April 6, 1999

To:Emergency and Protective Services Committee

From:H.W.O. Doyle

City Solicitor

Subject:Establishment of a Fourth Collision Reporting Centre

Purpose:

The purpose of this report is to respond to the request made to the City Solicitor by the Emergency and Protective Services Committee (EPSC) at its meeting held on January 12, 1999, for a report regarding various issues concerning the establishment of a fourth downtown collision reporting centre (CRC).

Funding Sources, Financial Implications and Impact Statement:

There are no financial implications from the recommendation contained in this report.

Recommendation:

It is recommended that the Emergency and Protective Services Committee consider the report of the Chief Administrative Officer, dated September 23, 1998, recommending that no additional CRC be established, in conjunction with the report of the City Auditor, dated November 17, 1998, regarding the operations and profit margins of existing CRCs, and in conjunction with the other material submitted as appendices to this report.

Council Reference/Background/History:

At its meeting held on October 6, 1998, the EPSC received two reports dealing with a proposal to establish additional CRCs in the City of Toronto. The first was a report from the Chief Administrative Officer, dated September 23, 1998, recommending that the City not establish any additional CRCs. This report contained the following key points:

• From a public perspective, the CRC offers a one stop facility to deal with all collision related issues. In addition, the public receives other ancillary services provided by the CRC operator and funded by the insurance industry, payment to tow truck operators, free one day parking of unsafe vehicles, initiation of claims processing, disposal of vehicles written off, assistance with vehicle rentals and assistance with completing the accident report form.

• The City's current role in the operation of the CRCs is exercised through the provision of police services and the City's existing departments have no interest in operating CRCs. The licensing and monitoring of CRC operations for the City is carried out by the Municipal Licensing and Standards Division. Extending this role to that of a CRC operator may not be appropriate or in the best public interest.

• The CRCs represent a collaborative partnership between the police, the insurance industry and the CRC operator in the interest of all the participants and the public. The existing CRCs are conveniently located, equipped to handle the mandatory drops, provide valuable services and have sufficient capacity to service the current volume of collisions. The proposed CRCs will not result in any additional benefits to the City and cost about $7.5 to $9.0 million annually. In addition, the proposed CRCs may jeopardize the financial viability of the existing CRC operations, resulting in incremental police expenditures of about $2.8 million.

The report is attached as Schedule "A" to this report.

The second was a report from the City Solicitor, dated August 11, 1998, on the EPSC's confidential agenda, addressing the issue of liability for establishment of additional collision reporting centres. A copy of the report is contained in a separate Schedule "B" on the EPSC's confidential agenda.

In its report to City Council, the EPSC recommended the adoption of the report from the Chief Administrative Officer. At its meeting held on October 28, 1998, City Council considered Clause No. 3 of Report No. 11 of the EPSC containing the aforementioned reports. Council struck out the foregoing Clause and referred it back to the EPSC for further consideration at such time as a report requested of the City Auditor respecting the operations and profit margins of the existing CRCs was submitted to the EPSC.

The City Auditor's report on this issue, dated November 17, 1998, was received by the EPSC at its meeting held on December 1, 1998. At that meeting, the EPSC deferred the City Auditor's report to its meeting of January 12, 1999 and requested a further report from the City Auditor regarding the names of the members of the Collision Reporting Centre Evaluation Committee referred to in the report that had been submitted by the City Auditor. The report dated November 17, 1998 from the City Auditor made the following central points:

• The City Auditor does not have access to the financial statements of the CRC operator. However, it was determined through estimations that profit generated by each of the CRCs is not unreasonable when viewed in the context of the operator's return on his projected investment.

• With respect to allegations that insurance companies on site, as well as CRC employees, were directing customers to preferred auto repair shops, the City Auditor saw no evidence of customers being directed to preferred auto repair shops.

• With respect to the potential regarding the operation of a downtown CRC location, the City Auditor made certain assumptions for operation of a 9 hour and a 24 hour facility and commented that the opening of a fourth centre appears to be financially viable. Those key assumptions included:

• There are no legal impediments to the opening of a fourth centre.

• The shift in collision volumes to the fourth centre facilitates a redeployment of police staff.

• The continued participation of the insurance industry at the fourth centre.

