The City’s Shareholder Direction to Toronto Community Housing Corporation (TCHC) requires TCHC to submit an annual Community Management Plan (CMP) to the City for comment. The CMP is a rolling three-year business plan including long-term business strategies but it is not a detailed activity plan.

The recommendations in this report have no financial impact.

The City Manager recommends that City Council:

1.         Consider the Council meeting to be the Annual General Meeting of the Shareholder for Toronto Hydro Corporation by:

a.         adopting the recommendations of the Toronto Hydro Corporation report dated May 10, 2010 in Attachment 1 to this report  in order to appoint Ernst and Young LLP, Chartered Accountants, as the auditor for Toronto Hydro Corporation, authorize the Corporation’s Board of Directors to fix the auditor's remuneration, and, receive the report from the Chair of the Board of Directors attached thereto;  and

b.         receiving the information report of the Deputy City Manager and Chief Financial Officer, dated May 31, 2010, “Toronto Hydro Corporation – Financial Statements” in  Attachment 2 to this report  together  with the financial statements in Appendix A to that report.

2.         Forward a copy of Toronto Hydro Corporation’s 2009 Audited Consolidated Annual Financial Statements in Attachment 2 to the Audit Committee for information.

This report recommends the actions necessary to comply with the requirements of the Business Corporations Act (Ontario) ("OBCA") for holding an annual general meeting of the shareholder of Toronto Hydro Corporation including receipt of the audited financial statements and appointment of the auditor.

There are no financial implications that would result from the adoption of this report.

 As this report deals with performance measurement results of prior years, there are no direct financial implications arising from this report. However, staff analysis of performance measurement results are utilized as part of the City’s service reviews, budget process and continuous improvement initiatives.

This report responds to a Council directive relating to the nomination and appointments process for the Balmy Beach Park Board of Management.

The nomination and appointments process, board composition and term of office have not changed substantially since the board was established in 1903 when the old Town of East Toronto existed.  This report recommends minor changes, including delegating authority to the Community Council to appoint the citizen board members and removing the requirement for the Mayor to nominate members.

The City Manager recommends that:

1.         City Council adopt Appendix A as the City of Toronto Statement of Commitment to Aboriginal communities in Toronto.

2.         The City Manager be requested to report to Council on the development of an Action Plan in consultation with the Aboriginal Affairs Committee to give effect to the commitments contained in Appendix A.

3.         Because of the increasing size of Aboriginal communities in urban areas across Canada, the City of Toronto continue to meet with Federal and Provincial officials to discuss the City’s formal role in the policy development process regarding urban Aboriginal issues and that the City’s participation be guided by the commitments outlined in Appendix A.

4.         City Council express its appreciation to the members of the Aboriginal Affairs Committee for their partnership role in the development of this Statement of Commitment and to members of the Aboriginal community for their participation  in this process.

This report responds to City Council’s decision to develop an Urban Aboriginal Framework for Toronto in consultation with Aboriginal communities in Toronto.  This report recommends a Statement of Commitment towards the Aboriginal people of Toronto and the development of an Action Plan in support of the Statement of Commitment.  The Aboriginal Affairs Committee has been consulted on this Statement of Commitment and has endorsed it.

The City of Toronto currently works with local Aboriginal communities on a wide spectrum of Aboriginal affairs and has established an Aboriginal Affairs Committee to provide advice to City Council.  A Toronto Urban Aboriginal Framework, which will provide a guiding framework that brings together community aspirations and City responsibilities, is being developed in two phases.

This report provides the result of the first phase is the proposed Statement of Commitment which has been grounded in a consultative and a research process, to outline the principles which are important to achieving strong Aboriginal-Municipal relations.  It will guide the City in its on-going relationships with Aboriginal communities, discussions with other municipalities and orders of government and inform all aspects of departmental policy, planning and service delivery throughout the Toronto Public Service in addition to being the foundation for completing Phase Two, the development of an Action Plan.

The recommendations in this report have no direct financial impact.

The Aboriginal Affairs Committee recommends to the Executive Committee that City Council endorse and support the proposed City of Toronto Statement of Commitment to Aboriginal Communities in Toronto.

The City Manager recommends that:

1.         City Council extend congratulations to the following who have been selected as recipients of the 2010 City of Toronto Access Equity and Human Rights Awards:         

            Aboriginal Affairs Award: Angela Connors and Kenn Richard;

            Access Award: Catherine Leitch, Asif Syed and the START Smart Program at

                        Centennial College;

            Pride Award:  André Goh; and

                        William P. Hubbard Award:  Alvin Curling and Roy McMurtry (joint award),

                                    Courtney Betty and Arnold Minors.

This report advises Council of the result of the nomination process for the City of Toronto Access, Equity and Human Rights Awards. These Awards are the Aboriginal Affairs Award, the Access Award on Disability Issues, the Constance E. Hamilton Award on the Status of Women, the Pride Award for Lesbian, Gay, Bisexual, Transgender, Transsexual and Two Spirited Issues and the William P. Hubbard Race Relations Award. 

Recipients of the Constance E. Hamilton Award are selected by the Women Members of Council and will be reported separately to City Council.

There are no financial implications arising from the adoption of this report.

The City Manager recommends that:

1.         This report is received for information.

 At its March 1, 2010 meeting Executive Committee considered the City Manager’s report on the “Feasibility To Create A Candidate Protection Fund To Be Funded By Candidates In The 2010 Municipal Election” and requested a report on the availability of an insurance product that provides candidate protection.  Following an extensive search of the world wide insurance market, an insurance product for municipal election candidates has not been found.  Such a program of coverage could not be developed because it can not be made to be mandatory for all candidates.

There are no financial implications arising from this report.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial implications.

There is no financial impact beyond what has been approved in the current year’s operating budget.

The Deputy City Manager and Chief Financial Officer recommends that:

1.

a.         Council approve the renewal of the line of credit guarantee on behalf of the Toronto Symphony Orchestra (TSO) to its financial institution in the amount of $3,000,000 (inclusive of all interest payable by the TSO), commencing on October 31, 2010 and ending on October 31, 2015:

b.         the City extend the agreement with the TSO with respect to the line of credit guarantee; and

c.         the City extend the tri-party agreement with the TSO and with its financial institution with respect to the line of credit guarantee.

2.        Such guarantee and all related agreements be on terms and conditions satisfactory to the City Solicitor, the Deputy City Manager and Chief Financial Officer and the Deputy City Manager, Cluster A, and that the Deputy City Manager and Chief Financial Officer be requested to negotiate appropriate and adequate safeguards, to the satisfaction of the City Solicitor, with the City being promptly advised in the event of default or delay in the payment of interest.

3.        The TSO provide the Deputy City Manager and Chief Financial Officer with their 2010 to 2015 inclusive audited financial statements when they become available.

4.        The guarantee be deemed to be in the interest of the municipality.

5.        The appropriate officials be authorized to take the necessary action to give effect thereto.

This report seeks Council approval to renew the line of credit guarantee for the Toronto Symphony Orchestra in the amount of $3,000,000 effective from October 31, 2010 until October 31, 2015.

 Issuance of a line of credit guarantee is considered to be a financial commitment of the City. However, there is no direct cost to the City for providing this guarantee unless the organization defaults on its obligation and the City cannot recover the funds.

This report seeks Council authority for the introduction of the by-law necessary to levy and collect taxes for the 2010 taxation year on railway roadways and rights of way and on land used as transmission or distribution corridors owned by power utilities, totalling approximately $7.8 million in taxation revenue, of which the municipal share is $6.6 million and the provincial share is $1.2 million.

