metering with the Water Services Program.

Of the 85,000 flat rate customers in the former City of Toronto, approximately 33,000 have been identified as substandard and in need of replacement. The Harmonized Water Services Program recently adopted by Council provides for the City to replace/repair substandard services on the road allowance, and to advise the customer of a competitive quote for the repair/replacement of the private-side water service. In the past, this section of upgrade has been totally funded by the homeowner. The average cost of the upgrade on the private portion of the water service ranges from $800.00 to $1,000.00.

An incentive program whereby the City subsidizes the full cost of repairing the water services on the private side would achieve a greatly accelerated Water Service Repair program and consequently an accelerated water meter installation program, however, the implications of such a fully subsidized program is prohibitive due to the cost (estimated at $33.0 million in the former Toronto). A more modest subsidy program may be considered whereby the homeowner pays a flat fee of $500.00 for upgrading the private portion of the water service, and the City provides a subsidy of approximately $400.00. This subsidy program will require further funding of approximately $13.2 million and necessitate a longer deferral of the harmonized rate for the metered customers in the former City of Toronto. Legal Services has advised that the Municipal Act and Public Utilities Act provide authority to implement a cost-sharing program for upgrading the private portion of the water service, providing the City obtains a consent waiver from the property owner and a warranty and indemnification provision from the contractor undertaking the work.

It is estimated that the remaining flat-rate customers in the former Cities of Etobicoke and Toronto, which are approximately 53,500, may have a reasonably adequate supply of water and consequently may not be interested in the private side water service repair incentive. Alternatively, the City may choose to install a low-flow toilet for these homeowners as an incentive to installing a water meter. A number of Canadian municipalities (City of Barrie, Durham Region, Region of Waterloo and City of Victoria) have implemented low-flow toilet change-out programs as a water efficiency initiative. Low-flow toilets are required in all new home construction under the current Ontario Plumbing Code and Ontario low-flow toilet manufacturers are required to meet the standards established by the Canadian Standards Association, which exceeds other manufacturers such as ASTM. These cities have found that the complaint frequency regarding the operation of low-flow toilets which are CSA approved is less than 1 percent. The cost of a CSA standard low-low toilet is approximately $300.00 per toilet, or approximately $15.6 million for the remaining flat-rate customers.

These major incentive programs will require additional funding in the amount of approximately $29 million. One possible source of funding is to defer the rate decreases in the former City of Toronto for 5.5 years, plus a four-year increase in flat-rate fees would generate funding in the amount of $50.5 million. This funding would be sufficient to fund the $21 million cost of universal metering and the $29 million in major incentives. Alternatively, the $21.0 million which has been held for Universal Metering in the 1999 Capital Budget plus a 3.5 year deferral in the rate decrease, combined with a four-year increase in flat-rate fees will provide sufficient funding for the major incentive programs.

This deferral of decreases will, however, have an impact on the four-year water rate harmonization strategy which Council has adopted, and further may be considered an unfair hardship on the former City's metered customers to defer the water rate decrease for a longer period to fund the major incentive programs. Consequently, the three-year rate deferral for the former City of Toronto metered customers is being recommended along with a four-year 5 percent per annum increase on the unmetered customers' rates as the financing strategy. This funding option will generate approximately $26.2 million, thus providing funding for the Universal Metering Program and a further $5.2 million towards a water efficiency incentive program. The additional revenues will be sufficient to provide a $60.00 incentive for flat-rate customers to install an ultra low flush toilet. Flat-rate property owners will be eligible to apply for this incentive by showing a proof of purchase receipt for the ULF toilets. This incentive is consistent with that offered under the Ultra Low Flush Program for the multi-residential sector which has been recommended under a separate report on this agenda.

(B) Mandatory Programs:

A mandatory program assumes that customers cannot be sufficiently motivated to convert to metered service, and that mandatory conversion would be enforced by by-law. Mandatory conversion programs have been utilized by other cities. The Region of Niagara recently adopted a by-law requiring that their 24,000 flat-rate customers be metered within one year. Customers who refuse entry to permit conversion, after sufficient notice is given, will be subject to a flat-rate charge increase of 300 percent.

If a mandatory program is adopted, then incentives may be considered as unnecessary. Thus any of the funding options described in the previous section that provide the necessary $21.0 million in funding may be used.

As previously discussed, the former City of Toronto enforced a minimum mandatory program whereby new home construction, homeowners undertaking plumbing upgrades and homeowners participating in the water service repair program were required to have a meter installed. It is proposed that these mandatory requirements continue, and further that purchasers of homes which are currently on a flat-rate system agree to allow the City to install a water meter, free of charge, as a condition of the City providing a clearance letter at the time of ownership transfers.

Installation of Water Meters Evenly Throughout all Neighbourhoods:

One means to ensure that water meters are installed evenly throughout all neighbourhoods is to specify that work be undertaken in designated geographic areas with a large number of installation crews, with first priority given to customers on a waiting list. It may be possible to assign one or more crews per Ward for those Wards which have a large number of flat-rate properties. The 1,500 flat-rate customers in Etobicoke could be included with the crew responsible for the Toronto High Park Ward, which has a large number of existing metered properties throughout the Swansea area. In the past, approximately five to seven contracts were called annually under the former City of Toronto Water Service Repair Program, and the same number could be called for the meter conversion; there may also be opportunities to combine contracts for both programs. The number of flat-rate customers by geographic area is estimated as follows:

Geographic Area Estimated Number of Flat-Rate Customers

Ward 19 and part of Ward 2 12,400

Ward 20 9,010

Ward 21 13,300

Ward 22 12,600

Ward 23 and 24 13,250

Ward 25 10,870

Ward 26 15,070

Total 86,500

Billing Due Dates and Meter Reading:

The existing water by-law for the former City of Toronto allows an early payment discount if the account is paid in full one calendar month from the due date and the due date is the last day of the month in which the account is billed.

Most water billing systems in the other former municipalities allow customers between 15 and 21 days to pay and qualify for the discount.

With the new water billing system, the billing of accounts will be done evenly throughout the month. In order to accomplish this, the existing by-laws must be amended to allow for flexible due dates within the existing cycles, and to allow the former City of Toronto water customers at least 21 days to pay the bill in full to qualify for the early payment discount.

With respect to meter reading, the Finance Department and Works and Emergency Services Department are jointly investigating a full range of meter reading and billing options and automated meter reading technologies, and will prepare a service rationalization report for a harmonized meter reading system(s) which will be presented to the Budget Committee and the Works Committee in the fall of 1999.

Conclusion:

This report presents various funding and implementation options available for the water meter conversion program for flat-rate customers in the former Cities of Toronto and Etobicoke. Funding may be achieved by the deferral of the decreases that the former City of Toronto customers would have realized under water rate harmonization and/or by rate increases specific to flat-rate customers. The amount of funding depends on the length of term that the decreases are deferred and on the degree of increases to flat-rate charges.

Implementation can be made through a voluntary or a mandatory program. Participation rates in voluntary programs may be increased through the use financial motivation and/or incentives. One means to motivate flat-rate customers to convert to metered service would be to increase flat-rate charges. However, such increases should not act as punitive measures to those customers who wish to accelerate their conversion, but may have to wait due to the logistics involved in coordinating such a large number of conversions. Establishing a priority list based on first-come first-served, and ensuring that meters are installed evenly throughout all neighbourhoods can alleviate much of this concern.

Incentives are another means to motivate customers in a voluntary program. Incentives can include a subsidy towards water efficient low-flow toilets, or a subsidy towards the repair of deficient water service on private property. Offering the full cost of these incentives would be prohibitively expensive for the City's water customers. Mandatory programs render incentives as unnecessary, as conversion would be mandated by by-law.

This report recommends a voluntary program with modest subsidies and escalating increases to the flat charges as an appropriate means to achieve the necessary participation. Such a program would be entirely funded by former City of Toronto water customers through a three-year deferral of the decreases that would be realized by their metered customers under water rate harmonization, in conjunction with escalating increases in flat-rate charges. It is believed that, as flat-rate charges escalate, most customers will be motivated to convert as their awareness of the benefits of metered service increase.

To successfully implement this type of voluntary metering program, it will be necessary to initiate a comprehensive public education program explaining the benefits of the "User Pay" principle and the opportunities to reduce water charges through indoor and outdoor water conservation practices. Further, the communication program will explain the water efficiency measures contained in the recommended program along with the sign-up procedures for having a meter installed.

Contact Names:

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

Michael A. Price, P.Eng., FICE, General Manager, Water and Wastewater Services, Tel: 392-8200

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Appendix "A"

The Works and Utilities Committee at its meeting of November 4, 1999, in considering the report from the General Manager of Water and Wastewater entitled "Universal Metering Program", requested, among other things, a further report on the following issues:

(1) "undertake a comparative study of alternative strategies to achieve the greatest efficiency for the funding of $21.0 million; and report back thereon to the Works and Utilities Committee in January 1999; and

(2) "report to the Committee on the following:

(i) the use of incentives such as free water saver kits and/or low-flow toilets to reduce water use;

(ii) the installation of water meters evenly throughout all neighbourhoods during each phase of the program, instead of designating one specific area for each year;

(iii) past practices in other municipalities;

(iv) background information on the cities mentioned as examples in the report, including information on the water rates before and after installation of the water meters;

(v) information regarding the amount paid by the average consumer in various cities outside of the City of Toronto for water;

(vi) a retrofit program for older meters in the City of Toronto, including the number of water meters in question, retrofit options and cost implications;

(vii) the cost per litre of the water that the Region of York pays the City of Toronto; and

(viii) the communication dated November 3, 1998, from Ms. Anne Dubas, President, Local 79, Canadian Union of Public Employees."

Further, City Council at its meeting of December 16 and 17, 1998, endorsed the recommendations from the December 9, 1998 Toronto Community Council meeting, which considered the Commissioner of Works and Emergency Services October 19, 1998 report on Universal Metering, and requested the Commissioner of Works and Emergency Services to report on the following [Report No. 16, Clause No. 67(i)]:

(1) requested the City Solicitor to report to the Toronto Community Council on whether small towns and villages which were amalgamated into the former City of Toronto can keep their flat-rate bill as part of previous agreements;

(2) requested the Commissioner of Works and Emergency Services to report comprehensively to the Toronto Community Council on:

(a) the impact of the proposals set out in the report (October 19, 1998) from the General Manager, Water and Wastewater Services, on the former City of Toronto's Water Pressure Improvement Grant System;

(b) the potential long-term loss in the revenue and the impact on the other former municipalities of the proposals set out in the report (October 19, 1998) from the General Manager, Water and Wastewater Services;

(c) the advantages, if any, of the former City of Toronto program as it relates to (i) voluntary participation; (ii) the value to the City of upgrading old and ageing water pipes; (iii) on the savings inherent in the reduction of ruptures, given the replacement of piping on City property; and (iv) the health benefits of replacing old lead piping with copper; and

(d) on a budget to supply one-third of the households with water meters, and a budget for water upgrades;

(3) requested the Commissioner of Works and Emergency Services to advise the Toronto Community Council when water efficiency measures, such as low-flow toilets and water saver kits, will be provided universally to every household across the City; and

(4) requested the Commissioner of Works and Emergency Services to advise senior citizens of the potential benefits of accepting water meters.

With respect to item (1) above, I can advise that the City Solicitor will respond directly to the Toronto Community Council and Works Committee on this issue. Further, action has been taken by staff to advise senior citizens of the benefits of accepting water meters as requested under item (4). Item (2) (c) was reported on to the Works and Utilities Committee as part of my April 30, 1999 report entitled "Harmonized Residential Water Service Connection Repair Program."

Further, City Council at its meeting of March 2, 1999, adopted the 1999-2003 Capital Works Program which among other things recommended that:

(1) "Although a policy decision regarding the Universal Metering Program is still subject to Council approval, funding ($21.0 million) to be retained in the estimates. Authorization to spend is however, contingent upon final Council approval."

(2) "It is further recommended that the Commissioner of Works and Emergency Services be requested to submit a report to the Works Committee, prior to the 2000 budget process, on the number of meter conversions that have been requested in 1999 and the ability of staff to respond to such requests."

Response to Other Issues Not Addressed in this Report:

(i) Universal Metering Program Impact on Water Pressure Grant Program:

City Council at its meeting of December 16 and 17, 1998, adopted the recommendations from the December 9, 1998 Toronto Community Council meeting which among other things, requested the Commissioner of Works and Emergency Services to report on the impact which a mandatory Universal Metering proposal would have on Toronto's Water Pressure Improvement Grant System otherwise known as the Water Service Connection Repair Program.

Homeowners who participated in the Water Service Repair Program are required to agree that the City install a free of charge water meter as a condition of having their water service repair upgraded. Should Committee choose to adopt a mandatory Universal Metering Program whereby the meters would be installed systematically throughout the former City, then the requirement for homeowners to install a meter at the time of the water service repair upgrade would no longer apply. In the event that Committee chooses a mandatory Universal Metering Program, there would continue to be a need to upgrade the ageing water services located within the street allowance thus ensuring an adequate supply of high quality drinking water to the street line at each property.

(ii) Retrofit Program for Older City Meters:

Generally, the meter installations for each of the former Cities and Scarborough Public Utilities Commission have received routine maintenance either through contracted services in the case of York, or by city crews assigned to meter maintenance within the operating divisions of the former Cities or within the Finance Departments. The former Cities of Etobicoke and Toronto and the former Scarborough Public Utilities Commission each had dedicated crews for meter maintenance and a dedicated meter maintenance shop. Meter maintenance in each of the former cities and Scarborough Public Utilities Commission was generally concentrated on the larger commercial meters which measured the majority of the water consumed and consequently necessitated the highest level of maintenance. Residential meter maintenance was generally limited to replacing faulty meters and changing out the very old style residential meters which were no long repairable or in some cases were no longer recording an accurate volume of water.

In the case of the former City of Etobicoke, a complete meter change-out program took place in the early 1990's for all of the residential metered customers.

A further evaluation of the maintenance requirements, particularly for the older residential meters, will be considered under the needs assessment evaluation of the Water and Wastewater Division.

(iii) Past Practices in Other Municipalities:

The majority of the residential water meters installed in North York, Scarborough, York, East York and parts of Etobicoke were installed by developers at the time of the original housing developments. All of the former cities and the Scarborough Public Utilities Commission had in place by-laws requiring a mandatory water meter installation with all new home construction.

(iv) Long Term Loss in Revenue:

The average residential flat-rate bill in the former City of Toronto is $348.00 and the average residential metered bill is $286.00. The lower revenue of approximately 15 percent from the metered customer is due primarily to a greater incentive to conserve water due to the user pay principal. Further, this reflects the reduced household water use due to the water efficiency kits installed in each home at the time of the water meter installation.

This reduction is consistent with the following municipalities which have undertaken Universal Metering Programs in the past:

Pre Metering Post Metering %Charge

(Litres/Capita/Day) (Litres/Capita/Day)

Leamington 627 563 -10

Port Colborne 777 689 -11

Kingston 1,003 748 -25

Brockville 889 752 -15

Given the variability of what these cities have experienced in water conservation due to metering programs, my previous report estimated a range of 5 percent to 15 percent in reduced water use due to a fully metered system, or across the new City, this would represent a .3 percent to 1 percent reduction in water use.

The former Metro Toronto Council, in 1996, established an objective of reducing the average day water demand by at least 15 percent by the year 2011. The reduction in water use due to the metering program in the former City will contribute to the 15 percent target. Further, the long-term water rates will reflect the reduced water use which the former Metro and new City have established as the 2011 targeted water use reduction.

(v) Water Rates in Various Cities Outside the City of Toronto:

City $/M³

(1) Peel Region 0.8100

(2) Toronto 1.0308

(3) Halton Region 1.2200

(4) Durham Region 1.2900

(5)(a) York Municipalities Using Toronto Water

(i) Markham 1.1021

(ii) Vaughan City 0.9730

(iii) Richmond Hill 1.2650

(5)(b) York Municipalities Not Using Toronto Water

(i) East Gwillimbury 1.2500

(ii) Newmarket 1.2643

(iii) Aurora 1.1070

(iv) Whitchurch/Stouffville 1.1420

(v) King City 1.5403

(vi) Number of Meter Conversions Requested in 1999 and Ability of Staff to Respond:

The estimated number of meter conversions for 1999 will be approximately 2,500. This number is lower than previous years where 3,500 to 4,000 meters per year have been installed. The estimated number of meters to be installed is made up from both voluntary meter installations where homeowners request a meter installation, and meters installed as a requirement of a plumbing upgrade or water service repair installation. An annual contract is called each year for the meter installations under the voluntary program. City crews have generally installed the meters required due to new home construction. Contractors have installed meters required under the Water Service Repair and Plumbing Upgrade Programs. Staff are available to respond to these requests in 1999.

(vii) Region of York Water Agreement:

The former Metro Toronto supplied water to Region of York on a wholesale basis at 19.5 cents per cubic metre. This rate is adjusted annually to reflect the current operating cost for producing water, an allowance for depreciation of capital assets and a replacement allowance. The current agreement was executed on September 14, 1998. In addition to the charges for water use, there is a cost-sharing provision requiring the Region of York to pay a share of any infrastructure required to produce and deliver water to the York Region customers based on the proportion of anticipated use. York Region sells the water to its local municipalities who distribute it to their customers at the following rates:

Markham .97 $/M3

Vaughan 1.10 $/M3

Richmond Hill 1.26 $/M3

The agreement indicates that both York Region and the City will apply best efforts to implement water efficiency programs as approved by their respective Councils.

(viii) Response to November 3, 1998 Communication from Local 79 Regarding Meter Reading:

In a communication to Councillor Betty Disero, Chair of the Works and Utilities Committee, Local 79 outlined the services provided by their membership in carrying out the meter reading function for the former City of Toronto Finance Revenue Section. The communication further urged the members of the Works and Utilities Committee to reject the staff recommendation to review opportunities for joint water meter reading and billing with Toronto Hydro and Consumers Gas, or alternatively, to consider a phone-in meter reading system.

At the present time, the Finance Department and Works Department are jointly investigating a full range of meter reading and billing options and automated meter reading technologies for each of the former cities and the former Scarborough PUC, and will prepare a service rationalization report for a harmonized meter reading system(s) which will be presented to the Budget Committee and the Works Committee in the fall of 1999.

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(Communication dated May 4, 1999, addressed to the

Works and Utilities Committee from the City Clerk)

City Council, at its Special Meeting held on April 26, 27 and 28, 1999, adopted, as amended, Clause No. 1 contained in Report No. 8 of The Strategic Policies and Priorities Committee, headed "1999 Operating Budget".

In so doing, Council referred the following motion to the Works Committee for further consideration and report thereon to Council:

Moved by Councillor Prue:

'That:

(1) Recommendation No. (233) of the Strategic Policies and Priorities Committee, be amended by:

(I) deleting the words "four-year deferral" from the first paragraph and inserting in lieu thereof the words "two-year deferral", so that such paragraph shall now read as follows:

"(233) the recommendations to provide for a harmonized water rate structure embodied in the report (March 22, 1999) from the Chief Financial Officer and Treasurer, entitled "Harmonization of Water and Water Pollution Control Rates", be adopted, subject to striking out Recommendations Nos. (1) and (4), and inserting in lieu thereof the following paragraphs in order to provide funding for the Universal Metering Project through a two-year deferral of the decreases to which former City of Toronto water users would realize under any harmonization initiative, while phasing-in increases and decreases for all other users over a four-year period, as described in Section (3) in the report (April 12, 1999) from the Chief Financial Officer and Treasurer, entitled 'Water Rate Harmonization - Addendum (2)':";

(ii) inserting after the words "Toronto shall be" in Part (1)(ii), the words "increased by 20 percent per year for a two year period effective July 1, 1999" (Schedules "B", "C" and "D" to be amended accordingly), so that such recommendation shall now read as follows:

"(ii) effective September 1, 1999, the combined water and sewer rate in the former City of Toronto for metered customers for accounts paid on or before the due date shall be $1.03083 per cubic metre, and the rate charged to flat-rate customers in the former City of Toronto shall be increased by 20 percent per year for a two-year period effective July 1, 1999 as set out in Schedules "B", "C" and "D" of City of Toronto By-law No. 356-1998;"; and

(iii) deleting Recommendation No. (233)(1)(iv) and inserting in lieu thereof the following:

"(iv) effective September 1, 2001, the rate charged to metered customers in the former City of Toronto shall be the appropriate phased-in competitive rate structure for the former City of Toronto;"; and

(2) the Clause be amended by adding thereto the following:

"It is further recommended that the Commissioner of Works and Emergency Services be requested to submit a report to the Works Committee, prior to the 2000 budget process, on the number of meter conversions that have been requested in 1999 and the ability of staff to respond to such requests." '

A copy of the aforementioned Clause No. 1 of Report No. 8 of The Strategic Policies and Priorities Committee, in its entirety, is available through this office. Please direct enquiries in this regard to 392-4737.

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(Communication dated October 6, 1999, addressed to the

Works Committee from Councillor Mario Silva, Trinity Niagara)

I respectfully wish to submit the following motions to your Committee for your review and approval in respect to the aforementioned agenda item.

Motions:

That Recommendation No. (1)(ii) of the June 30, 1999 report from the Commissioner of Works and Emergency Services and Chief Financial Officer and Treasurer regarding a subsidy incentive of $60.00 towards the installation of a low flow toilet be adopted;

(i) that bidders tendering for water service/meter repair provide a price per meter installed service cost estimate for private portion repair as part of their tender bid, and that this cost estimate be included in the bid evaluation process;

(ii) that this cost estimate be released upon the awarding of the successful tender to the home owners receiving the service;

(iii) that the successful bidder be required to honour this cost estimate for the private portion repair if requested to undertake that work by the home owner; and

(iv) that the City consider a cost recovery mechanism for the private portion repair cost to assist home owners, such as adding the cost to their water bill and spreading the payments out over an appropriate period of time at no additional cost to the City.

Redevelopment of Car Park 63 Located At

111 and 117 Richmond Street East

(Ward 24 - Downtown)

(City Council on October 26 and 27, 1999, by its adoption of the following Notice of Motion J(17), and the report dated October 25, 1999, from the Acting Commissioner of Corporate Services, appended thereto, deferred consideration of this Clause to the next regular meeting of City Council to be held on November 23, 1999:

Moved by: Councillor Rae

Seconded by: Councillor Li Preti

"WHEREAS City Council at its meeting held on September 28 and 29, 1999, adopted Clause No. 14 of Report No. 5 of The Administration Committee headed 'Declaration as Surplus - Nos. 111 and 117 Richmond Street East - Municipal No. 63', thereby declaring surplus to the City's requirements the properties known municipally as Nos. 111 and 117 Richmond Street East and authorizing that notice be given to the public of the intended manner of sale; and

WHEREAS, in accordance with By-law No. 551-1998, the notice of the proposed sale was given advising that the City proposes to enter into a joint venture with the developers of the abutting property respecting the sale of these lands to reflect the fact that, as part of the compensation for the lands, the City was to acquire strata title to a portion of the proposed development containing a 12-space parking facility; and

WHEREAS Clause No. 7 of Report No. 8 of The Policy and Finance Committee, headed 'Redevelopment of Car Park 63 Located at 111 and 117 Richmond Street East, (Ward 24- Downtown)' before Council at its meeting of October 26, 1999, recommends the adoption of the report (September 28, 1999) from the President, Toronto Parking Authority, entitled 'Redevelopment of Car Park No. 63 Located at Nos. 111 and 117 Richmond Street East', subject to amending Recommendation No. (1) and deleting Recommendation No. (2) thereby recommending that City Council approve an agreement of purchase and sale with Intracorp Developments (French Quarter II) Ltd. the total value of the transaction being $440,000.00 in cash and, accordingly, the City will not be acquiring strata title to a portion of the proposed development containing a 12-space parking facility; and

WHEREAS the Acting Commissioner of Corporate Services has submitted a report dated October 25, 1999, entitled 'Proposed Sale of Nos. 111 and 117 Richmond Street East', advising that, as the recommendation of the Policy and Finance Committee is inconsistent with the notice to the public of the proposed sale previously given pursuant to By-law No. 551-1998, it is necessary that approval be given, at this time, for a revision to the intended manner of sale; sufficient time allowed for the required notice to be given; and that Council defer consideration of the aforementioned sale report for one Council cycle;

NOW THEREFORE BE IT RESOLVED THAT, in accordance with Section 46 of the Council Procedural By-law, Clause No. 14 of Report No. 5 of The Administration Committee, headed 'Declaration as Surplus - Nos. 111 and 117 Richmond Street East - Municipal Car Park No. 63 ', be re-opened for further consideration, insofar as it pertains to the notice to the public of the proposed sale;

AND BE IT FURTHER RESOLVED THAT Council approve the report dated October 25, 1999, entitled 'Proposed Sale of Nos. 111 and 117 Richmond Street East', from the Acting Commissioner of Corporate Services."

Disposition: Council re-opened consideration of Clause No. 14 of Report No. 5 of The Administration Committee, headed "Declaration as Surplus - Nos. 111 and 117 Richmond Street East - Municipal Car Park No. 63", for further consideration, only insofar as it pertains to the notice to the public of the proposed sale, adopted the balance of the Motion, without amendment, and, in so doing, adopted, without amendment, the report dated October 25, 1999, from the Acting Commissioner of Corporate Services, embodying the following recommendations:

"It is recommended that:

(1) the approved manner of the sale of Nos. 111 and 117 Richmond Street East be a direct sale to Intracorp Developments (French Quarter II) Ltd.;

(2) to allow for the required notice to the public of the proposed sale to be given, consideration of Clause No. 7 of Report No. 8 of The Policy and Finance Committee be deferred to the Council meeting scheduled for November 23, 24 and 25, 1999;

(3) all steps necessary to comply with By-law No. 551-1998 be taken; and

(4) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.")

(A copy of the report dated October 25, 1999, from the Acting Commissioner of Corporate Services, referred to above, is on file in the office of the Clerk.)

The Policy and Finance Committee recommends the adoption of the report (September 28, 1999) from the President, Toronto Parking Authority, embodied in the communication (October 5, 1999) from the City Clerk, subject to:

(1) amending Recommendation No. (1) to read read as follows:

"(1) City Council approve an agreement of purchase and sale with Intracorp Developments (French Quarter II) Ltd. for the sale of 111 and 117 Richmond Street East (Municipal Carpark No. 63) the total value of the transaction being $440,000.00 in cash;"; and

(2) deleting Recommendation No. (2).

The Policy and Finance Committee submits the following communication (October 5, 1999) from the City Clerk:

The Administration Committee on October 5, 1999, referred the report (September 28, 1999) from the President, Toronto Parking Authority, entitled "Redevelopment of Car Park 63 Located at 111 and 117 Richmond Street East", to the Policy and Finance Committee for consideration.

Background:

The Administration Committee on October 5, 1999, had before it a report (September 28, 1999) from the President, Toronto Parking Authority, recommending that:

(1) City Council approve an agreement of purchase and sale with Intracorp Developments (French Quarter II) Ltd. for the sale of 111 and 117 Richmond Street East (Municipal Carpark No. 63) and the acquisition of strata title to a portion of the proposed development containing a 12 space at-grade parking facility built to the Parking Authority's specifications. The total value of the transaction is $440,000.00, which includes a cash payment of $300,000.00 and the construction and conveyance of the parking spaces which is valued at approximately $140,000.00;

(2) upon acquisition, that the lands to be acquired be designated for municipal parking purposes to be operated by the Toronto Parking Authority; and

(3) the appropriate City officials be authorized and directed to take whatever action necessary to give effect to the foregoing.