Both the auditor's reports are attached as Schedule "C" to this report.

In addition, Staff Sergeant Tom Huntley, who is responsible for administration of the existing CRCs on behalf of the Toronto Police Service, appeared before the EPSC at its December meeting in connection with its consideration of the matter. As noted above, the EPSC deferred the matter to its January meeting and Staff Sergeant Huntley was unable to attend before the EPSC at that meeting. However, on January 11, 1999, the Staff Sergeant provided his comments on the City Auditor's report dated November 17, 1999, to the City Auditor. His central comments were as follows:

• The City Auditor's assumption that police staff could be re-deployed to a fourth centre is incorrect as police staffing is related to shift requirements and not CRC volume levels.

• There are additional costs not yet considered including police clerical staff, significant additional technical and equipment funding to meet insurance industry requirements and pound operation costs under the City's mandatory drop provisions.

• The City Auditor's estimated revenues are high as they are based on the assumption that insurers continue their 70% purchase rate. However, the Insurance Bureau of Canada strongly suggests a purchase rate of only 7 - 10% for any future CRC operations.

• The highest volumes at the CRCs occur in the afternoon and evenings and, therefore, a 16 hour facility is more appropriate than the 9 hour operation proposed by the City Auditor.

A copy of Staff Sergeant Huntley's report is attached as Schedule"D" to this report.

At the meeting of the EPSC held on January 12, 1999, the EPSC received the requested reports from the City Auditor. In addition to receiving those reports, the EPSC, among other things, referred the following motions to the City Solicitor for a report thereon:

(1)that a fourth downtown CRC be opened;

(2)that the appropriate City staff recommend suitable City lands for a downtown CRC, in order to minimize the cost;

(3)that the appropriate staff report on a suitable location;

(4)that the downtown CRC be operated by the City of Toronto and, further that the responsibility for the administration of all CRC contracts be transferred to the City, with the Toronto Police Services Board continuing to provide Police personnel;

(5)that proceeds from the CRCs be directed towards civilian staffing by the CRCs;

(6)that, initially, the downtown CRC be operated as a nine-hour facility, with the possibility of expansion of a twenty-four hour facility; and

(7)that the insurance industry be advised that, should any legal actions nullify the provisions of the by-law that prohibits persons in a CRC from recommending an autobody shop, the City exercise its options with the Collision Reporting Centres' contracts to terminate and operate them as City facilities without the direct involvement of the insurance industry.

In addition, the EPSC referred a joint memorandum received from the Executive Director, Municipal Licensing Standards, and the General Manager, Toronto Licensing, to the City Solicitor with a request that he submit a confidential report thereon to the next meeting of the EPSC, such report to include a full range of remedies that might be available to respond to the actions taken by the insurance industry with respect to the CRCs.

However, at the EPSC meeting of January 12, 1999, the report of the Chief Administrative Officer, dated September 23, 1998, that Council had referred back to the EPSC at its meeting of October 28,

1998 to be considered in conjunction with the aforementioned reports from the City Auditor, was not considered by the EPSC.

Subsequently, at its meeting held on February 9, 1999, the EPSC received the confidential report from the City Solicitor requested at its meeting of January 12, 1999. In addition, it received a report from the City Solicitor respecting motion No. 7 of the motions made at its meeting held on January12, as identified above. That report is contained in a separate Schedule "E" on the EPSC's confidential agenda.

At its meeting held on March 2, 3 and 4, 1999, City Council considered Clause No. 6 of Report No.2 of the EPSC which contained the confidential report from the City Solicitor which had been submitted to February meeting of the EPSC. Among other things, Council amended the Clause to request the City Solicitor to submit the report previously requested by the EPSC on the possibility of establishing a fourth CRC operated by the City of Toronto to the next meeting of the EPSC and to request that the EPSC submit its recommendation on the matter to the next meeting of City Council to be held on April 13, 1999. Although the report was prepared for the meeting of EPSC held on March 23, 1999, due to the volume of material on the EPSC agenda, the Chair of the EPSC directed that the report be submitted to the next meeting of the EPSC scheduled for April 20, 1999.