The 2010 levy of taxes on railway roadways and rights of way and on power utility transmission or distribution corridors will raise approximately $7.8 million in taxation revenue, of which the municipal share is $6.6 million and the provincial share is $1.2 million.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

This report requests authority to adopt by-laws to levy amounts for the 2010 taxation year for public hospitals, universities and colleges, and correctional facilities (the “institutions”), totalling approximately $15 million (annual “Heads and Beds” levy).

This report recommends the creation of a reserve account to administer donations received for enhancements to Sir Casimir Gzowski Park. The overall fundraising target for this Reserve is $2,000,000.00 to be used entirely at the above-noted location. The projects associated with the plan for park enhancements are designed to be completed in phases as fundraising milestones are met for each phase. 

Preliminary Cost estimates for each phase:

Phase 1 – Submarine Splash Pad: $480,000.00

Phase 2 – Canadian Navy Centennial Commemorative Feature: $344,000.00

Phase 3 - Ship Splash Pad, Picnic Area and South Eastern Park Node: $657,400.00

Phase 4 – Playground Expansion:  $481,600.00

Once fundraising milestones for each phase of the park enhancement projects are realized, the Parks, Forestry and Recreation’s 10-year capital plan and appropriate operating budgets will be adjusted accordingly to identify the phase(s) of the projects that are ready to move forward. Operating impacts of these projects will be specified at that time. The degree of improvements will be solely based on the funds raised.

This report recommends to Council individuals to be appointed to the Compliance Audit Committee for a term of office coincident with the term of Council following the 2010 regular Municipal Election. 

While it is difficult for staff to provide an exact estimate of the number of compliance audit applications that might be received, based on past experience, it is estimated that the remuneration and administrative costs would be approximately $21,000 for a three member committee to consider seven to ten compliance audit applications (over the two year period 2011 and 2012).

Funding will be provided in the 2011 and 2012 operating budget submissions for the City Clerk’s Office, funded from the Election Reserve, for a $0 net impact to the City’s Operating budgets.

The funding level is based on activity related to the regular Election schedule.  Should one or more by-elections arise during the 2010 to 2014 term of office additional funding will be required.  The City Clerk will report should additional funding be required in subsequent years.

The Deputy City Manager and Chief Financial Officer has reviewed this report and concurs with the financial implications.

There are no immediate financial implications resulting from the approval of recommendations in this report, but there will be future financial impacts when the proposed Lower Don Lands Project is implemented.

In 2008, Council adopted a report entitled “Toronto Waterfront Revitalization Initiative Five-Year Business Plan/Ten-Year Forecast (2008-2017)” which includes $7.0 million for Don River EAs including the Don Mouth Naturalization and Flood Protection EA, and $47.502 million under the Port Lands Preparation Project for preparation of the plans and infrastructure EAs including for the Lower Don Lands. Beyond this, WT will need to obtain new funding in order to design and construct the Lower Don Lands Project. A funding source has not been identified by WT to date.

In the event that detailed design and engineering of Phase 1 of the Lower Don Lands (Don River Mouth) is funded over a 4-year period from 2012 to 2016, WT expects the cost will be a minimum of $50 million.

If construction of the Don River Mouth is also funded, WT’s preliminary estimate of the cost, assuming it occurs over 7 years from 2017 to 2023, is $600 to $700 million (in 2010 dollars).  This includes $325 million for the new river, $200 million for new bridges and utility relocation, $60 million for the sediment/debris management area and $40 million for the promontory park landform. This excludes additional related costs such as project management, land acquisition, site remediation and contingency allowance.

Assuming all phases of the Lower Don Lands are funded, and occur in the subsequent 10 to 15 year period (2024 and beyond), there will be substantial new capital costs beyond those for the initial phase. WT has not provided cost estimates for the future phases of the Lower Don Lands Project, but the costs would include new streets, water, wastewater and stormwater facilities, various community facilities, soil remediation, parks and public spaces, and other elements of the Lower Don Lands Framework Plan.

In addition to any contribution by the City towards the capital cost of the Lower Don Lands Project, the City will incur higher operating costs over the long term for the new municipal infrastructure, parks and other facilities.

It is noted that the City has not conducted a due diligence of WT’s projections contained in this Financial Impact analysis.  This will be done through a Business and Implementation Plan to be provided by WT following Council’s endorsement of the plans for the project.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information

The Integrity Commissioner recommends that: 

Council receive this report.

There is no financial impact.

The Government Management Committee:

1.        Recommends to the Executive Committee that:

a.         City Council receive the “Report on the Actuarial Valuation for Funding Purposes as at December 31, 2009” prepared by Mercer Human Resource Consulting with respect to the Metropolitan Toronto Police Benefit Fund.

b.        City Council approve a Non-Program Operating Budget increase of $4,983,600 gross and $0 net resulting in total contribution of $9,637,200 gross and $0 net funded from the Employee/Retiree Benefits Reserve Fund beginning on July 1, 2010 in order to fund the solvency deficiency of the Plan on the basis of the 2009 Actuarial Valuation.

c.         City Council approve a Non-Program Operating Budget increase of $33,129 gross and $0 net funded from the Employee/Retiree Benefits Reserve Fund for interest payments which are required as the increase in special payments will not be processed until July 1, 2010.

d.        City Council approve special annual payments to the Fund in the amount of $9,637,200 for the solvency deficiency in each of the years 2011-2013 and $4,983,600 for 2014.

e.         City Council confirm that given the difficult financial position of the Fund, the temporary supplementary pension recommended by the Board of Trustees of the Metropolitan Toronto Police Benefit Fund not be approved.

f.          City Council advise the Metropolitan Toronto Police Benefit Fund accordingly.

g.          City Council direct that an adjustment be made to the 2010 Non-Program Operating Budget accordingly.

h.          City Council authorize the appropriate City officials to take the necessary action to give effect to the foregoing recommendations.

The Government Management Committee:

1.         Recommends to the Executive Committee that:

a.          City Council receive the report on the “Actuarial Valuation for Funding Purposes as at December 31, 2009” prepared by Mercer Human Resource Consulting with respect to The Corporation of the City of York Employee Pension Plan.

b.          City Council approve a Non-Program Operating Budget increase of $404,772 gross and $0 net resulting in total contribution of $1,471,104 gross and $0 net funded from the Employee/Retiree Benefits Reserve Fund in order to fund the additional going-concern unfunded liability and the additional solvency deficiency which developed in 2009.

c.          City Council approve a Non-Program Operating Budget increase of $2,691 gross and $0 net funded from the Employee/Retiree Benefits Reserve Fund for interest payments to the Plan which are required because the increase in special payments will not be processed until July 1, 2010;

d.          City Council approve special annual payments to the Plan of $1,471,104 per year for 2011-2012 and $908,462 for 2013 and $404,772 for 2014 for the going-concern unfunded liability and the solvency deficiency.

e.          City Council direct that an adjustment be made to the 2010 Non-Program Operating Budget accordingly.

f.          City Council authorize the appropriate City officials to take the necessary action to give effect to the foregoing recommendations.

The Government Management Committee gave consideration to the following:

-           report (May 4, 2010) from the Treasurer, entitled " The Corporation of the City of York Employee Pension Plan – Actuarial Report as at December 31, 2009", submitting the Actuarial Valuation as at December 31, 2009 for the Corporation of the City of York Employee Pension Plan (the Plan) and requesting additional funding in the form of special annual payments to the Plan as required under Ontario pension legislation with respect to the solvency and going-concern funding deficiencies.