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(Report dated September 28, 1999, from the President,

Toronto Parking Authority, entitled "Redevelopment of Car Park 63

Located at 111 and 117 Richmond Street East

(Ward 24 - Downtown)

Purpose:

To obtain Council authority for a joint venture with Intracorp Developments (French Quarter II) Ltd., involving the sale of the City-owned lands located on the south west corner of Richmond Street East and Jarvis Street and the acquisition of 12 public parking spaces located at grade, within the proposed development to be built on the site.

Funding Sources, Financial Implications and Impact Statement:

No funding is required for this project. Intracorp Developments (French Quarter II) Ltd., will purchase the City-owned lands presently operated by the Authority as a surface parking lot together with associated air rights, and construct and convey to the City 12 public parking spaces at-grade within the proposed development.

Recommendations:

It is recommended that:

(2) upon acquisition, that the lands to be acquired be designated for municipal parking purposes to be operated by the Toronto Parking Authority; and

(3) the appropriate City officials be authorized and directed to take whatever action necessary to give effect to the foregoing.

Background History:

The Toronto Parking Authority has recently concluded negotiations with Intracorp Developments (French Quarter II) Ltd. to purchase 111 and 117 Richmond St. East (Municipal Carpark No. 63) which is located at the south west corner of Richmond Street and Jarvis Street. Presently the Parking Authority operates an irregular wedge shaped piece of property which is divided into two separate parcels, comprising 17 parking spaces in total, of which one portion having 5 spaces is partially located on the road allowance.

On lands directly to the west of the above discussed parcels, until recently the Parking Authority operated, under a management agreement with the owner, the Richmond Group, an additional 20 parking spaces. The owner of these lands and Intracorp recently approached the Parking Authority with a proposal whereby the Carpark 63 lands excluding the road allowance portion would be purchased by Intracorp so that both properties could be developed as a 75 unit, 11 storey residential condominium project with street related retail on the ground floor. If this project proceeds, the 17 existing public parking spaces would be eliminated and be replaced with 12 public parking spaces located at-grade within the proposed development, to be operated by the Toronto Parking Authority. Title to the portion of the development containing the public parking spaces would be conveyed to the City.

City Council has approved a report from the Acting Commissioner of Corporate Services declaring as surplus the real property owned by the City of Toronto, municipally known as 111 and 117 Richmond Street East.

Comments and/or Discussion and/or Justification:

The following is a summary of the issues related to the recommended transaction:

Site Location and Particulars:

Both 111 and 117 Richmond Street East are operated as one surface car park separated by a public laneway. These sites are located on the south west corner of Richmond Street East and Jarvis Street (see attached plan).

The new facility would be an enclosed deck at grade and would be constructed to meet Parking Authority standards. The entrance would be located further from the intersection of Richmond Street and Jarvis Street making it easier and safer to enter and exit the facility than at present although the site lines will be somewhat restricted. The site for the proposed development is very restrictive in size and no more than 12 public parking spaces can be accommodated.

Parking Supply and Demand Analysis:

The existing 17 space car park completely fills on a large majority of the days. A number of privately owned surface lots have been or are slated for redevelopment in this neighborhood. It is likely that there is or will be a parking shortfall. Although this transaction will result in a further reduction in available parking spaces, the proceeds from the sale of this property can be used to assist in acquiring another site on which additional parking spaces will be accommodated.

Financial Analysis:

A financial analysis of the proposed parking facility was undertaken. This facility will show a small loss annually. However, the developer is paying $300,000.00 to the Authority which more than offsets the net profit reduction. In addition, the excess proceeds can be used to acquire other properties in the area where we believe that a future parking shortfall will be identified.

Appraisal:

The Parking Authority retained the Morassutti Group, Real Estate and Financial Advisory Services, to appraise the property. The value of the proposed transaction is within the range of appraised value for the property.

Conclusions:

By pursuing this transaction, the Toronto Parking Authority will retain a more permanent presence in the area through the retention of 12 public parking spaces in an improved facility. From a financial perspective, this transaction will yield a positive financial return and when the specific future parking shortfall is determined, the proceeds from the land sale can be utilized to purchase an additional property.

Contact Names:

Maurice J. Anderson, President, Tel: (416) 393-7276, Fax: (416) 393-7352;

Lorne Persiko, Director, Real Estate and Development, Tel: (416) 393-7294, Fax: (416) 393-7352.

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(A copy of the site plan attached to the foregoing report was forwarded to all Members of Council with the October 14, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

Veterans' Clubhouses and Legion Halls -

Property Tax Rebates Under Section 442.1

of the Municipal Act

(City Council on October 26 and 27, 1999, amended this Clause by:

(1) deleting from the recommendation of the Policy and Finance Committee, all of the words after the words "City Clerk", so that such recommendation shall now read as follows:

"The Policy and Finance Committee recommends the adoption of the recommendations of the Assessment and Tax Policy Task Force embodied in the following communication (September 24, 1999) from the City Clerk:"; and

(2) amending the recommendations of the Assessment and Tax Policy Task Force, embodied in the communication (September 24, 1999) from the City Clerk, by:

(a) adding to Recommendation No. (4) the words "and further that they provide a current copy of their Multi-Cultural Race Relations Policy", so that such recommendation shall now read as follows:

"(4) each veterans' organization receiving a property tax rebate provide annually to the City by September 1 each year, organizational, operational and financial information in a form satisfactory to the Chief Financial Officer and Treasurer and further that they provide a current copy of their Multi-Cultural Race Relations Policy;"; and

(b) adding thereto the following new Recommendation No. (8):

"(8) the Chief Financial Officer and Treasurer be requested to work with individual legion halls which have existing contractual agreements with a view to phasing them out.")

The Policy and Finance Committee recommends the adoption of the Recommendations of the Assessment and Tax Policy Task Force embodied in the following communication (September 24, 1999) from the City Clerk; and further, that there be no other commercial use other than the renting of halls or else taxes will be applied:

Recommendations:

The Assessment and Tax Policy Task Force recommends that:

(1) the City discontinue the current tax relief program of providing exemptions and grants for the City share of taxes for Veterans' Clubhouses and Legion Halls;

(2) for 1999, 2000 and 2001, City Council adopt a rebate program under Section 442.1 of the Municipal Act to provide for the rebate of property taxes representing 100 percent of the property taxes payable on the clubhouse portion of the property for the Veterans' Clubhouses and Legion Halls listed in Appendix 1;

(3) the amount of $140,050.00 allocated in the 1999 Operating Budget under Non-Program Expenditures - Consolidated Corporate Grants - Legions be transferred to Non-Program Expenditures - Tax Deficiencies;

(4) each veterans' organization receiving a property tax rebate provide annually to the City by September 1 each year, organizational, operational and financial information in a form satisfactory to the Chief Financial Officer and Treasurer;

(5) the tax rebate program for Veterans' Clubhouses and Legion Halls be reviewed by June, 2001, with such review to include examination of the membership and financial status of such organizations to determine the appropriateness of continuing the tax rebate program;

(6) authority be granted for the introduction of the necessary bill in Council; and

(7) the appropriate civic officials be authorized to carry out the required actions to give effect to the foregoing.

Background:

The Assessment and Tax Policy Task Force, on September 22, 1999, had before it a report (June 21, 1999) from the Chief Financial Officer and Treasurer respecting Veterans' Clubhouses and Legion Halls - Property Tax Rebates Under Section 442.1 of the Municipal Act, and recommending that:

"(1) the City discontinue the current tax relief program of providing exemptions and grants for the City share of taxes for Veterans' Clubhouses and Legion Halls;

(5) that the tax rebate program for Veterans' Clubhouses and Legion Halls be reviewed in 2001, with such review to include examination of the membership and financial status of such organizations to determine the appropriateness of continuing the tax rebate program;

(6) that authority be granted for the introduction of the necessary bill in Council; and

(7) that the appropriate civic officials be authorized to carry out the required actions to give effect to the foregoing."

The Task Force also had before it a Status Report (September 8, 1999) from the Chief Financial Officer and Treasurer respecting Veterans' Clubhouses and Legions Tax Rebate - Meeting held on August 30, 1999, and recommending that this report be received for information.

The Task Force's recommendations are noted above.

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(Report dated June 21, 1999, addressed to the

Assessment and Tax Policy Task Force from the

Chief Financial Officer and Treasurer)

Purpose:

This report provides information and justification for the implementation of a property tax rebate program for Veterans' Clubhouses and Legion Halls for 1999, 2000 and 2001, which will replace the current method of providing tax relief to these organizations through exemptions and grants for the City share of taxes. This report also provides an update regarding the response of the Province to Council's request that these organizations be exempted from the education portion of taxes, as well as reporting on the disposition of grants for 1999 and future years.

Financial Implications:

A property tax rebate program for Veterans' Clubhouses and Legion Halls will result in tax relief totalling $430,205.00 being provided in 1999 for the City's share of taxes. Funds have been provided for this expenditure in the 1999 Operating Budget. Similar operating budget allocations will be required for the 2000 and 2001 tax years.

Under the proposed tax rebate program, these organizations will also receive a rebate for the education share of taxes. The total amount of education taxes to be rebated in 1999 is $283,501.00, which is recoverable from the Province under the provisions of Section 442.1 of the Municipal Act.

Recommendations:

It is recommended that:

(1) the City discontinue the current tax relief program of providing exemptions and grants for the City share of taxes for Veterans' Clubhouses and Legion Halls;

(6) that authority be granted for the introduction of the necessary bill in Council; and

(7) that the appropriate civic officials be authorized to carry out the required actions to give effect to the foregoing.

Background:

At its meeting of October 1, 1998, City Council adopted Clause 1 of Report No. 19 of the Strategic Policies and Priorities Committee regarding Veteran's Clubhouses and Legion Halls. The report recommended, among other things, that tax relief be provided for 1998 based on the status quo to those clubhouses and legion halls that were provided tax relief prior to amalgamation. For 1999, 2000 and 2001, tax relief was to be extended to all veterans' clubhouses and legion halls across the new City, through exemptions and grants for the City share of taxes. The properties affected are set out in Appendix 1. The total amount of tax relief that would have been provided in 1999 through exemptions and grants for the City share of taxes would have been $430,205.00.

At that time, Council also requested that the Province of Ontario exempt these organizations from the education portion of taxes. The Province has now responded to Council's request. In his letter dated April 13, 1999 (attached) to Councillor Nunziata, the Minister of Finance expressed the support of the Province in assisting veterans' organizations, and called attention to section 442.1 of the Municipal Act, which allows municipalities to provide property tax rebates to charities and similar organizations for up to 100 per cent of the organization's property taxes. The Minister also stated that if the City did choose to proceed with a rebate program in accordance with section 442.1, "The Province (would) share the cost of the rebate program with respect to the education portion of the property taxes."

Comments:

Section 442.1 of the Municipal Act provides for tax rebates for charities and similar organizations. For municipalities that did not adopt the 2.5 percent cap in 1998 under the provisions of Bill 16, section 442.1(3) requires municipalities to adopt a rebate program that provides a minimum rebate of 40 percent of the taxes payable by an eligible charity. The section also sets out other terms and conditions, such as the timing of payment of rebates, which must be met within the mandatory program established by the municipality.

In 1998, City Council opted for the 2.5 percent cap and therefore, was not required to have a mandatory rebate program. As a result, at its meeting on July 21 and 23, 1998, City Council adopted the recommendations that no property tax rebate program be instituted for charitable and similar organizations for the duration of the capping period (i.e, 1998 to 2000). Subsequent to, and as a result of Council's decision not to institute a property tax rebate program, the recommended tax relief mechanism to provide property tax relief for veterans' clubhouses and legion halls was to provide exemptions and grants for the City share of taxes. As noted above, at that time Council also requested that the Province of Ontario exempt these organizations from the education portion of taxes and once the response from the Province was received, that the Chief Financial Officer and Treasurer report to the Municipal Grants Committee on the disposition of grants for 1999 and future years.

Approval by Council of a tax rebate program will provide full relief for 100 percent of the property taxes payable by these organizations in a more effective way than the exemption route. In addition, a tax rebate program would not result in the City incurring more costs to provide tax relief for these organizations than has already been committed, as the Province will share in the cost of providing rebates for the education share of taxes.

Disposition of Grants - 1999 and Future Years:

The 1999 Operating Budget includes $140,050.00 for grants for Veterans' Clubhouses and Legion Halls. However, if Council chooses to adopt a tax rebate program, the rebates would be treated in a similar manner as other tax deficiencies, with the cost shared with the Province for education purposes. The total amount of rebates that would be required to be funded by the City in 1999 is $430,205.00. Funds are available for this expenditure under Non-Program Expenditures - Tax Deficiencies.

In the October 1998 report, the allocation of grants for 1999 was deemed to be required should the City decide to offset a portion of education taxes, if the Province did not agree to provide an exemption from taxes for education purposes for these organizations. However, as noted above, adoption of a rebate program would result in the rebate of education taxes being funded by the Province. Therefore, the 1999 grant allocation in the City's 1999 Operating Budget would no longer be required for this purpose and should be transferred to tax deficiencies.

Terms and Conditions - Proposed Rebate Program:

The City Solicitor advises that subsection (4) of Section 442.1 provides for a completely separate voluntary rebate program, the conditions of which can be established by the municipality. Such a program is not bound by the conditions required of the mandatory program under subsection (3). Consequently, the City can establish a rebate program for legions and veterans clubhouses which is not bound by the strict time deadlines established for the mandatory rebate program. If such a program is adopted, the cost of the rebates are shared by the municipality and the school boards in the same proportion as the municipality and school boards share in the revenue from the taxes on the property (subsection (7)). However, the City is required to give the recipient of the rebate a written statement of the proportion of the costs of the rebate that is shared by the school boards (subsection (8)).

It is recommended that the City establish a property tax rebate program to provide for the rebate of 100 percent of the property taxes payable by the Veterans' Clubhouses and Legion Halls, subject to the following terms and conditions:

(1) property tax rebates under this program are limited to those properties occupied and used as a memorial home, clubhouse or athletic grounds by persons who served in the armed forces of Her Majesty or Her Majesty's allies in any war as set out in Appendix 1;

(2) all clubhouses and legion halls receiving a property tax rebate must provide annually to the Chief Financial Officer and Treasurer a copy of their audited financial statements, as well as other information regarding their organization (including number of members) and operations (including community activities). This information must be received by September 1st each year;

(3) property tax rebates will only be provided for the portion of the property actually used as a clubhouse;

(4) Veterans' clubhouses and legion halls that occupy their premises pursuant to a lease will be required to provide a copy of their lease agreement and/or a statement from their landlord confirming the amount of property taxes payable by them through the terms of their lease agreement. Property tax rebates for leased premises will be paid to the organization subject to receipt of this information. Rebates for leased premises will be paid to the veterans' clubhouses and legion halls on the first due date following the issuing of the final tax bill for the year;

(5) property taxes for owned premises will be rebated through the direct adjustment of taxes on the property tax account;

(6) the Finance Department will provide each organization an annual statement of the property taxes rebated for the year, including the amount of taxes rebated for school purposes; and

(7) tax rebates apply to current taxes only and not tax arrears. Any clubhouse or legion hall with outstanding taxes from 1998 or prior years must enter into payment arrangements with the Finance Department, Revenue Services Division, with a view to bringing taxes current as quickly as possible.

The first three terms (noted above) were included as conditions for exemption from property tax in the original report dated September 22, 1999 (SPP Report No. 19, Clause 1, October 1, 1998). The balance are included to implement the recommended rebate program and have been developed in consultation with the City Solicitor.

Tax Rebate Program - Charities and Similar Organizations:

It should be noted that Council has not yet instituted a rebate program for charities and similar other organizations. However, development of a comprehensive policy for tax rebates for these organization is currently underway, and it is expected that a report recommending such a program will be before the Task Force by September, 1999.

Conclusion:

In 1998, City Council approved the provision of tax relief for Veterans' Clubhouses and Legion Halls for the years 1999, 2000 and 2001. The tax relief would be provided through exemptions and grants for the City share of taxes. At that time, Council also requested the Province of Ontario to exempt these organizations from education taxes.

It is recommended that, in lieu of the current tax relief program for Veterans' Clubhouses and Legion Halls, the City establish a property tax rebate program under Section 442.1 of the Municipal Act, which would provide for the rebate of 100 percent of the property taxes payable by the Veterans' Clubhouses and Legion Halls for 1999, 2000 and 2001. The tax rebates would be subject to the terms and conditions set out in this report. The tax rebate program would be reviewed in 2001 to determine whether it should be continued.

The Minister of Finance has indicated, in writing, that if the City adopts a property tax rebate program under Section 442.1 of the Municipal Act, the Province will share in the cost of the rebates for the education portion of taxes. Tax relief provided under a rebate program would effective in providing full relief for 100 percent of the property taxes payable by these organizations. In addition, a tax rebate program would not result increase the City's cost to provide this tax relief for these organizations as has already been committed, as the Province will share in the cost of providing rebates for the education share of taxes.

Development of a comprehensive policy for tax rebates for charities and other similar organizations is currently underway, and a report recommending such a program will be before the Task Force by September, 1999.

Contact Name:

Lynne Ashton, 397-4203

Paul Wealleans, 397-4208

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(Letter dated April 13, 1999 from the Honourable Ernie Eves,

Minister of Finance to Councillor Nunziata.)

Thank you for your letters supporting an exemption from the education portion of property taxes for the Royal Canadian Legion branches.

I understand and appreciate the level of service and benefits Royal Canadian Legions provide to communities throughout the province. As you may be aware, under section 442.1 of the Municipal Act, municipalities have the power to provide property tax rebates to charities and similar organizations. Municipalities can determine the eligibility criteria for similar organizations and can rebate up to 100 per cent of an organization's property taxes if they so choose. The Province will share the cost of the rebate program with respect to the education portion of the property taxes.

I appreciate your taking the time to bring this matter to my personal attention.

Insert Table/Map No. 1

appendix 1

Insert Table/Map No. 2

appendix 1

Insert Table/Map No. 3

appendix 1

Insert Table/Map No. 4

appendix 1

(Report dated September 8, 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 on the meeting held on August 30, 1999 between Councillor Adams, Councillor Nunziata, City Finance staff and representatives from various veterans' clubhouses and legions.

Recommendation:

It is recommended that:

This report be received for information.

Comments:

At its meeting of June 28, 1999, the Assessment and Tax Policy Task Force deferred consideration of a report dated June 21, 1999 from the Chief Financial Officer and Treasurer regarding tax rebates until its meeting in September 1999 and requested "its Chair and Councillor Nunziata, in consultation with appropriate officials, to meet with representatives of veterans' clubhouses and legions to address concerns they may have." On August 30, 1999 a meeting was held at City Hall to discuss this issue and those attending included: Councillor Adams, Councillor Nunziata, three members of Finance Department staff and sixteen representatives of various veterans' clubhouses and legions.

The recommendations contained in the June 21, 1999 report were discussed. The main recommendation is that, given the Provincial Government's refusal to exempt the clubhouses and legions from the education share of taxes (over which it has control), the City implement a tax rebate program under Section 447.1 of the Municipal Act for total taxes (city and education portion). The Provincial Government would then reimburse the City for the education portion. The result will be a complete rebate of property tax for the veterans' clubhouses and legion halls for the tax years 1999, 2000 and 2001.

At the August 30^th meeting representatives from the veterans clubhouse expressed a concern regarding the recommendation that "the tax rebate program for Veterans' Clubhouses and Legion Halls be reviewed in 2001 ...". Staff noted that the time frame was recommended to conform with the City's overall review of property tax policies which will coincide with the next Provincial reassessment in 2001. The City has established a Business Reference Group to review tax policies for the next reassessment and tax rebates will also be included in the analysis.

Most other issues discussed at the meeting were administrative in nature, such as procedures to apply for the rebate for those that lease properties, development of final procedures for the administration of the rebate program and communication of those to the clubhouses and legions, ensuring a complete and accurate mailing list is maintained, and the types of financial information to be provided to the Chief Financial Officer and Treasurer for annual review for a rebate. Staff addressed these issues at the meeting.

Conclusion:

The consensus from the representatives of veterans' clubhouses and legions at the meeting on August 30, 1999 was support for the tax rebate program and the recommendations contained in the June 21, 1999 report.

Contact Name:

Paul Wealleans, 397-4208

Giuliana Carbone 392-8065.

(Councillor Gardner, at the Council meeting on October 26 and 27, 1999, declared his interest in the foregoing Clause, in that he is a member of the Queen's Own Rifles Officers' Association, which is an affiliate of the subject properties.)

Fair Tax Policy for Ethno-Cultural Centres

and Similar Organizations

(City Council on October 26 and 27, 1999, amended this Clause by:

(1) adding to the recommendation of the Policy and Finance Committee, the words "through the Assessment and Tax Policy Task Force", so that such recommendation shall now read as follows:

"The Policy and Finance Committee recommends the adoption of the recommendation of the Assessment and Tax Policy Task Force embodied in the following communication (September 24, 1999) from the City Clerk; and, further, that the Chief Financial Officer and Treasurer be requested to submit an annual report in regard thereto to the Policy and Finance Committee, through the Assessment and Tax Policy Task Force:"; and

(2) adding thereto the following:

"It is further recommended that:

(a) the Chief Financial Officer and Treasurer be requested to submit a report to the Assessment and Tax Policy Task Force on the feasibility of including settlement houses in this program, including the University Settlement House, St. Stephen's House and the North York Community House, and further that these organizations be considered to have met the December 31, 1999 deadline; and

(b) the following motion be referred to the Chief Financial Officer and Treasurer:

Moved by Councillor McConnell:

'WHEREAS the Tamil Eelam Society had received the approval of Council for tax relief through the previously existing process for status; and

WHEREAS the current policy includes funding for accommodating Tax Rebate Status for the Tamil Eelam Society, with no effect on the cost of the program; and

WHEREAS the current criteria includes a clause that unnecessarily excludes the Tamil Eelam Society, despite their having met the criteria under the old process under which the City had supported them;

NOW THEREFORE BE IT RESOLVED THAT the Eligibility Criteria set out in Appendix "A" embodied in the report dated September 15, 1999, from the Chief Financial Officer and Treasurer, be amended by adding to the first criterion, the words "or has previously received the support of the Council of one or more of the former municipalities for Private Legislation to provide for property tax relief.", so that it reads as follows:

"The organization must be a registered charity within the meaning of the Income Tax Act (Canada) or has previously received the support of the Council of one or more of the former municipalities for Private Legislation to provide for property tax relief." ' ")

The Policy and Finance Committee recommends the adoption of the Recommendation of the Assessment and Tax Policy Task Force embodied in the following communication (September 24, 1999) from the City Clerk; and, further, that the Chief Financial Officer and Treasurer be requested to submit an annual report in regard thereto to the Policy and Finance Committee:

Recommendation:

The Assessment and Tax Policy Task Force recommends the adoption of the report (September 15, 1999) from the Chief Financial Officer and Treasurer.

Background:

The Assessment and Tax Policy Task Force, on September 22, 1999, had before it a report (September 15, 1999) from the Chief Financial Officer and Treasurer respecting Fair Tax Policy for Ethno-cultural Centres and Similar Organizations, and recommending that:

"(1) one time funding in the amount of $4.3 million (City share) be provided from the Tax Deficiencies account of the 1999 Operating Budget to cancel rebate property taxes without penalty to December 31, 1997, in accordance with the authority provided by private bill legislation, and to rebate the 1998 and 1999 property taxes without penalty pursuant to the Small Business and Charities Protection Act taxes, 1997, for the seven organizations shown under heading (A) of Table 1(a) who have received the support of the former Councils regarding Private Bill legislation, which has been enacted, and for whom the property taxes have yet to be cancelled/rebated;

(2) one time funding in the amount of $130.0 thousand (City share) also be provided from the Tax Deficiencies account of the 1999 Operating Budget to rebate the 1998 and 1999 property taxes without penalty pursuant to the Small Businesses and Charities Protection Act, 1997, for the four organizations shown under headings (B) and (C) of Table 1(a), subject to the organization meeting the eligibility criteria respecting property tax rebates for ethno-cultural organizations proposed in this report and attached as Appendix A;

(3) a corporate expenditure program of "Property Tax Rebates - Ethno-Cultural and Similar Organizations" be established in the 2000 Operating Budget for the purpose of property tax rebates as provided for under the Small Business and Charities Protection Act, 1997 and the eligibility criteria, and ongoing conformity requirements, respecting requests for property tax relief by Ethno-Cultural and Similar Organizations, as embodied in this report and attached as Appendix A, be adopted;

(4) funding in the amount of $1.0 million be transferred from the Tax Deficiencies budget line to a new budget line "Property Tax Rebates - Ethno-Cultural and Similar Organizations" in the new 2000 operating budget for the program described in (3) above; and

(5) the appropriate City officials be authorized and directed to introduce the necessary bills and to take the necessary action to give effect thereto."

The Task Force's recommendation is noted above.

--------

(Report dated September 15, 1999, addressed to the

Assessment and Tax Policy Task Force from the

Chief Financial Officer and Treasurer)

Purpose:

To provide a fair tax policy for Ethno-Cultural Centres and Similar organizations.

Funding Source, Financial Implications and Impact Statement:

The cancellation/rebate of current and retroactive property taxes to December 31, 1999, in the amount of $4.4 million (City share), pursuant to the motions adopted by the Councils of the former Metropolitan Toronto and the former local municipalities, will be funded from the Tax Deficiencies account for the nine cultural organizations that have received the support of the former Councils regarding Private Bill legislation, and for whom property tax relief has yet to be provided, and for two additional organizations that would be eligible under the eligibility criteria embodied in this report and who have also requested similar treatment.

Adoption of a fair tax policy for Ethno-Cultural Centres and Similar Organizations, as embodied in this report, will require funding in the amount of $1.0 million for the City share of taxes to be transferred from Tax Deficiencies in the 2000 Operating Budget for the purposes of continuing the new program of Property Tax Rebates for Ethno-Cultural and Similar Organizations for the above organizations.

Recommendations:

It is recommended that:

(1) one time funding in the amount of $4.3 million (City share) be provided from the Tax Deficiencies account of the 1999 Operating Budget to cancel rebate property taxes without penalty to December 31, 1997, in accordance with the authority provided by private bill legislation, and to rebate the 1998 and 1999 property taxes without penalty pursuant to the Small Business and Charities Protection Act, 1997, for the seven organizations shown under heading (A) of Table 1(a) who have received the support of the former Councils regarding Private Bill legislation, which has been enacted, and for whom the property taxes have yet to be cancelled/rebated;

(2) one time funding in the amount of $130.0 thousand (City share) also be provided from the Tax Deficiencies account of the 1999 Operating Budget to rebate the 1998 and 1999 property taxes without penalty pursuant to the Small Businesses and Charities Protection Act, 1997, for the four organizations shown under headings (B) and (C) of Table 1(a), subject to the organization meeting the eligibility criteria respecting property tax rebates for ethno-cultural organizations proposed in this report and attached as Appendix A;

(3) a corporate expenditure program of "Property Tax Rebates - Ethno-Cultural and Similar Organizations" be established in the 2000 Operating Budget for the purpose of property tax rebates as provided for under the Small Business and Charities Protection Act, 1997 and the eligibility criteria, and ongoing conformity requirements, respecting requests for property tax relief by Ethno-Cultural and Similar Organizations, as embodied in this report and attached as Appendix A, be adopted;

(4) funding in the amount of $1.0 million be transferred from the Tax Deficiencies budget line to a new budget line "Property Tax Rebates - Ethno-Cultural and Similar Organizations" in the 2000 operating budget for the program described in (3) above; and

(5) the appropriate City officials be authorized and directed to introduce the necessary bills and to take the necessary action to give effect thereto.

