October 16, 1998

To:Community and Neighbourhood Services Committee

From:City Clerk

Subject:Expenditure from the Residents' Interest Reserve Fund -

Purchase of Bus for Seven Oaks Home for the Aged

Recommendation:

The Advisory Committee on Homes for the Aged on October 16, 1998, recommended to the Community and Neighbourhood Services Committee the adoption of the attached report (October15,1998) from the General Manager, Homes for the Aged, respecting the purchase of a new wheelchair-accessible bus for Seven Oaks Home for the Aged.

City Clerk

R. Dyers/tl

Item No. 5

(Communication dated October 15, 1998, addressed to the

Advisory Committee on Homes for the Aged from the

General Manager, Homes for the Aged)

Purpose:

To receive authority to make an expenditure from the Residents' Interest Reserve Fund for the purpose of purchasing a new bus to respond to the transportation needs of the Home's Day Centre clients and residents.

Funding Sources/Financial Implications/and Impact Statement:

Annual expenditures from the Residents' Interest Reserve Fund are generally limited to 90 percent of the income generated by the fund. Consideration may, however, be given for an expenditure of capital from the fund in exceptional circumstances. The total cost of the bus proposed for purchase for Seven Oaks is $89,000.00 (inclusive of PST and GST).

Recommendations:

It is recommended that:

(1) approval be given for a one-time expenditure of an amount not to exceed $89,000.00 (inclusive of PST and GST) from the Residents' Interest Reserve Fund in order to purchase a new wheelchair-accessible bus to enhance the quality of life of Day Centre clients and residents of Seven Oaks Home for the Aged; and

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

Background:

In 1955, Metropolitan Toronto Council approved a transfer of trust funds held for residents in the Metropolitan Homes for the Aged from a non-bearing current account to an interest-bearing savings account and approved the use of interest for the general welfare of residents. This practice was discontinued in 1973. At that time, there was in excess of $400,000.00 in accumulated interest.

Under the new system, estimates were made of the rate of interest expected in the forthcoming year, and interest at this rate was credited to the residents except where an account was less than $50.00, or where the account was opened and closed during a quarterly period. This system continued until May 1981, when Council approved the current practice of paying the actual interest earned to the residents. In addition, Council approved the payment of interest on a monthly basis in January 1984.

In the years between 1973 and 1983, interest compounded annually and funds accumulated on the $400,000.00 balance of 1973, and this amount was further increased by the fact that during the period from 1973 to 1981, the estimated rate of interest (the rate used for paying the residents) tended to be less than that actually received, with the difference going into the reserve fund.

Metropolitan Toronto Council requested that the Province amend the Municipality of Metropolitan Toronto Act to establish the Residents' Interest Reserve Fund. The amendment was given third reading and Royal Assent on May 29, 1984.

Section 163a states: "The trust fund, composed of undisbursed interest accumulated prior to the 1st day of January 1982, on the trust accounts of the residents of Metropolitan Toronto Homes for the Aged, is vested in the Metropolitan Corporation for distribution of both the fund and the interest accruing therein by the Metropolitan Council in its absolute discretion for the general benefit of the residents of Metropolitan Toronto Homes for the Aged, provided that no expenditure shall be made for the ordinary operation and maintenance of the Homes".

Metropolitan Toronto Council established administrative procedures for the management of the Interest Reserve Fund as follows:

1.Expenditures are for the general benefit of residents of the Homes for the Aged.

2.No expenditure shall be made for the ordinary operation and maintenance of the Homes.

3.Annual expenditures shall not exceed 90 percent of the income generated by the fund without the express authority of the Advisory Committee on Homes for the Aged.

4.Expenditures up to $5,000.00 may be approved by the General Manager, Homes for the Aged. Expenditures $5,000.00 and over must be reviewed by the Advisory Committee on Homes for the Aged prior to submission to Council for approval.

The current balance of funds held in the Residents' Interest Reserve Fund is approximately $1.9 million.

Annually, based on the approved 90 percent spending limit, each of the 10 Homes for the Aged receives an allocation, to be used for quality of life issues for their residents. Each expenditure request must be submitted in advance, for review and approval. In addition to the annual usage described, there have been a number of capital items purchased from the fund. For example, decor and aesthetic enhancements requested by Residents' Councils have been approved. In addition, the fund was used to purchase three buses for the various Homes; these buses were purchased in the mid- to late-1980s. There are currently seven buses in use amongst the 10 Homes. No buses have been purchased since 1989, and several of the buses are now experiencing substantial maintenance costs.

Comments:

Seven Oaks Home for the Aged, located at 9 Neilson Road, administers a very successful Adult Day Centre, in partnership with Centenary Health Centre. Operated five days/week, the Day Centre averages 12-15 clients per day, with the Home's driver providing transportation for the Centre's clients. The daily bus route associated with Day Centre clients results in approximately 150 kilometres driving distance per day. In addition to the daily Day Centre requirements, the bus is used for weekly resident outings from the Home, adding an additional 200 kilometres driving distance per week.

The current Seven Oaks bus was purchased in 1989 and has been experiencing high maintenance costs for the last several years.

Upon a request from the General Manager, the Home's staff researched the marketplace to identify the styles and makes of buses currently available, consult with other service providers to access information about their experiences, and make a recommendation with respect to acquiring a new bus through use of the Residents' Interest Reserve Fund. In their research, staff paid particular attention to issues related to passenger comfort and convenience, design and construction features, and maintenance history. Major desired features include a fibreglass body, stainless bumpers, scenic windows, wide aisles, bright lighting, wheelchair lift, accessible entrance doors, and interior luggage racks. In addition, a diesel engine, with sound reduction insulation is a desired feature. Detailed specifications have been provided by Divisional staff, in anticipation of expenditure approval.

It is anticipated that the cost of a bus with the desired features can be purchased at a cost not to exceed $89,000.00 (inclusive of PST and GST).

Conclusions:

Given the age of the Division's current vehicles, there is a need to start a process of vehicle replacement, or transportation needs of residents and Day Centre clients will not be appropriately served. The Seven Oaks vehicle has been selected as the vehicle to be replaced at this time, in light of the scope of the Day Centre program and the regular use of the vehicle for resident outings and trips.

This expenditure request is consistent with the established criteria for use of the Residents' Interest Reserve Fund and is supported by Seven Oaks management staff, the Division's Executive Office staff, including the General Manager.

Contact Name:

Sandra Pitters, General Manager, Homes for the Aged Division

Tel: 392-8907/Fax: 392-4180 E-mail: sandra_pitters@city.toronto.on.ca