-           letter (April 26, 2010) from the City of York Employee Pension Plan Committee respecting the City of York Employee Pension Plan.

The Employee and Labour Relations Committee on May 19, 2010, recommended to the Executive Committee that:

1.         City Council receive, for information, the 2009 Annual Human Rights Office Report.

The Employee and Labour Relations Committee on May 19, 2010, considered a report (May 4, 2010) from the City Manager entitled "2009 Annual Human Rights Office Report", providing information on human rights consultations and complaints filed by service recipients and City employees in 2009 and actions undertaken to address human rights trends.

The Employee and Labour Relations Committee on May 19, 2010, recommended to the Executive Committee that City Council receive, for information, the Occupational Health and Safety Report - Fourth Quarter and End of Year, 2009.

The Employee and Labour Relations Committee on May 19, 2010, considered a report (March 4, 2010) from the City Manager entitled "Occupational Health and Safety Report Fourth Quarter and End of Year, 2009", providing information on the status of the City’s health and safety system, specifically on activities, priorities and performance during 2009, with particular emphasis on the 4^th quarter. There was a decrease in the number of lost time injuries (5.4%), medical aid only injuries (16.8%) and recurrence injuries (12.0%) in 2009 relative to 2008. WSIB invoiced costs were $3.13 million lower than those in 2008, due to a reduction in costs associated with firefighter cancer claims.

The Board of Health on May 3, 2010, considered a report (April 23, 2010) from the Medical Officer of Health entitled "Service Agreements Awarded and Executed by the Medical Officer of Health for 2010"; and forwarded the aforementioned report to the Executive Committee for information.

The Community Development and Recreation Committee recommends to the Executive Committee that:

1.         City Council direct that any funds beyond $34 million allocated to this project be matched in equal amounts in the same Capital Budgets to other currently identified ice arena projects.

The Community Development and Recreation Committee on May 26, 2010, considered a report (April 8, 2010) from Deputy City Manager Richard Butts entitled “Status Report on the Port Lands Sports Centre Project”.

 The Budget Committee on May 28, 2010, considered a report (May 27, 2010) from the Deputy City Manager and Chief Financial Officer and the President, Toronto Parking Authority entitled "Income Sharing Agreement Renewal with the Toronto Parking Authority."

The Budget Committee recommends to the Executive Committee that:

1.         City Council authorize the reallocation of funds in Facilities Management’s 2010 Approved Capital Budget and 2011-2019 Capital Plan in the amount of $1.318 million, which includes acceleration and offsetting deferral of funds, as illustrated in Appendix 1 of the report (May 10, 2010) from the Chief Corporate Officer, with zero gross and net impact.

2.         City Council authorize an increase to Facilities Management’s 2010 Approved Capital Budget in the amount of $0.060 million, and to allow Facilities Management to receive this funding from a 3rd party contributor, with a zero net impact.

The Budget Committee on May 28, 2010, considered a report (May 10, 2010) from the Chief Corporate Officer, entitled "Facilities Management 2010 Capital Budget Adjustments".

The Budget Committee recommends to the Executive Committee that:

1.         City Council authorize the reallocation of funds in the 2010 approved Economic Development and Culture capital budget in the amount of $829,000 illustrated in Schedule “A” of the report (May 11, 2010) from the General Manager, Economic Development and Culture, with zero gross and net impact.

The Budget Committee on May 28, 2010, considered a report (May 11, 2010) from the General Manager, Economic Development and Culture, entitled "Economic Development and Culture:  2010 Capital Plan Adjustments".

The Budget Committee recommends to the Executive Committee that:

1.         City Council amend the 2010 Recommended Operating Budget for Parks, Forestry and Recreation by increasing by $10,006 gross, $0 net, funded on a one-time basis from Section 37 Benefits Agreements related to Ward 14, 403 Keele Street for improvements to Pelmo Park in Ward 11.

The Budget Committee on May 28, 2010, considered a letter (May 21, 2010) from Councillor Frances Nunziata, Ward 11 York South-Weston, requesting that the Budget Committee give consideration to adjustments to the 2010 Parks, Forestry and Recreation Operating Budget.

The Budget Committee recommends to the Executive Committee that:

1.         City Council close the 2009 Council-approved Renovation of Crescent Town Club Recreational Infrastructure Canada (RInC)/Partnership Opportunities Legacy Fund (POL) project with project cost of $0.600 million funded by City debt of $0.500 million, Federal funding of $0.050 million and Provincial funding of $0.050 million.

2.         City Council request Federal and Provincial approval to re-allocate the awarded funding for the Renovation of Crescent Town Club project of $0.050 million from the Federal Government and $0.050 million from the Provincial Government to phase two renovations of Dentonia Park Clubhouse.

3.         The Council-approved Parks, Forestry and Recreation 2010 Capital Budget be amended to create a new sub-project known as Dentonia Park Clubhouse Renovations, Phase 2 with project cost of $0.200 million funded by City debt of $0.100 million, Federal funding of $0.050 million and Provincial funding of $0.050 million with cash flow of $0.200 million in 2010, if Federal and Provincial approvals are obtained, which shall be reduced to $0.100 million project cost and cash flow in 2010, should approval not be obtained.

4.         City Council amend the council-approved Parks, Forestry and Recreation 2010 Capital Budget to create a new sub-project known as George Webster Park Improvements with project cost of $0.400 million funded by City debt with cash flow in 2011.

5.         City Council authorize and direct the appropriate City officials to take the necessary action to give effect thereto; and that leave be granted for the introduction of any necessary bills in Council to give effect thereto.

The Budget Committee on May 28, 2010, considered a report (May 14, 2010) from the General Manager, Parks, Forestry and Recreation and the Deputy City Manager and Chief Financial Officer, entitled "Amendment to the 2010 Parks, Forestry and Recreation Capital Budget for Crescent Town Club".

The Budget Committee recommends to the Executive Committee that:

1.         City Council approve the acceptance of the donation from the East York Foundation in the amount of $525,000 to fund the schematic and detailed design of the proposed second ice pad at Leaside Memorial Gardens.

2.         City Council grant approval to amend the Council-approved 2010 Parks, Forestry and Recreation Capital Budget to create a new sub-project known as Leaside Memorial Gardens Expansion Design with project cost of $525,000 and cash flow of $225,000 in 2010 and $300,000 in 2011, conditional on the receipt of the donation of $525,000 from the East York Foundation.

The Budget Committee on May 28, 2010, considered a report (May 14, 2010) from the General Manager, Parks, Forestry and Recreation and the Deputy City Manager and Chief Financial Officer, entitled "Amendment to the 2010 Parks, Forestry and Recreation Capital Budget to Accept a Donation from the East York Foundation for Leaside Memorial Gardens".

The Budget Committee recommends to the Executive Committee that:

1.         City Council authorize an acceleration of funding for the Toronto Environment Office’s Home Energy Assistance Toronto (HEAT) Program by increasing the program’s 2010 Operating Budget by an additional $2.25 million gross and revenue, funded from the Home Energy Assistance Toronto (HEAT) Reserve Fund, from $2 million to $4.25 million, and with reductions to planned funding in 2011 from $3 million to $2.5 million and in 2012 from $3.5 million to $1.88 million, maintaining the approved $9 million total for the HEAT Program.