Council Reference:

At is meeting of July 21 and July 23, 1998, during consideration of Clause No. 5 of Report No. 13 of the Strategic Policies and Priorities Committee - "Property Tax Rebates for Charitable and Similar Organizations", Council further moved that the Chief Financial Officer and Treasurer submit a report to Council, through the Strategic Policies and Priorities Committee, on a fair tax policy for ethno-cultural centres.

Background:

At present, there are nine cultural organizations for which a decision of Council is pending respecting property tax relief. Prior to the amalgamation of the municipalities, these organizations had previously sought and received the support of the Councils of the former upper (Metro) and the respective lower tier municipalities for support for the introduction of private legislation in the Provincial Legislature. Private legislation was enacted by the Province in late 1997 for seven of these organizations, which legislation authorized the municipalities to cancel taxes by by-law under the rules in existence at that time. With the changes in provincial legislation and policy respecting Private Members bills in late 1997 and 1998, the other two organizations missed the window of opportunity for enactment of private legislation. Since then, two additional organizations have come forward seeking similar treatment.

The total current value assessment (CVA) of the subject properties is estimated at $66.0 million. The property taxes that would otherwise be payable by these organizations amounts to approximately $1.4 million per year under full CVA, of which the municipal portion would be approximately $0.8 million per year. Table 1(a) shows the outstanding requests by ethno-cultural and similar organizations for property tax relief.

Insert Table/Map No. 1

table 1a

The private bills for 4588 Bathurst (Bathurst Jewish Centre) and 750 Spadina Avenue Association provides for the municipality to continue with providing property tax relief for the former Jewish Community Centre at these two facilities, as a name change arising from their reorganization negated their tax exempt status provided by their private bill of 1951. The private bills for the Japanese Canadian Cultural Centre and for the Korean Canadian Cultural Association provides for the municipality to continue providing property tax relief to these organizations, as a change of location negated their tax exempt status provided by their private bills of 1982 and 1993, respectively. The private bills for the National Ballet of Canada, Chinese Canadian Cultural Centre of Greater Toronto Foundation, and the Jamaican Canadian Cultural Centre provides for the cancellation of taxes on properties that are presently taxable. The request by the Tamil-Eelam Society of Canada is for tax relief on a taxable property owned by the organization, for which no private bill has been enacted. The request by the Armenian Community Centre is to extend tax relief to an additional adjacent property owned and used by the organization that is presently taxable. The requests by the Cypriot Community of Toronto and the First Portuguese Canadian Cultural Centre are post-1997 requests for similar treatment for properties owned and occupied by these organizations for ethno-cultural purposes.

In their support of the application for Private Members bills, the Councils of the former lower tier municipalities passed resolutions to cancel the local portion of taxes, subject to the enactment of the relevant bills by the Province, and requested that Metropolitan Toronto and the Metropolitan Toronto School Board pass resolutions to cancel their share of taxes. The Metro level of government, in its support of the application for Private Members bills, authorized the cancellation of the Metro portion of property taxes payable to the end of 1997, also subject to the enactment of the relevant legislation by the Province. Given the late timing of the private bills being enacted and the end of the term for Council, the local portion of taxes payable to the end of 1997 were cancelled for only two organizations, located in the former City of Toronto (the National Ballet of Canada and 750 Spadina Avenue Association). The Private Members bills that were enacted provided for retroactive cancellation of taxes to the date that the subject properties became taxable. Given Councils support of the Private Members bills, there may have been an expectation by some of the organizations that the taxes would be cancelled retroactively, and as such, in certain cases taxes were not paid. Table 1(b) shows the estimated total tax arrears, penalties and interest owing, notwithstanding the retroactive cancellation of taxes.

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Table 1(b)

Estimated Taxes Paid, Arrears, Penalties and Interest Owing

Period

City

Education

Total

Pre-1998*

$ 2,094,399

$ 1,471,549

$ 3,565,948

1998 - Aug. 31,1999

2,082,458

1,384,278

3,466,736

Total Tax Arrears, Penalties and Interest (to Aug. 31/99)

4,176,857

2,855,827

7,032,684

Projected interest/penalties to December 31, 1999

100,000

Estimated Retroactive Cancellation/Rebate funding requirement (approximate)

$ 4.3 million

$ 2.9 million

$7.2 million

* based on retroactive dates pursuant to the respective private legislation

Councils support for Private Members bills for cultural organizations was generally on an ad-hoc basis, although the former Toronto and Metro followed a broad criteria that support only be provided to "unique, one-of-a-kind facilities in the opinion of Council".

With the amalgamation of the former municipalities, there is no longer a distinction between the local and Metro portions of the tax bill. During 1998, the new Council's priorities included property assessment and taxation reform, which included consideration of property tax relief for charitable and similar organizations. The legislation with respect to the latter evolved during 1998, culminating with the enactment of the Small Businesses and Charities Protection Act, 1998 (Bill 16). In the end, Council adopted a capping provision for the commercial/industrial property classes, negating the necessity for a policy to protect charities and similar organizations from the impacts of assessment and taxation reform. Consequently, no new policy respecting property tax relief for cultural centres was established in 1998.

Property tax relief for cultural and similar organizations falls into three categories: exemptions, cancellations, and rebates. Prior to 1994, organizations such as ethno-cultural centres that were not eligible for the specific types of exemptions listed in the Assessment Act could seek to obtain tax exempt status through private legislation, which were being approved on an ad hoc basis by the Province's Private Bills Committee and then enacted by the Provincial Legislature. To date, staff have identified twenty-nine organizations occupying forty-four property locations that have been granted tax exempt status through private bill legislation, as shown in Table 2(a). The total CVA of these exempted properties is estimated at approximately $167.0 million. It is estimated that the tax implication for these exempt properties amounts to approximately $7.4 million per annum (based on current tax rates), with the municipal portion being $4.2 million, as shown in Table 2(b).

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Table 2(a)

Existing Private Bills Providing for Property Tax Exemptions in Toronto

Private Bill Enacted

Organization

No. of Exempted Locations

Total Assessed Value

1868-1909

Toronto Young Men's Christian Association

$ 38,970,000

1942

Ina Grafton Homes

355,700

1946

Canadian Legion of the British Empire League

4,350,000

1951

Jewish Community Centre of Toronto*

36,576,000

1960-1961

Young Women's Christian Association of Canada

5,844,000

1976

Dovercourt Baptist Foundation

Not Found

1980

Italian-Canadian Benevolent Corporation

50,577,109

1981

Armenian Community Centre (45 Hallcrown)

5,896,000

1981

Latvian Canadian Cultural Centre

2,059,000

1982

Japanese Canadian Cultural Centre* (123 Wynford)

1,148,000

1982

Ukrainian Cultural Centre

2,198,000

1983

Armenian-General Benevolent Union (Alex Manoogian Cultural Centre)

4,137,000

1983

Bernard Betel Centre for Creative Learning

Not Found

1983

Hungarian Canadian Cultural Centre (Hungarian House)

2,611,000

1983

New Horizons Day Care Centre

276,000

1983

Massey Hall

11,147,000

1983

Roy Thompson Hall

18,650,000

1983

Frontier College

2,889,000

1983

The Missionary Church, Canada East

Not Found

1984

Scandinavian Canadian Centre

317,000

1984

United Jewish Welfare Fund

3,862,000

1984

Enoch Turner Schoolhouse Foundation

196,000

1986

Children's Oncology Care of Ontario (Ronald McDonald House)

4,725,000

1987

Canadian Opera Company

2,539,000

1989

Sisters of Social Service

Not Found

1991

Royal Conservatory of Music

4,523,000

1992

Cholim Bikur

411,000

1993

Korean Canadian Cultural Centre*

332,000

TOTAL

$ 166,532,809

*Tax exempt status subsequently negated as a result of a name or address change; see Table 1(a); not included in calculation of total.

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Table 2(b)

Estimated Tax Implication of Tax Exempt Properties

Estimated 1999 Municipal Tax Potential

$ 4,203,307

Estimated 1999 Education Tax Potential

3,200,324

Total Tax Implication

7,403,631

By 1994, the preferred form of such private legislation was revised to provide for tax cancellation as opposed to tax exemption, as is the case for seven of the organizations listed in Table 1(a). This change in treatment was important in four ways. First, it required that property tax relief be granted by the cancellation of taxes through municipal by-law rather than directly through exemption by the Province. As such, it provided the municipalities and school boards with a say in decisions which affected their tax base. Second, the cancellation did not remove the property from the tax assessment roll, and therefore did not affect the apportionment of taxes for upper tier and education purposes. Third, the bill allowed that the tax cancellation be subject to any such conditions as may be set out by Council in the by-law. The latter is significant because, whereas a tax exemption is effectively an invisible grant in perpetuity and is not accounted for in municipality's budgetary process, the cancellation necessitates that the amount of taxes cancelled be included in the annual expenditures of the municipality. As such, a cancellation is equivalent to a grant, in a monetary sense, for each and every year that the cancellation is in effect, and thus provides for some accountability.

In 1998, the introduction of Bill 16, the "Small Business and Charities Protection Act", fundamentally changed the rules governing property tax relief for charitable and similar organizations. The most significant change was that this Act transferred the decision-making and responsibility to the municipalities, who are now empowered to provide property tax relief by way of a tax rebate. In addition to owned-facilities, the Act further provides the municipality with the discretionary power to rebate taxes to charitable and similar organizations in leased premises. The definition of "similar" is at the discretion of Council.

Comments/Discussion:

The provision of property tax relief for cultural centres is a complex issue. The matter has been complicated by the varying manner in which these requests have been treated over many years. Attempting to redress many years of perceived inequity is a difficult task.

Consideration of this matter will likely attract other organizations to seek similar treatment. Council's action in this regard can result in long term consequences for the City. This report attempts to balance policy objectives with the financial pressures that the City faces. This report is premised on a definition of fair as being that "all similar organizations be treated in an equitable manner; that one organization should not be treated differently than another organization in a similar position".

Tax Cancellation verses Tax Rebate:

The enactment of the Small Business and Charities Protection Act, 1998 (Bill 16), as amended, provides the City with the authority and responsibility to provide property tax relief by way of a tax rebate to Cultural and Similar organizations, as defined by Council, in both owned and leased premises. Given this legislative change, it is our understanding that the province will no longer enact private bills under such circumstances. Thus any new requests for property tax relief by cultural and similar organizations can only be dealt with under the tax rebate mechanism. A policy in this regard is presented in a subsequent section of this report.

However, of the nine organizations whose requests for property tax relief have yet to be addressed, Council has two mechanisms available to address the seven organizations for whom private bills have been enacted: through a cancellation pursuant to the private bill; or through a tax rebate as permitted under Bill 16, which also requires a by-law. While either approach achieves the same end objective of providing property tax relief, there are subtle differences. For one, under the tax rebate approach (Bill 16), the by-law must provide a definition of eligible cultural or similar organizations. Upon receipt and review of applications, any organization meeting the eligibility criteria would be eligible for a tax rebate. Under the tax cancellation approach, only those organizations for whom private legislation is enacted would be eligible for property tax relief. For another, tax rebates may be extended to organizations in leased premises. Historically, Private Members bills have only been enacted for owned premises. Another difference is that the Private Members bills enacted since 1994 prescribe that the School Board "may", but is not required to, cancel their share of taxes. The Province has indicated their intent to cancel the School Board share of taxes should the City adopt by-laws under the Private Members bills. Under Bill 16, the legislation requires that the School Board share, in their proportion of taxes, in any rebate of taxes under the rebate program. As a final point, it is noted that the seven Private Members bills provide for the retroactive cancellation of taxes, in two cases to 1995, pursuant to the spirit of the motions passed by Council in 1997. The City Solicitor advises that rebates under Bill 16 may be extended only as far back as 1998, since the section authorizing such rebates was only enacted in 1998.

There are also similarities in both approaches. Under either approach, the by-law would be in effect essentially in perpetuity, unless the by-law was conditional to annual review, amended or repealed. For another, the tax cancellation/rebate need not be 100 percent of the taxes payable, but cannot be more than 100 percent of the taxes payable.

In the end, either approach could be made to be transparent to these cultural and similar organizations as they would receive their property tax relief to the extent and for the term deemed appropriate by Council. Under the rebate approach, property taxes could be rebated through the direct adjustment of taxes on the property tax account in order to avoid unnecessary transactions, similar to a cancellation. Given that the end objective is achieved under either approach, this report recommends that, on a going forward basis, the nine ethno-cultural organizations for which a decision regarding property tax relief is pending by Council, the tax rebate approach be followed so that the nine organizations, and subsequent applicants, are be treated in exactly the same manner. A separate by-law under the provisions of the Private Members bills will also be necessary to address the pre-1998 retroactive tax issue.

Proposed Criteria Respecting Requests for Property Tax Relief by Cultural and Similar Organizations:

For the most part, those ethno-cultural and similar organizations listed in Tables 1 and 2 of this report provide activities that promote their culture within the multicultural context of Canadian society and at the same time facilitate communication and understanding between Canada and foreign countries in culture, education, arts, and trade. For many of the organizations, their facilities and programs are available at little or no cost to the residents of Greater Toronto. Those with previous tax-exempt status through private legislation are registered charitable organizations within the meaning of the Income Tax Act.

Given the diverse range of activities and services provided by these organizations, a policy listing specific eligibility criteria for property tax relief is problematic and can inadvertently invite numerous applications, while restricting access by other worthy organizations. However, based on a review of the literature, as discussed in a report by the Chief Financial Officer and Treasurer, headed "Property Tax Rebates for Charitable and Similar Organizations" (June 30, 1998; Clause No. 5 of Report No. 13 of the Strategic Policies and Priorities Committee) it appears that there are a number of areas of commonality that can constitute as a framework to determine the eligibility of a "Ethno-Cultural" organization for a tax rebate. The criteria include:

(1) the organization must be a registered charity within the meaning of the Income Tax Act (Canada); and,

(2) the organization must demonstrate a going concern for promoting culture within the multicultural context of Canadian society and facilitating communication and understanding the areas of culture, education, arts, and trade; and,

(3) the activities must be accessible to the community as a whole or for an appreciable portion of it at minimal or no cost; and,

(4) the activities must not be contrary to public policy; and,

(5) the property must be owned, occupied and used for the purposes and under the conditions outlined above. Vacant and unused portions, and property or portions leased to entities not meeting the eligibility criteria should not be eligible for rebates.

All but one of the eleven subject organizations discussed in this report are registered charities, and meet the eligibility criteria discussed above. The Tamil-Eeelam Society of Canada is a not-for-profit organization. Although the Society received the support of the Council of the former Metropolitan Toronto regarding private bill legislation, it is unlikely that such legislation would have been enacted by the Province. Based on the above proposed eligibility criteria, the Tamil-Eelam Society would not be eligible for a tax rebate. To become eligible, the Tamil-Eeelam Society of Canada must register as a Charity under the Income Tax Act (Canada).

A criteria of demonstration of financial need is not recommended at this time. There are several reasons for this. For one, the criteria above includes that to be eligible, the organization must be a registered charity. For another, Council's support for tax relief for the subject organizations did not include consideration of financial need, and to introduce it now would be unfair to other organizations vis-à-vis to these organizations. Finally, financial consideration was not a factor in the enactment of tax exempt status by the Province for the twenty-nine similar organizations listed in Table 2(a).

The inclusion of leased premises as part of the eligible group is also not recommended at this time. The intent of the policy outlined in this report is to support the promotion of culture and community belonging, and the facility generally tends to be the focal point in this activity. A visit to any of the owned cultural facilities shows the significant capital improvements that have been made and the commitment to provide a unique atmosphere for the activity of these organizations. Nonetheless, a policy is being developed by the Chief Financial Officer and Treasurer, in conjunction with the Property Tax and Assessment Business Reference Group, to provide some form of property tax relief to mitigate financial impacts resulting from reassessment and taxation reform for Charitable and Non-Profit Organizations in owned and leased facilities. The policy recommendations of the Business Reference Group in this regard are expected in mid-2000.

Implementation Issues:

Outstanding Requests by Cultural Centres for Property Tax Relief:

Keeping with the spirit of the former Councils motions, this report recommends full and retroactive property tax relief for those organizations for which a decision of the new Council is pending, subject to these organizations meeting the eligibility criteria. To settle the pre-1998 tax accounts, it is recommended that the necessary by-laws pursuant to the relevant Private Members bills be enacted to settle any outstanding tax accounts to December 31, 1997 for the seven organizations shown under heading (A) of Table 1(a). Going forward, it is recommended that a program entitled "Property Tax Rebates - Ethno-Cultural Centres and Similar Organizations" be established and that the definition of cultural centre and eligibility criteria outlined in this report be adopted, and the necessary by-law be enacted pursuant to Bill 16 to rebate the 1998 and 1999 municipal and education taxes, without penalty, for the all the organizations listed in Table 1(a) of this report, subject to the eligibility criteria as proposed in this report being met.

New Requests and On-Going Adherence to Eligibility Criteria:

In order to ensure adequate time for review of requests, and that adequate information is provided, it is recommended that ethno-cultural and similar organizations seeking eligibility for the property tax rebate program be requested to make application to the Chief Financial Officer and Treasurer by December 31 to be considered under the tax rebate program for the following and subsequent years. All applicants will be tested against the eligibility criteria proposed in this report and attached as Appendix A. Furthermore, to ensure continued eligibility for the program, it is recommended that organizations in the program be required to certify continued conformance with the eligibility criteria, on a form to be set by the Chief Financial Officer and Treasurer and to be sent to the organizations annually, and where necessary, City officials be granted the necessary authority to confirm continued eligibility in the program.

Given that the City received written requests in 1998 by two additional organizations (the Cypriot Community of Toronto and the First Portuguese Canadian Cultural Centre of Toronto), and that these organizations meet the eligibility criteria proposed in this report, they have been included in the rebate program retroactive to and including 1998.

Funding Impact:

As previously discussed, the cost of the rebate program recommended in this report for the City share of taxes is estimated at $0.8 million. It is noted that four of the eleven organizations mentioned in this report were previously exempted from property taxation and, notwithstanding CVA and amalgamation effects, the continuation of property tax relief for these organizations would have a negligible financial impact on the City.

However, establishing a program of property tax rebates for ethno-cultural centres will invariably attract other organizations to seek similar treatment. While the exact number of organizations that potentially may be eligible under this program is not known, and is likely to grow with time, the June 30, 1998 report of the Chief Financial Officer and Treasurer provides an estimated figure of between 60 to 70 organizations that may be similar in nature, with the annual municipal taxes estimated in the order of $1.0 million. While the figure may seem low, a review of the data suggests that most of the major facilities are already exempted under private legislation, or are one of the eleven discussed in this report. Notwithstanding the construction or acquisition of any new major cultural facility, the balance of potential applicants reside in minor facilities. As such, additional initial funding in the amount of $0.2 million is recommended as a contingency, for a total 2000 Operating Budget funding requirement of $1.0 million.

Conclusion:

At present, there are nine cultural organizations for which a decision of Council is pending respecting property tax relief. These organizations had previously sought and received the support of the Councils of the former Metro and the respective former lower tier municipality for private legislation to provide for such property tax relief prior to the amalgamation of the municipalities. Due to timing and changes in provincial legislation late in 1997 and in 1998, only seven private bills were enacted by the Province. Since then, two additional ethno-cultural organizations have come forward to seek similar treatment.

Providing property tax relief for cultural centres is a complex issue. Property tax relief for cultural and similar organizations falls into three categories: exemptions, cancellations, and rebates. Much perceived inequity has arisen as a result of the varying manner in which these requests have been treated over many years.

This report presents a fair tax policy for ethno-cultural centres and similar organizations. It is premised on a definition of fair as being that "all similar organizations be treated in an equitable manner", while at the same time attempts to balance policy objectives with the financial pressure the City faces.

Keeping with the spirit of the former Councils' motions, this report recommends full and retroactive property tax relief for those nine organizations for which a decision of the new Council is pending, subject to the eligibility criteria proposed in this report being met, and for the two additional organizations that have requested similar treatment and also meet the eligibility criteria, which will require one time funding in the amount of $4.4 (City share) million from the tax deficiency account.

Invariably, other organizations will seek similar treatment. On a going forward basis, the tax rebate approach pursuant to Bill 16 is recommended so that the subject organizations, and subsequent applicants, are treated in exactly the same manner. The report recommends the creation of a Corporate program "Property Tax Rebates - Ethno-Cultural Centres and Similar Organizations". An eligibility criteria is proposed that includes being a registered charity, demonstrating a going concern for the promotion of culture, community accessibility, that the facility be owned, occupied and used for such purposes. Funding in the amount of $1.0 million in the 2000 Operating Budget is recommended to be transferred from the Tax Deficiencies account to a new account "Tax Rebates" for the purposes of continuing the program of Property Tax Rebates for the subject organizations and for similar organizations that meet the eligibility criteria for this program.

Contact Names:

Adir Gupta, 392-8071

Paul Wealleans, 397-4208

Giuliana Carbone, 392-8065

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Appendix A

Criteria for Ethno-cultural Organizations for Tax Rebates

Eligibility Criteria:

(1) the organization must be a registered charity within the meaning of the Income Tax Act (Canada);

(3) the activities must be accessible to the community as a whole or for an appreciable portion of it at minimal or no cost;

(4) The activities must not be contrary to public policy; and,

Conformity Requirements:

(6) Ethno-cultural and similar organizations seeking eligibility for the property tax rebate program shall make application, on a form to be set by the Chief Financial Officer and Treasurer, by December 31 to be considered under the tax rebate program for the following and subsequent years;

(7) organizations in the program shall certify continued conformance with the eligibility criteria, on a form to be set by the Chief Financial Officer and Treasurer and to be sent to the organizations annually, and where requested, shall provide City officials any additional information and access to the premises as necessary to confirm continued eligibility in the program.

Property Tax Relief for Low-Income Disabled Persons -

Criteria and Program Enhancement

(City Council on October 26 and 27, 1999, amended this Clause by amending Recommendation No. (2) of the Assessment and Tax Policy Task Force by:

(a) inserting, after the words "deferral of", the words and figure "up to $600.00 of"; and

(b) adding thereto the words "which was to be retroactive to 1998",

so that such recommendation shall now read as follows:

="BR1">

"(2) the Mayor be requested to write to the Premier of Ontario requesting the provincial government to expedite the special legislation requested by the City respecting deferral of up to $600.00 of property tax for low income persons and seniors which was to be retroactive to 1998.")

The Policy and Finance Committee recommends the adoption of the Recommendations of the Assessment and Tax Policy Task Force embodied in the following communication (September 24, 1999) from the City Clerk:

Recommendations:

The Assessment and Tax Policy Task Force recommends that:

(1) the report (September 21, 1999) from the Chief Financial Officer and Treasurer be adopted; and

(2) the Mayor be requested to write to the Premier of Ontario requesting the provincial government to expedite the special legislation requested by the City respecting deferral of property tax for low income persons and seniors.

Background:

The Assessment and Tax Policy Task Force, on September 22, 1999, had before it a report (September 21, 1999) from the Chief Financial Officer and Treasurer respecting Property Tax Relief for Low-Income Disabled Persons - Criteria and Program Enhancement, and recommending that:

"(1) the following expanded eligibility criteria for low-income disabled persons or the spouse of such a person be adopted:

To be eligible as a low-income disabled person, a person:

(i) must have owned and occupied the residential property for one year; and

(ii) must be receiving disability benefits under any one of the following: Ontario Disability Support Program (ODSP), Canada Pension Plan, Workplace Safety Insurance Board (WSIB), Unemployment Insurance Sickness Benefit, Motor Vehicle Accident Insurance, Private Disability Insurance Plan, Employer Disability Insurance Plan or disability programs provided by Professional Associations;

(2) a graduated deferral program for low-income disabled persons be implemented based on the income levels as set out in this report;

(3) no interest be charged on the deferred tax amount;

(4) the changes to the tax deferral program for low-income disabled persons, as set out in this report, be applied retroactively to January 01, 1998 and the applications already received for the 1998 and 1999 tax years be reviewed based on the expanded criteria and program;

(5) all administrative terms and conditions of the current low-income senior and low-income disabled tax deferral program, as established by By-law No. 603-1998, apply to the expanded eligibility criteria for low-income disabled persons;

(6) authority be granted for introduction of necessary bills in Council; and

(7) the appropriate civic officials be authorized and directed to take the necessary action to give effect thereto."

The Task Force's recommendations are noted above.

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(Report dated September 21, 1999, addressed to the

Assessment and Tax Policy Task Force from the

Chief Financial Officer and Treasurer)

Purpose:

This report is to provide a policy respecting tax relief for low-income disabled persons under enhanced criteria.

Financial Implications:

If Council adopts the expanded criteria and tax deferral program, as set out in this report, an estimated $1.6 million in taxes will be deferred annually, of which the City share is $1.0 million. There are no long term financial implications to the City because deferred amounts become payable at the time of sale or change in ownership of the property. The total deferred taxes are treated as a long term receivable and could potentially range between $723,000.00 for 1998 to $1.6 million for 2000.

The taxes deferred will result in lost interest revenue and the City will incur a cumulative interest expense of between $0.577 million and $1.23 million over a 10-year period, or $57,700.00 to $123,000.00 annually depending on the interest rate from year to year.

Recommendations:

It is recommended that:

(1) the following expanded eligibility criteria for low-income disabled persons or the spouse of such a person be adopted:

To be eligible as a low-income disabled person, a person:

(i) must have owned and occupied the residential property for one year; and

(2) a graduated deferral program for low-income disabled persons be implemented based on the income levels as set out in this report;

(3) no interest be charged on the deferred tax amount;

(6) authority be granted for introduction of necessary bills in Council; and

(7) the appropriate civic officials be authorized and directed to take the necessary action to give effect thereto.

Reference/Background:

Section 373 of the Municipal Act allows municipalities to pass by-laws to provide tax relief through deferrals or cancellations in respect of all or part of assessment related tax increases for low-income disabled persons.

At its meeting of July 21 and 23, 1998, City Council adopted the recommendations of the Tax Policy Task Force to implement a tax deferral program for tax increases due to reassessment for properties owned by low-income disabled persons (Strategic Policies and Priorities Committee Report No. 13, Clause 3). Council passed By-law No. 603-98 at its meeting on July 29, 30 and 31, 1998 to implement this program. In addition, Council requested the Chief Financial Officer and Treasurer and the Commissioner of Community and Neighbourhood Services to strike a working group that includes staff and representatives from community organizations including ARCH (A Legal Resource Centre for Persons with Disabilities) to develop criteria for an enhanced residential property tax relief program in respect of all or part of assessment-related tax increases on residential property owned by low-income disabled persons.

Comments:

In response to Council's request, a work group was struck comprising representatives from ARCH, North York Community House, the Centre for Independent Living in Toronto and staff from the Finance and Community and Neighborhood Services Departments, the Access/Equity Centre, Policy and Program Division of Urban Planning and Development Services and Corporate Planning of CAO's office. The first meeting of the work group was held on June 3, 1999. The intent of this meeting was to formulate possible expanded criteria and report to the Assessment and Tax Policy Task Force. A second meeting of this workgroup was held on July 22, 1999.