Comments and/or Discussion and/or Justification:

In light of the history of the matter set out above, it appears that neither the EPSC nor City Council have yet had the opportunity to simultaneously consider all the material relevant to the assessment of whether a fourth CRC should be established. As well, it appears that the EPSC has not yet had the opportunity to comply with Council's direction to consider the report of the Chief Administrative Officer, attached as Appendix "A", in conjunction with the report of the City Auditor, attached as Schedule "C". Accordingly, I have attempted above to set out a brief history of the matter and attach the relevant documents.

Nonetheless, in light of the attached material, my responses to the outstanding issues raised by EPSC at its meeting of January 12, 1999, are as follows:

1.Opening of a Fourth Downtown CRC

As noted above, a report on the suitability of opening additional CRCs was submitted by the Chief Administrative Officer to the EPSC at its meeting held on October 6, 1998. The Chief Administrative Officer's recommendation that the City not establish additional CRCs was adopted by the EPSC, although City Council referred the motion back to the EPSC for further consideration. The Chief Administrative Officer's report analyzes various considerations respecting the establishment of additional CRCs and should be considered as the response to the EPSC's request for a report thereon. It is also recommended that consideration be given to my prior confidential report, attached as confidential Appendix "B", as the issues raised therein may affect the EPSC's and Council's perspective on the viability and desirability of establishing a fourth CRC.

As well, for the information of the EPSC and Council, attached as Schedule "F" to this report is a copy of a portion of Minute No. 476/98 of the Toronto Police Services Board from its meeting held on November 19, 1998. This portion of the Minute addresses issues relating to the establishment of a fourth downtown CRC and may be of assistance in assessing that issue.

2.Suitable City Lands for a Downtown CRC

A determination as to what City lands might suitably be used as the site for a fourth downtown CRC is premature, given that the threshold issue of the appropriateness of establishing a fourth CRC has never been resolved. Therefore, it is recommended that the EPSC and City Council determine whether the establishment of a fourth downtown CRC is practical and feasible given the information and analysis contained in this report and its appendices. If Council ultimately determines that a fourth downtown CRC is appropriate, it is further suggested that the Facilities and Real Estate Division of the Corporate Services Department be requested to advise on a suitable CRC site.

3.City Operation of a Downtown CRC

As noted in my previous report attached as confidential Appendix "B", the City could establish an additional CRC. However, as noted in the attached materials, there are various factors that may impede the City's ability to successfully establish and operate a fourth CRC and that may affect the desirability of its establishment. In particular, consideration should be given to the legal issues set out in the aforementioned confidential report and to the matters identified in the Chief Administrative Officer's report, attached as Appendix "A".

4.Transfer of Administration of Current CRC Contracts from the Toronto Police Services Board to the City

As this is a matter that involves provision of legal advice, a report on this issue has been placed on the EPSC's confidential agenda and should be considered along with this report.

5.Directing Proceeds from CRCs to Civilian Staffing of CRCs

In the event the City established its own CRCs, and is entitled to retain any profits that might be generated by the operation of such CRCs, then the issue of directing any such profits would be a budgetary determination that could be made by City Council. If Council considered it appropriate to direct the funds to be allocated to the civilian staffing of the CRCs, then it could choose to do so.

6.Operation of CRC as a Nine-Hour Facility with Possibility of Expansion to a Twenty-Four Hour Facility

In his report attached as Appendix "C" to this report, the City Auditor undertook a financial analysis of the operation of a City-owned CRC in the downtown area for both a 9 hour and a 24 hour facility. However, as noted above, Staff Sergeant Huntley, in his attached report, indicated that it may be unrealistic to operate a CRC for less than 16 hours a day, given the current CRC experience with the volume and flow of collision reporting. Consequently, if EPSC and City Council move forward with the establishment of a fourth CRC, a more detailed assessment would have to be made of the minimum hours of CRC operations that would be required.

Conclusions:

It is recommended that the EPSC and Council consider the original recommendation of the Chief Administrative Officer respecting the establishment of a fourth CRC, in conjunction with other advice and information received from the City Solicitor, the City Auditor and the Toronto Police Services Board, as set out in this report, prior to determining how to proceed with respect to any proposed CRC.

The Chief Administrative Officer and the City Auditor have been consulted in the preparation of this report.

Contact Name:

Albert H. Cohen (392-8041)

H.W.O. Doyle

City Solicitor

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