2.         The Director, Toronto Environment Office report back to City Council before March 31, 2011, with recommendations for revisions to the home energy efficiency programs in 2011 and 2012, including any new opportunities to partner with federal, provincial or local utility programs for the remaining approved funds.

The Budget Committee on May 28, 2010, considered a report (May 14, 2010) from the Director, Toronto Environment Office, entitled "Budget Adjustment:  Home Energy Assistance Toronto".

The Budget Committee recommends to the Executive Committee that:

1.         City Council make the following adjustment to the Toronto Public Health 2010 Approved Operating Budget:

a.         a reduction of $1,410.2 thousand gross and $0.0 net, and a reduction of 4.0 permanent positions, to reflect confirmed funding from various Provincial ministries and external sources.

The Budget Committee on May 28, 2010, considered a letter (May 3, 2010) from the Board of Health forwarding a report (April 16, 2010) from the Medial Officer of Health, entitled "Budget Adjustments to the Toronto Public Health 2010 Approved Operating Budget".

The Budget Committee recommends to the Executive Committee that:

1.         City Council approve a one-time increase in the Toronto Public Library 2010 Operating Budget by $2,418,230 Gross and $0.0 Net, with funding from the Employee Benefits Reserve Fund to reflect the special payout for eligible employees who transferred to the Illness or Injury Plan (IIP).

The Budget Committee on May 28, 2010, considered a letter (May 12, 2010) from the City Librarian, entitled "Toronto Public Library – Special Payout – Illness or Injury Plan".

The Budget Committee recommends to the Executive Committee that:

1.         The following Recommendation 1 of the letter dated May 11, 2010 from the General Secretary, Toronto Transit Commission, be received, and that all potential year-end surplus be treated in accordance with the City's year-end practices and surplus management policy.

"1.        Approve adding $5.2 million of the projected 2010 operating surplus to the TTC Stabilization Reserve such that this amount will be drawn out in 2011 to offset the annualized costs of the 2010 service changes included in Recommendation 1 of the attached report."

2.         The City Manager and the Deputy City Manager and Chief Financial Officer, in consultation with the TTC's Chief General Manager, report to the Executive Committee as soon as possible to clarify in-year spending and reporting approval protocols.

3.         The City Manager work with the Chief General Manager to account for expenditure and funding sources required to proceed with the TTC staff's Recommendations 1 and 2 contained in the letter dated May 11, 2010 from the General Secretary, Toronto Transit Commission.

The Budget Committee on May 28, 2010, considered a letter (May 11, 2010) from the General Secretary, Toronto Transit Commission, entitled "2010 Toronto Transit Commission Budget Update".

The Budget Committee recommends to the Executive Committee that:

1.         The Executive Committee refer the confidential letter (April 21, 2010) from the General Manager of the Toronto Transit Commission, addressed to the City Manager, to the TTC, with the request that the TTC report to City Council, through the Executive Committee, on its position on the issues raised in the confidential communication.

The Budget Committee on May 28, 2010, considered a confidential letter from the General Manager, Toronto Transit Commission, addressed to the City Manager, submitted by Councillor Shelley Carroll regarding matters arising from the adoption of the TTC 2010 Operating Budget.

At its meeting on May 28, 2010, the City of Toronto – Budget Committee requested the Toronto Police Service to report to the Executive Committee on the issue of TTC Special Constables (Member Motion Regarding the TTC 2010 Operating Budget – BU72.11).  The purpose of this report is to provide the Executive Committee with the requested information.

City Council approved the Toronto Police Service’s 2010 operating budget at a net amount of $888.1M.  Included in the 2010 approved budget is an increase of 80 officers to the uniform officer authorized strength for transit policing.  Part year funding for 42 officers is included in the 2010 approved operating budget.  The remaining 38 officers are funded through the Police Officer Recruitment Fund (PORF) grant which expires on March 31, 2013.

The Chief of Police has indicated that 80 officers is an appropriate number to efficiently and effectively police the transit system.

There is no financial impact in 2010, beyond what has already been approved in the current year’s budget for the Toronto Police Service.  However, there will be an incremental impact of $1.9M in 2011 (for a total annualized cost of $3.7M in 2011) for the 42 additional officers, as only part-year funding ($1.8M) for 42 officers has been included in the 2010 budget.  Furthermore, PORF funding in the amount of $2.7M is committed only until March 31, 2013, at which time additional funding will be required in the Service’s operating budget if the PORF grant is not extended.

Councillor Moscoe, seconded by Councillor De Baeremaeker, recommends that:

1.         City Council request that the Hay Group, in reviewing the salaries of Toronto Councillors, be asked to take into account the average compensation paid to the non-employee members of the editorial board of the Toronto Star.

The Commission took the following action:

1.   Approved the recommendation contained in the confidential attachment;

2.   That the information contained in the confidential attachment remains confidential in its entirety as it contains advice which is subject to solicitor-client privilege.

The Commission’s recommendation is forwarded to Toronto City Council for information.

The Chief Corporate Officer recommends that:

1.         Authority be granted for the City to enter into an agreement with Toronto Hydro Electricity System Limited for a solar photovoltaic (PV) program substantially on the terms described in this report and as set out in Attachment 1 and other such terms and conditions as may be deemed appropriate by the Chief Corporate Officer, and in a form satisfactory to the City Solicitor, and that the Chief Corporate Officer be authorized to execute any related agreements on behalf of the City.

2.         City Council authorize the reallocation of funds in the 2010 Approved Capital Budget and 2011 to 2019 Capital Plan from the Energy Conservation Reserve Fund to a new project, the Solar Photovoltaic Program, within the Sustainable Energy Plan in the amount of $4 million in 2010 and $4 million in 2011, as set out in Attachment 2.

3.         Licenses to community-based solar co-operative groups for the installation of solar PV panels on City-owned facilities be granted for nominal value.

This report recommends the approval of a pilot program between the City and Toronto Hydro Electric Services Ltd. for the installation of solar photovoltaic panels on City‑owned buildings.  Under the program, the City would own up to 49% of the panels, with Toronto Hydro owning the balance.  The report requests Council’s authority to amend the Sustainable Energy Plan 2010 Approved Capital Budget and the 2011 to 2019 Capital Plan by reallocating $8 million included in the Toronto Energy Conservation Fund to a new project, the Solar Photovoltaic Program, with zero net impact corporately.

This report advises that a competitive process will be utilized to licence the use of City‑owned roof space to private sector solar developers on buildings not selected for the City-Toronto Hydro pilot program.  This report also advises that, depending on the availability of funds, the City may in the future continue to install its own solar installations on City facilities.  In addition, this report recommends that roof space on smaller City-owned facilities be made available at a nominal fee to community-based solar co-operative groups.

The approval of this report will result in the reallocation of a total of $8 million; $4 million in 2010 and $4 million in 2011 from within the Approved 10-Year Capital Plan for the Sustainable Energy Plan, from the Toronto Energy Conservation Fund to a new project, the Solar Photovoltaic Program, for a net $0 impact.

The OPA contract will provide a revenue stream for 20 years, in the amount of approximately $0.800 million annually.  This revenue will be paid back into the Sustainable Energy Plan, the Solar Photovoltaic Program.  In addition, Toronto Hydro will pay the City a fee of 4% of the revenue from the installations in exchange for the use of City roof space.  This revenue will also be paid into the Sustainable Energy Plan. After that 20-year period, the installations are expected to operate for approximately 10 years, which would provide free electricity to the City during that period.