The Current Program:

Eligibility for the current tax deferral program for low-income disabled home owners includes only applicants receiving disability benefits under the Ontario Disability Support Program (ODSP), the Family Benefits Act (FBA) and the Guaranteed Annual Income Systems (GAINS). ODSP, which was introduced in 1998, replaced both the FBA and GAINS. The ODSP, which is both asset-tested and income-tested, is made up of a Basic Need Allowance and a Shelter Allowance. The Shelter Allowance includes property taxes as a cost component. If property taxes are deferred, shelter costs may be reduced, thereby reducing the ODSP Shelter Allowance. Therefore, a property tax deferral may result in a disadvantage for many ODSP benefit recipients. Under the current program, although the City received 650 applications from disabled low-income home owners for 1998 and 1999, only 40 were qualified to receive tax deferral in this two-year period. These facts justify expansion of the current program to include other disability insurances in the criteria so that a larger number of disabled home owners could receive tax relief.

The Expanded Program:

Firstly, the workgroup identified the following disability insurances to be included in the expanded criteria: Ontario Disability Support Program (ODSP), Canada Pension Plan, Workplace Safety Insurance Board (WSIB), Unemployment Insurance Sickness Benefit, Motor Vehicle Accident Insurance, Private Disability Insurance Plans, Employer Disability Insurance Plans and disability benefits provided by Professional Associations.

It should be noted that eligibility for some of the disability benefits noted above are not income-tested and a person may receive benefits regardless of their level of income. Therefore, a graduated tax deferral program with income thresholds similar to the current senior's program is recommended for low-income disabled persons. In addition, under the expanded program, qualification for application requires proof of receipt of disability benefits from identified donor organizations and proof of income of applicants. The recommended graduated tax deferral program is as follows:

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Table 1. Expanded Tax Deferral Program for Low-Income Disabled Persons -

Amount of Tax Deferral as Percentage of Assessment-Related Tax

Increase (Various Household Income Levels)

Household Income	Amount of Tax Deferral as percentage of Assessment Related Tax Increase
Less than $20,000.00	100 percent
Greater than $20,000.00 but less than or equal to $25,000.00	75 percent
Greater than $25,000.00 but less than or equal to $30,000.00	50 percent
Greater than $30,000.00 but less than or equal to $35,000.00	25 percent

The workgroup also agreed that the City need not develop a unique definition to define 'disability', and the criteria for the relief program should be based on qualifications adopted by the various disability insurance agencies to determine disability benefit eligibility. The workgroup agreed that City staff should not be required to do their own needs assessment when evaluating deferral applications. Therefore, a tax deferral applications would be approved so long as the applicant is in receipt of any of the disability benefits noted above, with the amount of taxes eligible to be deferred determined based on the level of household income.

Administrative Terms and Conditions:

The administrative terms and conditions for the tax deferral programs adopted by Council in 1998 would apply to the expanded eligibility criteria and program for low-income disabled persons that is recommended in this report. The current administrative terms and conditions of the tax deferral program for both low-income seniors and disabled persons include the following:

(a) to qualify for tax deferral, applicants must have owned and occupied the property for a minimum of one year. Proof of residency must be provided;

(b) tax deferral is allowed on the principal residence only;

(d) tax deferral amounts are only advanced (or deferred) after payment is received in full for any current or past year amounts payable.

(e) application for tax deferral must be made annually;

(f) for properties held jointly, or co-owned by persons other than a spouse, both or all co-owners must qualify for benefits under the income means test in order to receive tax deferral;

(g) tax deferral amounts provided under the by-law are not transferrable to the estates of deceased persons; and

(h) any tax deferral ceases to apply once the property is sold, or when the eligible applicant dies or ceases to be eligible under the criteria established by the by-law. Any deferred amount become a debt payable to the City, including part-year portions.

The full terms and conditions, as amended and adopted by Council at its meeting on July 21 and 23, 1998, are set out in Strategic Policies and Priorities Report No. 13, Clause 3 and By-law No. 603-1998.

Analysis of Financial Implications due to Criteria and Program Enhancement:

Appendix 1 shows estimates of total tax deferred for various income groups among disabled homeowners in Toronto for 1998, 1999 and 2000. The analysis is based on the information provided by Statistics Canada for 1991. This is the latest available statistical data on persons with disabilities. An actuarial analysis regarding age groups and expected program take-up other than that included in this report cannot be done with information currently available.

Column 3 of the appendix shows the disabled person population for various income levels in 1991 in Ontario. Column 4 is an estimate of similar population distribution in Toronto for the same year. This estimate is based on the Toronto to Ontario population ratio of 0.22 in 1991. In 1991, Statistics Canada reported an increase of 2.3 percent in disabled persons' population in the five years since 1986. Based on this information, it is estimated that the disabled person's population in Toronto could rise by an additional 4.6 percent to 214,962 by 2000.

Statistics Canada reported a total of 562,015 disabled persons within the age groups between 15 and 64 years owned accommodation in Ontario in 1991. This was 60 percent of the total disabled population in Ontario at that time. From this, it is estimated that 129,330 disabled persons or 60 percent will own homes in Toronto in 2000 (Column 6). Based on the same Statistics Canada report, 20 percent of disabled persons in Ontario (186,826) received some kind of disability benefits in 1991. It can therefore be anticipated that 25,866 disabled homeowners may receive disability benefits in Toronto in 2000.

In the City of Toronto for 1998, 44 percent of the residential properties had an assessment-related tax increase due to reassessment. The average increase was $670.00 per household. Assuming that 30 percent (3,414) of the disabled homeowners who receive disability benefits and have annual incomes less than $35,000.00 would apply for a tax deferral, it is estimated a total of $1.6 million in taxes may be deferred annually. The City's share would be $ 1.0 million.

As noted above, there were 650 applications for 1998 and 1999 for the current tax deferral program for low-income disabled persons, of which 40 were approved based on the existing program criteria. If Council approves the expanded criteria and graduated tax deferral program recommended in this report, all of the remaining 610 applications in house would likely be approved due to the expansion of the criteria to include receipt of any disability benefit. However, income verification would still be required to determine the amount of taxes eligible for deferral. If all of the applicants qualify for a full deferral, the estimated amount of taxes deferred would $183,000.00 for 1998 and $366,000.00 for 1999, of which the City's share would be $120,578.00 and $241,156.00 respectively.

Analysis of Financial Implications - Interest Expense on Borrowing:

As reported previously, there is an interest cost to the City of the no interest deferral programs adopted by Council. The estimated cumulative interest lost on the deferred taxes receivable at no interest due to the implementation of the expanded deferral program is $0.577 million to $1.23 million in year 10, or $57,700.00 to $123,000.00 per year. The total deferred taxes would be treated as a receivable and could potentially range between $723,000.00 for 1998 to $1.6 million for 2000.

Conclusion:

The current tax deferral program for low-income disabled home owners includes property ownership with a minimum residency period of 1 year, and Ontario Disability Support Program (ODSP) as the only criteria for qualifying applications along with the requirement that an applicant must have owned and occupied the residential property for one year. In order to expand this program a working group comprised of ARCH, North York Community House, the Centre for Independent Living in Toronto and staff from the Finance and Community and Neighbourhood Services Departments, the Access/Equity Centre, Accessibility Planning of Urban Developing Service and Corporate Planning of CAO's office of the City of Toronto was established.

The workgroup recommends that eligibility for current tax deferral program for low-income disabled persons be extended to those persons in receipt of disability benefits under the Canada Pension Plan, Workplace Safety Insurance Board (WSIB), Unemployment Insurance Sickness Benefit, Motor Vehicle Accident Insurance, Private Disability Insurance Plan, Employer Disability Insurance Plan and disability programs provided by Professional Associations.

A graduated tax relief program similar to that currently available for low-income seniors should be established. The expanded program could benefit an estimated 9,268 low-income disabled homeowners in Toronto. This report recommends that the changes to the tax deferral program for low-income disabled persons, as set out in this report, be applied retroactively to January 01, 1998 and the applications received for the 1998 tax year be reviewed based on the expanded criteria and program.

Assuming 30 percent of this population or 2,780 disabled homeowners participate in the program, an estimated $1.6 million in annual taxes may be deferred, of which the City share is $1.0 million. The taxes deferred will result in lost interest revenue and the City will incur a cumulative interest expense of between $0.577 million and $1.23 million over a 10-year period, or $57,700.00 to $123,000.00 annually depending on the interest rate from year to year. The total deferred taxes would be treated as a receivable and could potentially range between $723,000.00 for 1998 to $1.6 million for 2000.

Contact Names:

Raj Mathavan, 395-6738

Lynne Ashton, 397-4203

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Insert Table/Map No. 1

Appendix 1

Estimated Deferred Tax Amounts

Association of Municipalities of Ontario -

Gas Franchise Defense Fund

(City Council on October 26 and 27, 1999, amended this Clause by adding thereto the following:

"It is further recommended that the recommendations of the Telecommunications Steering Committee embodied in the communication dated October 25, 1999, from the City Clerk, be adopted, subject to amending Recommendations Nos. (2) and (4) by inserting after the word 'counsel' the words 'and technical consultants', so that such recommendations shall now read as follows:

'The Telecommunications Steering Committee recommended to City Council that:

(1) the grant to the Association of Municipalities of Ontario (AMO) Gas Franchise Defence Fund be conditional on the City of Toronto having a representative on AMO's Gas Franchise Committee;

(2) the City Solicitor be granted the authority to engage outside legal counsel and technical consultants, if necessary, to supplement internal expertise in the areas of natural gas distribution, making submissions to the Ontario Energy Board and rights-of-way issues;

(3) if necessary, the City Solicitor be authorized to go to court to ensure that the City of Toronto has a fair opportunity to participate in relevant Ontario Energy Board proceedings; and

(4) any necessary funds for the purpose of the City Solicitor engaging external legal counsel or technical consultants for these activities be provided from the Corporate Contingency Account.' ")

The Policy and Finance Committee recommends the adoption of the Recommendation of the Telecommunications Steering Committee embodied in the following communication (September 27, 1999) from the City Clerk:

Recommendation:

The Telecommunications Steering Committee recommended to the Policy and Finance Committee, and Council, that the City of Toronto contribute to the Association of Municipalities of Ontario Gas Franchise Defense Fund at a rate of three cents per capita on a one-time basis; and that the necessary funds be taken from the Corporate Contingency Account.

Background:

The Telecommunications Steering Committee on September 24, 1999, had before it a communication (August 30, 1999) from Mr. Michael Power, President, Association of Municipalities of Ontario, providing an update on AMO's ongoing work in the development of a new model natural gas franchise agreement, and to ask for support; advising that the Board of Directors of AMO recently adopted a resolution calling for the establishment of a "Gas Franchise Defense Fund" and that the Board is asking that all AMO member municipalities voluntarily contribute to this fund, on a one-time basis, as follows:

(a) two cents per capita for lower-tier municipalities;

(b) one cent per capita for upper-tier municipalities; and

--------

(Communication dated August 30, 1999, addressed to

all Heads of Council from Mr. Michael Power, President,

Association of Municipalities of Ontario (AMO))

I am taking this opportunity to update you on AMO's ongoing work in the development of a new model natural gas franchise agreement, and to ask for your support. As you are aware, the model franchise agreement serves as the standard operating agreement between municipalities and gas utilities that sets out the terms and conditions under which gas utilities may distribute natural gas within a municipality.

AMO, with the support of its members, developed the original Model Gas Franchise Agreement in consultation with the gas industry in 1987, which was subsequently sanctioned by the Ontario Energy Board (OEB). As many of the current franchise agreements are coming up for renewal, AMO and the gas industry have been working on changes to the model agreement to bring it up to date and reflect current conditions.

While the AMO/Industry group have made progress in a number of areas of the agreement, there are several major unresolved issues on the municipal side, including permit fees, duration of renewals, and compensation for the use of municipal rights of way. It appears that these issues will not be resolved to our satisfaction without intervention by AMO at the Ontario Energy Board. AMO must therefore be prepared to defend its positions and provide evidence on these issues before the OEB. We expect the process will be complex and costly, and will require extensive research, specialized expertise, and external legal counsel. This is why we are asking for your immediate and urgent help.

What You Can Do:

We need your help to protect your interests. AMO's Board of Directors recently adopted a resolution calling for the establishment of a "Gas Franchise Defense Fund". The Board is asking that all AMO member municipalities voluntarily contribute to this fund, on a one time basis, as follows:

(a) two cents per capita for lower-tier municipalities;

(b) one cent per capita for upper-tier municipalities; and

The Gas Franchise Defense Fund (see attached Backgrounder for details) will be used to prepare a defense of the municipal position on natural gas franchise agreements, and to develop legal provisions for a revised model agreement, as well as to intervene in OEB proceedings and take appropriate legal action as required. We will be seeking to allow all municipalities to take advantage of changes resulting from the negotiation of a new model agreement, whether they have recently renewed their franchise agreements or not.

In January, AMO requested information from its members on the timing of upcoming renewals of existing franchise agreements. If you haven't already sent this information in, we are requesting that you do so now to assist us in our efforts. The gas industry is seeking 15 and 20 year renewal terms for existing franchises - it is extremely important that municipalities not undertake to renew franchise for more than fifteen years. The OEB, in decision EBO 125 (the precursor to the Model Agreement), stated that it was of the opinion that in the case of renewals a ten to fifteen year term seems to be adequate. Longer terms may affect the possible benefits achievable from a new agreement or any future changes in legislation.

Why the Defense Fund is Needed:

The OEB has not yet determined the process that they will use to approve a new model franchise agreement, but have made it clear that they would like to see a revised agreement in use by January 2000. The need to establish a defense fund is therefore pressing. We anticipate that AMO will make representation to the OEB in the Fall, and we want to have well-prepared arguments to advance our position, to counter the extensive financial and legal resources available to the gas industry lobby.

AMO's defense fund will allow us to intervene on behalf of the municipal sector in a generic hearing, or on behalf of individual municipalities seeking approval of their franchise renewals.

Your contribution to this fund is extremely important, as the costs involved in preparing and defending a case before the OEB are considerable, and represent an unbudgeted activity for AMO, requiring special assistance for research and legal representation.

When AMO launched its defense of the original model franchise agreement before the OEB in 1987, these costs were covered through a similar member-supported fund. The results of AMO's involvement then helped to secure for all municipalities the ability of municipal engineers to grant approvals and to specify the location and depth of buried facilities; special requirements or the right to refuse gas facilities on bridges; beneficial cost-sharing arrangements for relocation of gas pipelines; and guidelines for the length of initial and renewal terms.

AMO's Position on the Issues:

In current discussions with the gas industry, AMO has argued that private utilities using municipal property to earn profits should compensate municipalities and their property taxpayers on an annual basis for the economic benefit received from the use of the municipal resource. Increased operating costs related to ROW management should be borne by customers of a particular utility, and not unfairly passed on to property taxpayers.

AMO also maintains that municipalities must have the authority to collect permit fees for right of way access to offset municipal costs related to ROW administration and reduced pavement life. Discussion has also focussed on the duration of franchise agreements and the duration of franchise renewals, where AMO is proposing that renewal agreements be no longer than 10-15 years as was originally suggested by the OEB. AMO is also seeking to clarify issues surrounding the expiry and/or termination of franchise agreements. These and other issues are more fully detailed in the Backgrounder.

AMO remains committed to developing a new model gas franchise agreement that protects the interests of municipalities, and one that establishes fairness for property taxpayers. We need your help, and your financial contribution, to ensure that this objective is met. AMO's success in this initiative will have profound impacts on municipal right of way management across all energy sectors well into the future.

As always, our staff are available to answer any questions you may have. Please contact Pat Vanini, Director of Policy and Government Relations, at 416-971-9856, extension 316 or Casey Brendon, AMO Policy Advisor at extension 341.

I look forward to your prompt support of this important effort.

(A copy of the Backgrounder documents providing details respecting AMO's Model Natural Gas Franchise Agreement and the Gas Franchise Defense Fund, referred to in the foregoing communication, was forwarded to all Members of Council with the October 14, 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 October 26 and 27, 1999, had before it, during consideration of the foregoing Clause, the following communication (October 25, 1999) from the City Clerk:

Recommendations:

The Telecommunications Steering Committee recommended to City Council that:

(1) the grant to the Association of Municipalities of Ontario Gas Franchise Defense Fund be conditional on the City of Toronto having a representative on AMO's Gas Franchise Committee;

(2) the City Solicitor be granted the authority to engage outside legal counsel, if necessary, to supplement internal expertise in the areas of natural gas distribution, making submissions to the Ontario Energy Board and rights-of-way issues;

(3) if necessary, the City Solicitor be authorized to go to court to ensure that the City of Toronto has a fair opportunity to participate in relevant Ontario Energy Board proceedings; and

(4) any necessary funds for the purpose of the City Solicitor engaging external legal counsel for these activities be provided from the Corporate Contingency Account.

The Telecommunications Steering Committee reports, for the information of City Council, having requested:

(a) the City Solicitor to immediately investigate and clarify the terms "abandoned" vs. "decommissioned" natural gas lines as they apply to natural gas lines in municipal rights-of-way and identify and comment on the historic legislation that natural gas utilities and providers have relied on to enter the City's rights-of-way;

(b) the Chief Administrative Officer to organize an interdepartmental natural gas franchise staff team to work closely with the Telecommunications Steering Committee to support any submissions to the Ontario Energy Board; and

(c) the Chair of the Telecommunications Steering Committee to write to the Ontario Energy Board outlining the City's concerns on this issue.

Background:

The Telecommunications Steering Committee on October 25, 1999, had before it a copy of a memorandum (October 13, 1999) from the Director of Policy and Government Relations, Association of Municipalities of Ontario, which was submitted to the AMO Board of Directors at its recent meeting, and circulated to the Committee by Councillor John Adams, Chair, providing an update on the progress of AMO's negotiating team and on the status of the Gas Franchise Defense Fund.)

Tree Maintenance Backlog -

Funding from Department Sources

(All Wards)

(City Council on October 26 and 27, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the following report (October 8, 1999) from the Commissioner of Economic Development, Culture and Tourism, confirming that the funding in the amount of $650,000.00 for this initiative can be used for contracts awarded in 1999 with expenditures occurring in the year 2000:

Purpose:

To report on Council's request, as per Clause No.1 contained in Report No. 6 of The Policy and Finance Committee, which was adopted, as amended September 28, 29, 1999, for the Commissioner to identify the potential of the Economic Development, Culture and Tourism Department to absorb up to $350,000.00 within the 1999 Operating Budget to provide funds to reduce the outstanding service backlog in forestry services.

Funding Implications:

The Department is unable to absorb the $350,000.00 in its 1999 operating budget. The $350,000.00 has been included as a budget pressure in our year 2000 operating budget submission.

Recommendations:

It is recommended that:

(1) the $350,000.00 of the $1,000,000.00 1999 request for funding to reduce the forestry backlog be deferred for consideration with the year 2000 operating budget;

(2) total funding for this initiative remain at $2,700,000.00, funded by $650,000.00 from 1999 contingency funds as approved by Council September 28, 29, 1999, with the balance of $2,050,000.00 identified as an operating budget item for 2000;

(3) that an update report on the progress being made to reduce the forestry backlog be submitted to the Economic Development and Parks Committee in March 2000; and

(4) appropriate City officials be authorized to give effect thereto.

Background:

Council approved the program to aggressively reduce the outstanding backlog of forestry service calls which currently stand at approximately 15,000 service requests. Funding of $1,000,000.00 was requested for 1999 to reduce approximately 40 percent of the outstanding backlog, with the remaining $1,700,000.00 to be allocated in 2000 to eliminate the balance of the backlog. With respect to the request for $1,000,000.00 in 1999, Council approved the funding of $650,000.00 from the Corporate Contingency Account and requested that the Department report back on where and how the remaining $350,000.00 of the 1999 request could be absorbed within other Departmental sources.

The Department is not in a position to absorb the 1999 request of $350,000.00 from its 1999 budget. We are facing a number of budget pressures which will not allow for this to be absorbed in 1999. Accordingly, we would recommend that this portion of the 1999 request be deferred until 2000 and it will be identified as a budget pressure. This will mean that a total of $2,050,000.00 of the $2,700,000.00 program cost will be deferred for consideration with the 2000 Operating Budget.

Conclusion:

Since the department is unable to absorb the additional $350,000.00 from its 1999 budget, we have no alternative but to defer this element of the program to 2000. This will mean that we will only be able to eliminate approximately 25 percent of the current backlog in 1999. This will be accomplished by focusing on the priorities as identified in our earlier reports to the Economic Development and Parks Committee.

Contacts:

Richard Ubbens, City Forester, Tel: 392-1894

Karen Thorne-Stone, Director of Administration and Support Services, Tel: 395-6152.

1999 Levy on Railway Roadways or

Rights of Ways and on Power Utility

Transmission or Distribution Corridors

(City Council on October 26 and 27, 1999, amended this Clause by adding thereto the following:

"It is further recommended that:

(1) the phrase 'not including land leased by the railway company to another person for rent or other valuable consideration', as embodied in the first paragraph of the draft Bill, be referred to the City Solicitor for report thereon to the Policy and Finance Committee, through the Telecommunications Steering Committee, such report to include a review of the extent to which this policy applies to land leased by the Railways to telecommunications companies;

(2) the Chief Financial Officer and Treasurer be requested to undertake a review of all lands currently being severed by the Railways through Committees of Adjustment, to ensure that such lands are appropriately taxed in a timely manner; and

(3) the Chief Planner be requested to submit a report to the Planning and Transportation Committee, in consultation with the Chief Financial Officer and Treasurer and the appropriate staff of GO Transit, with respect to the possibility of negotiating tax relief with the Railways in exchange for the transfer of rights-of-way that the Railways intend to abandon.")

The Policy and Finance Committee recommends the adoption of the report (October 7, 1999) from the Chief Financial Officer and Treasurer.

The Policy and Finance Committee reports, for the information of Council, having requested the Chief Financial Officer and Treasurer to submit a further report thereon to the Policy and Finance Committee.

The Policy and Finance Committee submits the following report (October 7, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

To obtain Council's authority for the adoption of a by-law for the levying and collection of taxes on railway roadways or rights of ways and on power utility transmission or distribution corridors, as required by the Municipal Act and the Education Act.

Financial Implications:

Revenue of approximately $17 million will be raised and is included in the 1999 estimated property tax revenues.

Recommendations:

It is recommended that:

(1) Council authorize the levy and collection of taxes for the 1999 taxation year on roadways or rights of ways of railways and on transmission or distribution corridors owned by power utilities, in accordance with subsection 368.3(1) of the Municipal Act and subsection 257.7(1) of the Education Act; and

(2) Authority be granted for the introduction of the necessary bill in Council to levy taxes for the year 1999 on such roadways, rights of ways and transmission or distribution corridors, in the form or substantially in the form of the draft by-law attached hereto.

Comments:

Subsection 368.3(1) of the Municipal Act requires municipalities, in accordance with the regulations, to levy an annual tax for municipal purposes on railway roadways or rights of ways and on transmission or distribution corridors owned by certain power utilities. Ontario Regulation No. 387/98, as amended, prescribes the municipal rates which municipalities are required to levy. Such rates are prescribed as rates per acre of land.

Subsection 257.7(1) of the Education Act requires municipalities to levy and collect taxes based on the rates prescribed for school purposes on the railway and power utility lands described in subsection 368.3(1) of the Municipal Act. Ontario Regulation No. 392/98, as amended, prescribes the tax rate for school purposes which municipalities are required to levy. The rate is also prescribed per acre of land.

The attached draft by-law levies taxes on railway roadways or rights of ways and on power utility transmission or distribution corridors in Toronto for 1999, in accordance with the City's obligations under the Municipal Act and the Education Act.

Ontario Hydro made payments-in-lieu of taxes for its transmission and distribution corridors, pursuant to the Power Corporations Act. As such, no by-law is required for payment by Ontario Hydro. However, as the Power Corporations Act was repealed on April 1, 1999, Ontario Hydro is only required to make payments-in-lieu of taxes for the period of January 1, 1999, to March 31, 1999.

The Generation Corporation and the Services Corporation are two of the new corporations created by the Electricity Act, 1998 to replace Ontario Hydro. These corporations came into existence on April 1, 1999. The Generation Corporation and the Services Corporation, and their subsidiaries, are prescribed by the Minister as power utilities to which section 368.3(1) of the Municipal Act applies. The City is therefore required to levy taxes on their transmission and distribution corridors, in accordance with that section and the prescribed rates.

The rates set out in Table 1, below, are the rates to be levied for 1999 by the City on railway roadways and rights of ways and on power utility transmission and distribution corridors:

Table 1

Company	Municipal Taxes per Acre	Education Taxes per Acre
Canadian National Railway	$1,973.51	$2,488.79
Canadian Pacific Railway	$1,911.69	$2,381.71
Toronto Terminal Railway Company Limited	$11,275.71	$16,667.63
All other railway companies	$611.33	$822.69
Generation Corporation and its subsidiaries	$834.02	$1,208.66
Services Corporation and its subsidiaries	$834.02	$1,208.66

The late filing of the regulation for 1999 by the Province has delayed the billing of these properties. To ensure sufficient time for both the billing and mailing of the bills as well as providing sufficient time for payment by the taxpayer, a single instalment date of December 15, 1999 is recommended.

Contact Name:

Paul Wealleans, 397-4208

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Authority: Community Council/Committee Report No., Clause No. as adopted by City of Toronto Council on [Note: If the authority refers to a past Council, please insert all three dates; if it refers to a current Council meeting, just insert the first day of the Council meeting]

Enacted by Council:

CITY OF TORONTO

Bill No.

BY-LAW No. [By-law number]

To Levy and Collect Taxes for 1999 on Certain Railway Company

and Power Utility Lands

WHEREAS paragraph 1 of subsection 368.3(1) of the Municipal Act provides that every local municipality shall impose taxes, in accordance with the regulations on the roadway or right of way of a railway company, other than the structures, substructure and superstructures, rails, ties, polies and other property on the roadway or right of way, not including land leased by the railway company to another person for rent or other valuable consideration; and

WHEREAS paragraph 2 of subsection 368.3(1) of the Municipal Act provides that every local municipality shall impose taxes, in accordance with the regulations on land owned by a power utility prescribed by the Minister of Finance (other than a public utility defined in subsection 27(1) of the Assessment Act) and used as a transmission or distribution corridor, not including land leased by the power utility to another person for rent or other valuable consideration; and

WHEREAS Ontario Regulation No. 387/98, as amended, prescribes the 1999 tax rates for municipal purposes for such railway and power utility properties, and the tax rates levied for municipal purposes by sections 1 and 2 hereof are in accordance with the tax rates so prescribed; and

WHEREAS paragraph 1 of subsection 257.7(1) of the Education Act provides that every municipality shall in each year levy and collect the tax rates prescribed for school purposes on the business property in the municipality; and

WHEREAS section 257.5 of the Education Act defines "business property" to include the railway and power utility properties described in paragraphs 1 and 2 of subsection 368.3(1) of the Municipal Act.

WHEREAS Ontario Regulation No. 392/98, as amended, prescribes the 1999 tax rates for school purposes for such railway and power utility properties, and the tax rates levied for school purposes by sections 1 and 2 hereof are in accordance with the tax rates so prescribed; and

WHEREAS Ontario Regulation No. 387/98 and Ontario Regulation No. 392/98, as amended, prescribe the Generation Corporation, as defined in the Electricity Act, 1998, or a subsidiary thereof within the meaning of that Act, and the Services Corporation, as defined in the Electricity Act, 1998, or a subsidiary thereof within the meaning of that Act, as prescribed power utilities for the purposes of paragraph 2 of subsection 368.3(1) of the Municipal Act.

