July 6, 1998

 To:Corporate Services Committee

 From:Commissioner of Corporate Services

 Subject:Funding Issues - Relocation of the Learning Enrichment Foundation to 2700 Eglinton Avenue West (Ward 27 - York Humber)

 Purpose:

 To advise Council of funding issues in accommodating the Learning Enrichment Foundation at the former City of York Municipal Building.

Funding Sources, Financial Implications and Impact Statement:

 Because of recent provincial policy changes, child care centres no longer have access to capital funding. The estimated renovation costs of $125,350.00, to bring the space at 2700 Eglinton Avenue West up to the standards of the Day Nurseries Act, has no source of funding. The rental of the space will be $20,000.00 per annum net excluding any provision to amortize the cost of leasehold improvements, plus a proportionate share of operating costs and applicable taxes, if any, as additional rent. No funding source is available.

 Recommendations:

 It is recommended that:

(1)the Toronto District School Board be requested to allow the Learning Enrichment Foundation to remain at its present location, until an appropriate relocation plan can be funded; or

 (2)should Council decide to proceed to allow the Learning Enrichment Foundation to occupy space at the York Civic Centre: (i) financing in the amount of $125,350.00, which is exclusive of any potential soil remediation costs, be approved and an annual net rental of $20,000.00 plus additional rents such as a proportionate share of realty taxes and operating costs be funded by way of a grant; (ii) this report be referred to Budget Committee for a source of funding; and

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

  Council Reference/Background/History:

 By the adoption of Clause No. 30 of Report No. 7 of the Corporate Services Committee, as amended, authority was granted to lease space at 2700 Eglinton Avenue West to the Learning Enrichment Foundation, a non-profit organization which operates 13 day-care facilities in the former City of York. The Foundation advised the Committee that it had sufficient funds for a temporary relocation to the York Civic Centre with minimal renovations and costs.

 The available space of approximately 2500 square feet located at 2700 Eglinton Avenue West was recently shown to Ms. Pamela Roberts, Executive Director of the Learning Enrichment Foundation, who considered the location as being ideal for a child-care centre and that the Learning Enrichment Foundation could be relocated to the York Civic Centre at no cost to the City. However, after inspecting the premises with Ms. Yvonne Park, Licensing Specialist of the Licensing Unit with the Ministry of Community and Social Services for the Province of Ontario, it was discovered that in order to meet the standards of the Day Nurseries Act for licensing and service delivery, the space will require certain renovations which Facilities Management has estimated at $50,000.00, including contingencies. These costs include building an infants room, toddlers room and a sleep room, placing radiator covers over the electric base board heaters, fumigating and painting the entire area, and replacing three toilets and sinks to children size and height and returning them to adult use when the lease expires. As well, a 2,000 square foot playground must be constructed that will be divided in two areas for age specific activities. The intent is to have a Canadian Standard Association free standing mobile play equipment within a four feet (4') high fence with gates and locks. The cost of this is in a range of $57,500.00 - $69,000.00 including contingencies. This represents an expansion of service from pre-school care only to a program which serves younger children.

 The Learning Enrichment Foundation was informed that the parkland at the rear of the Municipal Building was once used as a dump for such environmental hazards as car batteries.

 Roy Auerill, a parks planner with the former City of York who is familiar with the property, states that to the best of his knowledge, the contaminants are not located in the tableland where the playground will be built, but below the top-of-bank where the site drops off. If bore-hole testing is required, the cost will be approximately $3,450.00, which does not include an amount for remediation. There will also be an asbestos inspection and report that is estimated at $3,450.00.

 The Learning Enrichment Foundation is not the only child care group that is looking for space.

 Children's Services further advises that:

"Approximately 40% (271 of 500) of all child care centres providing child care through a City purchase of service agreement are located in school facilities. Because of changing enrolment patterns in individual schools and other pressures related directly or indirectly to the new education funding formula (e.g. portable space is no longer funded resulting in instructional space returning to within the school facilities), 6 child care programs located in schools have been advised that they must vacate their space. In addition to the Learning Enrichment Foundation, at least one other program, also seeking access to City-owned space. Additionally, 15 programs have been advised of potential space reductions or termination of lease agreements.

 Financial Issues:

The challenges for child care centres facing eviction from school facilities are greater than the simple loss of space. Assuming new facilities are secured, the programs do not have access to the capital funding required to complete renovations necessary to meet the requirements of the Day Nurseries Act. Historically, the funding for capital costs has been borne by the Ministry of Community and Social Services. Current provincial policy does not provide for this funding support. Most child care centres currently facing eviction pay little or no occupancy costs and are facing increased occupancy costs if they are able to relocate to new premises. Existing per diem rates paid to these operators are not sufficient to allow for increased operation expenses. If the Children's Services Division were to increase rates to these programs, all of the other 500 programs under purchase of service agreements would seek recognition of their actual costs. This was estimated at an additional 14 million dollars for 1997. Pressure to maintain service levels to meet the City's cost sharing agreement with the Ministry precludes decreasing service to increase per diem rates to reflect new operation costs, such as rent.

 Without additional resources to provide for the capital and operating costs, no alternate space will resolve the crisis faced by this centre and others."

 Comments and/or Discussion and/or Justification:

 The Learning Enrichment Foundation has been advised to relocate by August 21, 1998. The estimated leasehold improvement costs of up to $125,350.00 for what amounts to a short term occupancy is not financially feasible. The Foundation has some funds to pay for moving and short term market rent, but not sufficient for rental of the space, estimated at $20,000.00 annually, net.

 Furthermore, the desired move date of August 21, 1998 presents logistical problems to the Facilities & Real Estate Division, as insufficient time is available to complete necessary consulting and contractor procurement in accordance with the Purchasing By-law. Council will need to declare this project an emergency, if funds are approved to complete the upgrades to the York Civic Centre for tenancy by the Learning Enrichment Foundation.

 There are no funds available in present Departmental accounts for the renovations ($125,350.00) which are required, but previously thought to be not needed. Funding would have to come from contingency.

The current dilemma has been created by the down loading of responsibility without funding support or time to develop appropriate planning. The Learning Enrichment Foundation facility is the first of many to be put in this situation. The Commissioner of Community Services will be reporting on this issue in September. The most appropriate option, therefore, is that the day care facility remain in its present location until a suitable alternative can be found.

 Conclusions:

 The best course of action would be to request the Toronto District School Board to delay the relocation of the Learning Enrichment Foundation facility until an appropriate solution is found. Should Council decide to proceed to allow the Learning Enrichment Foundation to occupy space at this location, it is necessary that Council approve the necessary funds to cover the expenditures outlined in this report.

 Contact Name:

 Mr. Tony Pittiglio, Manager of Property Services; Telephone No.: (416)392-8155; Fax No.: (416)392-4828; E-mail address: anthony_pittiglio@metrodesk.metrotor.on.ca

 Margaret Rodrigues

Commissioner of Corporate Services