The estimated simple payback period for the program is approximately 10 years. Operating costs are anticipated to be minimal.

It might be possible to access additional funding for this program from Ontario Power Authority programs that are currently under development, as well as from other sources.  Staff will pursue these opportunities as details regarding eligibility emerge.

The private sector component of this program will produce revenues through fees for the use of City roof space.  The fees will be established through a competitive tendering process.

In future years, subject to the availability of funds in the Capital Budget, the City may continue to undertake its own solar installations on City facilities.  These will be synchronized with State of Good Repair re-roofing budgets.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

 The City of Toronto will be faced with significant fiscal pressures in the coming years.  One strategy to help deal with fiscal constraints is to attempt to increase the returns on City held assets, as can sometimes be achieved by converting City investments in assets into cash where the assets may not be producing optimal financial or public policy benefits.

The purpose of this report is to provide preliminary information to Council regarding the potential for monetization of the City’s corporate investment interests in Toronto Hydro Corporation, Enwave Energy Corporation and the Toronto Parking Authority.  Monetization of these assets could allow for the City to realize a portion of the current market value, and reinvest the proceeds in higher order City public policy priorities, including debt reduction.

Notwithstanding the potential monetization of City assets, it must be emphasized that Council needs to consider the public policy ramifications of the sale of City assets.  In addition, Council is aware that potential monetization of City assets is not the long term solution to financial sustainability, but only one possible action in minimizing long term debt for the City of Toronto.

There are no financial impacts resulting from this report.

 The City Manager recommends that City Council receive this report for information.

This report discusses the actions underway by the City Clerk and the City administration to ensure that enfranchisement is promoted to all electors, consistent with the principles and terms of the Municipal Elections Act, 1996 (MEA).

There are no financial implications as a result of this report.

The City Manager recommends that this report be received for information.

This report responds to Executive Committee’s motion with respect to establishing an Office of Independent Legal Counsel.   The City Manager has reviewed the proposal and does not recommend establishing a separate office for this purpose.  Processes and policies are already in place to enable City Council and Members to seek external legal advice on all matters related to City business.

This report also responds to Executive Committee's motion with regard to developing a Policy for Council to use its grant making powers to reimburse legal expenses of Members in particular circumstances.

There are no financial implications as a result of this report.

Memo (June 3, 2010) from Councillor Howard Moscoe requesting that Item EX45.42 be deferred and placed on the next Executive Committee on August 16, 2010, as he is unable to attend the June 14, 2010 Executive Committee Meeting.

The Affordable Housing Committee recommends to the Executive Committee, for its meeting on June 14, 2010 that:

1.         City Council grant authority to provide capital funding of $1,198,800.00 from the Development Charges Reserve Fund – Shelters/Housing (XR2107) to YWCA of Greater Toronto, as a grant by way of a forgivable loan, to be used to complete construction of affordable housing at 110 Edward Street.

2.         City Council grant authority to provide capital funding of $967,032.00 from the Development Charges Reserve Fund – Shelters/Housing (XR2107) to TCHC, as a grant by way of a forgivable loan, to be used to complete construction of affordable housing at McCord site, West Don Lands.

3.         City Council grant authority to provide capital funding of $1,706,292.00 from the Development Charges Reserve Fund – Shelters/Housing (XR2107) to TCHC, as a grant by way of a forgivable loan, to be used to complete construction of affordable housing at Block 32 of the Railway Lands.

4.         City Council grant authority to provide capital funding of $347,652.00 from the Development Charges Reserve Fund – Shelters/Housing (XR2107) to Toronto Christian Resource Centre, as a grant by way of a forgivable loan, to be used to complete construction of affordable housing at 40 Oak Street.

5.         City Council grant authority to provide capital funding of $175,824.00 from the Development Charges Reserve Fund – Shelters/Housing (XR2107) to Woodgreen Community Housing Inc., as a grant by way of a forgivable loan, to be used to complete construction of affordable housing at 270 Donlands Avenue.

6.         City Council authorize and direct the Director, Affordable Housing Office, to enter into and execute, on behalf of the City, agreements with each of the five proponents to secure the funding, in addition to any other documents or agreements required to facilitate the completion of the funding recommended in this report and required by Proponents to obtain and maintain its other sources of funding and to approve any changes to the projects that the Director deems to be in the best interest of the City or the Projects and on terms and conditions satisfactory to the Director, Affordable Housing Office and in a form approved by the City Solicitor.

 The Affordable Housing Committee on June 3, 2010, considered a report (May 17, 2010) from Sue Corke, Deputy City Manager recommending the allocation of Development Charges Reserve Fund – Shelters/Housing (XR2107) monies to five previously approved affordable non-profit rental housing developments now under construction.

The Affordable Housing Committee also had before it a letter (June 1, 2010) from John Fox, Acting Vice-President, Development and Legal Counsel (Development), Toronto Community Housing Corporation.

The Affordable Housing Committee recommends to the Executive Committee, for its meeting on June 14, 2010 that:

1.         City Council, subject to authorizing the permanent closure of the untravelled portion of New Crescent between 697 and 699 Danforth Road, authorize the City to accept the Offer to Purchase from Habitat for Humanity Toronto Inc. (“Habitat”), to purchase a portion of untravelled New Crescent, designated as untravelled portion of New Crescent on Plan 1776, save and except SC101937 and except SC84473 and shown as Part 1 on Sketch No. PS-2003-100 (the “Highway”), in the amount of $460,000.00 less a Vendor Take Back Mortgage in the amount of $390,000.00,  substantially on the terms and conditions outlined in Appendix “A” to this report.

2.         City Council authorize each of the Chief Corporate Officer and the Director of Real Estate Services severally to accept the Offer to Purchase on behalf of the City.

3.         City Council authorize the City Solicitor to complete the transaction on behalf of the City, including paying any necessary expenses, amending the closing, due diligence and other dates, and amending and waiving terms and conditions, on such terms as she considers reasonable.

4.         City Council authorize the City to provide its consent for Habitat to act as agent for the City, as owner, with respect to any searches, applications or inquiries, and to grant licences for a term of up to six months from the date of execution of the Offer, renewable for up to three additional months, for the purposes of entering onto the Highway to carry out pre-development activities and that the Director of Real Estate Services, or his designate, be authorized to execute the applications, consents and licences.

5.         City Council grant authority to direct a portion of the proceeds of closing to fund the outstanding expenses related to the Highway and the completion of the sale transaction; and

6.         City Council authorize and direct the City Solicitor to execute all documents and to complete all discharge transactions required to give effect to the City's vendor take back mortgage.

The Affordable Housing Committee on June 3, 2010, considered a report (May 11, 2010) from the Chief Corporate Officer and Sue Corke, Deputy City Manager seeking approval for the sale of the untravelled portion of New Crescent, located between 697 and 699 Danforth Road, to Habitat for Humanity Toronto Inc. for its affordable housing building program in Toronto.

The Affordable Housing Committee recommends to the Executive Committee, for its meeting on June 14, 2010 that:

1.         City Council authorize the City to accept the Offer to Purchase from Habitat for Humanity Toronto Inc. (“Habitat”), to purchase four City-owned parcels of vacant land at 32 St. Dunstan Drive, 36 St. Dunstan Drive, north of 19 Macey Avenue and  21 Macey Avenue, being part of Lots 90, 91 on Plan 1951 and Part of Lots 24 and 25 on Plan 2236, City of Toronto and shown as Parts 1, 2, 3, 4, 6, 7, 8 and 9 on Sketch No. PS-2008-063A (the “Sketch”), subject to an easement over Parts 6, 7, 8 and  9 on the Sketch in favour of Bell Canada (collectively known as the “Property”), in the amount of $1,000,000.00 less a vendor take back mortgage in the amount of  $920,000.00, substantially on the terms and conditions outlined in Appendix “A” to this report.