The Council of the City of Toronto HEREBY ENACTS as follows:

1. (1) There shall be levied and collected as taxes for 1999 in the City of Toronto on the roadways or rights of way owned, or leased from a municipality, on December 31, 1997 by a railway company set out in Column I or the assessed owners corresponding to that railway company as set out in Table 7 of O. Reg. 387/98 and 392/98, as amended, other than the structures, substructures and superstructures, rails, ties, poles and other property on the roadway or right of way, but not including land leased by the railway company to another person for rent or other valuable consideration, the rate per acre for municipal purposes set out in Column II and the rate per acre for school purposes set out in Column III:

Column I Column II Column III

(railway company) (rate per acre for (rate per acre for

municipal purposes) school purposes)

Canadian National Railway 1,973.51 2,488.79

Canadian Pacific Railway 1,911.69 2,381.71

Toronto Terminal Railway 11,275.71 16,667.63

Company Limited

(2) There shall be levied and collected as taxes for 1999 in the City of Toronto on all other roadways or rights of way of a railway company, other than the structures, substructures and superstructures, rails, ties, poles and other property on the roadway or right of way, but not including land leased by the railway company to another person for rent or other valuable consideration, the rate of 611.33 per acre for municipal purposes and the rate of 822.69 per acre for school purposes.

2. There shall be levied and collected as taxes for 1999 in the City of Toronto on all land owned by a prescribed power utility and used as a transmission or distribution corridor, not including land leased by the power utility to another person for rent or other valuable consideration, the rate of 834.02 per acre for municipal purposes, and the rate of 1,208.66 per acre for school purposes.

3. All taxes levied by sections 1 and 2 hereof, shall be due and payable on or before December 15, 1999.

4. Sections 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 19, 20, and 21 respectively of By-law No. 231-1999, as amended, apply to the taxes levied by sections 1 and 2 hereof.

ENACTED AND PASSED this day of, A.D..

MayorCity Clerk

2000 Operating Budget - Proposed Process and

Schedule and Revised 2000 Capital Budget Schedule

(City Council on October 26 and 27, 1999, amended this Clause by adding thereto the following:

"It is further recommended that the Chief Financial Officer and Treasurer be directed to notify all Members of Council of any late items or reports which were presented to the Budget Advisory Committee and were not circulated as part of any agenda or supplementary agenda, and to ensure that any such late items or reports are circulated, even if after the meeting.")

The Policy and Finance Committee recommends the adoption of the following report (October 12, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

This report outlines a proposed process and timetable for the 2000 Operating Budget deliberations and a revised 2000 Capital Budget schedule.

Financial Implications:

There are no financial implications arising from this report.

Recommendations:

It is recommended that:

(1) the proposed process and schedule as described in this report and as outlined in Appendix A and Appendix B for the 2000 Operating Budget be approved;

(2) the revised schedule as outlined Appendix C for the 2000 Capital Budget be approved; and

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

Background:

The 1999 Operating Budget process was designed to facilitate and support the continuing decision-making needs of Council respecting the allocation of resources for City services. To that end, the 1999 process focused on requirements that enabled the following:

(i) identification of current City services and service levels, service plans, resource (human and financial) allocations and service delivery options;

(ii) identification of impacts of previously approved Council decisions, including capital programs, on the operating budget;

(iii) inclusion of a preliminary outlook for the following fiscal year;

(iv) the Chief Administrative Officer (CAO) and Chief Financial Officer and Treasurer (CFO) to review program/agency submissions, identify issues and provide recommendations, strategies and alternatives to the Budget Committee;

(v) the Budget Committee, Standing Committees and Community Councils to review the CAO-recommended Budget for service and funding priorities; and

(vi) Council consideration of a recommended 1999 Operating Budget that achieved a 0 percent tax increase while accommodating the harmonization and expansion of key services.

This was achieved through a two-stage process: the Preliminary Operating Budget Forecast Review and the detailed 1999 Operating Plan and Budget Review. The identification of forecasted changes provided the CAO with the Corporation's financial outlook for the upcoming year as well as the ability to develop strategies and options to address the pressures prior to the finalization of the detailed 1999 Operating Plan and Budget submissions (targets) and during the review process.

Upon completion of the 1999 budget process, the Budget Services Division surveyed program/agency staff; Clerks staff and the Senior Management Team for feedback in an effort to improve the operating budget process for 2000. Based on the survey, the following areas were identified for improvement:

(i) need to reduce paper through each phase of the process;

(ii) need for better systems support to eliminate duplicate systems and increase efficiency;

(iii) need to expand timeframes and adjust schedules to allow sufficient time for response; and

(iv) need to allow policy input and priority setting earlier in the process.

An action plan was developed to address these issues and resultant improvements have been incorporated into the proposed 2000 Operating Budget process.

The 2000 Operating Budget:

The 2000 Operating Budget process builds on the successes of the 1999 process, incorporates refinements to address areas identified for improvements and includes building blocks to move operating budget preparation, analysis and review towards a mature state of performance budgeting.

Highlights of key changes for the 2000 Operating Budget process include the following:

(i) services defined at the Activity level with key indicators and trend analysis to assist in evaluating the allocation of resource requirements; and

(ii) Standing Committee and Community Council input respecting service levels and standards early in the process.

(1) Activity-level Information and Key Indicators:

In 1998, budgetary information was provided, reviewed and approved at the program level only. In 1999, Program areas defined services provided to the public and financial information was reviewed and approved at the service level. For 2000, where appropriate, Programs will provide summary budgetary information for activities undertaken within each service delivered. This additional level of financial information will be utilized for analysis and review only. It is not intended that budgets will be approved at the activity level. This further delineation of budgetary information will provide the foundation for moving towards the implementation of activity-based costing and budgeting.

Although in 1999 key efficiency and effectiveness indicators were requested with the budget submission, most amalgamating programs did not have accurate or sufficient data to provide this information. For 2000, it is expected that at least some key program efficiency indicators will be provided to assess the need and allocation of resources to program areas.

Both the provision of activity level budgetary information and key performance indicators will improve over the next year as financial data becomes more readily available and programs have more experience with business planning. Proficiency in these areas will lay the groundwork for performance budgeting.

(2) Standing Committees and Community Councils to Provide Input Earlier in the Process

During the 1999 process, Standing Committees and Community Councils were able to provide policy input into the budgetary process once they received the CAO-recommended Operating Budget and the motions of the Budget Committee arising out of that Committee's preliminary review. Where a particular report may have been submitted to a particular committee, such as harmonization issues, policy input may have been earlier.

For 2000, it is proposed that the Standing Committee meetings scheduled for the end of November to December 1,1999 and the Community Council meetings scheduled for December 2 and 3, 1999, include briefings by Commissioners regarding service delivery issues, levels and standards in their respective program areas to enable policy decision-making and priority-setting early in the process. It is further envisaged that each Commissioner will submit reports on specific service issues with options on service levels or standards where there may be pressure to expand current service levels. Once considered by the appropriate Committees or Councils, the respective motions will be referred to the Budget Advisory Committee for consideration with the Operating Budget, enabling Committee/Council advice to inform the process.

It should be noted that Standing Committees will continue to receive the CAO-recommended Operating Budget and the motions of Budget Advisory Committee when that Committee completes the preliminary review. Similarly, any final recommendations arising out of the Standing Committee review will be reported back to the Budget Advisory Committee for its final deliberations.

Proposed Review Process and Schedule:

Appendix A and Appendix B outline the operating budget process and the proposed schedule for the 2000 Operating Budget cycle, respectively. Final Council approval is targeted for April 10 and 11, 2000.

Budget staff are currently reviewing the Operating Budget Preliminary Forecasts for City programs and agencies. Review by the CAO and CFO by the end of October will result in the issuance of reduction strategies back to agencies and programs. The CAO will be reporting on the findings of this stage of the process at a special meeting of the Policy and Finance Committee and the Budget Advisory Committee on November 15, 1999.

Agencies, Boards and Commissions (ABCs) are required to submit their 2000 Operating Plan and Budgets by November 1, 1999 and submissions by City programs are due on November 15, 1999. For 2000, a staggered submission and administrative review process has been developed to accommodate a delay in the Capital Budget process due to efforts required for strike contingency planning in August and September. The revised Capital Budget schedule has been provided as Appendix C for reaffirmation. The Chief Administrative Officer and Chief Financial Officer and Treasurer, in conjunction with the Budget Services Division and program staff, will review ABC submissions in mid-December. A similar review of program submissions will occur in mid-January.

Briefings by Commissioners to respective Standing Committees scheduled for November 29 through to December 1, 1999 and to Community Councils on December 2 and 3, 1999 will occur to enable earlier policy input into the budget process, as previously discussed.

The detailed political review will begin the end of January 2000, with a preliminary program by program review by the Budget Advisory Committee, commencing the week of January 24 to the 31 with additional days provided February 8 and 9. It should be noted that the Administration Committee and the Works Committee meetings which were originally scheduled for these latter two days have been moved to February 10 and 14, 2000, respectively. The chairs of these committees have been consulted and concur with these changes.

During the preliminary review phase, Budget Services will provide a corporate report to outline the issues and financial implications of the CAO-recommended Operating Budget. In addition, Budget Services will provide program specific reports summarizing key recommendations.

After the completion of the preliminary review, the CAO-recommended Operating Budget and Budget Advisory Committee's motions will be forwarded to Standing Committees for final consideration of policy issues specific to each Committee. These meetings will occur February 7, 10 and 14, 2000. The results of these deliberations will be considered during wrap-up sessions of the Budget Advisory Committee where a final 2000 Operating Budget is recommended and then forwarded to the Policy and Finance Committee for its consideration and then on to a special meeting of City Council on April 10 and 11, 2000.

Conclusion:

The proposed 2000 Operating Budget process and schedule builds on the successes of the 1999 process, incorporates refinements to address areas identified for improvements and includes building blocks to move operating budget preparation, analysis and review towards a mature state of performance budgeting. Key changes for 2000 include (a) services defined at the activity level with key indicators and trend analysis to assist in evaluating the allocation of resource requirements and (b) Standing Committee and Community Council input respecting service levels and standards early in the process.

The Chief Administrative Officer has been consulted on the proposed 2000 Operating Budget process contained in this report and concurs with the recommendations.

Contacts:

Josie La Vita, Manager, Operating Budget, Tel: 397-4229, Fax: 397-4465,

Glenn Vollebregt, Director, Budget Services, Tel: 392-8095, Fax: 397-4465.

Insert Table/Map No. 1

appendix a - 2000 op bud proc

Appendix B

City of Toronto - 2000 Operating Budget Schedule

	Major Activities	Original Dates	Dates Revised Oct. 14
1.	Distribution of Preliminary Operating Budget Forecast Instructions and Templates	July 15	July 15
2.	Distribution of Operating Budget Manual, Instructions and Guidelines	August 30	August 30
3.	Submission of Preliminary Operating Budget Forecast (included in Business Plan)	September 30	September 30
4.	Administrative Review of Preliminary Operating Budget Forecast with Budget Office, CFO and CAO	October 1 - 7	October 1 - 22
5.	Senior Management Team Review of Preliminary Forecast	October 8	October 28
6.	Policy and Finance Committee Consideration of Financial Principles and Guidelines	October 14	November 10
7.	Policy and Finance Committee/Budget Advisory Committee Briefing - Overview Operating Budget Forecast	October 14	November 15*
8.(a)	2000 Operating Budget Submissions to Budget Office - ABCs	November 1	November 1
8.(b)	2000 Operating Budget Submissions to Budget Office - City Programs	November 1	November 15
9.(a)	Standing Committee Service Levels/Standards Briefings	Nov. 2, 3, 4, 9 & 12	Nov. 29-Dec. 1
9.(b)	Community Council Service Levels/Standards Briefings	Nov. 2, 3, 4, 9 & 12	Dec. 2 & 3
10.(a)	Administrative Review for ABCs: - Budget Office Review of Agency Budgets - CFO/CAO Review with Agency Budgets	Nov./Dec. Dec. 8-17	Nov./Dec. Dec. 14-17
10.(b)	Administrative Review for City Programs: - Budget Office Review of Program Budgets - CFO/CAO Review of Program Budgets	Nov/Dec. Dec. 8-17	Nov./Dec Jan. 10-13
11.	Committee Review: - Budget Advisory Committee Review - Standing Committee Review & Public Deputations - Budget Advisory Committee Wrap-up	Jan. 14,21-28, Feb. 7-14 Feb. 24, 25, 28 and March 3	Jan. 24-28, 31, Feb 8,9* Feb. 7, 10,14 Feb. 24, 25, 28 and March 3
12.	Preparation of Consolidated Budget Document	March 3 - 20	March 3 - 20

13.

Consideration/Approval of Consolidated Budget:

- Special Budget Advisory Committee Meeting

- Policy and Finance Committee Meeting

- Special City Council Meeting

March 24*

March 30

April 17 & 18*

March 24*

March 30

April 10 & 11*

* Special meeting dates

Bold Represents new revised dates

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Appendix C

City of Toronto

2000 Capital Budget Schedule

	Major Activities	Original Schedule	Dates Revised Sept. 22
1.	Development of New Capital Budget System - Phase I	June/July	June/July
2.	Review of Capital Budget process and develop definitions, instructions and guidelines - for review by S.M.T.	June/July	June/July
3.	Policy & Finance Committee consideration of Process, Guidelines and Timetable	July 20	July 20
4.	Distribute Capital Budget Guidelines and Timetable	July	July
5.	Capital Budget Preparation (Programs/Agencies)	July/August	July/August
6.	2000 - 2004 Capital Works Program Submission to Finance	September 3	October 1
7.	Administrative Review: - Budget Office Review with Programs/Agencies - CAO/CFO Review with Programs/Agencies	September/October	October
8.	Policy & Finance/Budget Advisory Committee - Overview of Capital Works Program and related issues	October 14	November 15 *
	COMMITTEE REVIEW & PUBLIC CONSULTATION
9.	Budget Advisory Committee Preliminary Review of CAO Recommended Budget	October 21, 22, 25	Nov. 15, 16, 17 *
10.	Capital Budget Submission to Standing Committees/Community Councils ( & Public Deputations)	November 1 - 12 *	Nov. 29 - Dec. 3
11.	Final Budget Advisory Committee Review and Wrap-up	Nov. 15, 16 & 17 *	Dec. 9, 10, & 13 *
12.	Preparation of Capital Budget Document	November 18 - 22	Dec. 14 - Jan. 7
13.	Consideration/Approval of Consolidated Capital Budget: -Special Budget Advisory Committee - Final Approval -Policy & Finance Committee Meeting -City Council Meeting	November 26 * December 7 December 16 & 17	January 14 * January 20 February 1, 2 &3

* Special Meeting Date

Bold Represents new revised dates

Actions Required Resulting from the Board Meeting

of the Federation of Canadian Municipalities

(City Council on October 26 and 27, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends the adoption of the following Recommendation No. (2) embodied in the communication (Undated) from Councillor Olivia Chow, Downtown, viz:

"(2) that the City of Toronto reiterate its support for the federal firearms control legislation, and that this support be communicated to the Federal Justice Minister and the Solicitor General of Canada, and to the Federation of Canadian Municipalities (FCM).

The Policy and Finance Committee reports, for the information of Council, having referred the following Recommendations Nos. (3) and (4) embodied in the communication (undated) from Councillor Olivia Chow, Downtown, to the Commissioner of Community and Neighbourhood Services for consideration and report thereon to the Community Services Committee:

"(3) that staff complete the survey regarding the establishment of a Local Crime Prevention Council and explore federal funding sources in support of Council's work on safe community initiatives; and

(4) that various existing policies and initiatives on prostitution be collected and sent to the December board meeting of FCM for discussion.".

The Policy and Finance Committee submits the following communication (October 7, 1999) from the City Clerk:

Recommendation:

The Community Services Committee on October 7, 1999, recommended that the following recommendations contained in the attached communication (undated) from Councillor Olivia Chow, Child and Youth Advocate, be referred to the Policy and Finance Committee for consideration:

(3) that staff complete the survey regarding the establishment of a Local Crime Prevention Council and explore federal funding sources in support of Council's work on safe community initiatives; and

(4) that various existing policies and initiatives on prostitution be collected and sent to the December board meeting of FCM for discussion."

The Community Services Committee reports, for the information of the Policy and Finance Committee, having received Recommendation No. (1) contained in the attached communication from Councillor Chow.

Background:

The Community Services Committee had before it the following communications:

- (September 23, 1999) from the City Clerk advising of the actions of the Children and Youth Action Committee with respect to the National Children's Agenda; and

- (undated) from Councillor Olivia Chow, Child and Youth Advocate, reporting on the recent Board meeting of the Federation of Canadian Municipalities and the issues of concern to the City of Toronto.

(Communication (undated), addressed to the

Community Services Committee from

Councillor Olivia Chow, Child and Youth Advocate)

Recommendations:

It is recommended that:

(1) the FCM Budget submission to the Federal government be received for information.

(2) the City of Toronto reiterate its support for the federal firearms control legislation, and that this support be communicated to the Federal Justice Minister and the Solicitor General of Canada, and to the Federation of Canadian Municipalities (FCM).

(3) staff complete the survey regarding the establishment of Local Crime Prevention Council and explore federal funding sources in support of Council's work on safe community initiatives.

(4) various existing policies and initiatives on prostitution be collected and sent to the December board meeting of FCM for discussion.

Background:

Toronto Council provided significant leadership at the September Board meeting of the FCM, the following are issues of concern to the City of Toronto.

(I) Motions submitted from Toronto adopted:

FCM supported Toronto's motion urging the federal government to provide stiff and consecutive penalty and sentencing for all indictable offences under the Criminal Code of Canada for any individual who operates a motor vehicle for the purpose of evading a peace officer in the performance of his duties.

(II) Budget submission to the federal government:

The FCM board adopted a "Quality of Life Infrastructure Program Proposal" to the Finance Minister Paul Martin.

The focus of the program proposal includes:

Investment in water, waste energy and transportation systems to increase penetration of efficient and innovative technologies that improve health and protect the environment (this proposal is modelled under the very successful Better Building Partnership program and other environmental initiatives pioneered by the City of Toronto).

Investment in affordable housing to increase access to shelter for low-income households and reduce growing levels of homelessness in Canadian communities.

Investment in recreational facilities for children and youth, and increased support for the National Strategy on Community Safety and Crime Prevention and Canada's Drug Strategy.

(III) On Crime and Safety Issues:

The Federation of Canadian Municipalities (FCM) is doing a survey on the establishment of Local Crime Prevention Council. Attached please find a survey and the work plan initiated by FCM.

FCM has secured funding from HRDC to assist in crime reduction. Other municipalities have applied successfully for this funding. Since Toronto has a Community Safety Council, our participation on this FCM initiative would be helpful.

I raised the issue of escalating policing costs as a result of demonstrations and special events that is national in scope (such as Kosovo). Other large cities such as Montreal, Ottawa, Vancouver and Ottawa also shared the same concern. This issue will be further discussed at a later date.

In December, there will be presentations on policy around prostitution and statistical and demographic trends in crime prevention.

In March, there will be a presentation on upcoming changes to CPIC (the national computer program tracking people with criminal records).

(IV) Children:

The FCM board supported the request to endorse the Headstart program, as suggested through the Fraser Mustard and Margaret McCain report commissioned by the Premier of Ontario. It also calls on the federal government to invest in children, including creating a comprehensive multi-year Early Childhood Development Program that is affordable and accessible to all children, and continued support for increased investment in the National Children Benefit.

There will be further discussions on what actions can be taken by cities in support of various children initiatives in future FCM Board meetings.

--------

(A copy of Bill C-440 - "Penalties Under the Criminal Code - Use of Motor Vehicle to Evade Police" and the attachments to the foregoing communication were forwarded to all Members of Council with the October 14, 1999, agenda of the Policy and Finance Committee and a copy thereof is also on file in the office of the City Clerk.)

Fees Charged for Police Reference Checks

(City Council on October 26 and 27, 1999, amended this Clause by inserting in the recommendation of the Policy and Finance Committee, after the word "charged", the words "to incorporated and non-incorporated non-profit groups", so that such recommendation shall now read as follows:

"The Policy and Finance Committee recommends that the Toronto Police Services Board be advised that Council in the adoption of its 1999 Operating Budget, clearly requested the Board to waive the fees charged to incorporated and non-incorporated non-profit groups for Police Reference Checks; and that the Board be requested to carry out Council's request.")

The Policy and Finance Committee recommends that the Toronto Police Services Board be advised that Council in the adoption of its 1999 Operating Budget, clearly requested the Board to waive the fees charged for Police Reference Checks; and that the Board be requested to carry out Council's request.

The Policy and Finance Committee submits the following communication (August 6, 1999) from Councillor Norman Gardner, Chairman, Toronto Police Services Board:

Recommendations:

It is recommended that:

(1) the Toronto Budget Committee agree to reimburse the Toronto Police Services Board with funds equivalent to the cost of processing all reference checks for non-profit organizations only; and

(2) the Toronto Budget Committee forward this report to Toronto City Council for approval.

Council Reference/Background History:

At its meeting on July 22, 1999, the Toronto Police Services Board was in receipt of the following report July 6, 1998, from David J. Boothby, Chief of Police, respecting Policy & Budget Sub-Committee and Audit Sub-Committee - Minutes of the July 5, 1999, meeting.

Recommendations:

(1) That the Board receive and approve the Minutes of the July 5, 1999 Policy Sub-Committee and the Audit Sub-Committee amended;

(2) That the Audit of Contracts Phases I and II be referred to the July 22, 1999 Confidential Board meeting and that the Audit be separated into Public and Confidential sections and those to be appropriately identified;

(3) That no application fee be imposed on Court Officer applicants;

(4) That the Board receive the Metropolis Audit update report;

(5) That the TPS continue to charge the City and non-profit organizations for Police Reference Checks, as is current practice, for the balance of 1999. TPS staff are to present alternatives for this revenue for the year 2000 budget proposal;

(6) That the Helicopter Pilot Project Report Recommendation 2 be amended to state that expansion of the program only occur when more funds are raised and to say "plus applicable taxes";

(7) That a report on how the police officers employed for the Helicopter Pilot Project would be replaced in their current roles be before the Board by September 1, 1999;

(8) That the interim evaluation of the success of the Helicopter Pilot Project be complete by the end of December 1999;

(9) That the report Awarding Of A Contract For Toronto Police Service Helicopter Pilot Project for Air Service be adopted, as amended, at the July 22, 1999 Board meeting;

(10) That the 1999 Operating Budget Variance Report be received from the Finance department before the next Policy & Budget Sub-Committee by the Board office and be faxed to Board members and Sub-Committee members;

(11) That the agreement with EDS for the replacement of Workstations & Printers be redrafted for the next Board meeting to identify captured savings projected for next year;

(12) That the report on the Potential Sale of the CIPS System to Western Australia Police be received;

(13) That City Legal and the City Auditor sign-off on the Towing Tendering process;

(14) That a written request be made to the City Audit Committee for the City Auditor's involvement in the Towing Tendering process;

(15) That the Chairman send a letter to the City CAO Michael Garrett advising him to proceed in hiring a Consulting Firm to facilitate the Restructuring Task Force; and

(16) That without delay the Board issue an RFP for a Consultant to assist with the search and selection of a new Chief of Police.

Background:

The Policy & Budget Sub-Committee and the Audit Sub-Committee met on Monday July 5, 1999, to discuss and consider:

(1) Audit of Contracts Phases I and II.

(2) Application Fee for Court Officer Applicants - Recommendation from the Audit of Court Services.

(3) Metropolis Audit.

(4) Police Reference Checks.

(5) Helicopter Trust Fund Update.

(6) 1999 Operating Budget Variance Update.

(7) Life Cycle Plan - Workstations & Printers.

(8) Potential Sales of CIPS System to Western Australia Police.

(9) Date and Time of Next Policy & Budget Sub-Committee and Date and Time of Next Audit Sub-Committee.

(10) Other Business.

In attendance: Chairman Norman Gardner, Vice-Chair Judy Sgro, Board Members - Jeff Lyons, Olivia Chow, Sylvia Hudson, Sandy Adelson, Chief David Boothby, Deputy Chief Steve Reesor, Deputy Chief Loyall Cann, Deputy Chief Mike Boyd, Deputy Chief Joe Hunter, Deputy Chief Bob Kerr, CAO Policing - Frank Chen, Angelo Cristofaro - Director Finance and Administration, Dana Styra - Manager Internal Audit & Program Review, William Gibson - Director Human Resources, Larry Stinson - Director Information Technology, Inspector Mike Farrar, Superintendent Gary Grant, S/Sgt. Fergie Reynolds

(1) Audit of Contracts Phases I and II:

Dana Styra presented the documentation of the Recommendations from Phase I and Phase II Audit of Contracts.

The Sub-Committee decided that they required more time to review the documentation provided and therefore:

Recommendation: That the Audit of Contracts Phases I and II be referred to the July 22, 1999 Confidential Board meeting and that the Audit be separated into Public and Confidential sections and those to be appropriately identified.

Recommendation Carried.

(2) Application Fee for Court Officer Applicants - Recommendation from the Audit of Court Services:

Bill Gibson debriefing the Sub-Committee on the pertinent points of his report. He noted that Court Officers are civilian employees and that due to the often part-time nature and payment of the positions that a fee would be a hardship and set a precedent for other civilian positions.

Recommendation: That no application fee be imposed on Court Officer applicants.

Recommendation Carried.

(3) Metropolis Audit:

Frank Chen provided an update of the Metropolis Audit. He will report back on the efficiencies by the end of the year 2000. He re-stated that Occurrence Re-engineering was previously approved by the Board and the City during the budget process.

Recommendation: To receive the Metropolis Audit update report.

Recommendation Carried.

(4) Police Reference Checks:

Frank Chen debriefed the Sub-Committee on the issues and status of the discussions between the City and the TPS regarding charging the City and non-profit organizations for Police reference checks.

Recommendation: That the TPS continue to charge as is current practice for the balance of 1999. TPS staff are to present alternatives for this revenue for the year 2000 budget proposal.

Recommendation Carried.

(5) Helicopter Trust Fund Update:

Deputy Reesor updated the Sub-Committee on the status of the Helicopter Trust Fund. Chief Boothby stressed the importance of City Council showing enthusiastic support as a critical factor in generating financial contributions.

Recommendations:

(a) amend Recommendation 2 of the Report to state that expansion of the program only occur when more funds are raised and to say "plus applicable taxes";

(b) that a report on how the police officers employed for this project would be replaced be before the Board by September 1, 1999;

(d) that the report Awarding Of A Contract For Toronto Police Service Helicopter Pilot Project for Air Service be adopted, as amended, at the July 22, 1999 Board meeting.

Recommendation Carried.

(6) 1999 Operating Budget Variance Update:

Frank Chen and Angelo Cristofaro updated the Sub-Committee on the status of the 1999 Operating Budget. It was stated that although every effort is made to meet the budget an overage is expected.

Frank Chen explained that the City is taking the OMERS overpayment from the TPS. These monies might be applied to the TPS budget if the TPS would be allowed to keep it.

Recommendation: That the Variance Report be received from the Finance department before the next Policy and Budget Sub-Committee by the Board office and be faxed to Board members and Sub-Committee members.

Recommendation Carried.

(7) Life Cycle Plan - Workstations & Printers:

Larry Stinson and Inspector Farrar delivered a presentation on the Life Cycle Plan for Workstations and Printers. This report will be coming to the July 22, 1999 Police Services Board Meeting.

Recommendation: That the agreement with EDS be redrafted for the next Board meeting to identify captured savings projected for next year.

Recommendation Carried. (Jeff Lyons declared a conflict of interest and did not vote).

(8) Potential Sales of CIPS System to Western Australia Police:

Larry Stinson and Frank Chen debriefed the Sub-Committee on the terms and conditions of the potential sale of the CIPS system to Western Australia Police.

Recommendation: That the report be received.

Recommendation Carried.

(9) Date and Time of Next Policy & Budget Sub-Committee and Date and Time of Next Audit Sub-Committee:

The Chairman advised the Sub-Committees that the next Policy & Budget Sub-Committee is Monday August 16, 1999. From 4:00 - 6:00 pm. Agenda items due in the Board office by Friday July 23, 1999.

The next Audit Sub-Committee is Wednesday October 13, 1999 at 9:30 am. Agenda items are due by Friday September 24, 1999.

(10) Other Business:

(10.1) Towing:

Superintendent Gary Grant and S/Sgt. Fergie Reynolds updated the Sub-Committee on the Towing Contracts process.

Whereas the Board is concerned as to fairness and competition they request the City Auditor is to review the process prior to tendering. Letter from Board Member Jeff Lyons is attached.

Recommendations:

(a) that City Legal and the City Auditor sign-off on the tendering process; and

(b) that the request go to the City Audit Committee to request this time commitment.

Recommendation Carried.

(10.2) Restructuring Task Force - Hiring of a Consultant:

Vice-Chair Judy Sgro stated that at the last Board meeting of June 24, 1999 that the Board agreed to proceed with the hiring of a consulting firm to facilitate restructuring. The Chairman noted that the City CAO Michael Garrett will pay for the Restructuring Consulting Firm

Recommendation: That the Chairman write to the City CAO Michael Garrett to authorize him to proceed immediately.

Recommendation Carried.

(10.3) Search for New Chief- Hiring of Consulting/Search Firm:

Vice-Chair Judy Sgro stated that timing is critical and that the Board commence the process for an RFP to engage the services of a Consultant to assist with the search and selection of a new Chief of Police.

Recommendation: That without delay the Board issue an RFP for a Consultant to assist with the search for a new Chief of Police.

Recommendation Carried.

There being no other business, the meeting was adjourned."

Conclusions:

The following persons were in attendance and made deputations to the Board:

Fees for Police Reference Checks:

David Rew

Executive Director, East Scarborough Boys & Girls Club

Police Helicopter Pilot Project:

Tom Jakobek *

Councillor - East Toronto, City of Toronto

Sheldon Bergson

Tamara Parris *

George Christoff

* written submissions also provided.

Ms. Parris also provided the Board with a petition containing 1000 names of citizens in the Greater Toronto Area who support a Toronto Police Air Service Unit.

The Board approved the following Motions:

(1) That the deputations, written submissions and petition be received;

(2) That Recommendation No. 1, 4, 13, 14 and 16 be approved as submitted;

(3) That Recommendation No. 2 be received given that the response to the request for information was considered during the confidential portion of the meeting (Min. No. C203/99 refers);

(4) That Recommendation No. 3 be received given that it was considered in a separate report (Min. No. 312/99 refers);

(5) That Recommendation No. 5 be received and the following Motion be approved in its place:

That fees for providing police reference checks to non-profit organizations be waived immediately subject to the City of Toronto Budget Committee and the Toronto City Council agreeing to reimburse the Board with funds equivalent to the cost of processing reference checks for non-profit organizations;

(6) That Recommendation No. 6, 7, 8 and 9 be received and the following Motions be approved in their place:

(a) That the issue of helicopters be deferred until the 2000 operating budget and capital budget process and that the entire Board meet with the City of Toronto Budget Committee regarding the 1999 over-expenditure and the upcoming capital and operating budget submissions; and

(b) That the issue of helicopters be referred back to the Policy and Budget Subcommittee for further discussions and, following the pilot projects of York and Peel Regional Police Services, a joint review be done to analyze the feasibility of establishing regional air service in the Greater Toronto Area with the province and Police Services Boards of the GTA;

(7) That Recommendation No. 10 be approved along with the following additional Motion:

That Motions from Toronto City Council concerning the 1999 over-expenditure be sent to the Policy & Budget Subcommittee for consideration and that a joint meeting between the Board, Toronto budget staff and Toronto Police Service budget staff be held to review the over-expenditure;

(8) That Recommendation No. 11 be received given that it was considered in a separate report (Min. No. 313/99 refers);

(9) That Recommendation No. 12 be received given that it was considered during the confidential portion of the meeting (Min. No. C202/99 refers); and

(10) That Recommendation No. 15 be received given that it was considered during the confidential portion of the meeting (Min. No. C205/99 refers).

Board Member Jeff Lyons indicated a conflict of interest with regard to Recommendation No. 11 given that he represents EDS Canada on another matter and did not participate in the consideration of this recommendation.

Contact Name and Telephone Number:

Angelo Cristofaro, Acting Director, Finance and Administration, Telephone No. 808-7877.

Year 2000 Priority One Business Functions

Status Report - September 1999

(City Council on October 26 and 27, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee reports having:

(1) received the following report (October 12, 1999) from the Chief Financial Officer and Treasurer; and

(2) requested the Chief Financial Officer and Treasurer to provide an additional follow-up report directly to Council for its meeting scheduled to be held on October 26, 1999, on the issue of external partnerships and agreements:

Purpose:

The Year 2000 Business Continuity Plan Status Report (September 1999) outlines the following information as requested by Council at its November 1998 meeting:

(i) Status report of each Priority One business function (October 5, 1999);

(ii) Status report on the ABC's and their state of readiness;

(iii) Status report on expenditures for Priority 1 Year 2000 functions (September, 1999); and

(iv) Change requests.

Funding Sources:

No funding is required at this time.

Recommendation:

It is recommended that this report be received for information.

Comments:

The City of Toronto Year 2000 project has achieved another project milestone. September 30 was the date targeted for the completion of year 2000 testing. At this point the essential public services are now year 2000 ready. These include services such as water supply, social services, traffic control, and fire and ambulance services. Work is continuing on the documentation of test results and completing the implementation of year 2000 ready solutions to production.

Clean Management:

In parallel to the above activity, the City has implemented a Clean Management Strategy. The objective of this strategy is to ensure that no new year 2000 issues are re-introduced once a system has been declared ready. This involves numerous steps such as:

(a) educating staff on the issues;

(b) issuing all RFPs, RFQs and POs with the appropriate year 2000 warranties and liabilities;

(d) implementing "managed change" and "system freeze" procedures;

(e) decommissioning non-year 2000 ready systems; and

(f) ensuring that Commissioners acknowledge adherence to the Clean Management Strategy.

Transition Planning:

Transition planning has been initiated. The Year 2000 program has begun creating a countdown schedule for activities leading up to midnight December 31, 1999. The activities include precautionary steps to be taken by the City such as system backups, system printouts and topping up reserves. The Year 2000 readiness program will establish an operations center to monitor the millennium rollover. The Year 2000 Project Management staff will be on site to provide the ability to respond to and manage any year 2000 issues identified and to support the restoration of service where appropriate. The Year 2000 Operations Center will act as a resource to the City's Emergency Operation Center. All communications with the public will be handled through Corporate Communications. As the rollover occurs on a Friday night, there is a 3-day lead for problem resolution. The Operations Center plans to leverage the opportunity for pro-active problem identification and resolution over the long weekend. During the week of January 4 through 7 the Operations Center plans to monitor, log and respond to any year 2000 issues identified.

Data Retention Project:

As a result of the Year 2000 program, 2 mainframe computers and 577 mid-range servers will be decommissioned. These servers are not year 2000 ready. In addition, hundreds of applications are being decommissioned as they have been consolidated or replaced by other solutions. These applications are not year 2000 ready. The integrity of data left on platforms that are not year 2000 ready or data accessed by applications which are not year 2000 ready could be affected. Therefore, it is critical that this data is migrated to a year 2000 ready platform and that information used on a day-to-day basis (active data) is made accessible by year 2000 ready tools. The Data Retention Project team is in the process of identifying this "orphaned" data and assessing the retention and access requirements. They are working with the Year 2000 mainframe and server team to identify the data by platforms and with the Year 2000 departmental teams to identify the data by application. In addition, the Audit Department and the City Clerk's are working with the team to identify the appropriate data retention schedules. Access to active data will be addressed as part of the Year 2000 Project.

In discussions with the City Clerk and the Audit Department, it has been identified that a significant amount of the "orphaned" data is unusable. This is a result of issues such as inadequate documentation, loss of knowledgeable staff, encrypted information and meaningless file names. A report is being brought forward by the City Clerk to notify Council of the planned destruction of this useless information. Appropriate records retention schedules will be applied to all usable information.

Communications Strategy:

In the past month, public interest in Year 2000 has increased. The Year 2000 program office and the Emergency Services staff have co-presented at 2 sessions held by the Metro Toronto Housing Authority and at a session held by Councillor Saundercook for members of the York community.

A public information session for members of the Scarborough community is scheduled for later this month at the request of Councillor Berardinetti.

Now that the essential public services of the City of Toronto are year 2000 ready, the City plans to pro-actively notify the public that they can expect business as usual on January 1, 2000 and beyond. In addition to the usual distribution channels, this will be handled through a media briefing later this month, through inserts in water bills and other city mailings and through the use of advertisements in TTC shelters.

Status report on Priority One business functions (Appendix 1):

Desktop Rollout:

To date, the Desktop team has rolled out 13,593 units. This includes the 2,500 desktops rolled out by the Province. The remaining 748 desktops will be rolled out by October 22, 1999.

External Partnerships and Agreements:

After further analysis by the operating departments, the number of priority-1 vendors was reduced from 750 to 625. Follow-up calls and letters have been sent to all non-respondents. There are now 134 responses outstanding.

Mainframes:

The number of mainframes has been consolidated from 4 to 2. Of the approximately 14 millions lines of code assessed, approximately 10 million lines have been decommissioned leaving 4 million lines for remediation. Currently there are 4 applications pending implementation to production and these are scheduled for completion by October 20, 1999.

Midrange Servers:

359 of the targeted 523 servers have been certified year 2000 ready. The servers requiring certification are departmental servers. Departments have been contacted to provide testing windows for the midrange team to conduct the year 2000 testing.

Communications and Training:

Of the 10,000 City staff targeted for Desktop training, 8,554 staff have been assessed for their training needs. Of those assessed, 6,696 staff have received training. The target date for completing all desktop training remains December 17.

Of the 3,000 staff targeted for Groupwise Email training, 41 percent have been assessed, while 1 percent have received training. Groupwise training will also be completed on December 17.

Network/Voice:

Voice Network testing is complete. Forty-five of the forty-nine systems to be remediated have been implemented. The projected target for completion is October 31, 1999. The solutions for the remaining systems include conversion to Centrex or the application of software patches.

The core and peripheral data network and the network systems management are year 2000 ready. Operating department initiatives has imposed additional network requirements. These additional requirements are 80 percent complete with a target completion date of November 1, 1999.

Facilities:

An additional 5,000 (bringing the revised total to 11,000) building systems have been identified as a result of the inventory of 2,100 buildings identified. Approximately 300 building systems have been identified as having date implications. These systems will be compared to a database of test results purchased by the City to identify the necessary action plan, if any. The QA manager will determine if the test database meets all the testing requirements. Testing of systems in critical buildings continue. Information will be available by building at the end of October.

Letters have been sent to the landlords of non city-owned facilities. 40 percent have responded to date. A second mail out is active. In addition, City tenants are being notified of the building status where no response has been received or the response is not satisfactory.

Only critical business machines are being addressed. A pool of "replacement" equipment is being acquired to address any year 2000 issues identified with office equipment. All medical equipment has been assessed. No problems were identified.

Fleet:

Fleet has assessed all vehicles in the fleet. Only fire engines were tested. Readiness of all other vehicles was determined based on research and vendor-provided information

Status from Year 2000 ABC Team:

There were 110 Agencies, Boards, Commissions and related organizations identified in a report to Council last November. The report stated that the City would apply the same due diligence to Agencies, Boards and Commissions as to Departments. In February 1999, the City's Y2K Project Office established an ABC Team to ensure this was done. The ABC Team has:

(i) Helped the Y2K Project Office and City Departments establish and get agreement to their responsibilities for the Agencies, Boards, Commissions and related organizations. City responsibilities have been finalized for 108 of the organizations. For the remaining two organizations, the Toronto Parking Authority and the Toronto Port Authority, only minor questions are outstanding. We expect to resolve the questions by September 30, 1999. Departments have responsibility for delivering or conducting quality assurance reviews, and reporting on, the Y2K programs of 95 of the Agencies, Boards and Commissions. The ABC Team is conducting quality assurance reviews of the Y2K programs of four Agencies, Boards and Commissions, and is providing assistance on request to the remaining eleven related organizations. Detailed documentation of the responsibility decisions and the reasoning for those decisions has been produced.

(ii) Provided awareness seminars or otherwise ensured that the organizations have an appropriate awareness of Y2K issues, the City's role and what Y2K actions they must be undertaking themselves. A communication plan has been documented for all the organizations. The final two meetings of the planned communication are scheduled for the week ending September 10.

The four organizations whose Y2K programs are under review by the ABC Team are Toronto Hydro-Electric Commission, Toronto Police Services, Toronto Economic Development Corporation, and Toronto Transit Commission. The review for Hydro, Police and TEDCO involves extensive interviews, document inspection, attendance at internal meetings, coaching and assistance as applicable. Due to TTC's legal independence from the City, the TTC review is being conducted at arms length. A summary of the review status follows.

Toronto Hydro-Electric Commission (August, 1999):

The findings from the initial review will be delivered to Hydro in September.

Toronto Police Services (August, 1999):

Draft findings, delivered to the Police August 6, identified a number of potential action items for Police attention. The Police are working, with assistance from the ABC Team, to analyze the items and initiate actions as appropriate. The items can be addressed in the time remaining to the end of the year. Meanwhile, review activities are ongoing.

Toronto Economic Development Corporation (August, 1999):

An interim report, delivered to TEDCO July 8, has been reviewed and accepted by TEDCO. As a result TEDCO is obtaining legal advice regarding their exposure as port lands property manager, and the ABC Team will be assisting TEDCO to ensure the adequacy of their software testing and their overall record of due diligence.

Toronto Transit Commission (August, 1999):

TTC engaged two independent companies to review their Y2K Project - Ernst & Young for their overall project, and Stone & Webster for engineering aspects. On September 7, the ABC Team will initiate work with TTC project management to examine the TTC response to the recommendations made by the reviewers.

Status report from the TTC - August 20, 1999:

Summary:

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, as well as 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 and Engineering Document Control. Individual project plans are being tracked closely, and no critical delays are expected.

Contingency and continuity planning are well under way, 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.

Progress:

Details on progress by group, project, and project phase are represented in the Y2K Progress Chart (appendix 2) attached. The chart represents the seven major phases of the Year 2000 project: Initiation, Inventory, Assessment, Remediation or Replacement, Testing, Implementation, and Post Implementation. The percent 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 General Ledger, Metropass Discount Plan, the Ticket Order Processing System, Accounts Receivable, Job Based Cost System, Scheduling System (Trapeze), ATOS (Transit Admin System), WTIS (Wheel Trans), Route Planning (MADITUC), and the Delay Logs application, which monitors service delays. In addition, a number of other major applications have been tested and put into production, and are awaiting final documentation. As of August 20, 1999, 19 percent of the Commission's 135 Level 1 and 2 Systems are completing remediation, 42 percent are actively being tested for Y2K compliance, and the remaining 39 percent are in the process of being implemented or have been Y2K certified. By the end of August, over 78 percent of all Level 1 and 2 applications will be tested, with all of the most critical IT applications Y2K ready by September 30, 1999.

The number of embedded systems being tested now stands at over 350, due largely to the addition of testing equipment to the inventory. All but 12 of these have now been tested, and final certification documentation is currently being compiled.

Highlights of Accomplishments:

Embedded Systems:

- All in-house testing is complete. The remaining testing requires vendor involvement, which will take place in August.

- All buses, streetcars, and revenue subway cars are certified Y2K compliant.

- RT1 and RT3 subway work cars are certified Y2K compliant.

- Wilson CNG Plant: Y2K test completed; vendor supplied PC motherboard upgraded and is now Y2K compliant.

- SMC: Y2K tested, and date is incorrectly recorded on event logs after January 1, 2000. No impact to system. Technical Requirements for replacement have been written.

Financial:

- General Ledger system has been upgraded to most current version, and has been certified as Y2K compliant.

- Payroll: All applications are in production, and awaiting final certification

- MDP: upgraded system is in production.

- TOPS: upgraded system is in production.

- A/R: certified Y2K compliant

- JBCS: upgraded system is in production.

Transportation:

- FOCUS: Security (which includes the Security Occurrences database) are tested and implemented.

- Service Planning Applications (which includes Stops Administration and all the Counts) are tested and are currently being implemented.

- Scheduling System (Trapeze): tested and certified Y2K compliant.

- ATOS (Transit Admin System): tested and certified Y2K compliant.

- Delay Logs: tested and certified Y2K compliant.

Maintenance:

- Maximo: Tested and in production.

- SMS 2 in production in all but one location.

Corporate and Other:

- Wheel Trans: Certified Y2K compliant.

- Wheel Trans IVR: Vendor selected, and implementation plan is underway.

- Claims (Riskmaster): New application software being implemented in pilot parallel mode.

- MADITUC (scheduling) replaced, tested, implemented, and Y2K certified

- Corporate Client-Server applications: 4 of 10 Level 1 and 2 applications certified.

Engineering:

- CADD applications tested and in production.

- Contract Management schedule reviewed; implementation targeted for November.

- Document Management: Implementation plan being assessed to determine opportunities to advance the implementation schedule.

IT Infrastructure:

- Desktop rollout Commission-wide is 89 percent complete.

- Network Servers: All NT and Novell Servers designated for remediation have been replaced or upgraded.

- Voice: All Voice systems (Hardware and Software) are now Y2K compliant.

- Mainframe: All VM and VSE software has been certified Y2K compliant.

Contingency Planning:

- All Business Operations contingency plans are drafted. These Department/Branch plans handle outages from hydro, water, telecommunications and external suppliers.

- All detailed IT contingency plans (Applications, Infrastructure and Embedded Systems) have been drafted. Most are in their final review with almost one quarter of them signed-off. All plans are targeted for completion by August 30, 1999.

Budget:

The current projected cost for the TTC Y2K project is $15.8M. 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 $1.0M over the approved budget, and the Y2K Project Office is currently investigating options to make up the shortfall internally.

Conclusions:

- Expected to meet target of all level 1 and 2 applications Y2K ready be end of September 1999, with a few exceptions.

- Exceptions are: SMC for SRT, Engineering's Document Management System, Time Keeping and Contract Management System, Wheel Trans Interactive Voice Response System, and the Drop Vault System.

Status Report from the Toronto Police Service - August 23, 1999:

Year 2000 preparations are continuing to progress at the Toronto Police Service. In this update the Service reports on its preparedness status conforming to the previously submitted reporting format.

Emergency Preparedness:

Consistent with established timelines, the Service is in the process of preparing unit specific operational contingency plans. Unit plans are expected to be finalized by the end of the month. These plans prepare units in the event that they have to operate with diminished services (i.e., electricity, heat and water) or have to re-locate to another facility.

Contingency plans are also being prepared to enable police services to be delivered if computerized systems fail or suffer prolonged downtime.

The Toronto Police Services Y2K Task Force is making the necessary preparations and seeking approvals to provide all police divisional facilities with emergency power generation capability. In addition plans are being prepared to facilitate fuel delivery to police facilities in the event that the normal fuel distribution process becomes disrupted.

Information Technology Systems:

The TPS project is close to its target schedule, with most high priority systems implemented or nearing implementation. As per the original plan, there are still a number of systems to be converted, with work expected to extend right up to the end of 1999.

The status is as follows:

(i) Priority A: All of the remediation work for applications in this category is complete. Two of the 21 applications are undergoing internal testing since they were delivered and certified by the vendor late.

(ii) Priority B: Ten of the 21 systems in this category are completed and implemented; two will be replaced by a new application; two are awaiting new releases from the vendors. The rest have been renovated and are undergoing internal testing with scheduled implementation in September.

(iii) Priority C: 13 of the 28 systems in this category are completed and implemented; the rest are expected to meet their target date.

(iv) Priority D: 5 of the 17 systems in this category are completed; three have been decommissioned as no longer required; the rest have still not been addressed, due to their relatively low priority.

Staff has also been assisted recently by the City of Toronto ABC Quality Assurance team on the Year 2000 Project Review. The City of Toronto team has found that overall, good progress has been made on the renovations of TPS' applications inventory. Also, there are a number of suggested improvements made by this team which the Service will be using to strengthen its administrative diligence.

Information Technology System Funding:

As previously reported, it is anticipated that the remaining funding of $1.35 million included in the Service's 1999 budget request to Council will be sufficient to complete the remaining aspects of priority A-D technology systems.

Facilities and Other Equipment Assets:

A complete inventory of equipment assets that may be affected by the Year 2000 conversion has been prepared. Remediation and testing of these assets is continuing. It is anticipated that critical or priority A equipment assets will be remediated and tested before year end.

The Service continues to work closely with city staff on the assessment and remediation of facilities in keeping with established timelines.

In closing, Chief David Boothby remains confident that the Service will be prepared to deliver police services in the new millennium in keeping with the expectations of our communities.

Status Report from Toronto Hydro - August 27, 1999:

Toronto Hydro's Year 2000 project is on target and there are currently no known issues that jeopardize the goal of 100 percent year 2000 readiness.

Systems affecting the flow of power to customers are now 100 percent ready with only contingency planning remaining to be completed. 100 percent ready means that inventory, assessment, remediation and testing of all systems affecting the delivery of power are completed . The Contingency Planning team reports that the finalizing of contingency plans, including practice and revision, is targeted for October 31.

Half of Toronto Hydro's electrical distribution control systems are already operating in the Year 2003 and the transition from December 31 to January 1 will be from Year 2003 to 2004. This operating procedure eliminates any possibility of rollover problems associated with the turn of the century in these systems.

The Year 2000 Project Office has met with Toronto Hydro's senior vice presidents to update them on the Y2K readiness programs in their area. Testing authorization and exemptions have been thoroughly documented. Reports are being prepared for each of the senior vice presidents, documenting the testing and results for all systems for which they have responsibility.

The City of Toronto is currently performing a quality assurance audit of Hydro's entire Year 2000 readiness effort. Interviews have been arranged with more than 30 key Toronto Hydro staff, managers and vice presidents. The review is now 95 percent complete and Hydro looks forward to receiving the final report.

Hydro is continuing to participate on the Emergency Services Providers Ad Hoc committee to ensure that its emergency communications and response are coordinated with those of other key agencies. Upcoming communication activities focus on youth, senior and disabled populations. Communications with Toronto's health sector include a bulletin to be issued by Community Care Access Centre Toronto to its members to notify them of Toronto Hydro's life support services registry.

Corporate communications staff are developing emergency communications protocols in cooperation with all business units and these will be finalized by the end of September. Extra communication officers will be on duty through the year-end changeover and during the first few days of the New Year.

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 October 5, 1999, a total of $87.2 million has been committed or spent leaving $62.4. For September 1999, $3.3 million have been committed. The majority of this expenditure is again for resources, hardware, software, servers, and network equipment. Contingency Planning and change requests for critical 2 and 3 will be approved on an individual basis and money will be drawn from the administration funds allocated to each department first, then from the Project Contingency Fund. Additional funding will be requested to Council only after these funds have been depleted. It should be noted that the original budget for each area is not adjusted based on approval change requests. (See Appendix 3).

Change Requests:

The following change requests have been approved by the Year 2000 Steering Committee and are presented for information.

Community and Neighborhood Services:

B.C. No. 20 - Media and Communications (Public Health):

Log No. 181 - Remediate Food Handler Certification Program:

The Food Handler Certification Presentation has been replaced by a version written in MS PowerPoint97. Therefore, this application should be considered replaced (retired).

B.C. No. 10, Criticality 2 No. 150 - Library Services, Voice applications:

Log No.182 - Request to activate a criticality 2 business case:

The Library's criticality 1 business case, Library Services (four partitions) is on schedule and on budget. The Library Services business case is scheduled to be completed before the end of the third quarter.

The Library would like to activate the criticality 2 business case, Library Services, Voice Applications, based on the revised version of the business case. The original funding request has been revised from $95,040 to $18,620. This represents a net decrease of $76,420 to the original business case.

B.C. No. 10, Criticality 2 No. 149 - Library Services, Room Booking:

Log No. 183 - Request to activate a criticality 2 business case:

The Library's criticality 1 business case, Library Services (four partitions) is on schedule and on budget. The Library Services business case is scheduled for completion before the end of third quarter.

The Library would like to activate the criticality 2 business case, Library Services, Room Booking, based on the revised version of the business case. The original funding request has been revised from $257,850 to $47,186. This represents a net decrease of $210,664 to the original business case.

B.C. No. 10 Criticality 2 No. 156 - Library Services, Electronic Services:

Log No. 184 - Request to activate a criticality 2 business case:

The Library would like to activate the criticality 2 business case, Library Services, Electronic Services, based on the revised version of the business case. The original funding request has been revised from $172,800 to $45,880. This represents a net decrease of $126,920 to the original business case.

B.C. No. 10 Criticality 2 No. 146 - Library Services, Management of Donated Revenue:

Log No. 186 - Request to activate a criticality 2 business case:

The Library would like to activate the criticality 2-business case, Library Services, Management of Donated Revenue, based on the revised version of the business case. The original funding request has been revised from $125,550 to $48,195. This represents a net decrease of $77,355 to the original business case.

B.C. No. 6 - Operating Budget Preparation and Analysis:

Log No. 200 - Changes to Social Development EP&A Requirements:

Reinstatement of Strategic Reporting Systems (aka Borland) ReportSmith from EP&A list for year 2000 readiness letter pursuit.

The new version of Debudas was to have all reports converted to Crystal Reports thereby not requiring any further usage of ReportSmith. Current revision Debudas strategy requires the continued usage of ReportSmith (Year 2000 ready version) until the implementation of the new Debudas system is completed (to follow Year 2000).

Continued usage of ReportSmith means this software must be reinstated on the EPA list of critical software for Social Development and Administration.

B.C. No. 26 - Research and Data Support for Partition No. 1:

Log No. 201 - Add MapInfo Inc. MapInfo:

EPA list of CNS02601 critical vendors had removed MapInfo Inc.'s MapInfo software from the list. MapInfo is a critical piece of software for CNS02601 operations and should be included within the sphere of EPA.

B.C. No. 11 - Hostels (Housing Improvement and Support Mainframe):

196 - This Change Request is to initiate a new business case (Criticality 1) for 10 new Shelter Housing and Support mainframe applications were recently discovered - $94,500.

(1) Termite Program;

(2) Low-rise Rehabilitation Program;

(3) Ontario Home Renewal Program;

(4) Residential Rehab. Assistance Program;

(5) Carpenter Ants Program;

(6) Home Modification Program;

(7) City of Toronto Program;

(8) Contract After Care Program;

(9) Convert to Rent Program; and

(10) Commercial Façade Program.