2.         City Council authorize each of the Chief Corporate Officer and the Director of Real Estate Services severally to accept the Offer to Purchase on behalf of the City.

3.         City Council authorize the City Solicitor to complete the transaction on behalf of the City, including paying any necessary expenses, amending the closing, due diligence and other dates, and amending and waiving terms and conditions, on such terms as she considers reasonable.

4.         City Council authorize the City to provide its consent for Habitat to act as agent for the City, as owner, with respect to any searches, applications or inquiries, and to grant licences for a term of up to six months from the date of execution of the Offer, renewable for up to three additional months, for the purposes of entering onto the Highway to carry out pre-development activities and that the Director of Real Estate Services, or his designate, be authorized to execute the applications, consents and licences.

5.         City Council grant authority to direct a portion of the proceeds of closing to fund the outstanding expenses related to the Property and the completion of the sale transaction; and

6.         City Council authorize and direct the City Solicitor to execute all documents and to complete all discharge transactions required to give effect to the City's vendor take back mortgage.

The Affordable Housing Committee on June 3, 2010, considered a report (May 11, 2010) from the Chief Corporate Officer and Sue Corke, Deputy City Manager seeking approval for the sale of four vacant City properties known municipally as 32 St. Dunstan Drive, 36 St. Dunstan Drive, 21 Macey Avenue and a parcel north of 19 Macey Avenue to Habitat for Humanity Toronto Inc. for its affordable housing building program in Toronto.

The Affordable Housing Committee recommends to the Executive Committee, for its meeting on June 14, 2010 that:

1.         City Council recommend that a tax exemption be granted to Nishnawbe Homes Inc. for municipal and school purposes for any affordable units in its non-profit development currently municipally known as 423-7 Dundas Street East for a period of 25 years.

2.         City Council grant authority to the Director, Affordable Housing Office, to negotiate a municipal capital facility agreement with Nishnawbe Homes to secure the ongoing affordability of the rental units being exempted from taxation; and

3.         City Council grant authority to and direct the Director, Affordable Housing Office, to enter into and execute, on behalf of the City, a municipal capital facility agreement, the City’s security and any other documents or agreements required to facilitate the completion of the funding from Miziwe Biik Development Corporation and required by Nishnawbe Homes Inc. to obtain and maintain its other sources of funding, on terms and conditions satisfactory to the Director, Affordable Housing Office, and in a form approved by the City Solicitor.

The Affordable Housing Committee on June 3, 2010, considered a report (May 17, 2010) from Sue Corke, Deputy City Manager seeking approval to recommend that Nishnawbe Homes Inc. be exempt from property taxes for a period of 25 years for its new 32-unit non-profit affordable rental housing development for aboriginal people at 423-7 Dundas Street East.

The Affordable Housing Committee recommends to the Executive Committee, for its meeting on June 14, 2010 that:

1.         City Council authorize the Director, Affordable Housing Office, in consultation with Toronto Community Housing, Shelter, Support and Housing Administration, Toronto Housing Connections and affordable ownership development groups, to launch an enhanced marketing of ownership options aimed at social housing tenants and those on the waiting list.

2.         City Council request the Chair, Affordable Housing Committee, write to the Federal and Provincial governments to recommend they continue to make affordable ownership an eligible component of the Affordable Housing Program with sustained annual funding; and

3.         City Council request the Director Affordable Housing Office report back to Budget Committee with the details of the grants to be awarded though the City’s new assisted ownership policy, once the details of the proposals have been identified.

The Affordable Housing Committee on June 3, 2010, considered a report (May 18, 2010) from Sue Corke, Deputy City Manager providing recommendations to expand and consistently apply marketing efforts to support non-profit developers with their affordable home ownership initiatives.

The Affordable Housing Committee on June 3, 2010, considered a report (May 10, 2010) from Sue Corke, Deputy City Manager responding to the requests of the Affordable Housing Committee at its meeting of April 8, 2010, by providing an outline of current rental and ownership RRAP activity and the ward-by-ward breakdown of CMHC’s House Value Thresholds compared to actual residential assessment value.

The Affordable Housing Committee recommends to the Executive Committee, for its meeting on June 14, 2010 that:

1.         City Council endorse the Senate Sub-Committee Report "In From the Margins: A Call to Action on Poverty, Housing and Homelessness", prepared by The Standing Senate Committee on Social Affairs, Science and Technology, Subcommittee on Cities, which reinforces and supports the actions in Toronto’s Housing Opportunities Toronto: An Affordable Housing Acton Plan 2010 – 2020.

2.         City Council direct that this endorsement and request for implementation be forwarded to the Prime Minister of Canada, the Federal Minister of Finance, the President of the Treasury Board, the Minister of Human Resources and Skills Development, the Minister of Indian and Northern Affairs, the Minister Responsible for Canada Mortgage and Housing Corporation, the Leaders of the Opposition Parties, the Provincial Premiers, Territorial Leaders and Federation of Canadian Municipalities (FCM).

3.         City Council direct that City staff, working with civic partners, convene a Symposium for Action within six months to serve as a catalyst for implementing "In From the Margins" and to mobilize public and political support for its report and further federal engagement on poverty, housing and homelessness solutions.

4.         City Council encourage the Opposition Parties to initiate a Cross Party Hearing to allow Canadians to address the Government's response to the Senate Sub-Committee Report "In From the Margins".

5.         City Council encourage the Senate to hold further hearings on the Government's response to their report.

6.         City Council encourage the Federation of Canadian Municipalities Executive to develop an implementation strategy to address the Government's response to the Senate Sub-Committee Report "In From the Margins" and to present that framework to the Fall meeting of the Social Economic Development Committee and further to prepare a briefing paper for FCM's advocacy days at Parliament Hill in November, 2010.

The Affordable Housing Committee received a presentation from the Honourable Art Eggleton, P.C., Chair, Senate Sub-Committee on Cities on their report "In From the Margins: A Call to Action on Poverty, Housing and Homelessness".

The Chair of the Affordable Housing Committee thanked Senator Art Eggleton for his extensive contribution and representation to the citizens of Toronto and named Senators Art Eggleton and Hugh Segal as City of Toronto Affordable Housing Champions.

The Affordable Housing Committee on June 3, 2010, considered a report (June 1, 2010) from Sue Corke, Deputy City Manager discussing and recommending site specific amendments to the City’s Municipal Housing Facility By-law, which are required to implement Council’s direction of  May 11 and 12, 2010, that staff  immediately commence an Official Plan Amendment (OPA) process to allow 20 condominium registered rental units at 38 Abell Street (formerly known as 150 Sudbury Street) for the purpose of receiving municipal financial support for affordable rental housing units that would be owned and operated by Toronto Artscape Inc. (“Artscape”).

The Board of Health on June 1, 2010, considered a report (May 20, 2010) from the Medical Officer of Health entitled “Toronto Food Strategy: Cultivating Food Connections”; and forwarded a copy of the aforementioned report to the Executive Committee for information.