EDS has completed the assessment and is in the process of remediating the applications. This change request is to add the above applications to the Hostels business case (create a new partition to track the HIPS costs).

B.C. No. 10 - Library Services:

Log No. 206 - Clean Management Strategy for the ILS:

The ILS production environment (7X24) requires a departure from the "Clean Management Guidelines". This request seeks acknowledgement of the need for business continuity. The Library requests that it be released from future date testing and it be allowed to implement changes to the application when required according to its own clean management practices, informing the PMO/Steering Committee through the change request process after the change has been implemented.

The other three partitions associated with this business case are not affected by this request. The Library has a test environment available for those applications. Departure from the city's Clean Management Guidelines for those partitions will not be required.

B.C. No. 6 - Operating Budget Preparation and Analysis:

Log No. 210 - Continued use of current production Year 2000-ready Debudas system:

Social Development and Administration has chosen not to implement the new version of the Daedalian remediated Debudas system which was to be implemented by 30-September-1999. Social Development and administration will instead use their existing Debudas system, which has been certified by the vendor (Daedalian) as Year 2000 ready.

Because of the conflict between freezing code revisions after Year 2000 certification following post-remediation, and the necessity of making continued revisions to the new Debudas system in order to meet Divisional Budget Reporting requirements in the Year 2000, Social Development feels they will be unable to meet an implementation deadline before late in the fourth quarter.

In order to meet the Year 2000 readiness certification and ensure continued business operation, Social Development has chosen to continue using the current Debudas system, which is in production and Year 2000 ready, but without the new reporting features to be implemented in the next release (due no earlier than March 2000).

B.C. No. 7 - Subsidy Claims:

Log No. 211 - Omission of detailed Year 2000 testing of remediated and converted spreadsheets because of lack of date impact.

Social Development and Administration has chosen not to conduct further detailed Year 2000 testing beyond functionality and user acceptance testing following Year 2000 conversion of their spreadsheet files. This decision is based on the year conversion of their spreadsheets from Lotus 123 to the Year 2000 ready Excel 97 and a cell-by-cell assessment of the converted files by Daedalian.

The vendor assessment of all spreadsheets before and after conversion has determined that all date-related field fall in the following categories:

(1) Text fields (with no date impact on formulas or calculation); and

(2) System date fields (which are defined by the Corporate Desktop Initiative and beyond the control of the Business User to change).

It has been determined by Daedalian and the business users that to conduct detailed Year 2000 testing on the spreadsheets is not relevant due to the following:

(1) Lack of date fields that can be tested;

(2) Reliance of date formatting on the desktop system date settings which are determined by CWI and the Desktop group; and

(3) Year 2000 testing and approval of the current desktop configuration and software applications used.

B.C. No. 23 - Financial Reporting:

Log No. 212 - Omission of detailed Year 2000 testing of remediated and converted spreadsheets because of lack of date impact.

Description same as Log No. 211 above. This request was approved by the Year 2000 Steering Committee.

B.C. No. 23 - Financial Reporting:

Log No. 213 - Omission of detailed Year 2000 testing of shrink-wrapped software packages:

Social Development and Administration, Research and Data Support plans to test only the high level functionality of its current report generation tools for Year 2000 compliance. The omissions to testing concern the complete software list of this business case, namely:

(1) MS Office 97;

(2) Corel WordPerfect Office 2000;

(3) SAS v6;

(4) MapInfo and tools;

(5) Harvard Graphics; and

(6) Stats Canada Census Browser.

The omission of testing is justified on the basis that each of the software packages listed above is a shrink-wrapped solution with exclusive maintenance and support of the program being provided via the vendor. The City of Toronto in no way has control over remediating any aspect of the program source code and must rely solely on vendor support to do so (e.g., Version upgrades, maintenance releases, etc.). All versions of the software used are the most current ones readily available.

Items 1 - 3 above are applications used throughout the City and have received Year 2000 readiness confirmation via the Year 2000 Corporate Standards group, as well as the Corporate Year 2000 Desktop Rollout Team.

Items 4 - 6 above are also used through the City and verification of Year 2000 readiness via the vendors is handled via External Partners and Agreements. Vendor compliance statements received through EP&A in the case of items numbered 4-6 above verify Year 2000 readiness of the above products.

Corporate Services:

B.C. No. 27 - Fleet Management and Maintenance - $156,497:

Log No. 160 - Advance Completion Date of this project to September 30, 1999 from November 30.

The project team has been asked to advance the completion date of this project from November 30 to September 30. This Change Request defines the minimum additional hardware and labour needed to accomplish this schedule improvement.

B.C. No. 28 - Integrated Disability Management and Claims Processing - $34,668:

Log No. 179 - The Human Resources Division is requesting additional funds in the amount of $25,680 (+35 percent PM, QA, Systems Mgmt.) for the above Business Case.

Based on current SAP development and implementation information, the effort to interface the IDSM application and SAP are now known. These include employee number conversions, organizational specification, input from former municipal payrolls and manual entry of employee profile information as required. These changes will require a project extension of 2 - 3 weeks. The Integrated Disability and Safety Management application is not viable and cannot be implemented without these changes.

All Priority 1 Business Cases - $28,400:

Log No. 224 - A Contingency Planner is required by the Corporate Services Department to assist divisional Y2K project teams with the development of contingency plans for Y2K priority one projects.

The Contingency Planner has met with all divisions who require contingency plans for their Priority One Business Cases and estimates that it will take her approximately 200 hours to document all required contingency plans for the City Clerk's. Facilities and Real Estate, Fleet, Human Resource (Integrated Disability Claims Management only), Information and Technology and Legal Divisions. This estimate does not include testing of the Y2K Contingency Plans. This was approved by the Y2K Steering Committee. However, it was felt that this person may need to stay on longer and additional funding may be required.

B.C. No. 28 - Integrated Disability Mgmt. and Claims Processing - $120,336:

Log No. 225 - The Human Resources Division is requesting additional funds.

The original submission assumed that Oracle, as a City standard, would be available for common use. Discussions with Computer Operations and Telecommunications began in May re the need/process of acquiring Oracle as licensing issues were then under review. It appears that insufficient licenses are available for our use at this time and that it would be prudent to acquire additional licenses. We are asking for 60 full concurrent licenses. Our current projected user base is 80-85 HR users, with a possible 500-600 supervisors being added some time after implementation. The supervisors would be ultra-low usage users, simply using the system to fill in claims forms.

Criticality 2/3 Systems, B.C. No. 100, 101, 102, 103, 104, 105, 106, 161, 162, 163, 164, plus 3 new ones:

Log No. 226 - Assessment of Criticality 2/3 Systems, Corporate Services.

This Change Request is provided as a marker for the Corporate Services Critical 2/3 Business Cases.

A final review of the Business Cases developed in January 1999 is currently in progress. This work is being performed by business unit staff and is independent of Critical No. 1 projects. As assessments are completed, individual Change Requests will be submitted requesting activation of each business case and confirming impact statements, project completion dates, resources and costs for the individual projects. The current Freeze schedule for new applications from September 30, 1999 to January 15, 2000 will be respected. Implementation dates are to be targeted for January 16, 2000. As identified in the Freeze schedule, the Change Request process for critical circumstances will be utilized on an as needed basis. It is understood any staff involved with Criticality 1 Systems must complete those tasks prior to commencement of work on Criticality 2/3 systems.

Economic Development, Culture and Tourism:

B.C. No. 43 - Recreational Program Delivery:

Log No. 136 - To comply with the directive put forward by the CAO and Commissioners to bring forward the implementation timetable for the CLASS project - $2,124,100

Advance implementation, harmonization and business continuity - $1,507,600

35 percent Allocation $616,500

Due to an oversight in the original business case, the 35 percent allocation was missed.

B.C. No. not yet assigned - $357,750:

Log No. 174 - Request to extend Y2K remediation for hardware/software to the Heritage and Museum Boards including Heritage Toronto.

B.C. No. 48 - Maintain Cultural Attractions/Finance - Zoo - $295,000:

Log No. 175 - Funds to implement Critical 2 Business Cases for the Zoo.

Additional funds are requested to implement a Year 2000 solution for:

(1) Admissions (Point of Sale);

(2) Development/Membership; and

(3) Maintenance Management.

B.C. No. not yet assigned - $108,000:

Log No. 176 - Request to bring forward this Critical 2 Business Case for independent Toronto Arena Boards in the former City of Toronto.

Provide assistance to the Toronto Arena Boards. Provide Y2K compliant hardware and upgrade financial software where necessary to ensure the Arenas are able to operate, provide services and track finances through the year 2000.

Finance:

B.C. No. 59 - Capital Budget Preparation:

Log No. 148 - Request for incremental funding due to a change in scope of the project - $220,495:

The Finance Department's Capital Budgeting process needs a single integrated system to replace the former cities' budgeting system and to achieve reporting and operational efficiencies. Each of the cities had their own systems and interface between these systems was through an Excel spreadsheet file submitted to Finance for consolidation. The proposed system will eliminate this exercise by having the users input the business cases directly into the system.

B.C. No. 58 - Operating Budget Preparation:

Log No. 157 - Daedalian functional changes of Operating Budget System - $50,000:

In 1999, the City of Toronto implemented a new accounting system and introduced a number of administrative changes including restructuring of feature detail and account structure codes. The new system's budgeting module will not be available for immediate use. As a result, DEBUDAS will be used to prepare the year 2000 budget with certain changes/modifications.

Change in scope requires additional funding. The modifications will cost $40,000 to complete. Only $5,000 has been budgeted for Y2K testing last October 15, 1998. After the completion of the changes, Y2K assessment and remediation will be conducted prior to testing. This will require an additional $10,000 bringing the total request to $50,000.

B.C. No. 56 - Accounting (SAP):

Log No. 173 - Request approval for $437,000 in order to implement the SAP Accounts Receivable module.

The implementation of SAP application has been undertaken by the City as the Year 2000 solution for a number of applications, as well as being the integrated solution for the amalgamated City. Phase 1A of the SAP Project went into production at the end of June and Phase 1B is scheduled for production at the end of August. The following modules have been implemented: General Ledger, Accounts Payable, Purchasing, and Material Management. The Accounts Receivable module was removed from implementation scope in 1999 in the interest of saving implementation time and effort. The original plan called for a remediation of the Accounts Receivable Module of the Computron Financial System as a short-term solution. However, upon an analysis of the viability of this alternative, it became clear that this is not a solution, even in the short term.

B.C. No. 55 - Pension Administration:

Log No. 185 - Delete non-critical vendors from EP&A vendor list:

The following vendors were originally associated with the Pension Administration business case, but have been re-evaluated and found not to be criticality 1 vendors. They will not cause injury, result in a major lawsuit, loss of revenue or impact the reputation of the city if they are not Year 2000 ready.

The vendors are:

Baker Gilmore Mulvihill Financial TAL

Beutel Goodman Pearlstein Financial TD Quantitative Capital

Bissett & Assoc. Phillips, Hager Investment Counsel Ultravest Investment Council

Gryphon Investment Counsel Sanford C. Bernstein & Co William M. Mercer

Howson Tattersal Sceptre Investment Yield Mgmt. Group

McLean Budden State Street Global Advisors

B.C. No. 61 - Insurance Management - $10,500 (Finance Contingency Fund):

Log No. 227 - Add a new Priority 2 System - W5 Claim System:

This claim management is required by the insurance division to keep track of the claims and to manage the claim data. However, this link to McLaren Toplis is not highly critical to the business, since alternative modes of communication such as fax, telephone, and courier are available to obtain information. Hence, the business has decided to add this application as a Priority 2 system.

In addition, it is recommended that the cost be absorbed by the Finance Y2K project contingency fund.

B.C. No. 56 - Accounting Services:

Log No. 203 - Request for Year 2000 compliance remediation and funding of $1,553:

The Furniture and Equipment Inventory of the Accounting Services Division is a mainframe system. It was agreed to perform only a year 2000 compliant testing for this system by the Year 2000 Mainframe Group. Unfortunately, the system was failed in the year 2000 compliant testing and the users must have this system operational beyond year 2000 to continue their services.

Reason for Change: The system was failed in the year 2000 compliant testing and a remediation to make the system year 2000 compliant is required.

Cost Analysis: The remediation will cost $1,445 to complete. The Accounting Services Division has no budget for the Year 2000 Project. It is recommended to have this amount of $1,445 be absorbed by the contingency fund.

B.C. No. 62 - Tendering and Contract Management.:

Log No. 204 - Recommendation that the sign-off date of this project be changed from August 4, 1999 to October 19, 1999, with a go-live date of October 20, 1999.

(1) Testing was delayed as the division experienced two major setbacks to operations and, as a result, all staff were assigned to work on these two high priority projects, leaving no staff available to work on the macro conversion project. The two setbacks were: printer problems for corporate purchase orders, and problems with Word Perfect on the new desktops.

(2) The training of SAP staff took place over 3 sessions only, which resulted in the unit having to send several staff to each session, leaving a staffing deficit. Aside from covering off critical areas and services in PMMD, the project leader was not able to dedicate staff for the macro conversion project during that period.

(3) The rollout of SAP will be commencing August 30 and there is still preparation at this end for the effective conversion and implementation, etc. All available staff are being utilized to assist in the implementation process.

(4) In the month of September, staffing levels will not be sufficient to commence testing until the week of September 13.

B.C. No. 52 - Payroll:

Log No. 199 - delete non-critical vendors from EP&A vendor list - amended:

The following vendors were originally associated with the payroll business case, but have been re-evaluated and found not to be criticality 1 vendors, as they will not cause injury, result in major lawsuit, loss of revenue or impact the reputation of the City if they are not Year 2000 ready.

The following vendors are insurance carriers covering the employees of the City. The impact to the City of one or more of these vendors not being ready for the year 2000 is to move the coverage to a carrier that is year 2000 ready:

Cumba

Lloyds of London

London Life

Manion, Wilkins & Assoc.

Mutual Life

It is the intention of Payroll to notify staff of any problem supplier and to initiate benefit service from another supplier. In addition, these suppliers report that they are already Year 2000 compliant or will be compliant by the end of September, 1999. In addition, the product Sync Up by I.T. vendor, Universal Data, is no longer used, so it can be removed from the list.

The following vendor Bell and Howell provides mailing machinery. This contract is the responsibility of the city-wide facilities initiative. EP&A project manager has confirmed this transfer with the CWI facilities project manager.

B.C. No. 50 - Tax Collection:

Log No. 214 - Delete non-critical vendors from EP&A vendor list :

The following vendors were originally associated with the Property Tax business case, but have been re-evaluated and found not to be criticality 1 vendors, as they will not cause injury, result in a major lawsuit, loss of revenue or impact the reputation of the City if they are not Year 2000 ready.

The following vendors are armoured couriers used to transport cash and cheques to the bank. The impact to the city of one or more of these vendors not being ready for the year 2000 is to switch to another vendor for cash delivery.

The vendors are Brinks Armoured Services and Loomis Armoured Services. There are other service providers that could be used if one or both of the above fail. In addition, deposits could be held for a period of time in vaults of the City.

The following vendors provide cash register services. These contracts are the responsibility of the city-wide facilities initiative: Ithaca, Quandrant Systems, Sweda Litton.

EP&A project manager has confirmed this transfer with the CWI facilities project manager.

B.C. No. 61 - Insurance Management:

Log No. 215 - Reduce scope to a manual process supported by an Excel spreadsheet - completion date from November 15 to October 15.

This project commenced later than originally planned. The recommended solution to support the City's requirement is a purchased package (called STARS). At this time, negotiations are underway to finalize a contract between the vendor and the City. Timing of this implementation is early 2000. This requires a change in strategy to ensure business continuity. The insurance and risk management unit has been converting to a manual process supported by an Excel spreadsheet.

This project scope is now reduced to ensuring the manual process and associated spreadsheet is year-2000 ready. Testing confirms the spreadsheet is not compliant. Since the original cost of the purchased software is in the Treasury Division budget, there is no change to this partition budget. Completion date is reduced from November 15 to October 15.

B.C. No. Payroll and HR (SAP):

Log No. 218 - To fund an SAP consultant to do Year 2000 testing - $54,500:

The Atlas HRP Project team has analyzed the testing requirements and timeline essential to demonstrate continuity of business processes using the SAP software in year 2000. Resourcing the SAP Year 2000 HRP test effort with City would critically impact either the timelines of the Metro/Scarborough Go Live or the ability of the SAP Yorks production team to process payrolls in a timely and efficient manner. It is recommended that this change request for a SAP consultant familiar with the City business rules by hired through the Year 2000 Project. The Atlas HRP Team Leads for payroll and HR will review and sign-off on the Y2K testing.

The estimation of the job is between 14 and 20 days to conduct the testing for HRP at a total of $54,400.

Urban Planning and Development:

B.C. No. 67 - Building Permits, Municipal Standards, Urban Planning - Group 1:

Log No. 155 - Upgrade monitors to 17" - $150,166:

The Integrated Business Management System (IBMS), the main Y2K and strategic system for UPDS, requires that larger monitors be used wit the display of geographical and land use information in graphic form. This request is to cost-share the monitors on a 50-50 basis between the Y2K project and the UPDS department. The total cost for the monitors is $300,232; split in half, the requested cost is $150,116.

B.C. No. 67 - Building Permits, Municipal Standards, Urban Planning - Group 1:

Log No. 172 - Resources for Desktop and IBMS Rollout - $92,400:

UPDS requires additional staff to support the desktop rollout and server migration in Metro Hall and North York, as well as the IBMS rollout. A total of 3 people x 16 weeks are required. Assuming a $55/hr. rate x 35 hours per week, a total of $92,400 is requested. These resources are required as backfill for existing staff working on other Y2K projects for UPDS (for the IBMS project and the ATS project).

B.C. No. 68 - Service Integration and Support - Prosecutions:

Log No. 207 - Funding for Pen-based Units - $148,786:

The pen-based units (Fujitsu Stylist 500, 1000) used by the North York Municipal Standards department are not Y2K-ready and need to be replaced immediately. With the new NT server rollouts, the current pen-based units are not longer functional and the department is now forced to operate in contingency mode. This request is to obtain Y2K funding in the amount of $148,786.

The scope of the business case only covered the Y2K testing of the application. With no resolution, an issue was officially raised on June 28, 1999 to request these units. By the end of August, it was established that the desktop business case would not include this in its scope.

The quoted cost is $146,285.75 (from the sole supplier, Filbitron Marketing Corp.). This amount is rounded to $148,786 to cover the UPDS resource costs in implementing these upgrades.

B.C. No. 112, Criticality 3 - Building Permits, Municipal Standards, Urban Planning - Group 3:

Log No. 220 - Merge Business Cases, move partitions:

UPDS would like to make the following realignments of systems within the Criticality 2/3 Business Cases to improve project management and organization and simplify reporting:

(i) Merge business case 110 to 113 (affects one Criticality 2 system, testing of Microstation SE/J);

(ii) Merge business case 108 to 112 (one system, North York ISS, to move to partition 112-01);

(iii) Business case 109; add one system that was not in original inventory (testing of SYDPLUS app);

(iv) Move four systems from business case 112 to 111 (North York ARCView, EY Desktop GIS, Toronto GIS ARCView, MapInfo) to better align with the "Drafting and Design (3)" business case

Citywide Initiatives - Desktops:

B.C. No. 82 - Desktops - $375,000:

Log No. 180 - Request for advance of funds from next year's Operating Budget to finance 250 desktops:

The Year 2000 Project Office is currently utilizing these desktops. As the project will not be completed until next year and there is a need for 250 desktops right now, a request is being made for an advance of $375,000 from next year's operating budget. The Steering Committee approved for the purchase of these desktops as part of the Year 2000 Project.

B.C. No. 82 - Desktops:

Log No. 229 - Request to send decommission computer to a recycling plant.

A request was put forward to have obsolete computers (previously rejected by the School Board) decommissioned be sent to a recycling plant. If we do not recycle, it is estimated that the removal of operating systems and erasing hard drives would cost an additional $2 million dollars. However, using a computer recycling facility, the City would incur no cost.

CityWide Initiatives - Facilities and Fleet:

B.C. No. 81 - Building Systems - $3,500,000:

Log No. 170 - Engineering Firms required to perform building system test activities:

Approval of DMSI/GSI and AGRA/Microlar to perform the testing of at least 900 Building Control Systems. Approval to proceed under a letter of intent to be given in order to meet the project deadline.

B.C. 81 - Facilities - Building Systems:

Log No. 217 - Change the scope of the Facility Systems project to include 5,000 additional systems discovered during the inventory process. Date change from October 22 to November 30, 1999. No funding impact at this time.

City Wide Initiatives - Network - Voice:

B.C. No. 87 - Network - Voice:

Log No. 202 - Change in scope related to contingency planning - $35,000:

The change in mandate, related to the contingency plan for voice, highlights the need to extend the contract of the Contingency Planner (Terry Wasylycia) which was initially identified to the end of September. However, since it is now the expectation that the Network-Voice Project Manager, along with the Contingency Planner, prepare a high-level contingency plan for the whole City, without the assistance and necessary input from the Business Units, the contract will have to be extended until November 30, 1999.

NOTE: Remediation costs have not been increased. There is some risk that these may be understated. Remediation is expected to be in the form of workarounds in the majority of cases. This was approved, but it was stated that there might be a requirement from the Project Management Office to retain the contingency planner to January 15, 2000.

Conclusion:

The City of Toronto's Year 2000 readiness program is moving forward as anticipated. Council will continue to receive progress reports as requested.

Contact:

Lana Viinamae, Director Year 2000.

(A copy of the Y2K Progress Charts detailing progress by group, project, project phase, and charts respecting Priority 1 business functions referred to in the foregoing report, were forwarded to all Members of Council with the October 14, 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 October 26 and 27, 1999, had before it, during consideration of the foregoing Clause, the following report (October 19, 1999) from the President, Toronto Parking Authority:

Purpose:

(1) To describe activities undertaken to date to assess the Year 2000 compliance of the facilities, equipment, and systems under the control of the Toronto Parking Authority.

(2) To describe areas where known deficiencies have been or are being addressed.

(3) To identify remaining activities required to ensure Year 2000 compliance.

Funding Sources, Financial Implications and Impact Statement:

Toronto Parking Authority Retained Earnings.

Recommendations:

That this report be received for information.

Council Reference/Background/History:

At its meeting of July 29, 30, 31, 1998, City Council adopted the joint report from the Chief Administrative Officer and the Chief Financial Officer which set out the City's Year 2000 work plan. As part of that work plan, Council requested the City's Agencies, Boards and Commissions to notify Council as to the actions they were taking to ensure Year 2000 readiness.

Comments and/or Discussion and/or Justification:

The Authority began their review of Year 2000 readiness in March of 1998. An inventory of all equipment and systems which may be susceptible to Year 2000 problems was prepared. Letters were sent to the suppliers of these systems and equipment and the suppliers were requested to confirm, in writing, the Year 2000 status of their products or services. Responses were received from all of the suppliers of critical systems indicating that they were or would be, Year 2000 compliant. Schedule 'A' identifies the systems by functional area.

An inventory of the Authority's in-house systems was also prepared including the LAN Server and the workstations. Many of the existing workstations were older P.C.'s which were found either not Year 2000 compliant or not suitable for hosting the Windows NT workstation OS which the Authority is using as a standard office platform. An equipment replacement program aimed at critical workstations and the network server was undertaken as part of the 1998 budget year with some final minor replacements during 1999. Most of this upgrade program would have been required as a normal life cycle activity in the near term without regard to the Year 2000 issue. The Authority's Year 2000 readiness plan and equipment replacement program was approved by the Authority's Board of Directors in September of 1998 and has proceeded according to the schedule approved at that time (Minute No. 98-210).

Subsequent to the above activities being undertaken by the Authority, the City's Year 2000 Office contacted the Authority in December of 1998 to determine our readiness status. The TPA has been co-ordinating our Year 2000 readiness activities with the Year 2000 Office since that time. At the City's request, the TPA prepared a complete inventory of its building and facilities and forwarded this to the Y2K Office for review. We are awaiting a response regarding this matter which the City has indicated will be available shortly.

Known Problems

The review and testing of equipment and systems identified the following known problems and the steps indicated below are being undertaken to address these problems:

(1) Intranet/Mail Server. The TPA e-mail connection to the City Server is hosted through Group Wise version alpha (hosted on the former Parking Authority of North York Novell 3.11 Server). The City has indicated it will provide direct access for the Authority's NT Server to the groupwise V5.5 system once a high speed fiber line and router is installed in the TPA office. This will eliminate the need for the non-compliant North York Novell Server. This system is critical to the function of the Authority's on-street meter program and discontinuity in service will create severe delays and server failures. Work on this upgrade is well underway and will almost certainly be completed by year end.

(2) Pay on Foot System. The supplier of the Pay-on-Foot Parcstar M820 system used to operate four of the Authority's large facilities has verified that the application software is compliant. However, the system is hosted under the OS9 operating system which is not Year 2000 compliant. The Authority has located an OS9 patch and will be installing this shortly.

(3) AutoCarpark Fee Computers. These PC based fee computers were certified compliant by the supplier, AutoCarpark Controls Limited. However, in field testing the systems, it was found that the software was not recognizing February 29, 2000 as a valid operating day. AutoCarpark was notified of this defect in April 1999 and has promised a fix. The corrected version of the software has not been delivered at this time. The failure to fix this defect will be inconvenient to the Authority, however, all facilities will still operate without loss of revenue or service.

Conclusions:

The Authority has achieved a high stage of preparedness with respect to potential Y2K problems. All office P.C.'s have been tested and have passed Year 2000 hardware/firmware compliance tests or been replaced. The vendor of the Financial Systems software, including the host Pick platform, has certified, in writing, Year 2000 compliance. Testing of specific accounting applications to identify deficiencies was undertaken in the spring of this year and any deficiencies have been addressed. All on-street equipment and systems have been certified Year 2000 compliant. A known problem has been identified with two off-street systems and a work around has been developed to deal with it. The City's Year 2000 office is reviewing the Authority's facilities and will respond shortly as to deficiencies. The remaining critical system which needs resolution is the replacement of the current City Intranet link, however, progress has been made towards achieving this. While there are some known Y2K issues which have yet to be resolved, except with respect to the City Link, work arounds have been developed to avoid serious failures.

Contact Names:

Maurice J. Anderson

President

Telephone: (416) 393-7276

Facsimile: (416) 393-7352

G.C. Daigle

Director, Finance and Administration

Telephone: (416) 393-7295

Facsimile: (416) 393-7352

Ian Maher

Director, Planning and Analysis (Information Technology Lead)

Telephone: (416) 393-7291

Facsimile: (416) 393-7352

SCHEDULE A

TORONTO PARKING AUTHORITY

YEAR 2000 EQUIPMENT/SYSTEMS READINESS CHECKLIST

ON-STREET OPERATIONS

- Single Space Meters

- Handheld Terminals

- Revenue Auditing Software

- Pay & Display Machines

OFF-STREET OPERATIONS

- Pay & Display Machines

- Single Space Meters

- Fee Computers

- Ticket Spitters and Gates

- Card Access Systems

- Pay-on-Foot Systems

- Security Monitoring and Response

- Handheld Terminals

OFFICE SYSTEMS

- Accounting Software

- Lan/Wan

- Workstations

- Card Access Systems

- Third party financial applications (credit card processing, other banking, etc.))