The City Manager recommends that:

1.         Council endorse the approach to implementing the Tower Renewal Program City-wide presented in the Tower Renewal Implementation Book (Attachment 1 to this report) including the Sustainable Towers, Engaged People (STEP) Program and the proposed financing option.

2.         As required by Ontario Regulation 609/06 prior to establishing a city services corporation, Council adopt the Tower Renewal Corporation Business Case Study (Attachment 2 to this report) for the establishment of a new corporation referred to as the Tower Renewal Corporation with a mandate to administer the financing option as described in this report and to coordinate all incentive programs and tools that will minimize the amount of project financing required.

3.         Council authorize the City Manager to request that the Province make appropriate legislative or regulatory amendments:

a.         to permit the City to provide financial assistance in the initial start-up phase to city services corporations incorporated pursuant to Ontario Regulation 609/06, including the proposed Tower Renewal Corporation;

b.         to give effect to the proposed financing mechanism by providing the City the authority to add payments in default owing to the Tower Renewal Corporation to the tax roll and according such payments priority lien status; and

c.         to permit the City to invest in the new Tower Renewal Corporation.

4.         Council authorize the City to collect defaulted payments owing to the Tower Renewal Corporation by adding such payments to the tax roll and collecting them in the same manner as municipal taxes.

5.         Once the Province has enacted the legislative amendments described in Recommendation 3, the City Manager report on the recommended corporation model including its structure and board composition, policies to be applied to the corporation and its reporting relationship to the City.

6.         Funding required to undertake activities necessary to support the development of the financing option and establishment of the Corporation be set out in the 2011 Operating Budget.

In September 2008, City Council recognized Tower Renewal as an opportunity to transform older apartment buildings to result in a cleaner and greener environment, stronger communities with increased social and cultural benefits, and improvements in the local economy. At that time Council gave direction to investigate and develop a range of opportunities at selected pilot locations. A series of feasibility studies was undertaken, focused on the pilot sites, to better understand the impact of Tower Renewal if applied to the over 1,000 strong cohort of concrete slab style apartment buildings.

These investigations determined that it would be possible to dramatically reduce energy and water use, increase waste diversion and reduce greenhouse gas emissions throughout the apartment building sector. The results of the findings are provided in the attached Tower Renewal –Implementation Book. In summary, studies indicate that reductions of 50% in electricity use, 70% natural gas use, 20% water use and waste diversion rates improved by 30% are possible. By addressing this class of buildings, greenhouse gas emissions for the City overall can be reduced by 5%. With City-wide participation, renewal activities will generate billions of dollars in investment and create tens of thousands of person years of employment. Tower Renewal will provide greater opportunities for engagement of people in neighbourhoods and enhance the quality of life for residents.

There are, however, many barriers to achieving these benefits.  Due to the complex nature of the projects and significant upfront cost, coupled with a lack of appreciation by property owners of the full benefits to be gained, Tower Renewal projects will not be undertaken in significant numbers under current circumstances.

To address these barriers, the Tower Renewal – Implementation Book outlines the Sustainable Towers=Engaged People (STEP) program that will provide a guide to how and what to do. This program will guide and support the movement of buildings to increased levels of performance. To address the financing challenge, the creation of a new financing option that, once established, can be designed to operate on a self-sustaining basis, is proposed.

The financing option includes two critical components: creating a “pool” of projects to reduce costs and improve credit terms, and making use of the City’s ability to collect unpaid obligations by way of adding to the tax rolls and according priority lien status to any project payments that might fall into arrears. At approximately $4 million per project, that means providing the opportunity for billions of dollars in local investment. The majority of the pool of funds will be from capital markets. The City, as part of its capital that is available for investment, may direct some investment to the corporation’s pool of funds at competitive rates of return. Implementation of the financing option will require the creation of a new city services corporation and obtaining from the Province legislative amendments to implement this financing structure.

For the current year, there will be no direct financial impact beyond what has already been approved in the current year’s budget.

Over the long term, based on recovery of all costs through service payments from Tower Renewal participants, the proposed Tower Renewal Corporation will be self-financing. When the Corporation is created, after the required Provincial actions requested are undertaken, the City will provide start-up funding in the form of a loan, which will be sourced from existing Reserve Funds, such as the Strategic Infrastructure Reserve Fund. No new funds will be required in 2010. In 2011, any funding requirements will be identified in the 2011 Budget process. Once operations begin, the Corporation will be entering into contracts with building owners, and contract fees will be included in the agreements which will recover all corporate costs. The Start-up funding provided by the City is envisioned to be repaid over time through these fees.

The Corporation would be expected to develop a business plan during its first year of operation to set out its future plan. It is expected that this non-program funding could be augmented from other sources such as the Federation of Canadian Municipalities, Toronto Atmospheric Fund, Ontario Power Authority and other entities.

Although various City staff can provide significant resources to assist in establishing the new Corporation, it is expected that specific external expertise will be required to address issues that the Province may identify to support the establishment of the financing option and to assist with setting up the technical and legal structures, such as setting out model contracts and establishing service provider qualifications, necessary to support the financing option implementation. Funding for the activities that will take place prior to the Corporation being established will be undertaken within existing budgeted activities in 2010 and based on identified requirements to be addressed, further funding will be included in the 2011 Operating Budget process with the source of the funding likely to be from existing Reserve Funds.

Separate from start-up funding, the recommended financing option calls for the potential future investment by the City in the pool of funds that will support Tower Renewal projects. The City’s investment would be a small portion of the overall fund, with the bulk of funds raised from the capital markets. The City’s investment would take the form of equity or subordinated debt, and would not be required until projects are actually signed. It is estimated that the invested capital would be in the amount of no more than $5 million over the first 2 years of the Corporation’s operations.

This investment would be part of the City’s portfolio of investments and would be subject to the same security provisions that the City applies to other investments. The City would earn a return on the invested capital. It is staff's intent to structure the corporation, it's capitalization and its operations so that the debt of the new corporation will not have an impact on the City's credit rating and its ability to borrow for its regular needs.  Financial participation from other orders of government or their agencies would assist in this regard. The details of the arrangements for the capital provided as an investment by the City in the program will be subject to a further report to Council. The City is currently limited under Provincial legislation in its ability to invest in its own Corporation so this permission would have to be granted by the Province.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The Toronto Transit Commission recommends that City Council, through the Executive Committee:

1.         provide confirmation of funding under the GTA Farecard project.

The Commission on June 2, 2010 considered the attached report entitled, "Procurement Authorization – Automatic Fare Collection – Open Payments”.

The City Manager recommends that:

1.         The General Manager of Economic Development and Culture initiate the dispute resolution process under the Management Agreement respecting all matters where the Kiwanis Club of Casa Loma has not met its obligations, including the requirements to submit by the dates currently agreed to by the City, all payments, reports, and interior restoration plans satisfactory to the City's Chief Corporate Officer.

2.         The General Manager of Economic Development and Culture notify the Kiwanis Club of Casa Loma that the City requires a written commitment by the end of July 2010 that the following actions will be undertaken:

i.          a joint staff working group be established, meet regularly and work with a management consultant as necessary to resolve the operational and financial issues outlined in this report;

ii.         the Board meet monthly for the balance of their term;

iii.        a financial plan satisfactory to the Deputy City Manager and Chief Financial Officer be developed by the Kiwanis Club of Casa Loma by September 30, 2010 demonstrating its ability to meet the obligations of the Management Agreement; and

iv.        the further actions outlined in the Confidential Attachment be agreed to;

3.         The Deputy City Manager and Chief Financial Officer undertake  an audit of Casa Loma operations and finances including how the Casa Loma Improvement Fund is managed to ensure that funds are being used as anticipated by the Management Agreement and that Casa Loma has the organizational and financial capacity to fulfill the terms of the Agreement; and

4.         If the General Manager of Economic Development and Culture is not satisfied that progress on Recommendations 1, 2, and 3 will result in moving toward implementation of the Strategic Vision, the appropriate City staff, in consultation with the City Solicitor, take steps to terminate the Management Agreement and recommend an alternative way of managing Casa Loma.