(City Council also had before it, during consideration of the foregoing Clause, the following report (October 26, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

The Policy and Finance Committee requested the Chief Financial Office and Treasurer to provide an additional follow-up report directly to Council for its meeting scheduled to be held on October 26, 1999 on the issue of External Partnerships and Agreement.

Funding Sources:

No funding is required at this time.

Recommendations:

It is recommended that this report be received for information.

Comments:

The External Partners and Agreements (EP&A) section is part of the overall Year 2000 program for the City of Toronto. The mandate for the EP&A section is to:

- Work with the Business Units to identify all external suppliers and ministries of the government of Ontario that directly support the critical business functions.

- Work with the appropriate ministries and government departments of the Provincial Government of Ontario that provide services to the City departments.

- Ascertain the level of Year 2000 readiness/compliance of products and services supplied by external suppliers.

- Evaluate alternate suppliers in the cases where existing suppliers are unable to demonstrate Year 2000 readiness/compliance

- Manage and respond to the general inquiries being presented to the City of Toronto regarding internal Year 2000 readiness/compliance as governed by the published Communications Strategy.

- Review all existing agreements and contracts with critical suppliers for Year 2000 readiness/compliance.

- Review any Purchase Orders, Requests for Proposal, Quotation or Information.

- Review any new agreements with critical suppliers for Year 2000 readiness/compliance.

Supplier Identification Process

External Partners & Agreements (EP&A) worked with each Business Unit to develop a list of critical suppliers on a business case basis. EP&A analysts investigated each supplier to obtain contact information (i.e. contact name, address, website, email).

A total of 1731 suppliers was initially identified. A rationalization process was then conducted to determine as accurately as possible the suppliers that are vital to the success of business continuity of the Priority One business cases. This process included eliminating duplications, government ministries, and internal suppliers. Also, where suppliers appeared in more than one business case they were re-classified as having a corporate or City-wide status.

The net result is a total of approximately 625 suppliers that supply crucial products and services to the critical business functions and the standard Year 2000 Supplier Readiness letter with an accompanying questionnaire was sent to each supplier.

Responses Received Process

All supplier responses are first reviewed by EP&A analysts for initial, high-level risk assessment. Factors such as the completed questionnaire authorized by an officer of the company, the supplier's internal Year 2000 strategy, overall economic stability, dependency on other suppliers for their end-product and the existence of contractual relationship all contribute to the risk assessment process.

Once the risk assessment process was complete, a copy of the letter was forwarded to the Business Unit. The Business Unit then reviewed the response and could choose to do one of the following:

- Accept the response as satisfactory and certify the supplier.

- Accept the response as satisfactory and test the equipment to ensure compliance.

- Accept the response as satisfactory and request additional information from the supplier.

- Decline the response as unsatisfactory and request further clarification (i.e. request test plans of the supplier's Y2K testing).

- Decline the response and begin the search for alternate suppliers.

Responses Not Received Process

EP&A provided each Business unit a weekly report of the supplier letter tracking. The report provided details by Business Case and supplier, the date the letter was mailed, the date responses were received and any follow-up action. If a response was not received by 30 days from the mail date, the EP&A analyst advises the Business Unit of the supplier's lack of response. The analyst suggests the following options to the Business Unit:

- Telephone the supplier's contact name to ensure receipt of the letter and determine when to expect the letter

- Send a second letter as a "friendly reminder" of the importance of the Year 2000 issue to the City

As the Business Unit is the supplier's business partner, it is their decision. EP&A deferred to their judgement and acted according to their direction.

In the first week of August/99 all suppliers who had still not returned a completed questionnaire were contacted. The EP&A Analyst contacted each supplier and documented one of the following actions for each supplier:

- Will Return - Supplier is planning to return survey.

- Left Message - Left Message for supplier to call back

- Will not be Returning - Also find out why

- Send Again - Supplier has lost original letter.

When a message was left for the supplier to return the analyst's call, a second and third phone call were made 24 hours later if the supplier did not return phone message. When a supplier indicated that they would be returning the questionnaire the analyst requested an approximate date of return. When the supplier indicated that the letter was never received, address, telephone, and fax information was verified and the original letter was faxed to the supplier. In some cases the Supplier indicated that they would not be returning the questionnaire, the analyst would request to know reason for not returning questionnaire and forwarded this information to the Business Unit.

By the 4^th week in August/99, any supplier who had still not responded to the City Y2K Questionnaire was sent a letter stating that if the supplier was supplying the City with goods and services then the City's Year 2000 warranty and representation contract terms would apply and the supplier would be liable for any damages resulting from a Year 2000 failure. There were a total of 165 of these letters were sent.

Immediately following the mailing of the above noted letter a report was prepared and sent to each Department Project Manager, copied to the Project Director and the Commissioner, with a clearly documented risk assessment for each supplier. Each department was required to respond to the following questions:

- Does the list accurately represent the suppliers associated with Priority 1 Business Cases?

- Identify which suppliers are mission critical or business critical.

- What are the Business arrangements with these companies?

Some departments have responded to the report and have been evaluating their supplier's criticality to the business unit. There have been a number of changes to the critical suppliers list as departments use the Change Control Process to add and delete suppliers.

Status:

Questionnaires were sent to all 625 suppliers identified by the departments as critical to their business continuity. Recently departments have been re-assessing the critical nature of some of these suppliers and through the Project's Change Control Process are removing some suppliers from the critical list. To date 33 suppliers have been removed bringing to 592 the total number of critical suppliers, of these 125 have not responded to the City's request for Year 2000 information. A list of the suppliers who have not responded is available in the Clerk's office for Council review In cases where suppliers have not responded to the City's request for information and there is no current contract it is the recommendation of the Year 2000 PMO that departments should seek alternative sources of supply through a competitive process.

Conclusions:

The Year 2000 Project has made every effort and will continue working with departments to determine the ability of suppliers to meet the City's Year 2000 business requirements. A further check on the readiness of suppliers will be done at business case closure when EP&A will be further assessing the risk associated with each identified supplier associated with the business case.

Contact:

Lana Viinamae, Director Year 2000)

(City Council also had before it, during consideration of the foregoing Clause, the following communication (undated) from the Year 2000 Project Director:

Year 2000 Communications Update

Executive Summary

The City has been working since early 1998 to address the Year 2000 issue, and is on track and on target. As part of this effort, The City of Toronto established a Year 2000 Project Office to co-ordinate the inventory, assessment, remediation, and testing of all equipment to ensure that it is "business as usual" for all City services on January 1, 2000. Currently, teams of specialists are working to ensure that: all essential services, e.g. water and water pollution control, hydro; and emergency response services, e.g. Police, Fire and Ambulance services, will continue to be available to the public on and after January 1, 2000.

Year 2000 External Communication Initiatives

- In April, Council approved the City of Toronto's Year 2000 Communications Strategy which is being implemented.

- This strategy informs the public about the Year 2000 issue in general, and explains what the City is doing to ensure it will be "business as usual" for essential public services.

Key Messages

Overall message: "Our goal is business as usual for all city services on

January 1^st, 2000 and beyond."

Our plan is extremely comprehensive - The City's plan covers all essential services delivered in the city. The City is working closely with the Police, Toronto Hydro and the TTC, as well as other utilities, telephone and cable television providers.

The City is also confirming the Year 2000 readiness of key City suppliers.

The Year 2000 program is among the top priorities for the City. We have a full-time Year 2000 team that reports directly to the Policy and Finance Committee - a Standing Committee of Council. All City Commissioners have direct responsibility for implementing the program within their sectors.

Communication activities include information about personal preparedness and the City's Emergency Preparedness Plan - a plan that involves all city services and coordinates closely with agencies and essential services such as the Police, Toronto Hydro and the Toronto Transit Commission.

Tactics

Year 2000 Information Line

Year 2000 Website with detailed monthly updates

Year 2000 Project e-mail address

Year 2000 Project factsheets (project overview, water, Works and Emergency Services, personal emergency preparedness and the city's own emergency preparedness plans)

Briefings for City Councillors - and provision of Year 2000 information for constituent newsletters

Year 2000 Intranet website within the city's website, with ongoing continuous updates

Distribution of partner service provider materials, e.g. Bell Canada, Toronto and Ontario Hydro, Enbridge Consumers Gas, and the pamphlet "Be Prepared Not Scared"

Media Releases

Public Information Sessions, e.g. BOMA

Community Forums

Appointment of Community Liaison designate

Information brochure to all Toronto households

Detailed information kits upon request

Transit shelter ads

City billing inserts

Recent Activities

Community Forums:

District Health Councils

MTHA

United Way/Red Cross forums

Community Health Centres

Community Calendar (Aug. - Nov):

Toronto Regional Hospital group

Ontario Hospital Association

TDHC

Church and synagogue forums

MTHA sessions

York Community Meeting

North York Seniors Centre

Toronto Community Economic Development Learning Network Symposium

District Health Council Steering Committees

United Way/Red Cross forums

Davenport/Perth Neighbourhood Centre

Seniors Conference Centre

Community Outreach Initiatives

- Appointment of a Year 2000 Community Outreach Officer

- Community outreach to identified social agencies, community and volunteer groups, and vulnerable populations such as seniors, physically-challenged, etc., and to provide linkages for groups and agencies to other partner service providers and / or community groups, where appropriate

- Year 2000 community liaison information line

- Year 2000 community outreach factsheet

- Public Information Sessions - e.g. St. Lawrence Centre, Beaches, York Civic Centre

- Ongoing meetings with key partners, e.g. Toronto District Health Council, key service providers

Councillor-sponsored Forums:

York and Scarborough

Oct. 13 announcement of the completion of all testing of city essential services

Media Interviews

Councillor D. O'Brien and Y2K Project Director on open-line Rogers Cable TV program

Shaw TV coverage of Scarborough Forum

As part of community and business community outreach programs, the ongoing sessions bring together City and partner service providers, and community and business leaders to identify and discuss the unique aspects of the Year 2000 which may be anticipated to impact upon the their organizations.

These sessions are often facilitated by the Year 2000 Community Liaison Officer who provides base-line discussion guidance to focus the participant discussions and provide a range of issues for consideration.

The city recognizes, however, that many Toronto residents have special communications needs; for example, some may be more difficult to reach because of age, disabilities, language barriers or other communication challenges. To meet these needs, the Year 2000 Community Liaison Officer provides local community organizations, social agencies and volunteer groups with Y2K-related information.

For example, for tenants, the Community Liaison Officer works with key essential service providers to educate and inform them of personal emergency preparedness. A booklet "Be Prepared Not Scared" is available through Emergency Measures Ontario, and provides further information for households on how to deal with different kinds of emergencies. In addition, the Community and Neighbourhood Services Department has a comprehensive evacuation and reception centre plan providing a coordinated response with police, fire and other emergency services.

Phase 3 - Response to any Year 2000 incidents (through-out the date-change roll-over)

The Year 2000 Project team is preparing a Year 2000 Event Management Initiative (plan), and Corporate Communications is preparing a Year 2000 Contingency communications plan to determine what is to be communicated, how it will be communicated, and what communication vehicles are needed. For example, the Access Toronto telephone lines will be fully staffed 24-7 to accommodate any volume of public inquiries. The key messages will remain consistent.)

Feasibility of Phase II Review of Fire Services

(City Council on October 26 and 27, 1999, adopted this Clause, without amendment.)

The Policy and Finance Committee recommends that Council concur with the Recommendations embodied in the following report (September 30, 1999) from the Chief Administrative Officer:

Purpose:

This report comments on the Feasibility of a Phase II review of Fire Service's business processes, operations and practices.

Financial Implications:

There are no financial implications for the current year with respect to this report.

Recommendations:

It is recommended that:

(1) a Phase II review of Fire Service's business processes, operations and practices not be considered until after the Fire Service has resolved three key issues, including the implementation of the KPMG Fire and Ambulance Facilities Study, the achievement of a single collective agreement for fire service staff and a remedial strategy for the current levels of absenteeism; and

(2) the necessary City officials be authorized to give effect thereto.

Council Reference:

On July 27, 1999, City Council adopted a joint report from the Commissioner of Works and Emergency Services and the Fire Chief entitled "Staffing Requirements - Toronto Fire Services", as amended. As part of this report, City Council approved the recommendation 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.

Discussion:

During the amalgamation of Fire Services, the consulting firm of KPMG was retained by the City of Toronto to complete the Fire and Ambulance Facilities Study. This study was a stand alone review focused on the overall objective of identifying efficiencies and cost savings in facilities while ensuring continued excellence in Fire and Ambulance Services in the future. The study was intended to: determine the most appropriate plan for fire station locations and apparatus reallocation to provide appropriate emergency protection; to examine opportunities for co-locating Ambulance and Fire Services. The study was strictly a facilities study. An operational review of Fire and Ambulance Services or a review of adequate and appropriate human resources for the delivery of Fire and Ambulance Services was not part of the terms of reference for this study.

The results of the KPMG Fire and Ambulance Facilities were reviewed by the Emergency and Protective Services Committee on April 12, 1999. Among other recommendations, this Committee requested that the Fire Chief and the General Manager of Ambulance Services review the KPMG study and prepare an implementation plan. It was also recommended that a community consultation process on the findings of the report be undertaken. City Council received a status update on the KPMG Fire and Ambulance Study at its meeting on May 11, 1999.

A joint report by the Fire Chief and the General Manager of Ambulance Services will be presented for community consultation at the October 12/13, 1999 Community Council meetings; this report is subsequently scheduled for presentation to the Community Services Committee on November 4, 1999 and City Council on December 14, 15, and 16, 1999.

Apart from the KPMG study, there are a number of other crucial issues which the Fire Service has been asked to address. These include:

(i) lack of a single collective agreement for Fire Services Staff: in the absence of a single collective agreement, redeployment of staff between the various former municipalities is severely impeded; and

(ii) current levels of absenteeism: The Fire Chief, in conjunction with Human Resources, has been asked to report to the Policy and Finance Committee with a plan and monitoring system that would reduce the current levels of absenteeism within the Fire Service. A report on a corporate attendance management system is expected in December this year. This report may have a substantial impact on the strength and establishment of staffing in the Fire Service.

These three issues - implementation plan of the KPMG Fire and Ambulance Facilities Study, a single collective agreement and a remedial strategy for current level of absenteeism, will significantly influence the organizational structure, staffing levels and operational practices of the Fire Service. It is thus recommended that these issues be successfully resolved prior to conducting a review of the Fire Service's business practices, operations and practices. In this manner, the Fire Service will be in a better position to formulate key questions and issues as the primary focus of an operational review. This way, an operational review will contribute to the effective and efficient operation of the Fire Service in a more constructive manner and can add significant value to enhanced operational practices.

Conclusion:

This report recommends that a Phase II review of the Fire Service's business processes, operations and practices be deferred until such time as the Fire Service has successfully resolved the three identified crucial issues. This report has been prepared in consultation with the Finance Department, the Commissioner of Works & Emergency Services and the Fire Chief.

Contact Name:

Judy Broughton, Tel: 392-8393

Hilda Briks, Tel: 392-9176.

Other Items Considered by the Committee

(City Council on October 26 and 27, 1999, received this Clause as information, subject to:

(1) striking out and referring Item (a), entitled "Cost Estimate for a Cost Benefit Analysis of Internal vs. External Legal Services", embodied therein, back to the Policy and Finance Committee for further consideration;

(2) striking out and referring Item (h), entitled "Area Specific Development Charges", embodied therein, back to the Policy and Finance Committee for further consideration; and

(3) adopting the following Operative Paragraph embodied in Notice of Motion J(5), moved by Councillor Korwin-Kuczynski, seconded by Councillor Adams, to waive the provisions of the Council Procedural By-law to permit consideration of the report dated dated September 30, 1999, from the Chief Financial Officer and Treasurer, an extract of which is embodied in Item (b), entitled "Feasibility of Implementing a Parking Levy on Private/Public Parking to Support Public Transit and Application of Revenues from Parking", and deferring consideration of such report and the balance of Notice of Motion J(5) to the next regular meeting of City Council to be held on November 23, 1999:

"NOW THEREFORE BE IT RESOLVED THAT, notwithstanding subsection 127(5) of the Council Procedural By-law, Council give consideration to the attached report dated September 30, 1999, from the Chief Financial Officer and Treasurer, entitled 'Feasibility of Implementing a Parking Levy on Private/Public Parking to Support Public Transit and Application of Revenues from Parking'.")

(a) Cost Estimate for a Cost Benefit Analysis of Internal vs. External Legal Services

The Policy and Finance Committee reports having concurred with the recommendation embodied in the following report:

(September 24, 1999) from the Chief Financial Officer and Treasurer, providing information on the price for a management type study on a cost benefit analysis of internal vs. external legal services; and recommending that this report be received for information and that any further action to define the scope parameters of such a study be referred to the City Auditor in consultation with the City Solicitor.

(b) Feasibility of Implementing a Parking Levy on Private/public Parking to Support Public Transit and Application of Revenues From Parking

The Policy and Finance Committee reports having received the following report:

(September 30, 1999) from the Chief Financial Officer and Treasurer, examining the feasibility of implementing a parking levy on private and public parking in support of public transit in the City of Toronto; providing an overview of the application of revenues from the City's parking related programs/services and examining the feasibility of allocating a portion of existing or future revenues to support the TTC; stating that the City has no authority to pass a by-law under the Municipal Act to impose a $1.00 levy on private parking in the City of Toronto on either the number of parking spaces or on a per vehicle parked basis; that the City could pass a by-law under section 220.1 to levy a $1.00 fee on users of parking facilities operated by the Toronto Parking Authority on behalf of the City, however, such a fee could only be used for the purposes of the Toronto Parking Authority and not for the purpose of offsetting TTC costs; and that the implementation of a new parking levy on residential/non-residential properties would require special legislation; and recommending that this report be received for information.

--------

The following Members of Council appeared before the Policy and Finance Committee in connection with the foregoing matter:

- Councillor John Adams, Midtown;

- Councillor Chris Korwin-Kuczynski, High Park; and

- Councillor Howard Moscoe, North York Spadina.

(c) Storm Water Management Facilities Funding Options

The Policy and Finance Committee reports having received the following joint report:

(September 28, 1999) from the Chief Financial Officer and Treasurer, Acting Commissioner of Urban Planning and Development Services, and the Commissioner of Works and Emergency Services, discussing the available funding options for off-site storm water management facilities arising from new growth; advising that apart from the plan of subdivision and severance (consent) approval processes, there are no specific contribution mechanisms available in legislation and which are generally applicable to the majority of development applications to address funding requirements for off-site storm water management facilities; that for other planning approval processes, negotiated agreements which are not explicitly authorized in legislation can be reached on a case-by-case basis, but cannot be required by a City policy, since such a policy would have no legislative basis; that development charges remain the best tool to consistently address the funding of off-site storm water management facilities; that in order to implement the relevant development charge, the necessary Wet Weather Flow Management Master Plan and capital forecasts must first be completed and the amount of the charge calculated; that until such time as the Wet Weather Flow Master Plan is complete and the Development Charge By-law is amended, staff will continue to utilize all mechanisms legally available to address funding or provision of off-site storm water facilities in the development approval process; and recommending that this report be received for information.

(d) Environmental Task Force - Education and Awareness Work Group - Final Report

The Policy and Finance Committee reports having:

(1) endorsed the principle embodied in the Final Report of the City of Toronto Environmental Task Force Education and Awareness Workgroup, contained in the following communication (September 29, 1999) from the City Clerk; and

(2) referred the aforementioned report to the Chief Administrative Officer with a request that he consult with the Workgroup, and submit a report to the Policy and Finance Committee, no later than December, 1999, if possible, in terms of how the implementation of the Recommendations of the Environmental Task Force Education and Awareness Workgroup can be phased in.

(September 29, 1999) from the City Clerk, advising that the Environmental Task Force on September 27, 1999, recommended to the Policy and Finance Committee, and Council, that the Final Report dated September 27, 1999, from the Education and Awareness Workgroup be adopted.

--------

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

- Ms. Eleanor Dudar, Environmental Task Force Education and Awareness Workgroup Participant;

- Ms. Karen Yukich, Environmental Task Force Education and Awareness Workgroup Participant;

- Councillor Irene Jones, Lakeshore Queensway; and

- Councillor Jack Layton, Don River.

(e) Toronto Hydro Rate Increases

The Policy and Finance Committee reports having referred the following communication from Councillor Howard Moscoe, North York Spadina, to the President and Chief Executive Officer, Toronto Hydro Corporation, for a detailed response in regard thereto to the Policy and Finance Committee:

(September 22, 1999) from Councillor Howard Moscoe, North York Spadina, expressing concern with regard to Toronto Hydro rate increases affecting several residents across the Greater Toronto Area and raising a number of questions in regard thereto.

(October 13, 1999) from the City Clerk, North York Commnity Council, advising that the North York Community Council received a communication (September 23, 1999) from Councillor Moscoe, North York Spadina, and referred the following recommendations to the Policy and Finance Committee for its meeting on October 14, 1999:

(1) that Council exercise shareholders direction to instruct Toronto Hydro to not proceed with increases in rates planned for January 2000 without referring the proposed increases to the Community Councils and Works Committee for Council recommendations; and

(2) that all motions from the Budget Committee and/or Council, which dealt with Toronto Hydro rates, be brought forward and considered at the Policy and Finance Committee meeting of October 14, 1999.

--------

The following Members of Council appeared before the Policy and Finance Committee in connection with the foregoing matter:

- Councillor Jack Layton, Don River; and

- Councillor Howard Moscoe, North York Spadina.

(f) Procurement Authorization Traffic Barriers for Spadina LRT

The Policy and Finance Committee reports having received the following communication:

(September 23, 1999) from the General Secretary, Toronto Transit Commission, advising that the Toronto Transit Commission on September 22, 1999, adopted the following recommendations contained in Report No. 4 of the Toronto Transit Commission:

"It is recommended that the Commission:

(1) approve a previously unscheduled and unbudgeted expenditure of $1,500,000 for the provision of permanent traffic barriers along the Spadina LRT Streetcar line from College Street to Front Street;

(2) authorize the issuance of Purchase Orders to the City of Toronto in an aggregate amount not to exceed $1,400,000, without further authorization, for the design, contract procurement, construction, supervision and project management of the project;

(3) authorize staff to proceed with project expenditures immediately as required to comply with City Council directives adopted at its meeting of July 27, 28, 29 and 30, 1999; and

(4) forward this report to the City Policy and Finance Committee for their information."

(g) City of Toronto Quarterly Investment Report as at July 31, 1999

The Policy and Finance Committee reports having received the following report:

(September 28, 1999) from the Chief Financial Officer and Treasurer, summarizing the holdings in the City's investment portfolio and reporting on current investment practices; advising that the City continues to receive returns on its investments that generally exceed established benchmarks; that interest earnings attributable to the operating budget are projected to have a year end favourable variance of $13 million; that the City's investments are in compliance with the Council adopted investment policies; and recommending that this report be received for information.

(h) Area Specific Development Charges

The Policy and Finance Committee reports having received the following report:

(October 6, 1999) from the Chief Financial Officer and Treasurer, reporting on area specific development charges, and in particular, as they apply to the previous Sheppard Subway development charges imposed by the former Municipality of Metropolitan Toronto; advising that the projected annual revenue based on the approved schedule of charges is estimated at $15.0 million, or $150.0 million over the ten year planning period which is approximately the same amount that was collected through the development charge regimes of the former municipalities in 1998; that the City-wide schedule of charges adopted by Council provides for partial recovery of development related costs for a variety of services such as fire, roads, water and sewage, parks, libraries and transit, including costs related to the Sheppard Subway project; that with the exception of the former Metro Sheppard Subway development charge by-law, none of the former municipalities imposed a charge in respect of development-related transit infrastructure costs; that recoveries from the transit component of the new development charges on a City-wide basis is estimated at $19.0 million over ten years, of which approximately $10.0 million is attributed to the costs of the Sheppard Subway, as compared to the total estimated transit recoveries of $11.2 million from the former Sheppard Subway area-specific development charge by-law; and recommending that this report be received for information.

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(Mayor Lastman declared his interest in the foregoing matter, in that partners at the same law firm as his son, who is not a real estate lawyer and does not personally act on these files, are representing applicants and have worked on related files.)

(Mayor Lastman, at the Council meeting on October 26 and 27, 1999, declared his interest in the foregoing item, in that the Applicant's solicitor is employed by the same law firm as his son who is not a real estate lawyer and does not personally act on this file.)

(i) A Reconstituted Task Force on Community Safety.

The Policy and Finance Committee reports having:

(1) deferred consideration of the following report until its meeting scheduled to be held on November 10, 1999; and

(2) requested the Commissioner of Community and Neighbourhood Services to submit a report to the aforementioned meeting of the Committee on the full cost to date of the endeavours of the Task Force:

(October 8, 1999) from the Commissioner of Community and Neighbourhood Services, recommending that:

(1) Council adopt the proposed mandate and composition of the reconstituted Community Safety Task Force as outlined in this report and Appendix A;

(2) for 2000, CNS charge the Task Forces Budget in the Other Corporate Expenditures Account for administrative and other expenditures to support the work of the reconstituted Task Force on Community Safety;

(3) Departments incorporate financial requests related to the implementation of the Council approved Community Safety Task Force recommendations within their respective budget submissions for consideration by Council within the 2000 budget process; and

(4) the appropriate City officials be authorized and directed to give effect thereto.

(j) Toronto Police Service - Parking Enforcement Unit - Absenteeism.

The Policy and Finance Committee reports having received the following report:

(October 1, 1999) from Councillor Norman Gardner, Chairman, Toronto Police Services Board, advising that the Toronto Police Services Board on August 12, 1999, received a report (July 19, 1999) from the Chief of Police providing information requested by the Budget Committee relating to "Parking Enforcement Unit Absenteeism" and recommended that a copy of said report be forwarded to the Policy and Finance Committee for information.

(k) Staffing Resources - Urban Planning and Development Services, Municipal Licensing and Standards Division: Common Area Apartment Re-Inspection Programme.

The Policy and Finance Committee reports having concurred with the action taken by the Planning and Transportation Committee embodied in the following communication:

(October 6, 1999) from the City Clerk, advising that the Planning and Transportation Committee on October 4, 1999, in considering a report (September 16, 1999) from the Acting Commissioner, Urban Planning and Development Services, entitled "Staffing Resources - Urban Planning and Development Services, Municipal Licensing and Standards Division: Common Area Apartment Re-inspection Programme" recommended to Council for its next meeting on October 26, 1999, that the above noted report be adopted subject to:

(1) deleting Recommendations Nos. (2) and (3) and substituting therein with the following:

"(2) multi-unit rental residential buildings be licensed using the classification and fee formula outlined in Appendix A of the report (September 16, 1999) from the Acting Commissioner, Urban Planning and Development Services which proposes three classes of licence as follows:

Class A Licence - a five year licence with a fee of 40 cents per suite per month;

Clause B Licence - a three year licence with a fee of 60 cents per suite per month; and

Class C Licence - a one year licence with a fee of 70 cent per suite per month; and

(3) that this licensing program be implemented on a cost-recovery basis"; and

(2) adding the following additional Recommendation:

"(4) that the City Solicitor be requested to prepare the necessary by-laws to give effect thereto."

Respectfully submitted,

MEL LASTMAN

Chair

Toronto, October 14, 1999

(Report No. 8 of The Policy and Finance Committee, including additions thereto, was adopted, as amended, by City Council on October 26 and 27, 1999.)