Casa Loma is a key asset of the City of Toronto and was managed for 70 years by the Kiwanis Club of Casa Loma (KCCL).  The castle needed a facelift, new programming, and a new approach to integrating this grand estate into the surrounding neighbourhood.  The City began a 10-year restoration plan for the Casa Loma main building exterior in 2003.   When its previous license was about to expire, KCCL proposed and Council adopted a Strategic Vision for Casa Loma, that included renovating the interior, rejuvenating the visitor experience, and introducing new programming and visitor amenities including food services.  In the spring of 2008 Council approved the Management Agreement between KCCL and the City.  The Agreement took effect on July 1, 2008 and requires KCCL to implement the Strategic Vision and to meet certain financial, planning and physical improvement obligations. 

A joint Casa Loma Board was established in accordance with the Management Agreement to direct the operations of the estate administered by staff who are employees of KCCL (Board and staff together referred to as Casa Loma).  The City appoints half of the voting members of the Board and 4 ex officio non-voting members.  The Mayor appoints the Chair of the Board from among the members on the advice and recommendation of the President of KCCL.  The Board is not a City board nor is it a separate legal entity from KCCL, but rather a committee of KCCL as KCCL retains the responsibility for meeting the terms of the Agreement.  This is a unique governance model that is a hybrid between a private enterprise and a public sector board and is not subject to the usual requirements of a public sector entity.  Council's objectives are met through the terms of the Agreement rather than any direct authority over the Board.

Entering into the Management Agreement, it was understood and expected that implementing the Strategic Vision would require a higher level of activity and a higher standard of performance than in the past.  Nevertheless, in its first 2 years of operation, Casa Loma has missed a number of important deadlines, has not been able to make all of the required payments due to the City, and is far behind the schedule outlined in the Management Agreement for implementing the Strategic Vision.  Casa Loma has advised that the recession and changes to tourist visits to the City have had an adverse impact on its operations and finances and therefore Casa Loma has had to draw from funds intended for enhancement of the estate to meet operating obligations.  However, this situation was well known at the time that KCCL developed the Strategic Vision and committed to these financial obligations.

Over the past two years City staff have sought to provide assistance to Casa Loma including authorizing extensions to deadline dates; suggesting that Casa Loma look at alternative income opportunities, including recommending grant opportunities, and offering to assist with preparation and submission of applications; proposing the establishment of a staff work group to help Casa Loma address the challenges; and attempting to arrange governance training for the Board.  The Mayor has also advised KCCL of the City's concerns over the slow progress toward achieving the Strategic Vision, concerns that governance practices do not meet the standard that the public would expect in operating a City facility, and the City's growing lack of confidence that Casa Loma can improve the situation.  KCCL has not acknowledged that any significant action is necessary.

The Management Agreement lays out a process for conducting a review of the governance model at the end of 3 years of operation (July 1, 2011).  The mechanisms for monitoring progress and holding the Casa Loma Board and KCCL accountable for implementing the Strategic Vision have worked effectively in bringing these problems to light at an early stage.  After 2 years it is evident that the current model is not working to enhance Casa Loma as an attraction and there are indications that KCCL is not able to deliver the full extent of the obligations laid out in the Agreement.  This report recommends a course of action to be undertaken immediately to prevent the situation from growing worse.

Prior to establishing this new model for Casa Loma, the City received a share of the revenue from operations and also received property taxes.  The new financial arrangement recognizes the need to put additional funding back into Casa Loma to bring it into a state of good repair and to implement the new Strategic Vision.  The City contributes to this in 3 ways – first, by capping the payments to the City; second, by committing to use the funds for exterior restoration;  and third, by forgoing property tax revenue and retaining that money in Casa Loma for implementing the Strategic Vision.

Under the terms of the Agreement, KCCL is to pay $800,000 to the City annually payable quarterly as a share of Casa Loma revenues.  Council has committed to using these funds from Casa Loma toward the exterior restoration work.  These funds are deposited into the City's Casa Loma Capital Reserve Fund (CLCRF) and used to pay for the exterior restoration work.  The City's capital program totals $33 million, funded partially from the CLCRF and partially from debt. 

In addition, the City applied for a tax exemption for Casa Loma and no longer receives property tax payments.  Capping the City's share of Casa Loma revenue at $800,000 and foregoing the property tax revenue results in approximately $375 thousand less revenue for the City than in an average year prior to the Agreement.  The City intended that these forgone revenues would be retained by Casa Loma and used toward the interior restoration work to implement the Strategic Vision.  The Management Agreement requires that all Casa Loma net revenues, all ticket surcharges, and the property tax equivalent be deposited into the Casa Loma Improvement Fund (CLIF).  The CLIF is to be used each year for the much-needed interior restoration to implement the Strategic Vision.

City's Exterior Restoration to Casa Loma

From the $800,000 due to the City for 2009, Casa Loma still owes the City $160,000.  At the request of Casa Loma, the City agreed to defer this payment until July 2010.  The first quarter 2010 payment of $120,000 has been received and another $200,000 is due at the end of June 2010. 

The City has spent over $16 million from 2003 to 2009 for exterior restoration work on the main building.  The Economic Development and Culture 10 Year Capital Plan (2010 to 2019) includes another $17.35 million gross for Casa Loma, funded by $9.193 million or 53% debt and $8.157 million or 47% from the CLCRF.  This includes another $4 million to complete the restoration of the main building and funding to restore the remaining buildings and structures such as the stables.   Completion of this work is dependent on securing $6.430 million in future contributions from Casa Loma ($800,000 per year).  If these contributions are not made, the City's ability to complete the planned restoration work will be threatened and the ongoing integrity of the castle and other buildings affected. 

Casa Loma's Strategic Vision

The Management Agreement outlines the interior restoration work that KCCL has committed to completing in the first 5 years.   The plan is that KCCL will invest approximately $4.4 million in 2 phases - $1.6 million by July 1, 2010 and another $2.8 million by 2013. The intent was that Casa Loma would draw from the CLIF each year the funds necessary to complete the planned interior restoration. 

However, in the first 2 years of operation, Casa Loma has had to use these funds to supplement shortfalls in operating revenue.  Current budget projections show that a total of approximately $1 million should have been accumulated and used for improvements by the end of 2010 and $1.5 million by the end of 2011.  Because the CLIF is being used to support operating shortfalls, the desired improvements are not being carried out and the balance available for improvements will only be $335,000 by the end of 2011.  Although these shortfalls do not affect the City directly, they will affect the future maintenance and attractiveness of the site, and resultant financial viability. 

Thus, the City has committed to its plan for exterior restoration, whereas KCCL's Strategic Vision is not being implemented due to financial and management difficulties.

As a result of the present financial situation and projected revenue shortfalls, it is recommended that the Deputy city Manager and Chief Financial Officer undertake an audit of Casa Loma operations and finances.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.